Edgar Filing: ORIX CORP

Form 6-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

Pursuant to Rule 13a-16 or 15d-16 OF

THE SECURITIES EXCHANGE Act of 1934

For the month of February, 2005.

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 x Form 40-F ¨

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

Yes ¨ No x

Table of Documents Filed


		Page
1.	ORIX’s Third Quarter Consolidated Financial Results (April 1, 2004 - December 31, 2004) filed with the Tokyo Stock Exchange on Friday, February 4, 2005.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	ORIX Corporation

Date: February 8, 2005	By	/s/ Shunsuke Takeda
		Shunsuke Takeda
		Director
		Vice Chairman and CFO
		ORIX Corporation

Consolidated Financial Results

April 1, 2004 – December 31, 2004

February 4, 2005

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 104.21 to $1.00, the approximate exchange rate prevailing at December 31, 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

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

JAPAN

Tel: (03) 5419-5102 Fax: (03) 5419-5901

E-mail: raymond_spencer@orix.co.jp

Consolidated Financial Results from April 1, 2004 to December 31, 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)

1. Performance Highlights for the Nine Months Ended December 31, 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
December 31, 2004	611,903	18.7	%	92,108	37.3	%	113,458	39.8	%
December 31, 2003	515,582	4.0	%	67,081	23.2	%	81,179	35.0	%
March 31, 2004	719,132	—		83,978	—		101,360	—
	Net Income	Year-on-Year Change		Basic Earnings Per Share			Diluted *Earnings Per Share3**
December 31, 2004	67,718	47.6	%	808.27			743.17
December 31, 2003	45,892	30.3	%	548.36			509.86
March 31, 2004	54,020	—		645.52			601.46


1.	Equity in Net Income of Affiliates was a net gain of JPY 17,803 million for the nine months ended December 31, 2004, a net gain of JPY 14,630 million for the nine months ended December 31, 2003 and a net gain of JPY 17,924 million for the year ended March 31, 2004.
2.	The average number of shares was 83,781,217 for the nine months ended December 31, 2004, 83,688,890 for the nine months ended December 31, 2003 and 83,685,449 for the year ended March 31, 2004.
3.	Adoption of simplified accounting method	Yes ( x )	No ( )
4.	Changes in Accounting Principles	Yes ( )	No ( x ) (except for adoptions of new accounting principles)
5.	Changes in Numbers of Consolidated Subsidiaries and Affiliates	Yes ( x )	No ( )
	Additions: Consolidated Subsidiaries 10, Affiliates 3	Deletions: Consolidated Subsidiaries 4, Affiliates 5

*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.”

*Note 3:

In accordance with the requirements of EITF 04-08, diluted earnings per share for the nine months ended December 31, 2003 and the year ended March 31, 2004 are revised retroactively.

(2) Performance Highlights - Financial Position (Unaudited)


	Total Assets	Shareholders’ Equity	Shareholders’ Equity Ratio		Shareholders’ Equity Per Share
December 31, 2004	5,873,033	641,332	10.9	%	7,642.86
December 31, 2003	5,672,032	551,768	9.7	%	6,594.86
March 31, 2004	5,624,957	564,047	10.0	%	6,739.64

1. The number of outstanding shares was 83,912,548 as of December 31, 2004, 83,666,365 as of December 31, 2003 and 83,691,007 as of March 31, 2004.

(3) Performance Highlights - Cash Flows (Unaudited)


	Cash Flows from Operating Activities	Cash Flows from Investing Activities		Cash Flows from Financing Activities		Cash and Cash Equivalents at End of Period
December 31, 2004	73,554	(334,182	)	188,573		80,129
December 31, 2003	—	—		—		—
March 31, 2004	152,812	123,978		(328,284	)	152,235

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


Fiscal Year	Total Revenues	Income before Income Taxes	Net Income
March 31, 2005	810,000	134,000	80,000

Note:

Basic Earnings Per Share is forecasted to be JPY 953.37.

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

Summary of Consolidated Financial Results

1. Nine Months Ended December 31, 2004


Financial Highlights

Income before Income Taxes*		113,458 million yen (Up 40% year on year)
Net Income		67,718 million yen (Up 48% year on year)
Earnings Per Share (Basic)		808.27 yen (Up 47% year on year)
Earnings Per Share (Diluted)		743.17 yen (Up 46% year on year)
Shareholders’ Equity Per Share		7,642.86 yen (Up 13% on March 31, 2004)
ROE (Annualized)		15.0% (December 31, 2003: 11.6%)
ROA (Annualized)		1.57% (December 31, 2003: 1.05%)

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

Revenues: 611,903 million yen (Up 19% 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, revenues increased 19% to 611,903 million yen in the first nine months of this fiscal year compared with the same period of the previous fiscal year. Furthermore, a new item has been added to the consolidated statements of income entitled, “transportation revenues,” which has been separated from “other operating revenues.”

In Japan, revenues from “direct financing leases” were up 1% year on year. The automobile leasing operations performed steadily. In addition, other direct financing leases generated higher revenues compared with 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, although the leasing operations in the Asia and Oceania region expanded, revenues were down 9% year on year due to the reduction in assets in the U.S. and the appreciation of the yen against the dollar. As a result, overall revenues from “direct financing leases” decreased 1% to 83,381 million yen compared with the same period of the previous fiscal year.

In Japan, revenues from “operating leases” increased 21% year on year due to an expansion of the automobile operating lease operations with the acquisition of JAPAREN Co., Ltd. (merged into ORIX Auto Corporation on January 1, 2005) in October 2003, which contributed from the beginning of this fiscal year, and the precision measuring and other equipment rental operations were steady year on year. Overseas, revenues were up 9% year on year due to the steady performance centering on the automobile operating lease operations. As a result, overall revenues from “operating leases” increased 18% to 111,124 million yen compared with the same period of the previous fiscal year.

In Japan, “interest on loans and investment securities” increased 19% year on year. Although revenues were down at our card loan operations as a result of a lower balance of loans due to a more strict credit screening process, an increase in loans to corporate customers, including non-recourse loans, contributed to the rise in revenues. Overseas, revenues were down 5% year on year due mainly to the reduction in assets in the U.S. and the appreciation of the yen against the dollar. As a result, overall revenues from “interest on loans and investment securities” increased 13% to 98,973 million yen compared with the same period of the previous fiscal year.

Brokerage commissions increased 13% year on year due to the high trading volume on the stock market. Net gains on investment securities increased 54% year on year due to the sale of securities associated mainly 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 45% to 20,589 million yen compared with the same period of the previous fiscal year.

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“Life insurance premiums and related investment income” increased 4% to 97,045 million yen compared with the same period of the previous fiscal year due to an increase in new contracts and our continued focus on more profitable life insurance products.

“Residential condominium sales” declined 32% year on year to 46,947 million yen, which is consistent with the plan for the fiscal year and reflects a reduction in the number of condominiums sold to buyers. Furthermore, net revenues associated with residential condominiums developed through certain joint ventures, which are accounted for by the equity method, are included in “equity in net income of affiliates” (3,832 million yen associated with “residential condominium sales” and 3,370 million yen associated with “costs of residential condominium sales,” which includes selling costs).

“Gains on sales of real estate under operating leases” were down 88% year on year to 1,086 million yen due to lower revenues associated with the sales of office buildings and other real estate and the reclassification of a majority of revenues associated with the sales of office buildings and other real estate to “discontinued operations.”

“Transportation revenues” were 39,715 million yen in the first nine months of this fiscal year. “Transportation revenues,” which are associated with the operations of Footwork Express Co., Ltd., were included in “other operating revenues” up to the first half of this fiscal year and were separated from “other operating revenues” from the third quarter of this fiscal year. Furthermore, although “transportation revenues” were recorded from January 2004 upon the acquisition of net assets in December 2003 that constituted a business of reorganization company, Footwork Logistics Corporation (previously reorganization company, Footwork Express Co., Ltd.), “transportation revenues” were not recorded in the previous fiscal year due to the recording of income on a three months lag basis.

“Other operating revenues” were up due to the increase in revenues associated with our building maintenance and real estate development operations. In addition, companies in which we invested as part of our corporate rehabilitation business in the second half of the previous fiscal year made contributions from the beginning of this fiscal year and the expansion of fee businesses (mainly loan servicing fees and arrangement fees) also contributed to earnings. As a result, “other operating revenues” increased 78% to 113,043 million yen compared with the same period of the previous fiscal year.

Expenses: 519,795 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 in the first nine months of this fiscal year. As a result, expenses were up 16% to 519,795 million yen compared with the same period of the previous fiscal year. Furthermore, a new item has been added to the consolidated statements of income entitled, “costs of transportation revenues,” which has been separated from “other operating expenses.”

“Interest expense” was down 9% year on year to 41,824 million yen due mainly to the lower average debt levels in Japan and overseas.

“Depreciation-operating leases” increased 13% year on year to 69,667 million yen due to the increase in operating assets compared to the same period of the previous fiscal year.

“Life insurance costs” increased 5% year on year to 87,058 million yen in line with the rise in life insurance premiums.

“Costs of residential condominium sales” were down 30% year on year to 43,191 million yen in line with the decrease in “residential condominium sales.”

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“Costs of transportation revenues” were 34,051 million yen in the first nine months of this fiscal year. “Costs of transportation revenues” represent the cost corresponding to “transportation revenues” and were included in “other operating expenses” up to the first half of this fiscal year.

“Other operating expenses” were up 110% year on year to 72,347 million yen along with the rise in “other operating revenues.”

“Selling, general and administrative expenses” were up 12% year on year to 130,610 million yen due mainly 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” was down 22% year on year to 27,054 million yen due to a lower level of non-performing assets despite the rise in operating assets.

The majority of the “write-downs of long-lived assets” in the first nine months of this fiscal year 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 in the first half of this fiscal year. 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 flat year on year at 3,999 million yen as we recorded write-downs associated with investments in stocks in our venture capital operations in Japan and securities investment operations in the U.S.

Net Income: 67,718 million yen (Up 48% year on year)

“Operating income” was up 37% year on year to 92,108 million yen. “Equity in net income of affiliates” was up 22% to 17,803 million yen compared to the same period of the previous fiscal year (while “equity in net income of affiliates” in the first half of the previous fiscal year included our proportionate interest in 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 nine months of this fiscal year only included the contribution from KLI’s regular operations). “Income before discontinued operations, extraordinary gain and income taxes” rose 40% year on year to 113,458 million yen with contributions from the “gains on sales of affiliates.”

“Discontinued operations, net of applicable tax effect” were 4,697 million yen. “Income from discontinued operations, net” of 7,890 million yen and “gains on sales of real estate under operating leases” of 1,086 million yen totaled 8,976 million yen, a decrease of 3,979 million yen compared to the same period of the previous fiscal year.

As a result, “net income” rose 48% compared to the same period of the previous fiscal year to 67,718 million yen.

Operating Assets: 5,072,970 million yen (Up 5% on March 31, 2004)

Operating assets were up 5% on March 31, 2004 to 5,072,970 million yen.

Segment Information (“Segment 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 while “Europe” moved back into the black compared to a segment loss in the first nine months of the previous fiscal year. On the other hand, “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 and loans to corporate customers both expanded. Direct financing 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 at the same level as compared to the same period of the previous fiscal year. As a result, segment revenues were up 9% year on year to 104,189 million yen. Segment profits increased 30% to 43,512 million yen compared to 33,511 million yen in the same period of the previous fiscal year thanks in part to the lower “provision for doubtful receivables and probable loan losses.” Segment assets increased 8% on March 31, 2004 to 1,957,302 million yen.

Rental Operations (Segment name changed from “Equipment Operating Leases” to “Rental Operations”):

Revenues for operating leases associated with the precision measuring and other equipment rental operations were steady compared with the same period of the previous fiscal year. In addition, operating leases for automobiles were up along with the acquisition of JAPAREN Co., Ltd, which contributed from the beginning of this fiscal year. As a result, segment revenues were up 16% year on year to 61,784 million yen. Although segment assets were down 1% on March 31, 2004 to 146,109 million yen, segment revenues increased. As a result, segment profits rose 56% to 8,605 million yen compared to 5,528 million yen in the same period of the previous fiscal year.

Real Estate-Related Finance:

Revenues associated with corporate loans including non-recourse loans increased and the loan servicing operations, which include servicing fees, also made a larger contribution to revenues compared to the same period of the previous fiscal year. As a result, segment revenues increased 60% year on year to 61,718 million yen. In addition, although there was an increase in “provision for doubtful receivables and probable loan losses” in this segment, segment profits increased 46% to 19,766 million yen compared to 13,531 million yen in the same period of the previous fiscal year. Segment assets increased 15% on March 31, 2004 to 1,045,373 million yen.

Real Estate:

While “residential condominium sales” declined year on year, which is consistent with the plan for the fiscal year, and lower revenues from the sale of office buildings were recorded, revenues associated with our building maintenance operations increased. As a result, segment revenues increased 3% year on year to 105,394 million yen. “Write-downs of long-lived assets” were lower than in the same period of the previous fiscal year and segment profits increased 56% to 12,521 million yen compared to 8,051 million yen in the same period of the previous fiscal year. Segment assets increased 9% on March 31, 2004 to 337,892 million yen.

Life Insurance:

Segment revenues increased 5% year on year to 97,027 million yen due to a shift to more profitable life insurance products and an increase in the number of new contracts. Segment profits, which included the recognition of “gains on sales of affiliates,” increased 33% to 5,765 million yen compared to 4,341 million yen in the same period of the pervious fiscal year. Segment assets were down 2% on March 31, 2004 to 572,742 million yen.

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 average loan balance and subsequent lower interest on loans. However, net gains on investment securities were up at our venture capital operations and brokerage commissions at our securities brokerage expanded due to the high trading volume on the stock market. In addition, companies in which we invested as part of our corporate rehabilitation business in the second half of the previous fiscal year made a contribution to revenues from the beginning of this fiscal year. As a result, segment revenues increased 100% year on year to 102,555 million yen. “Provision for doubtful receivables and probable loan losses” associated with our card loan operations decreased, while “equity in net income of affiliates” increased year on year. As a result, segment profits increased 221% to 16,286 million yen compared to 5,081 million yen in the same period of the previous fiscal year. As the level of loans associated with our card loan operations declined, segment assets increased only 1% on March 31, 2004 to 416,146 million yen.

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Overseas Operations

The Americas:

Although revenues from “direct financing leases” and interest on loans to corporate customers were down, net gains on investment securities increased due mainly to the sale of CMBS (commercial mortgage-backed securities) and the net gains on the sales of real estate were also recorded. As a result, segment revenues were up 4% year on year to 34,985 million yen. “Provision for doubtful receivables and probable loan losses” was down and an equity method affiliate went from a loss in the first half of this fiscal year to a gain in the first nine months of this fiscal year. As a result, segment profits increased 102% to 12,207 million yen compared to 6,035 million yen in the same period of the previous fiscal year. Segment assets were down 10% on March 31, 2004 to 427,689 million yen due to the decrease in balance of direct financing leases and loans to corporate customers.

Asia and Oceania:

Segment revenues were up 4% year on year to 41,278 million yen. Automobile leasing and corporate lending of a number of companies in the region performed steadily, while the ship-related operations expanded. However, “equity in net income of affiliates” was down year on year, as the first half of the previous fiscal year included, in addition to the contribution from the regular operations of KLI, our proportionate interest in the recognition of deferred tax assets of 5,380 million yen for KLI attributable to a change in tax rules in Korea. As a result, segment profits decreased 2% to 16,097 million yen compared to 16,385 million yen in the same period of the previous fiscal year. Segment assets increased 7% on March 31, 2004 to 442,427 million yen.

Europe:

Segment revenues were down 9% year on year to 7,683 million yen due in part to the lower balance of segment assets. Segment profits were 1,420 million yen compared to segment losses of 1,445 million yen in the same period of the previous fiscal year as this segment recorded losses on certain equity method investments from which we withdrew in the previous fiscal year.

2. Summary of Cash Flows (Nine Months Ended December 31, 2004)

Cash and cash equivalents decreased by 72,106 million yen to 80,129 million yen compared to March 31, 2004.

“Cash flows from operating activities” provided 73,554 million yen in the first nine months of this fiscal year due to the “net income” as well as profit and loss items without cash activities such as “depreciation and amortization” and “provision for doubtful receivables and probable loan losses,” while “increase in inventories,” which is associated with the residential condominium development operations, was an outflow.

“Cash flows from investing activities” used 334,182 million yen in the first nine months of this fiscal year. This was due to the increase in “installment loans made to customers” in consequence of the expansion of loans to corporate customers, including non-recourse loans, as well as the increase of “purchases of available-for-sale securities.” Along with those investing activities, “cash flows from financing activities” provided 188,573 million yen in the first nine months of this fiscal year due to the increase in debt.

Please note that a consolidated statement of cash flows has not been provided for the nine months ended December 31, 2003. Therefore, no comparison has been made regarding the cash flows for operating, investing and financing activities for that period.

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3. Summary of Third Quarter (Three Months Ended December 31, 2004)

In the third quarter revenues increased 36,509 million yen year on year. Although direct financing lease assets decreased, revenues from “direct financing leases” were up compared to the third quarter of the previous fiscal year due to the higher profitability of transactions. Revenues from “operating leases” were up in line with the increase in operating assets. “Interest on loans and investment securities” was up due to the increase in loans to corporate customers, including non-recourse loans. “Brokerage commissions and net gains on investment securities” were up as net gains on the sale of securities in Japan and securities investment operations in the U.S. were higher compared to the same period of the previous fiscal year even though brokerage commissions were flat year on year. “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” decreased year on year, due to the reduction in the number of condominiums sold to buyers, which is consistent with the plan for the fiscal year, and the aforementioned joint development of residential condominiums, which are accounted for by the equity method. “Gains on sales of real estate under operating leases” were down slightly as a majority of revenues associated with the sales of office buildings and other real estate were reclassified in “discontinued operations.” “Transportation revenues” (refer to page 2 of this document) were 12,788 million yen in the third quarter of this fiscal year. “Other operating revenues” were up year on year due to the increase in revenues associated with companies in which we invested as part of our corporate rehabilitation business mainly from the third quarter of the previous fiscal year, and the higher contribution from the building maintenance and real estate development operations.

On the other hand, expenses were up 23,908 million yen compared to the third quarter of the previous fiscal year. “Interest expense” decreased mainly as a result of the decline in the average level of debt overseas. “Depreciation-operating leases” increased in line with the increase in operating assets as compared to the third quarter of the previous fiscal year. “Life insurance costs” and “other operating expenses” increased in line with the increase in associated revenues, while “costs of residential condominium sales” declined in line with the decrease in associated revenues in the third quarter of this fiscal year. “Costs of transportation revenues” (refer to page 3 of this document) were 10,652 million yen in the third quarter of this fiscal year. “Selling, general and administrative expenses” were up due to the costs associated with the increase in the number of consolidated companies from the third quarter of the previous fiscal year. Although operating assets were up year on year, “provision for doubtful receivables and probable loan losses” was down slightly compared to the third quarter of the previous fiscal year. There were no “write-downs of long-lived assets” in the third quarter of this fiscal year and “write-downs of securities” decreased compared to the third quarter of the previous fiscal year.

This resulted in an increase in “operating income” by 12,601 million yen to 35,500 million yen compared with the third quarter of the previous fiscal year.

“Equity in net income of affiliates” was up year on year due to the contribution of an equity method affiliate in the U.S. “Income before discontinued operations, extraordinary gain and income taxes” increased by 18,813 million yen to 44,283 million yen compared to the third quarter of the previous fiscal year.

“Discontinued operations, net of applicable tax effect” added 905 million yen and “net income” in the third quarter of this fiscal year rose by 10,557 million yen to 25,030 million yen compared with a “net income” of 14,473 million yen in the third quarter of the previous fiscal year.

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

For the fiscal year ending March 31, 2005, we have revised our forecast as follows. “Revenues” 810,000 million yen (up 13% compared with the fiscal year ended March 31, 2004), “income before income taxes” of 134,000 million yen (up 32%), and “net income” of 80,000 million yen (up 48%).


	(Millions of Yen)
	Total Revenues	Income before Income Taxes*	Net Income
Previous Forecast (A)	780,000	122,000	74,000
New Forecast (B)	810,000	134,000	80,000
Change (B-A)	30,000	12,000	6,000
Change (%)	3.8	9.8	8.1
(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.”

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Consolidated Financial Highlights

(For the Nine Months Ended December 31, 2004 and 2003, and the Year Ended March 31, 2004)

(Unaudited)


	(millions of JPY, except for per share data)
	December 31, 2004		Change from March 31, 2004		Year -on- year Change		December 31, 2003		Year -on- year Change		March 31, 2004		Year -on- year Change
Operating Assets
Investment in Direct Financing Leases	1,480,526		102	%	96	%	1,545,853		95	%	1,453,575		92	%
Installment Loans	2,328,427		104	%	105	%	2,224,670		94	%	2,234,940		98	%
Investment in Operating Leases	576,621		107	%	116	%	496,570		109	%	536,702		101	%
Investment in Securities	605,511		110	%	111	%	544,021		78	%	551,928		81	%
Other Operating Assets	81,885		114	%	116	%	70,556		56	%	72,049		94	%

Total	5,072,970		105	%	104	%	4,881,670		92	%	4,849,194		94	%

Operating Results
Total Revenues	611,903		—		119	%	515,582		104	%	719,132		106	%
Income before Discontinued Operations, Extraordinary Gain and Income Taxes	113,458		—		140	%	81,179		135	%	101,360		227	%
Net Income	67,718		—		148	%	45,892		130	%	54,020		179	%
Earnings Per Share
Net Income
Basic	808.27		—		147	%	548.36		130	%	645.52		179	%
Diluted	743.17		—		146	%	509.86		129	%	601.46		176	%
Shareholders’ Equity Per Share	7,642.86		113	%	116	%	6,594.86		109	%	6,739.64		112	%

Financial Position
Shareholders’ Equity	641,332		114	%	116	%	551,768		109	%	564,047		112	%
Number of Outstanding Shares (’000)	83,913		100	%	100	%	83,666		100	%	83,691		100	%
Long-and Short-Term Debt and Deposits	4,060,447		105	%	103	%	3,941,826		90	%	3,859,180		91	%
Total Assets	5,873,033		104	%	104	%	5,672,032		94	%	5,624,957		95	%
Shareholders’ Equity Ratio	10.9	%	—		—		9.7	%	—		10.0	%	—
Return on Equity (annualized)	15.0	%	—		—		11.6	%	—		10.1	%	—
Return on Assets (annualized)	1.57	%	—		—		1.05	%	—		0.93	%	—

New Business Volumes
Direct Financing Leases
New Receivables Added	601,777		—		98	%	614,520		79	%	801,787		80	%
New Equipment Acquisitions	536,022		—		98	%	547,264		79	%	713,240		80	%
Installment Loans	1,098,271		—		133	%	822,979		85	%	1,124,276		89	%
Operating Leases	177,600		—		150	%	118,634		133	%	189,737		109	%
Investment in Securities	165,745		—		185	%	89,457		74	%	122,066		53	%
Other Operating Transactions	101,346		—		96	%	105,434		134	%	186,265		160	%

- 8 -

Condensed Consolidated Statements of Income

(For the Nine Months Ended December 31, 2004 and 2003, and the Year Ended March 31, 2004)

(Unaudited)


	(millions of JPY, millions of US$)
	Nine Months ended December 31, 2004		Year-on-year Change (%)	Nine Months ended December 31, 2003		Year-on-year Change (%)	Year ended March 31, 2004		Year-on-year Change (%)	U.S. dollars December 31, 2004
Total Revenues :	611,903		119	515,582		104	719,132		106	5,872

Direct Financing Leases	83,381		99	84,368		90	112,372		91	800
Operating Leases	111,124		118	94,528		107	128,955		106	1,066
Interest on Loans and Investment Securities	98,973		113	87,437		92	116,744		89	950
Brokerage Commissions and Net Gains on Investment Securities	20,589		145	14,164		153	26,025		240	198
Life Insurance Premiums and Related Investment Income	97,045		104	93,598		94	134,154		97	931
Residential Condominium Sales	46,947		68	68,864		133	98,034		138	451
Gains on Sales of Real Estate under Operating Leases	1,086		12	9,015		774	9,116		280	10
Transportation Revenues	39,715		—	—		—	—		—	381
Other Operating Revenues	113,043		178	63,608		113	93,732		116	1,085

Total Expenses :	519,795		116	448,501		102	635,154		99	4,988

Interest Expense	41,824		91	46,206		86	60,145		84	401
Depreciation - Operating Leases	69,667		113	61,742		107	83,537		105	669
Life Insurance Costs	87,058		105	83,135		91	119,653		95	835
Costs of Residential Condominium Sales	43,191		70	62,136		143	88,679		146	414
Costs of Transportation Revenues	34,051		—	—		—	—		—	327
Other Operating Expenses	72,347		210	34,519		122	52,551		127	694
Selling, General and Administrative Expenses	130,610		112	117,021		111	161,835		112	1,254
Provision for Doubtful Receivables and Probable Loan Losses	27,054		78	34,682		93	49,592		91	260
Write-downs of Long-Lived Assets	9,165		218	4,202		29	12,345		24	88
Write-downs of Securities	3,999		100	3,987		50	5,240		37	38
Foreign Currency Transaction Loss, Net	829		95	871		56	1,577		130	8

Operating Income	92,108		137	67,081		123	83,978		231	884

Equity in Net Income of Affiliates	17,803		122	14,630		258	17,924		289	171
Gains (Losses) on Sales of Affiliates	3,547		—	(532	)	—	(542	)	—	34

Income before Discontinued Operations, Extraordinary Gain and Income Taxes	113,458		140	81,179		135	101,360		227	1,089

Provision for Income Taxes	50,437		133	37,859		137	51,215		250	484

Income from Continuing Operations	63,021		145	43,320		133	50,145		208	605

Discontinued Operations
Income from Discontinued Operations, Net	7,890			3,940			5,510			76
Provision for Income Taxes	(3,193	)		(1,611	)		(2,244	)		(31	)

Discontinued Operations, Net of Applicable Tax Effect	4,697		202	2,329		330	3,266		321	45

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

Net Income	67,718		148	45,892		130	54,020		179	650


Note:		1. Comprehensive Income under FASB Statement No.130 (“Reporting Comprehensive Income”) was a gain of JPY 77,668 million (US$745 million) for the nine months ended December 31, 2004, a gain of JPY 48,501 million for the nine months ended December 31, 2003 and a gain of JPY 60,626 million for the year ended March 31, 2004.

		2. 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”).

		3. 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 nine months ended December 31, 2003, has been reclassified.

		4. 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.

		5. “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.

		6. “Transportation Revenues” and “Costs of Transportation Revenues” were reclassified from “Other Operating Revenues” and “Other Operating Expenses,” respectively.

- 9 -

Condensed Consolidated Statements of Income

(For the Three Months Ended December 31, 2004 and 2003)

(Unaudited)


	(millions of JPY, millions of US$)
	Three Months ended December 31, 2004		Year-on-year Change (%)	Three Months ended December 31, 2003		Year-on-year Change (%)	U.S. dollars December 31, 2004
Total Revenues :	209,552		121	173,043		107	2,011

Direct Financing Leases	27,720		101	27,503		92	266
Operating Leases	36,854		110	33,471		110	354
Interest on Loans and Investment Securities	33,119		119	27,860		89	318
Brokerage Commissions and Net Gains on Investment Securities	7,502		114	6,595		487	72
Life Insurance Premiums and Related Investment Income	30,704		108	28,463		101	295
Residential Condominium Sales	13,985		53	26,329		120	134
Gains(Losses) on Sales of Real Estate under Operating Leases	(195	)	—	1,121		—	(2	)
Transportation Revenues	12,788		—	—		—	123
Other Operating Revenues	47,075		217	21,701		111	451

Total Expenses :	174,052		116	150,144		106	1,670

Interest Expense	13,547		93	14,588		84	130
Depreciation - Operating Leases	23,006		111	20,705		106	221
Life Insurance Costs	27,139		109	24,892		93	260
Costs of Residential Condominium Sales	12,669		52	24,463		139	122
Costs of Transportation Revenues	10,652		—	—		—	102
Other Operating Expenses	31,827		249	12,779		127	305
Selling, General and Administrative Expenses	43,139		109	39,551		112	414
Provision for Doubtful Receivables and Probable Loan Losses	10,367		96	10,839		87	99
Write-downs of Long-Lived Assets	—		—	—		—	—
Write-downs of Securities	1,236		64	1,930		89	12
Foreign Currency Transaction Loss, Net	470		118	397		77	5

Operating Income	35,500		155	22,899		111	341

Equity in Net Income of Affiliates	8,038		297	2,707		117	77
Gains (Losses) on Sales of Affiliates	745		—	(136	)	—	7

Income before Discontinued Operations, Extraordinary Gain and Income Taxes	44,283		174	25,470		111	425

Provision for Income Taxes	20,158		171	11,818		111	193

Income from Continuing Operations	24,125		177	13,652		112	232

Discontinued Operations
Income from Discontinued Operations, Net	1,518			1,393			15
Provision for Income Taxes	(613	)		(572	)		(7	)

Discontinued Operations, Net of Applicable Tax Effect	905		110	821		317	8

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

Net Income	25,030		173	14,473		116	240

- 10 -

Condensed Consolidated Balance Sheets

(As of December 31, 2004 and March 31, 2004)

(Unaudited)


		(millions of JPY, millions of US$)
		December 31, 2004		March 31, 2004		U.S. dollars December 31, 2004
Assets
Cash and Cash Equivalents		80,129		152,235		769
Restricted Cash		46,231		35,621		444
Time Deposits		969		677		9
Investment in Direct Financing Leases		1,480,526		1,453,575		14,207
Installment Loans		2,328,427		2,234,940		22,344
Allowance for Doubtful Receivables on Direct Financing Leases and Probable Loan Losses		(120,508	)	(128,020	)	(1,156	)
Investment in Operating Leases		576,621		536,702		5,533
Investment in Securities		605,511		551,928		5,810
Other Operating Assets		81,885		72,049		786
Investment in Affiliates		193,836		157,196		1,860
Other Receivables		156,404		142,711		1,501
Inventories		141,777		121,441		1,360
Prepaid Expenses		46,309		44,139		444
Office Facilities		66,718		71,196		640
Other Assets		188,198		178,567		1,807

Total Assets		5,873,033		5,624,957		56,358

Liabilities and Shareholders’ Equity
Short-Term Debt		987,791		903,916		9,479
Deposits		319,281		292,545		3,064
Trade Notes, Accounts Payable and Other Liabilities		277,864		279,852		2,666
Accrued Expenses		88,391		96,668		848
Policy Liabilities		554,161		592,782		5,318
Current and Deferred Income Taxes		160,002		153,937		1,535
Deposits from Lessees		90,836		78,491		873
Long-Term Debt		2,753,375		2,662,719		26,421

Total Liabilities		5,231,701		5,060,910		50,204

Common Stock		52,709		52,068		506
Additional Paid-in Capital		70,661		70,015		678
Retained Earnings:
Legal Reserve		2,220		2,220		21
Retained Earnings		546,716		481,091		5,246
Accumulated Other Comprehensive Loss		(23,191	)	(33,141	)	(223	)
Treasury Stock, at Cost		(7,783	)	(8,206	)	(74	)

Total Shareholders’ Equity		641,332		564,047		6,154

Total Liabilities and Shareholders’ Equity		5,873,033		5,624,957		56,358


		December 31, 2004		March 31, 2004		U.S. dollars December 31, 2004
Note :	Accumulated Other Comprehensive Loss
	Net unrealized gains on investment in securities	32,618		25,048		313
	Minimum pension liability adjustments	(7,701	)	(7,967	)	(74	)
	Foreign currency translation adjustments	(45,723	)	(45,629	)	(439	)
	Net unrealized losses on derivative instruments	(2,385	)	(4,593	)	(23	)

- 11 -

Condensed Consolidated Statements of Cash Flows

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

(Unaudited)


	(millions of JPY, millions of US$)
	Nine months ended December 31, 2004		Year ended March 31, 2004		U.S. dollars Nine months ended December 31, 2004
Cash Flows from Operating Activities:
Net income	67,718		54,020		650
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	97,219		121,530		933
Provision for doubtful receivables and probable loan losses	27,054		49,592		260
Decrease in policy liabilities	(38,621	)	(15,771	)	(371	)
Gains from securitization transactions	(2,744	)	(446	)	(26	)
Equity in net income of affiliates	(17,803	)	(17,924	)	(171	)
(Gains) losses on sales of affiliates	(3,547	)	542		(34	)
Extraordinary gain	—		(609	)	—
Gains on sales of available-for-sale securities	(14,333	)	(8,728	)	(138	)
Gains on sales of real estate under operating leases	(1,086	)	(9,116	)	(10	)
Write-downs of long-lived assets	9,165		12,345		88
Write-downs of securities	3,999		5,240		38
Increase in restricted cash	(10,667	)	(17,393	)	(102	)
Increase in inventories	(29,176	)	(18,197	)	(280	)
Increase in prepaid expenses	(2,212	)	(1,974	)	(21	)
Increase (decrease) in accrued expenses	(7,872	)	7,481		(76	)
Increase in deposits from lessees	12,883		683		124
Other, net	(16,423	)	(8,463	)	(158	)

Net cash provided by operating activities	73,554		152,812		706

Cash Flows from Investing Activities:
Purchases of lease equipment	(696,071	)	(873,248	)	(6,680	)
Principal payments received under direct financing leases	468,106		731,702		4,492
Net proceeds from securitization of lease and loan receivables	74,315		35,704		713
Installment loans made to customers	(1,098,051	)	(1,130,986	)	(10,537	)
Principal collected on installment loans	928,679		1,092,698		8,912
Proceeds from sales of operating lease assets	64,334		116,531		617
Investment in and dividends received from affiliates, net	39		5,822		0
Purchases of available-for-sale securities	(151,696	)	(90,527	)	(1,456	)
Proceeds from sales of available-for-sale securities	72,367		164,860		695
Maturities of available-for-sale securities	53,574		88,601		514
Purchases of other securities	(14,049	)	(32,707	)	(135	)
Proceeds from sales of other securities	7,819		12,648		75
Purchases of other operating assets	(6,868	)	(8,966	)	(66	)
Proceeds from sales of other operating assets	2,906		10,468		28
Acquisitions of subsidiaries, net of cash acquired	(5,799	)	(8,861	)	(55	)
Sales of subsidiaries, net of cash disposed	—		24		—
Other, net	(33,787	)	10,215		(324	)

Net cash provided by (used in) investing activities	(334,182	)	123,978		(3,207	)

Cash Flows from Financing Activities:
Net increase in debt with maturities of three months or less	16,832		50,109		162
Proceeds from debt with maturities longer than three months	1,373,413		1,640,244		13,179
Repayment of debt with maturities longer than three months	(1,223,032	)	(2,051,777	)	(11,736	)
Net increase in deposits due to customers	26,736		30,078		257
Issuance of common stock	1,279		8		12
Dividends paid	(2,093	)	(2,092	)	(20	)
Net increase (decrease) in call money	(5,000	)	5,000		(48	)
Other, net	438		146		4

Net cash provided by (used in) financing activities	188,573		(328,284	)	1,810

Effect of Exchange Rate Changes on Cash and Cash Equivalents	(51	)	(948	)	(1	)

Net Decrease in Cash and Cash Equivalents	(72,106	)	(52,442	)	(692	)
Cash and Cash Equivalents at Beginning of Period	152,235		204,677		1,461

Cash and Cash Equivalents at End of Period	80,129		152,235		769

- 12 -

Segment Information

(For the Nine Months Ended December 31, 2004 and 2003, and the Year Ended March 31, 2004)

(Unaudited)


	(millions of JPY)
	Nine months ended December 31, 2004						Nine months ended December 31, 2003					Year ended March 31, 2004
	Revenues		Income (Loss) before Income Taxes*1		Operating Assets		Revenues	Income (Loss) before Income Taxes		Operating Assets		Revenues		Income (Loss) before Income Taxes		Operating Assets
Operations in Japan
Corporate Financial Services	104,189		43,512		1,957,302		95,348	33,511		1,878,794		128,355		43,787		1,806,686
Rental Operations	61,784		8,605		146,109		53,344	5,528		141,932		74,370		9,342		147,231
Real Estate-Related Finance	61,718		19,766		1,045,373		38,671	13,531		901,501		54,792		18,102		909,019
Real Estate	105,394		12,521		337,892		102,589	8,051		283,227		143,451		6,244		309,558
Life Insurance	97,027		5,765		572,742		92,541	4,341		533,708		133,391		5,382		582,473
Other	102,555		16,286		416,146		51,243	5,081		412,459		73,986		10,079		412,505

Sub-Total	532,667		106,455		4,475,564		433,736	70,043		4,151,621		608,345		92,936		4,167,472

Overseas Operations
The Americas	34,985		12,207		427,689		33,565	6,035		517,134		47,294		7,601		472,595
Asia and Oceania	41,278		16,097		442,427		39,502	16,385		419,775		53,694		17,848		413,041
Europe	7,683		1,420		45,152		8,460	(1,445	)	57,298		10,708		(1,252	)	56,634

Sub-Total	83,946		29,724		915,268		81,527	20,975		994,207		111,696		24,197		942,270

Segment Total	616,613		136,179		5,390,832		515,263	91,018		5,145,828		720,041		117,133		5,109,742

Difference between Segment totals and Consolidated Amounts	(4,710	)	(22,721	)	(317,862	)	319	(9,839	)	(264,158	)	(909	)	(15,773	)	(260,548	)

Consolidated Amounts	611,903		113,458		5,072,970		515,582	81,179		4,881,670		719,132		101,360		4,849,194



	(millions of US$)
	U.S. dollars December 31, 2004
	Revenues		Income (Loss) before Income Taxes		Operating Assets
Operations in Japan
Corporate Financial Services	1,000		418		18,782
Rental Operations	593		83		1,402
Real Estate- Related Finance	592		190		10,031
Real Estate	1,011		120		3,242
Life Insurance	931		55		5,496
Other	984		156		3,994

Sub-Total	5,111		1,022		42,947

Overseas Operations
The Americas	336		117		4,104
Asia and Oceania	396		154		4,246
Europe	74		14		433

Sub-Total	806		285		8,783

Segment Total	5,917		1,307		51,730

Difference between Segment totals and Consolidated Amounts	(45	)	(218	)	(3,050	)

Consolidated Amounts	5,872		1,089		48,680


*Note 1:		“Income (Loss) before Income Taxes” represents “Income (Loss) 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.”

- 13 -

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)		Q3 (04/10-12)
1) Investment in Direct Financing Leases	1,582,153		1,542,172		1,545,853		1,453,575		1,454,461		1,465,856		1,480,526
Japan	1,242,600		1,237,347		1,255,453		1,183,187		1,183,421		1,187,595		1,212,340
Overseas	339,553		304,825		290,400		270,388		271,040		278,261		268,186

2) Installment Loans	2,302,005		2,224,486		2,224,670		2,234,940		2,221,554		2,254,387		2,328,427
Japan	1,969,694		1,922,105		1,943,624		1,984,416		1,997,881		2,019,718		2,100,661
Overseas	332,311		302,381		281,046		250,524		223,673		234,669		227,766

3) Investment in Operating Leases	523,413		487,613		496,570		536,702		529,078		536,489		576,621
Japan	358,596		333,527		346,064		388,452		385,532		380,550		425,178
Overseas	164,817		154,086		150,506		148,250		143,546		155,939		151,443

4) Investment in Securities	697,926		589,918		544,021		551,928		579,193		591,714		605,511
Japan	528,184		440,598		394,784		399,463		423,111		446,026		466,607
Overseas	169,742		149,320		149,237		152,465		156,082		145,688		138,904

5) Other Operating Assets	75,065		72,502		70,556		72,049		68,004		72,932		81,885
Japan	65,803		64,300		63,008		64,993		61,071		64,772		74,538
Overseas	9,262		8,202		7,548		7,056		6,933		8,160		7,347

Total Operating Assets	5,180,562		4,916,691		4,881,670		4,849,194		4,852,290		4,921,378		5,072,970

Allowance for Doubtful Receivables on Direct Financing Leases and Probable Loan Losses	(134,740	)	(130,015	)	(130,851	)	(128,020	)	(128,726	)	(125,309	)	(120,508	)
Allowance/Investment in Direct Financing Leases and Installment Loans	3.5	%	3.5	%	3.5	%	3.5	%	3.5	%	3.4	%	3.2	%

Total Assets	5,923,307		5,684,598		5,672,032		5,624,957		5,651,018		5,724,771		5,873,033

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		4,060,447
Policy Liabilities	604,830		607,591		600,281		592,782		577,024		559,815		554,161

Total Liabilities	5,396,760		5,143,520		5,120,264		5,060,910		5,056,239		5,105,522		5,231,701

Shareholders’ Equity	526,547		541,078		551,768		564,047		594,779		619,249		641,332

Total Liabilities & Shareholders’ Equity	5,923,307		5,684,598		5,672,032		5,624,957		5,651,018		5,724,771		5,873,033


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)		Q3 (04/10-12)
Direct Financing Leases: New receivables added	212,175		186,370		215,975		187,267		188,262		210,689		202,826
Japan	158,176		139,969		172,006		148,301		150,035		169,583		160,378
Overseas	53,999		46,401		43,969		38,966		38,227		41,106		42,448

Direct Financing Leases: New equipment acquisitions	188,194		166,734		192,336		165,976		166,937		188,911		180,174
Japan	138,479		121,963		151,787		129,688		130,715		148,909		139,736
Overseas	49,715		44,771		40,549		36,288		36,222		40,002		40,438

Installment Loans: New loans added	270,959		258,464		293,556		301,297		307,530		396,510		394,231
Japan	225,042		223,315		247,284		262,005		273,289		352,816		351,053
Overseas	45,917		35,149		46,272		39,292		34,241		43,694		43,178

Operating Leases: New equipment acquisitions	40,810		33,722		44,102		71,103		40,737		55,077		81,786
Japan	29,880		20,354		38,392		55,714		33,195		35,750		70,626
Overseas	10,930		13,368		5,710		15,389		7,542		19,327		11,160

Investment in Securities: New securities added	57,370		12,107		19,980		32,609		45,486		60,092		60,167
Japan	53,835		11,020		6,051		30,006		38,795		56,822		58,932
Overseas	3,535		1,087		13,929		2,603		6,691		3,270		1,235

Other Operating Transactions: New assets added	28,655		48,363		28,416		80,831		29,354		26,429		45,563
Japan	28,655		48,301		28,416		80,831		29,354		25,017		45,386
Overseas	—		62		—		—		—		1,412		177

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	(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)		Q3 (04/10-12)
Revenues
1) Direct Financing Leases	28,516		28,349		27,503		28,004		27,399		28,262		27,720
Japan	21,906		21,865		21,462		21,695		21,698		22,268		21,915
Overseas	6,610		6,484		6,041		6,309		5,701		5,994		5,805

2) Operating Leases	30,354		30,703		33,471		34,427		35,844		38,426		36,854
Japan	21,726		20,821		24,783		25,201		26,836		27,913		26,669
Overseas	8,628		9,882		8,688		9,226		9,008		10,513		10,185

3) Interest on Loans and Investment Securities	28,314		31,263		27,860		29,307		29,904		35,950		33,119
Interest on loans	25,729		29,001		25,820		26,940		27,204		33,371		30,711
Japan	21,082		23,958		21,706		22,549		23,383		29,195		26,591
Overseas	4,647		5,043		4,114		4,391		3,821		4,176		4,120
Interest on investment securities	2,585		2,262		2,040		2,367		2,700		2,579		2,408
Japan	173		295		165		252		264		313		268
Overseas	2,412		1,967		1,875		2,115		2,436		2,266		2,140

4) Brokerage Commissions and Net Gains on Investment Securities	3,246		4,323		6,595		11,861		5,160		7,927		7,502
Brokerage commissions	691		1,167		1,006		1,103		1,226		1,001		997
Net gains on investment securities	2,555		3,156		5,589		10,758		3,934		6,926		6,505

5) Life Insurance Premiums and Related Investment Income	30,583		34,552		28,463		40,556		30,208		36,133		30,704
Life insurance premiums	27,524		31,114		24,231		36,589		28,007		33,676		26,966
Related investment income	3,059		3,438		4,232		3,967		2,201		2,457		3,738

6) Residential Condominium Sales	23,176		19,359		26,329		29,170		12,903		20,059		13,985
Japan	23,176		19,359		26,329		29,170		12,903		20,059		13,985
Overseas	—		—		—		—		—		—		—

7) Gains (Losses) on Sales of Real Estate under Operating Leases	5,549		2,345		1,121		101		1,198		83		(195	)
Japan	5,464		2,317		981		109		1,198		83		(195	)
Overseas	85		28		140		(8	)	—		—		—

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

9) Other Operating Revenues	19,185		22,722		21,701		30,124		37,485		28,483		47,075
Japan	17,057		19,733		18,875		27,712		34,432		25,982		44,424
Overseas	2,128		2,989		2,826		2,412		3,053		2,501		2,651

Total Revenues	168,923		173,616		173,043		203,550		192,876		209,475		209,552

Expenses
1) Interest Expense	16,110		15,508		14,588		13,939		14,152		14,125		13,547
2) Depreciation—Operating Leases	20,381		20,656		20,705		21,795		23,057		23,604		23,006
3) Life Insurance Costs	29,326		28,917		24,892		36,518		27,965		31,954		27,139
4) Costs of Residential Condominium Sales	20,372		17,301		24,463		26,543		11,803		18,719		12,669
5) Costs of Transportation Revenues	—		—		—		—		11,714		11,685		10,652
6) Other Operating Expenses	10,214		11,526		12,779		18,032		23,896		16,624		31,827
7) Selling, General and Administrative Expenses	37,489		39,981		39,551		44,814		39,074		48,397		43,139
8) Provision for Doubtful Receivables and Probable Loan Losses	11,968		11,875		10,839		14,910		8,795		7,892		10,367

9) Write-downs of Long-Lived Assets	—		4,202		—		8,143		—		9,165		—

10) Write-downs of Securities	1,506		551		1,930		1,253		1,468		1,295		1,236
11) Foreign Currency Transaction (Gain) Loss, Net	548		(74	)	397		706		(172	)	531		470

Total Expenses	147,914		150,443		150,144		186,653		161,752		183,991		174,052

Operating Income	21,009		23,173		22,899		16,897		31,124		25,484		35,500
Equity in Net Income of Affiliates	3,384		8,539		2,707		3,294		4,754		5,011		8,038
Gains (Losses) on Sales of Affiliates	—		(396	)	(136	)	(10	)	839		1,963		745
Income before Discontinued Operations, Extraordinary Gain and Income Taxes	24,393		31,316		25,470		20,181		36,717		32,458		44,283
Provision for Income Taxes	11,199		14,842		11,818		13,356		16,125		14,154		20,158
Income from Continuing Operations	13,194		16,474		13,652		6,825		20,592		18,304		24,125
Discontinued Operations, Net of Applicable Tax Effect	904		604		821		937		2,935		857		905
Extraordinary Gain, Net of Applicable Tax Effect	—		243		—		366		—		—		—

Net Income	14,098		17,321		14,473		8,128		23,527		19,161		25,030


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)		Q3 (04/10-12)
Return on Equity (ROE)*	10.9	%	13.0	%	10.6	%	5.8	%	16.2	%	12.6	%	15.9	%
Return on Assets (ROA)*	0.95	%	1.19	%	1.02	%	0.58	%	1.67	%	1.35	%	1.73	%
Shareholders’ Equity Ratio	8.9	%	9.5	%	9.7	%	10.0	%	10.5	%	10.8	%	10.9	%
Debt-to-Equity Ratio (times)	8.0		7.4		7.1		6.8		6.5		6.3		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		7,642.86
Basic EPS (yen)	168.45		206.96		172.94		97.14		281.05		228.73		298.51
Diluted EPS (yen)	157.07		192.06		160.72		91.33		258.14		211.02		274.02
Number of Employees	11,621		11,723		12,698		12,481		14,917		15,184		15,699

*	annualized

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	(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)	Q3 (04/10-12)
Operations in Japan
Corporate Financial Services	30,993		33,269		31,086	33,007		33,865	35,416	34,908
Rental Operations	16,980		17,717		18,647	21,026		20,377	21,678	19,729
Real Estate-Related Finance	10,937		13,011		14,723	16,121		16,538	20,838	24,342
Real Estate	37,239		29,921		35,429	40,862		37,238	33,128	35,028
Life Insurance	30,590		33,973		27,978	40,850		30,260	36,046	30,721
Other	16,231		16,398		18,614	22,743		32,772	34,650	35,133

Sub-Total	142,970		144,289		146,477	174,609		171,050	181,756	179,861

Overseas Operations
The Americas	11,313		11,916		10,336	13,729		10,086	12,836	12,063
Asia and Oceania	12,857		13,814		12,831	14,192		13,004	13,632	14,642
Europe	2,606		2,721		3,133	2,248		2,265	2,780	2,638

Sub-Total	26,776		28,451		26,300	30,169		25,355	29,248	29,343

Total Segment Revenues	169,746		172,740		172,777	204,778		196,405	211,004	209,204

Operations in Japan
Corporate Financial Services	9,345		12,574		11,592	10,276		13,040	14,312	16,160
Rental Operations	1,520		1,936		2,072	3,814		2,302	3,579	2,724
Real Estate-Related Finance	3,018		6,101		4,412	4,571		4,906	9,804	5,056
Real Estate	8,160		(1,831	)	1,722	(1,807	)	6,515	1,496	4,510
Life Insurance	(392	)	2,899		1,834	1,041		1,879	2,113	1,773
Other	1,177		1,651		2,253	4,998		6,374	5,426	4,486

Sub-Total	22,828		23,330		23,885	22,893		35,016	36,730	34,709

Overseas Operations
The Americas	2,131		1,781		2,123	1,566		1,210	3,515	7,482
Asia and Oceania	4,204		9,735		2,446	1,463		5,679	4,229	6,189
Europe	(258	)	(1,641	)	454	193		255	770	395

Sub-Total	6,077		9,875		5,023	3,222		7,144	8,514	14,066

*Total Segment Profits (Income before Income Taxes)**	28,905		33,205		28,908	26,115		42,160	45,244	48,775

Operations in Japan
Corporate Financial Services	1,910,425		1,845,251		1,878,794	1,806,686		1,841,124	1,878,231	1,957,302
Rental Operations	142,189		140,987		141,932	147,231		143,350	148,535	146,109
Real Estate-Related Finance	932,999		879,964		901,501	909,019		929,378	944,867	1,045,373
Real Estate	295,663		275,967		283,227	309,558		315,257	321,126	337,892
Life Insurance	592,987		570,013		533,708	582,473		561,819	565,021	572,742
Other	395,184		406,076		412,459	412,505		419,110	421,744	416,146

Sub-Total	4,269,447		4,118,258		4,151,621	4,167,472		4,210,038	4,279,524	4,475,564

Overseas Operations
The Americas	604,167		541,036		517,134	472,595		451,032	446,231	427,689
Asia and Oceania	461,345		434,584		419,775	413,041		412,171	442,765	442,427
Europe	70,657		64,524		57,298	56,634		55,550	56,661	45,152

Sub-Total	1,136,169		1,040,144		994,207	942,270		918,753	945,657	915,268

Total Segment Assets	5,405,616		5,158,402		5,145,828	5,109,742		5,128,791	5,225,181	5,390,832

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

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