(Indicate by check mark whether the registrant files or will file annual reports under cover of Form
20-F
or 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.)
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: January 30, 2018
|
|
By
|
|
/s/ Kazuo Kojima
|
|
|
|
|
Kazuo Kojima
|
|
|
|
|
Director
|
|
|
|
|
Deputy President & CFO
|
|
|
|
|
ORIX Corporation
|
Consolidated Financial Results
April 1, 2017 December 31, 2017
January 30,
2018
In preparing its consolidated financial information, ORIX Corporation (the Company) and its subsidiaries have
complied with generally accepted accounting principles in the United States of America.
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 Companys annual report on Form
20-F
filed with the United States Securities and Exchange Commission.
The Company believes that
it may have been a passive foreign investment company for U.S. federal income tax purposes in the year to which these consolidated financial results relate by reason of the composition of its assets and the nature of its income. In
addition, the Company may be a PFIC for the foreseeable future. Assuming that the Company is a PFIC, a U.S. holder of the shares or ADSs of the Company will be subject to special rules generally intended to eliminate any benefits from the deferral
of U.S. federal income tax that a holder could derive from investing in a foreign corporation that does not distribute all of its earnings on a current basis. Investors should consult their tax advisors with respect to such rules, which are
summarized in the Companys annual report.
For further information please contact:
Investor Relations
ORIX Corporation
World Trade Center Building,
2-4-1
Hamamatsu-cho,
Minato-ku,
Tokyo
105-6135
JAPAN
Tel:
+81-3-3435-3121
Fax:
+81-3-3435-3154
E-mail:
orix_corpcomm@orix.jp
- 1 -
Consolidated Financial Results from April 1, 2017 to December 31, 2017
(U.S. GAAP Financial Information for ORIX Corporation and its Subsidiaries)
|
|
|
Corporate Name:
|
|
ORIX Corporation
|
Listed Exchanges:
|
|
Tokyo Stock Exchange (Securities No. 8591)
|
|
|
New York Stock Exchange (Trading Symbol : IX)
|
Head Office:
|
|
Tokyo JAPAN
|
|
|
Tel:
+81-3-3435-3121
|
|
|
(URL http://www.orix.co.jp/grp/en/ir/index.html)
|
1. Performance Highlights as of and for the Nine Months Ended December 31, 2017
(1) Performance Highlights - Operating Results (Unaudited)
(millions of yen)*1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Revenues
|
|
|
Year-on-Year
Change
|
|
|
Operating
Income
|
|
|
Year-on-Year
Change
|
|
|
Income before
Income Taxes
|
|
|
Year-on-Year
Change
|
|
|
Net Income
Attributable to
ORIX Corporation
Shareholders
|
|
|
Year-on-Year
Change
|
|
December 31, 2017
|
|
|
2,194,882
|
|
|
|
14.0
|
%
|
|
|
273,282
|
|
|
|
10.4
|
%
|
|
|
360,488
|
|
|
|
7.9
|
%
|
|
|
256,391
|
|
|
|
18.1
|
%
|
December 31, 2016
|
|
|
1,925,769
|
|
|
|
7.2
|
%
|
|
|
247,567
|
|
|
|
(2.0
|
%)
|
|
|
334,096
|
|
|
|
(0.2
|
%)
|
|
|
217,118
|
|
|
|
0.8
|
%
|
Comprehensive Income Attributable to ORIX Corporation Shareholders was ¥272,442 million
for the nine months ended December 31, 2017
(year-on-year
change was a 46.8% increase) and ¥185,536 million for the nine months ended December 31,
2016
(year-on-year
change was a 4.6% decrease).
|
|
|
|
|
|
|
|
|
|
|
Basic
Earnings Per Share
|
|
|
Diluted
Earnings Per Share
|
|
December 31, 2017
|
|
|
200.05
|
|
|
|
199.86
|
|
December 31, 2016
|
|
|
165.89
|
|
|
|
165.74
|
|
*Note 1:
|
Unless otherwise stated, all amounts shown herein are in millions of Japanese yen, except for per share and
dividend amounts which are in single yen.
|
(2) Performance Highlights - Financial Position (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
|
Total
Equity
|
|
|
Shareholders
Equity
|
|
|
Shareholders
Equity Ratio
|
|
December 31, 2017
|
|
|
11,551,918
|
|
|
|
2,806,396
|
|
|
|
2,667,906
|
|
|
|
23.1
|
%
|
March 31, 2017
|
|
|
11,231,895
|
|
|
|
2,647,625
|
|
|
|
2,507,698
|
|
|
|
22.3
|
%
|
*Note 2:
|
Shareholders Equity refers to Total ORIX Corporation Shareholders Equity.
|
Shareholders Equity Ratio is the ratio of Total ORIX Corporation
Shareholders Equity to Total Assets.
2. Dividends (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
Quarter-end
|
|
|
Second
Quarter-end
|
|
|
Third
Quarter-end
|
|
|
Year-end
|
|
|
Total
|
|
March 31, 2017
|
|
|
|
|
|
|
23.00
|
|
|
|
|
|
|
|
29.25
|
|
|
|
52.25
|
|
March 31, 2018
|
|
|
|
|
|
|
27.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2018 (Est.)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Note 3:
|
Estimated dividend amount for the fiscal year ending March 31, 2018 has not yet been determined.
|
For details of dividend payout ratio forecast for the fiscal year ending March 31, 2018, please
refer to Announcement Regarding Interim Dividend and Dividend Payout Ratio for the Fiscal Year Ending March 31, 2018 announced on October 30, 2017.
3. Targets for the Year Ending March 31, 2018 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Net Income
Attributable to
ORIX Corporation Shareholders
|
|
|
Year-on-Year
Change
|
|
March 31, 2018
|
|
|
300,000
|
|
|
|
9.8
|
%
|
4. Other Information
|
|
|
|
|
(1) Changes in Significant Consolidated Subsidiaries
|
|
|
Yes ( ) No ( x )
|
|
|
|
Addition - None
( )
|
|
|
Exclusion - None
( )
|
|
|
|
(2) Adoption of Simplified Accounting Method
|
|
|
Yes ( ) No ( x )
|
|
|
(3) Changes in Accounting Principles, Procedures and Disclosures
|
|
|
|
1. Changes due to adoptions of new accounting standards
|
|
|
Yes ( ) No ( x )
|
|
|
|
2. Other than those above
|
|
|
Yes ( ) No ( x )
|
|
(4) Number of Issued Shares (Ordinary Shares)
1. The number of issued shares, including treasury shares, was 1,324,285,528 as of December 31, 2017, and 1,324,107,328 as of
March 31, 2017.
2. The number of treasury shares was 42,843,313 as of December 31, 2017, and 19,394,191 as of March 31,
2017.
3. The average number of outstanding shares was 1,281,625,426 for the nine months ended December 31, 2017, and 1,308,792,220
for the nine months ended December 31, 2016.
The Companys shares held through the Board Incentive Plan Trust (1,962,243 shares
as of December 31, 2017 and 2,126,076 shares as of March 31, 2017) are not included in the number of treasury shares as of the end of the periods, but are included in the average number of shares outstanding as treasury stock shares that
are deducted from the basis of the calculation of per share data.
- 2 -
1. Summary of Consolidated Financial Results
(1) Financial Highlights
Financial Results for the
Nine Months Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months
ended December 31,
2016
|
|
|
Nine months
ended December 31,
2017
|
|
|
Change
|
|
|
|
|
|
Amount
|
|
|
Percent
|
|
Total Revenues
|
|
(millions of yen)
|
|
|
1,925,769
|
|
|
|
2,194,882
|
|
|
|
269,113
|
|
|
|
14
|
%
|
Total Expenses
|
|
(millions of yen)
|
|
|
1,678,202
|
|
|
|
1,921,600
|
|
|
|
243,398
|
|
|
|
15
|
%
|
Income before Income Taxes
|
|
(millions of yen)
|
|
|
334,096
|
|
|
|
360,488
|
|
|
|
26,392
|
|
|
|
8
|
%
|
Net Income Attributable to ORIX Corporation Shareholders
|
|
(millions of yen)
|
|
|
217,118
|
|
|
|
256,391
|
|
|
|
39,273
|
|
|
|
18
|
%
|
Earnings Per Share (Basic)
|
|
(yen)
|
|
|
165.89
|
|
|
|
200.05
|
|
|
|
34.16
|
|
|
|
21
|
%
|
(Diluted)
|
|
(yen)
|
|
|
165.74
|
|
|
|
199.86
|
|
|
|
34.12
|
|
|
|
21
|
%
|
ROE (Annualized) *1
|
|
(%)
|
|
|
12.2
|
|
|
|
13.2
|
|
|
|
1.0
|
|
|
|
|
|
ROA (Annualized) *2
|
|
(%)
|
|
|
2.62
|
|
|
|
3.00
|
|
|
|
0.38
|
|
|
|
|
|
*Note 1:
|
ROE is the ratio of Net Income Attributable to ORIX Corporation Shareholders for the period to average ORIX
Corporation Shareholders Equity.
|
*Note 2:
|
ROA is calculated based on Net Income Attributable to ORIX Corporation Shareholders.
|
Overview of Business Performance (April 1, 2017 to December 31, 2017)
Total revenues for the nine months ended December 31, 2017 (hereinafter, the third consolidated period) increased 14% to
¥2,194,882 million compared to ¥1,925,769 million during the same period of the previous fiscal year. Life insurance premiums and related investment income in the life insurance business increased due to an increase in life
insurance premiums from an increase in
in-force
policies, and an increase in investment income from assets under variable annuity and variable life insurance contracts following the markets recovery. In
addition, sales of goods and real estate increased due primarily to revenues generated by subsidiaries in the principal investment business, and services income increased due primarily to service expansion in the asset management business and the
environment and energy business.
Total expenses increased 15% to ¥1,921,600 million compared to ¥1,678,202 million
during the same period of the previous fiscal year. Life insurance costs increased due to an increase in a provision of liability reserve in line with the aforementioned increase in
in-force
policies and an
increase in investment income. In addition, costs of goods and real estate sold and services expense increased in line with the aforementioned increased revenues.
Equity in net income of affiliates increased due mainly to the recognition of significant gains on sales of investments in real estate joint
ventures. Gains on sales of subsidiaries and affiliates and liquidation losses, net decreased compared to the same period of the previous fiscal year due to significant gains on sales of subsidiaries and affiliates recorded during the previous
fiscal year.
As a result of the foregoing, income before income taxes for the third consolidated period increased 8% to
¥360,488 million compared to ¥334,096 million during the same period of the previous fiscal year. In addition, due to the impact from tax reform in the United States, net income attributable to ORIX Corporation shareholders
increased 18% to ¥256,391 million compared to ¥217,118 million during the same period of the previous fiscal year.
- 3 -
Segment Information
Total segment profits for the third consolidated period increased 8% to ¥356,218 million compared to ¥329,115 million during
the same period of the previous fiscal year. While segment profits decreased in the Investment and Operation segment, segment profits for each of the other segments increased.
Segment information for the third consolidated period is as follows:
Corporate Financial Services Segment
:
Loan, leasing and fee business
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months
ended December 31,
2016
(millions of yen)
|
|
|
Nine months
ended December 31,
2017
(millions of yen)
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount
(millions of yen)
|
|
|
Percent
(%)
|
|
Segment Revenues
|
|
|
|
|
|
|
75,546
|
|
|
|
86,091
|
|
|
|
10,545
|
|
|
|
14
|
|
Segment Profits
|
|
|
|
|
|
|
26,314
|
|
|
|
37,551
|
|
|
|
11,237
|
|
|
|
43
|
|
|
|
|
|
|
|
|
|
|
|
As of
March 31,
2017
(millions of yen)
|
|
|
As of
December 31,
2017
(millions of yen)
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount
(millions of yen)
|
|
|
Percent
(%)
|
|
Segment Assets
|
|
|
|
|
|
|
1,032,152
|
|
|
|
966,914
|
|
|
|
(65,238
|
)
|
|
|
(6
|
)
|
The Japanese economy on the whole entered a moderate recovery phase. The balance of outstanding loans at
financial institutions continues to increase while interest rates on loans remain at low levels.
Segment revenues increased 14% to
¥86,091 million compared to ¥75,546 million during the same period of the previous fiscal year due to an increase in gains on sales of securities, an increase in services income resulting from our stable fee businesses provided to
domestic small- and
medium-sized
enterprise customers and from revenue generated by Yayoi Co. Ltd, despite a decrease in finance revenues from decreases in investment in direct financing leases and installment
loans.
Segment expenses decreased due to a decrease in interest expense.
As a result of the foregoing, segment profits increased 43% to ¥37,551 million compared to ¥26,314 million during the same
period of the previous fiscal year.
Segment assets decreased 6% to ¥966,914 million compared to the end of the previous fiscal
year due to decreases in investment in direct financing leases, installment loans and investment in securities.
- 4 -
Maintenance Leasing Segment
:
Automobile leasing and rentals,
car-sharing,
and test and measurement instruments and
IT-related
equipment rentals and leasing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months
ended December 31,
2016
(millions of yen)
|
|
|
Nine months
ended December 31,
2017
(millions of yen)
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
Amount
(millions of yen)
|
|
|
Percent
(%)
|
|
Segment Revenues
|
|
|
202,657
|
|
|
|
207,085
|
|
|
|
4,428
|
|
|
|
2
|
|
Segment Profits
|
|
|
28,642
|
|
|
|
31,085
|
|
|
|
2,443
|
|
|
|
9
|
|
|
|
|
|
|
|
As of
March 31,
2017
(millions of yen)
|
|
|
As of
December 31,
2017
(millions of yen)
|
|
|
Change
|
|
|
|
|
|
|
|
|
Amount
(millions of yen)
|
|
|
Percent
(%)
|
|
Segment Assets
|
|
|
752,513
|
|
|
|
780,548
|
|
|
|
28,035
|
|
|
|
4
|
|
Demand in corporate capital investment has been gradually increasing. The volume of new auto-leases is
gradually increasing due to moderate economic recovery in Japan.
Segment revenues increased 2% to ¥207,085 million compared to
¥202,657 million during the same period of the previous fiscal year due to increases in finance revenues and operating leases revenues in line with an increased average segment asset balance in the automobile leasing business and an
increase in services income.
Segment expenses increased in line with the aforementioned revenue increases.
As a result of the foregoing, segment profits increased 9% to ¥31,085 million compared to ¥28,642 million during the same
period of the previous fiscal year.
Segment assets increased 4% to ¥780,548 million compared to the end of the previous fiscal
year due primarily to an increase in new auto-leases in the automobile leasing business.
Real Estate Segment
:
Real
estate development and rental, facility operation, REIT asset management, and real estate investment and advisory services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months
ended December 31,
2016
(millions of yen)
|
|
|
Nine months
ended December 31,
2017
(millions of yen)
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
Amount
(millions of yen)
|
|
|
Percent
(%)
|
|
Segment Revenues
|
|
|
153,243
|
|
|
|
138,632
|
|
|
|
(14,611
|
)
|
|
|
(10
|
)
|
Segment Profits
|
|
|
49,721
|
|
|
|
52,084
|
|
|
|
2,363
|
|
|
|
5
|
|
|
|
|
|
|
|
As of
March 31,
2017
(millions of yen)
|
|
|
As of
December 31,
2017
(millions of yen)
|
|
|
Change
|
|
|
|
|
|
|
|
|
Amount
(millions of yen)
|
|
|
Percent
(%)
|
|
Segment Assets
|
|
|
657,701
|
|
|
|
605,767
|
|
|
|
(51,934
|
)
|
|
|
(8
|
)
|
- 5 -
Land prices remain high and vacancy rates in the Japanese office building market remain at low
levels, especially in the Greater Tokyo Area due primarily to the quantitative easing policies implemented by the Bank of Japan, including the low interest rate environment. However, we are also seeing a trend where sales prices of condominiums are
no longer increasing. Changes in tourism preferences such as increased availability and usage of vacation rentals are affecting the operations of hotels and Japanese inns.
Segment revenues decreased 10% to ¥138,632 million compared to ¥153,243 million during the same period of the previous
fiscal year due primarily to a decrease in operating leases revenues in line with a decrease in gains on sales of rental property in Japan and a decrease in asset balance in operating leases, partially offset by an increase in services income from
facilities operations.
Segment expenses increased compared to the same period of the previous fiscal year due primarily to an increase in
services expense from facilities operations.
As a result of the foregoing and due to an increase in equity in net income of affiliates in
line with the recognition of significant gains on sales of investments in real estate joint ventures, segment profits increased 5% to ¥52,084 million compared to ¥49,721 million during the same period of the previous fiscal year.
Segment assets decreased 8% to ¥605,767 million compared to the end of the previous fiscal year due primarily to a decrease in
investment in operating leases, which resulted from sales of rental properties.
Investment and Operation Segment
:
Environment and energy, principal investment, loan servicing (asset recovery), and concession
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months
ended December 31,
2016
(millions of yen)
|
|
|
Nine months
ended December 31,
2017
(millions of yen)
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
Amount
(millions of yen)
|
|
|
Percent
(%)
|
|
Segment Revenues
|
|
|
870,404
|
|
|
|
1,073,655
|
|
|
|
203,251
|
|
|
|
23
|
|
Segment Profits
|
|
|
68,783
|
|
|
|
62,648
|
|
|
|
(6,135
|
)
|
|
|
(9
|
)
|
|
|
|
|
|
|
As of
March 31,
2017
(millions of yen)
|
|
|
As of
December 31,
2017
(millions of yen)
|
|
|
Change
|
|
|
|
|
|
|
|
|
Amount
(millions of yen)
|
|
|
Percent
(%)
|
|
Segment Assets
|
|
|
768,675
|
|
|
|
870,257
|
|
|
|
101,582
|
|
|
|
13
|
|
Investment in infrastructure, especially energy infrastructure, is diversifying in Japan. In the energy
business, among renewable energy, investment is expanding beyond solar power to wind and geothermal power. In addition, business structures are diversifying. In infrastructure investment markets, the use of private funds is expanding within public
facilities management. In emerging countries, infrastructure demand is growing rapidly with economic growth, and Japanese companies are expected to increase infrastructure investment.
Segment revenues increased 23% to ¥1,073,655 million compared to ¥870,404 million during the same period of the previous
fiscal year due to increases in sales of goods from subsidiaries in the principal investment business and services income from the environment and energy business.
Segment expenses increased compared to the same period of the previous fiscal year in line with the aforementioned revenues expansion.
On the other hand, due to the recognition of significant gains on sales of shares of an affiliate during the same period of the previous
fiscal year, segment profits decreased 9% to ¥62,648 million compared to ¥68,783 million during the same period of the previous fiscal year.
- 6 -
Segment assets increased 13% to ¥870,257 million compared to the end of the previous
fiscal year due primarily to a new large-scale investment in affiliates in the environment and energy business.
Retail
Segment
:
Life insurance, banking and card loan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months
ended December 31,
2016
(millions of yen)
|
|
|
Nine months
ended December 31,
2017
(millions of yen)
|
|
|
Change
|
|
|
|
|
|
|
|
|
Amount
(millions of yen)
|
|
|
Percent
(%)
|
|
Segment Revenues
|
|
|
274,708
|
|
|
|
336,381
|
|
|
|
61,673
|
|
|
|
22
|
|
Segment Profits
|
|
|
60,055
|
|
|
|
63,274
|
|
|
|
3,219
|
|
|
|
5
|
|
|
|
|
|
|
|
As of
March 31,
2017
(millions of yen)
|
|
|
As of
December 31,
2017
(millions of yen)
|
|
|
Change
|
|
|
|
|
|
|
|
|
Amount
(millions of yen)
|
|
|
Percent
(%)
|
|
Segment Assets
|
|
|
3,291,631
|
|
|
|
3,212,749
|
|
|
|
(78,882
|
)
|
|
|
(2
|
)
|
While the life insurance business in Japan is currently affected by macroeconomic factors such as domestic
population decline, we are seeing a rise in demand for medical insurance. Companies are developing new products and revising insurance premiums which reflect the performance of related products. In the card loan business for individuals and the
mortgage business, some lenders are refraining from expanding their assets due to an overheating business environment.
Segment revenues
increased 22% to ¥336,381 million compared to ¥274,708 million during the same period of the previous fiscal year due mainly to an increase in life insurance premiums in line with an increase in
in-force
policies, and an increase in investment income from assets under variable annuity and variable life insurance contracts in the life insurance business following the markets recovery.
Segment expenses increased compared to the same period of the previous fiscal year due to an increase in a provision of liability reserve in
line with the aforementioned increase in
in-force
policies and an increase in investment income.
As a result of the foregoing, segment profits increased 5% to ¥63,274 million compared to ¥60,055 million during the same
period of the previous fiscal year.
Segment assets decreased 2% to ¥3,212,749 million compared to the end of the previous fiscal
year due primarily to sales of investment in securities as well as the surrender of variable annuity and variable life insurance contracts in the life insurance business, which offset an increase in installment loans in the banking business.
- 7 -
Overseas Business Segment
:
Leasing, loan, bond investment, asset management
and aircraft and ship-related operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months
ended December 31,
2016
(millions of yen)
|
|
|
Nine months
ended December 31,
2017
(millions of yen)
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
Amount
(millions of yen)
|
|
|
Percent
(%)
|
|
Segment Revenues
|
|
|
351,733
|
|
|
|
358,340
|
|
|
|
6,607
|
|
|
|
2
|
|
Segment Profits
|
|
|
95,600
|
|
|
|
109,576
|
|
|
|
13,976
|
|
|
|
15
|
|
|
|
|
|
|
|
As of
March 31,
2017
(millions of yen)
|
|
|
As of
December 31,
2017
(millions of yen)
|
|
|
Change
|
|
|
|
|
|
|
|
|
Amount
(millions of yen)
|
|
|
Percent
(%)
|
|
Segment Assets
|
|
|
2,454,200
|
|
|
|
2,756,502
|
|
|
|
302,302
|
|
|
|
12
|
|
The U.S. economy has continued to recover with improvements in employment and income environment; other
regions have also experienced moderate recovery. Although interest rates remain low worldwide, the scaling back of quantitative easing policies are likely in advanced nations. The asset management industry is expected to increase assets under
management due to the increase in pension assets and the high-income class population over the
mid-
and long-term. The aviation industry is expected to continue to expand its market size against the backdrop
of increasing passenger demand mainly in emerging countries. In addition, there are political and geopolitical tensions in certain regions that need to be monitored carefully.
Segment revenues increased 2% to ¥358,340 million compared to ¥351,733 million during the same period of the previous fiscal
year due to increases in services income in the asset management business and operating leases revenues in our aircraft-related operations in line with an increase in gains on sales of aircraft, despite a decrease in sales of goods resulting from
the sale of a subsidiary during the previous fiscal year.
Segment expenses decreased compared to the same period of the previous fiscal
year due primarily to a decrease in costs of goods sold resulting from the aforementioned sale of a subsidiary.
As a result of the
foregoing, segment profits increased 15% to ¥109,576 million compared to ¥95,600 million in the same period of the previous fiscal year.
Segment assets increased 12% to ¥2,756,502 million compared to the end of the previous fiscal year due to increases in investment in
operating leases in our aircraft-related operations, installment loans in the Americas and Asia, and the recognition of goodwill and other intangible assets in line with investment in a new subsidiary, offset by a decrease in investment in
securities.
- 8 -
(2) Consolidated Financial Condition
Summary of Assets, Liabilities, Shareholders Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
March 31,
2017
|
|
|
As of
December 31,
2017
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
Amount
|
|
|
Percent
|
|
Total Assets
|
|
(millions of yen)
|
|
|
11,231,895
|
|
|
|
11,551,918
|
|
|
|
320,023
|
|
|
|
3
|
%
|
(Segment Assets)
|
|
|
|
|
8,956,872
|
|
|
|
9,192,737
|
|
|
|
235,865
|
|
|
|
3
|
%
|
Total Liabilities
|
|
(millions of yen)
|
|
|
8,577,722
|
|
|
|
8,738,720
|
|
|
|
160,998
|
|
|
|
2
|
%
|
(Long- and Short-term Debt)
|
|
|
|
|
4,138,451
|
|
|
|
4,249,576
|
|
|
|
111,125
|
|
|
|
3
|
%
|
(Deposits)
|
|
|
|
|
1,614,608
|
|
|
|
1,745,058
|
|
|
|
130,450
|
|
|
|
8
|
%
|
Shareholders Equity
|
|
(millions of yen)
|
|
|
2,507,698
|
|
|
|
2,667,906
|
|
|
|
160,208
|
|
|
|
6
|
%
|
Shareholders Equity Per Share
|
|
(yen)
|
|
|
1,925.17
|
|
|
|
2,085.15
|
|
|
|
159.98
|
|
|
|
8
|
%
|
Note:
|
Shareholders Equity refers to ORIX Corporation Shareholders Equity based on U.S. GAAP.
Shareholders Equity Per Share is calculated using total ORIX Corporation Shareholders Equity.
|
Total assets
increased 3% to ¥11,551,918 million compared to ¥11,231,895 million at the end of the previous fiscal year. Investment in securities decreased due primarily to sales of investment in securities as well as the surrender of variable
annuity and variable life insurance contracts in the life insurance business. On the other hand, installment loans increased due primarily to an increase in the banking business in Japan, and investment in affiliates increased due primarily to a new
large-scale investment in the environment and energy business. Segment assets increased 3% to ¥9,192,737 million compared to the end of the previous fiscal year.
We manage the balance of our interest-bearing liabilities at an appropriate level taking into account the condition of our assets and
liquidity
on-hand
as well as the domestic and overseas financial environments. As a result, long- and short-term debt and deposits increased compared to the end of the previous fiscal year. In addition, policy
liabilities and policy account balances decreased due to the surrender of variable annuity and variable life insurance contracts.
Shareholders equity increased 6% to ¥2,667,906 million compared to the end of the previous fiscal year due primarily to an
increase in retained earnings, despite a decrease due to share repurchases.
(3) Medium-Term Management Targets FY2016-2018
ORIX continues to provide innovative and flexible solutions to address changes in the market environment and customer needs. ORIXs
diversified business portfolio consists of six business segments: Corporate Financial Services, Maintenance Leasing, Real Estate, Investment and Operation, Retail, and Overseas Business. These business segments are closely integrated with each other
to create greater value through sharing
know-how
and expertise.
ORIX, using its diversified
business portfolio as a basis, intends to capitalize on its business foundation, client base, industry
know-how
and accumulated expertise, to continuously improve profitability by providing high value-added
services to the market. Furthermore, under our
mid-term
strategy of Expansion in
Non-Finance
Business, ORIX aims to achieve sustainable profit growth.
Our strategy of Expansion in
Non-Finance
Business consists of Organic growth
and New investment in key areas. With these principles, we will pursue new business arising from the changing business environment.
Organic growth: Deepen our strengths and expertise to further expand our existing operations both in Japan and abroad. Those in
Japan include fee business, automobile-related business, facility operation business, and life insurance business. Those abroad include automobile-related business, and further diversification towards
non-finance
business.
New investment in key areas: Continue to pursue new investment
opportunities in key areas identified as the environment and energy business and private equity investment in Japan and abroad, the network in Asia, global asset management and concession business.
- 9 -
The Company aims to achieve ¥300 billion in net income and ROE around 11% to 12% for the
fiscal year ending March 31, 2018.
Although forward-looking statements in this document are attributable to current information
available to ORIX Corporation and are based on assumptions deemed reasonable by ORIX Corporation, actual financial results may differ materially due to various factors. Readers are urged not to place undue reliance on such forward-looking
statements.
Factors causing a result that differs from forward-looking statements include, but are not limited to, those described under
Risk Factors in our Form
20-F
submitted to the U.S. Securities and Exchange Commission.
- 10 -
2. Financial Information
(1) Condensed Consolidated Balance Sheets (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of yen)
|
|
|
|
|
|
|
As of
March 31,
2017
|
|
|
As of
December 31,
2017
|
|
Assets
|
|
|
Cash and Cash Equivalents
|
|
|
1,039,870
|
|
|
|
1,232,874
|
|
Restricted Cash
|
|
|
93,342
|
|
|
|
90,680
|
|
Investment in Direct Financing Leases
|
|
|
1,204,024
|
|
|
|
1,214,118
|
|
Installment Loans
|
|
|
2,815,706
|
|
|
|
2,872,025
|
|
The amounts which are measured at fair value by electing the fair value option are as
follows:
|
|
|
|
|
|
|
|
|
March 31, 2017
|
|
¥19,232 million
|
|
|
|
|
|
|
|
|
December 31, 2017
|
|
¥31,980 million
|
|
|
|
|
|
|
|
|
Allowance for Doubtful Receivables on Direct Financing Leases and Probable Loan
Losses
|
|
|
(59,227
|
)
|
|
|
(55,713
|
)
|
Investment in Operating Leases
|
|
|
1,313,164
|
|
|
|
1,346,466
|
|
Investment in Securities
|
|
|
2,026,512
|
|
|
|
1,834,645
|
|
The amounts which are measured at fair value by electing the fair value option are as
follows:
|
|
|
|
|
|
|
|
|
March 31, 2017
|
|
¥24,894 million
|
|
|
|
|
|
|
|
|
December 31, 2017
|
|
¥39,277 million
|
|
|
|
|
|
|
|
|
Property under Facility Operations
|
|
|
398,936
|
|
|
|
408,140
|
|
Investment in Affiliates
|
|
|
524,234
|
|
|
|
588,376
|
|
Trade Notes, Accounts and Other Receivable
|
|
|
283,427
|
|
|
|
308,128
|
|
Inventories
|
|
|
117,863
|
|
|
|
137,909
|
|
Office Facilities
|
|
|
110,781
|
|
|
|
109,845
|
|
Other Assets
|
|
|
1,363,263
|
|
|
|
1,464,425
|
|
The amounts which are measured at fair value by electing the fair value option are as
follows:
|
|
|
|
|
|
|
|
|
March 31, 2017
|
|
¥22,116 million
|
|
|
|
|
|
|
|
|
December 31, 2017
|
|
¥12,834 million
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
|
11,231,895
|
|
|
|
11,551,918
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
Short-Term Debt
|
|
|
283,467
|
|
|
|
358,570
|
|
Deposits
|
|
|
1,614,608
|
|
|
|
1,745,058
|
|
Trade Notes, Accounts and Other Payable
|
|
|
251,800
|
|
|
|
210,031
|
|
Policy Liabilities and Policy Account Balances
|
|
|
1,564,758
|
|
|
|
1,524,532
|
|
The amounts which are measured at fair value by electing the fair value option are as
follows:
|
|
|
|
|
|
|
|
|
March 31, 2017
|
|
¥605,520 million
|
|
|
|
|
|
|
|
|
December 31, 2017
|
|
¥487,136 million
|
|
|
|
|
|
|
|
|
Current and Deferred Income Taxes
|
|
|
445,712
|
|
|
|
393,207
|
|
Long-Term Debt
|
|
|
3,854,984
|
|
|
|
3,891,006
|
|
Other Liabilities
|
|
|
562,393
|
|
|
|
616,316
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
8,577,722
|
|
|
|
8,738,720
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable Noncontrolling Interests
|
|
|
6,548
|
|
|
|
6,802
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and Contingent Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock
|
|
|
220,524
|
|
|
|
220,724
|
|
Additional
Paid-in
Capital
|
|
|
268,138
|
|
|
|
267,319
|
|
Retained Earnings
|
|
|
2,077,474
|
|
|
|
2,261,107
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
|
(21,270
|
)
|
|
|
(5,219
|
)
|
Treasury Stock, at Cost
|
|
|
(37,168
|
)
|
|
|
(76,025
|
)
|
|
|
|
|
|
|
|
|
|
Total ORIX Corporation Shareholders Equity
|
|
|
2,507,698
|
|
|
|
2,667,906
|
|
Noncontrolling Interests
|
|
|
139,927
|
|
|
|
138,490
|
|
|
|
|
|
|
|
|
|
|
Total Equity
|
|
|
2,647,625
|
|
|
|
2,806,396
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Equity
|
|
|
11,231,895
|
|
|
|
11,551,918
|
|
|
|
|
|
|
|
|
|
|
- 11 -
|
|
|
|
|
|
|
|
|
|
|
Note
: Breakdowns of Accumulated Other Comprehensive
Income (Loss)
|
|
|
|
|
|
|
|
|
As of
March 31,
2017
|
|
|
As of
December 31,
2017
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
|
|
|
|
|
|
|
Net unrealized gains on investment in securities
|
|
|
32,279
|
|
|
|
22,402
|
|
Defined benefit pension plans
|
|
|
(17,330
|
)
|
|
|
(17,915
|
)
|
Foreign currency translation adjustments
|
|
|
(31,736
|
)
|
|
|
(5,629
|
)
|
Net unrealized losses on derivative instruments
|
|
|
(4,483
|
)
|
|
|
(4,077
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
(21,270
|
)
|
|
|
(5,219
|
)
|
|
|
|
|
|
|
|
|
|
|
|
- 12 -
(2) Condensed Consolidated Statements of Income (Unaudited)
|
|
|
|
|
|
|
|
|
(millions of yen)
|
|
|
|
|
|
|
Nine months
ended
December 31, 2016
|
|
|
Nine months
ended
December 31, 2017
|
|
Revenues :
|
|
|
|
|
|
|
|
|
Finance revenues
|
|
|
147,894
|
|
|
|
160,915
|
|
Gains on investment securities and dividends
|
|
|
24,354
|
|
|
|
33,919
|
|
Operating leases
|
|
|
289,769
|
|
|
|
289,967
|
|
Life insurance premiums and related investment income
|
|
|
221,398
|
|
|
|
278,538
|
|
Sales of goods and real estate
|
|
|
695,616
|
|
|
|
836,689
|
|
Services income
|
|
|
546,738
|
|
|
|
594,854
|
|
|
|
|
|
|
|
|
|
|
Total Revenues
|
|
|
1,925,769
|
|
|
|
2,194,882
|
|
|
|
|
|
|
|
|
|
|
Expenses :
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
53,955
|
|
|
|
56,806
|
|
Costs of operating leases
|
|
|
181,417
|
|
|
|
188,777
|
|
Life insurance costs
|
|
|
147,467
|
|
|
|
205,030
|
|
Costs of goods and real estate sold
|
|
|
631,538
|
|
|
|
782,273
|
|
Services expense
|
|
|
332,299
|
|
|
|
358,724
|
|
Other (income) and expense, net
|
|
|
710
|
|
|
|
(1,096
|
)
|
Selling, general and administrative expenses
|
|
|
307,280
|
|
|
|
315,267
|
|
Provision for doubtful receivables and probable loan losses
|
|
|
12,371
|
|
|
|
11,960
|
|
Write-downs of long-lived assets
|
|
|
4,802
|
|
|
|
3,029
|
|
Write-downs of securities
|
|
|
6,363
|
|
|
|
830
|
|
|
|
|
|
|
|
|
|
|
Total Expenses
|
|
|
1,678,202
|
|
|
|
1,921,600
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
247,567
|
|
|
|
273,282
|
|
|
|
|
|
|
|
|
|
|
Equity in Net Income of Affiliates
|
|
|
25,811
|
|
|
|
46,289
|
|
Gains on Sales of Subsidiaries and Affiliates and Liquidation Losses, net
|
|
|
56,431
|
|
|
|
40,917
|
|
Bargain Purchase Gain
|
|
|
4,287
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
Income before Income Taxes
|
|
|
334,096
|
|
|
|
360,488
|
|
|
|
|
|
|
|
|
|
|
Provision for Income Taxes
|
|
|
110,212
|
|
|
|
98,934
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
|
223,884
|
|
|
|
261,554
|
|
|
|
|
|
|
|
|
|
|
Net Income Attributable to the Noncontrolling Interests
|
|
|
6,542
|
|
|
|
4,875
|
|
|
|
|
|
|
|
|
|
|
Net Income Attributable to the Redeemable Noncontrolling Interests
|
|
|
224
|
|
|
|
288
|
|
|
|
|
|
|
|
|
|
|
Net Income Attributable to ORIX Corporation Shareholders
|
|
|
217,118
|
|
|
|
256,391
|
|
|
|
|
|
|
|
|
|
|
- 13 -
(3) Condensed Consolidated Statements of Comprehensive Income (Unaudited)
|
|
|
|
|
|
|
|
|
(millions of yen)
|
|
|
|
|
|
|
Nine months
ended
December 31, 2016
|
|
|
Nine months
ended
December 31, 2017
|
|
Net Income :
|
|
|
223,884
|
|
|
|
261,554
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
Net change of unrealized gains (losses) on investment in securities
|
|
|
(16,872
|
)
|
|
|
(9,926
|
)
|
Net change of defined benefit pension plans
|
|
|
677
|
|
|
|
(583
|
)
|
Net change of foreign currency translation adjustments
|
|
|
(18,528
|
)
|
|
|
25,882
|
|
Net change of unrealized gains (losses) on derivative instruments
|
|
|
353
|
|
|
|
439
|
|
Total other comprehensive income (loss)
|
|
|
(34,370
|
)
|
|
|
15,812
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Income
|
|
|
189,514
|
|
|
|
277,366
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Income Attributable to the Noncontrolling Interests
|
|
|
3,479
|
|
|
|
4,587
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Income Attributable to the Redeemable Noncontrolling Interests
|
|
|
499
|
|
|
|
337
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Income Attributable to ORIX Corporation Shareholders
|
|
|
185,536
|
|
|
|
272,442
|
|
|
|
|
|
|
|
|
|
|
(4) Assumptions for Going Concern
There is no corresponding item.
(5)
Significant Changes in Shareholders Equity
There is no corresponding item.
- 14 -
(6) Segment Information (Unaudited)
1. Segment Information by Sector
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of yen)
|
|
|
|
|
|
|
|
|
Nine Months ended
December 31, 2016
|
|
|
Nine Months ended
December 31, 2017
|
|
|
March 31,
2017
|
|
|
December 31,
2017
|
|
|
|
Segment
Revenues
|
|
|
Segment
Profits
|
|
|
Segment
Revenues
|
|
|
Segment
Profits
|
|
|
Segment
Assets
|
|
|
Segment
Assets
|
|
Corporate Financial Services
|
|
|
75,546
|
|
|
|
26,314
|
|
|
|
86,091
|
|
|
|
37,551
|
|
|
|
1,032,152
|
|
|
|
966,914
|
|
Maintenance Leasing
|
|
|
202,657
|
|
|
|
28,642
|
|
|
|
207,085
|
|
|
|
31,085
|
|
|
|
752,513
|
|
|
|
780,548
|
|
Real Estate
|
|
|
153,243
|
|
|
|
49,721
|
|
|
|
138,632
|
|
|
|
52,084
|
|
|
|
657,701
|
|
|
|
605,767
|
|
Investment and Operation
|
|
|
870,404
|
|
|
|
68,783
|
|
|
|
1,073,655
|
|
|
|
62,648
|
|
|
|
768,675
|
|
|
|
870,257
|
|
Retail
|
|
|
274,708
|
|
|
|
60,055
|
|
|
|
336,381
|
|
|
|
63,274
|
|
|
|
3,291,631
|
|
|
|
3,212,749
|
|
Overseas Business
|
|
|
351,733
|
|
|
|
95,600
|
|
|
|
358,340
|
|
|
|
109,576
|
|
|
|
2,454,200
|
|
|
|
2,756,502
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Total
|
|
|
1,928,291
|
|
|
|
329,115
|
|
|
|
2,200,184
|
|
|
|
356,218
|
|
|
|
8,956,872
|
|
|
|
9,192,737
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Difference between Segment Total and Consolidated Amounts
|
|
|
(2,522
|
)
|
|
|
4,981
|
|
|
|
(5,302
|
)
|
|
|
4,270
|
|
|
|
2,275,023
|
|
|
|
2,359,181
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Amounts
|
|
|
1,925,769
|
|
|
|
334,096
|
|
|
|
2,194,882
|
|
|
|
360,488
|
|
|
|
11,231,895
|
|
|
|
11,551,918
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 1:
|
|
The Company evaluates the performance of segments based on income before income taxes, adjusted for net income
attributable to the noncontrolling interests and net income attributable to the redeemable noncontrolling interests before applicable tax effect. Tax expenses are not included in segment profits.
|
Note 2:
|
|
For those VIEs that are used for securitization and are consolidated, for which the VIEs assets can be used only
to settle related obligations of those VIEs and the creditors (or beneficial interest holders) do not have recourse to other assets of the Company or its subsidiaries, segment assets are measured based on the amount of the Company and its
subsidiaries net investments in the VIEs, which is different from the amount of total assets of the VIEs, and accordingly, segment revenues are also measured at a net amount representing the revenues earned on the net investments in the VIEs.
Certain gains or losses related to assets and liabilities of consolidated VIEs, which are not ultimately attributable to the Company and its subsidiaries, are excluded from segment profits.
|
Note 3:
|
|
Inter-segment transactions are included in segment revenues, and eliminations of inter-segment transactions are included
in the difference between segment total and consolidated amounts.
|
2. Geographic Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of yen)
|
|
|
|
|
|
Nine Months Ended December 31, 2016
|
|
|
|
Japan
|
|
|
The
Americas*1
|
|
|
Other*2
|
|
|
Consolidated
Amounts
|
|
Total Revenues
|
|
|
1,555,622
|
|
|
|
116,680
|
|
|
|
253,467
|
|
|
|
1,925,769
|
|
Income before Income Taxes
|
|
|
239,166
|
|
|
|
35,626
|
|
|
|
59,304
|
|
|
|
334,096
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of yen)
|
|
|
|
|
|
Nine Months Ended December 31, 2017
|
|
|
|
Japan
|
|
|
The
Americas*1
|
|
|
Other*2
|
|
|
Consolidated
Amounts
|
|
Total Revenues
|
|
|
1,822,281
|
|
|
|
83,738
|
|
|
|
288,863
|
|
|
|
2,194,882
|
|
Income before Income Taxes
|
|
|
247,489
|
|
|
|
37,778
|
|
|
|
75,221
|
|
|
|
360,488
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Note 1:
|
|
Mainly the United States
|
*Note 2:
|
|
Mainly Asia, Europe, Australasia and Middle East
|
Note 3:
|
|
ORIX Corporation Europe N.V., one of the Companys subsidiaries domiciled in the Netherlands, which has changed its
name from Robeco Groep N.V. on January 1, 2018, is a holding company owning asset management companies. Due to its customer base spread across the world, total revenues and income before income taxes of the company are included in
Other. Based on its legal entity location, revenues generated in the Americas were ¥71,914 million and ¥76,330 million and in Other were ¥56,102 million and ¥65,204 million for the nine months ended
December 31, 2016 and 2017, respectively.
|
- 15 -
(7) Subsequent Events
There are no material subsequent events.
- 16 -