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 August, 2007.

ORIX Corporation

(Translation of Registrant’s Name into English)

Mita NN Bldg., 4-1-23 Shiba, Minato-Ku,

Tokyo, 108-0014, 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 First Quarter Consolidated Financial Results (April 1, 2007 – June 30, 2007) filed with the Tokyo Stock Exchange on Thursday, August 9, 2007.

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: August 9, 2007	By	/s/ Yasuhiko Fujiki
		Yasuhiko Fujiki Director President, Chief Operating Officer and Chief Financial Officer ORIX Corporation

Consolidated Financial Results

April 1, 2007 – June 30, 2007

August 9, 2007

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 123.26 to $1.00, the approximate exchange rate prevailing at June 30, 2007.

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 believes that it will be considered a “passive foreign investment company” for United States Federal income tax purpose in the year to which these consolidated financial results relate and for the foreseeable future by reason of the composition of its assets and the nature of its income. A U.S. holder of the shares or ADSs of the Company is therefore 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 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: +81-3-5419-5102 Fax: +81-3-5419-5901

E-mail: raymond_spencer@orix.co.jp

Consolidated Financial Results from April 1, 2007 to June 30, 2007

(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: +81-3-5419-5102 (URL http://www.orix.co.jp/grp/ir_e/ir_index.htm)

1.	Performance Highlights for the Three Months Ended June 30, 2007 and 2006, and the Year Ended March 31, 2007

(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		Net Income	Year-on-Year Change
June 30, 2007	284,019	5.1	%	52,999	(23.5	%)	70,854	(10.3	)%	45,778	(2.8	)%
June 30, 2006	270,212	27.3	%	69,235	40.9	%	78,990	36.5	%	47,103	24.6	%
March 31, 2007	1,141,474	22.9	%	282,396	31.7	%	316,304	26.9	%	196,506	18.1	%


	Basic Earnings Per Share	Diluted Earnings Per Share
June 30, 2007	501.27	488.19
June 30, 2006	523.51	504.02
March 31, 2007	2,177.10	2,100.93

*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 Income Taxes, Minority Interests in Earnings of Subsidiaries, Discontinued Operations and Extraordinary Gain.”

(2)

Performance Highlights—Financial Position (Unaudited)


	Total Assets	Shareholders’ Equity	Shareholders’ Equity Ratio		Shareholders’ Equity Per Share
June 30, 2007	8,724,936	1,247,341	14.3	%	13,629.34
June 30, 2006	7,223,560	986,502	13.7	%	10,955.86
March 31, 2007	8,207,187	1,194,234	14.6	%	13,089.83

(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
June 30, 2007	(74,086	)	(395,447	)	442,426		189,223
June 30, 2006	116,129		(178,905	)	(33,282	)	149,498
March 31, 2007	226,128		(802,278	)	545,014		215,163

2.	Forecasts for the Year Ending March 31, 2008 (Unaudited)

Forecasts for the year ending March 31, 2008 have not been changed since the public release on May 10, 2007.

3.	Other Information


(1) Changes in Significant Consolidated Subsidiaries	Yes ( )	No ( x )

(2) Adoption of Simplified Accounting Method	Yes ( )	No ( x )

(3) Changes in Accounting Principles, Procedures and Disclosures	Yes ( )	No ( x )

[Summary of Consolidated Financial Results]

1.	Analysis of Results of Operations

Financial Highlights for the Three Months Ended June 30, 2007



Income before Income Taxes*		70,854 million yen (Down 10% year on year)
Net Income		45,778 million yen (Down 3% year on year)

Earnings Per Share (Basic)		501.27 yen (Down 4% year on year)
Earnings Per Share (Diluted)		488.19 yen (Down 3% year on year)
Shareholders’ Equity Per Share		13,629.34 yen (Up 4% on March 31, 2007)

ROE (Annualized)		15.0% (June 30, 2006: 19.4%)
ROA Annualized)		2.16% (June 30, 2006: 2.60%)

*	”Income before income taxes” refers to “income before income taxes, minority interests in earnings of subsidiaries, discontinued operations and extraordinary gain.”

Revenues: 284,019 million yen (Up 5% year on year)

Revenues increased 5% to 284,019 million yen compared with the same period of the previous fiscal year. Although revenues from “direct financing leases,” “brokerage commissions and net gains on investment securities,” “real estate 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,” “life insurance premiums and related investment income” and “other operating revenues” were up compared to the same period of the previous fiscal year.

Revenues from “direct financing leases” decreased 16% to 19,471 million yen compared to the same period of the previous fiscal year. In Japan, revenues from “direct financing leases” were down 17% to 12,948 million yen compared to 15,597 million yen in the same period of the previous fiscal year due to the lower level of operating assets in addition to the decrease in revenues from cancellations and decrease in revenues from sales of direct financing lease assets. Overseas, revenues were down 14% to 6,523 million yen compared to 7,577 million yen in the same period of the previous fiscal year due primarily to the lower level of operating assets as a result of the sale of a business unit in the third quarter of the previous fiscal year.

Revenues from “operating leases” increased 13% to 70,716 million yen compared to the same period of the previous fiscal year. In Japan, revenues were up 10% to 51,542 million yen compared to 46,798 million yen in the same period of the previous fiscal year due to an expansion in real estate and automobile operating leases in addition to an increase in revenues from the precision measuring and other equipment rental operations. Overseas, revenues were up 24% to 19,174 million yen compared to 15,507 million yen in the same period of the previous fiscal year due to the expansion of automobile operating leases in the Asia, Oceania and Europe segment, despite a decrease in revenues from gains on sales of operating lease assets.

Revenues from “interest on loans and investment securities” increased 27% to 54,423 million yen compared to the same period of the previous fiscal year. In Japan, “interest on loans and investment securities” increased 27% to 43,153 million yen compared to 33,910 million yen in the same period of the previous fiscal year due primarily to an expansion of loans to corporate customers, including non-recourse loans, as well as the contribution to revenues from the loan servicing operations. Overseas, revenues were up 26% to 11,270 million yen compared to 8,922 million yen in the same period of the previous fiscal year due to an expansion of loans to corporate customers in The Americas segment.

Revenues from “brokerage commissions and net gains on investment securities” decreased 23% to 7,999 million yen compared to the same period of the previous fiscal year. Brokerage commissions decreased 13% year on year. Net gains on investment securities decreased 26% year on year due to the decrease in revenues from the venture capital operations.

Although life insurance premiums were flat year on year, revenues from “life insurance premiums and related investment income” were up 10% year on year to 32,552 million yen due to an increase in life insurance related investment income.

Although real estate sales were recorded in the Oceania region, “real estate sales” decreased 40% year on year to 17,354 million yen due mainly to a decrease in the number of condominiums sold to buyers in Japan in the first quarter of this fiscal year compared to the first quarter of the previous fiscal year.

“Gains on sales of real estate under operating leases” (refer to (Note 1) below) were down 49% year on year to 5,830 million yen due to a decrease in sales of office buildings and other real estate under operating leases not classified under discontinued operations.

“Other operating revenues” increased 23% year on year to 75,674 million yen. In Japan, revenues were up 23% to 59,461 million yen compared to 48,182 million yen in the same period of the previous fiscal year due to the increase in revenues associated with the real estate management operations, including golf courses and training facilities, and contribution from the beginning of this fiscal year from companies in which we invested in the previous fiscal year, as well as the expansion of revenues from the integrated facilities management operations and its related services, and the automobile maintenance service operations. Overseas, revenues increased 23% to 16,213 million yen compared to 13,165 million yen in the same period of the previous fiscal year due to the recognition of ship-related revenues in the Asian region, despite a decrease in revenues from the investment banking operations in The Americas segment.

Note 1: Subsidiaries, business units, and certain rental properties sold or to be disposed of by sale without significant continuing involvements are reported under discontinued operations and the related amounts that had been previously reported have been reclassified retroactively.

Expenses: 231,020 million yen (Up 15% year on year)

Expenses increased 15% to 231,020 million yen compared with the same period of the previous fiscal year. Although “interest expense,” “costs of operating leases,” “other operating expenses,” “selling, general and administrative expenses,” “provision for doubtful receivables and probable loan losses” and “write-downs of securities” increased, “life insurance costs” and “costs of real estate sales” were down year on year.

“Interest expense” was up 40% year on year to 24,901 million yen due mainly to the increase in Japan. In Japan, “interest expense” increased 57% year on year due to the higher interest rates as well as higher average debt levels. Overseas, “interest expense” increased 19% year on year due mainly to the higher average debt levels.

“Costs of operating leases” were up 18% year on year to 45,804 million yen accompanying the increase in operating lease assets.

“Life insurance costs” were almost flat year on year at 26,974 million yen.

“Costs of real estate sales” were down 32% year on year to 15,610 million yen along with the decrease in “real estate sales.”

“Other operating expenses” were up 34% year on year to 42,059 million yen accompanying the increase in “other operating revenues.”

“Selling, general and administrative expenses” were up 14% year on year to 66,673 million yen due to an increase in general and administrative expenses for write-downs of intangible assets, in addition to recorded expenses associated with companies in which we invested in the previous fiscal year from the beginning of this fiscal year, and associated with the expansion of the existing operations.

“Provision for doubtful receivables and probable loan losses” almost tripled year on year to 7,128 million yen due to some reversals of the provision for doubtful receivables and probable loan losses in the same period of the previous fiscal year, and reflecting an increase in installment loans.

There were no “write-downs of long-lived assets” recorded in the first quarter of this fiscal year.

“Write-downs of securities” were up 13% year on year to 1,767 million yen.

Net Income: 45,778 million yen (Down 3% year on year)

“Operating income” was down 23% year on year to 52,999 million yen due to the reasons noted above.

“Equity in net income of affiliates” increased 97% to 17,848 million yen due to an increase in profits from equity method affiliates both in Japan and overseas, and an increase in earnings from investments in residential condominiums developed through certain joint ventures.

“Gains on sales of subsidiaries and affiliates and liquidation losses” were 7 million yen.

As a result, “income before income taxes, minority interests in earnings of subsidiaries, discontinued operations and extraordinary gain” decreased 10% year on year to 70,854 million yen.

“Minority interests in earnings of subsidiaries, net” increased 8% year on year to 956 million yen.

“Income from continuing operations” decreased 10% year on year to 41,278 million yen.

“Discontinued operations (refer to (Note 1) on page 2), net of applicable tax effect” more than tripled year on year to 4,500 million yen due mainly to the sales of real estate under operating leases in Japan.

As a result, “net income” decreased 3% year on year to 45,778 million yen.

Segment Information

Segment profits (refer to (Note 2) below) declined for the “Corporate Financial Services,”

“Automobile Operations,” “Real Estate-Related Finance” and “Real Estate,” segments; and increased for the “Rental Operations,” “Life Insurance,” “Other,” “The Americas” and “Asia, Oceania and Europe” segments compared to the same period of the previous fiscal year.

The results of the reported segments from the first quarter of this fiscal year reflect the revised business classification of the Company. Accordingly, leasing operations of the affiliates, which had been included in the “Other” segment, have been included in the “Corporate Financial Services” segment from the first quarter of this fiscal year (refer to (Note 1) below on page 12 of the Segment Information).

Note 2: Since the Company evaluates the performance of its segments based on profits before income taxes, tax expenses are not included in segment profits. In addition, results of discontinued operations are included in “Segment Revenues” and “Segment Profits” of each segment, if any.

Operations in Japan

Corporate Financial Services Segment:

Segment revenues were up 14% year on year to 29,890 million yen due primarily to the expansion of loans to corporate customers.

Segment profits decreased 38% to 7,111 million yen compared to 11,473 million yen in the same period of the previous fiscal year due to the increases in “interest expense” and “provision for doubtful receivables and probable loan losses,” in addition to the recognition of write-downs of intangible assets.

Segment assets increased 7% on March 31, 2007 to 1,988,400 million yen due to the expansion of loans to corporate customers.

Automobile Operations Segment:

Segment revenues increased 3% year on year to 37,701 million yen due to the increase in revenues from operating leases and maintenance services in the automobile leasing operations.

Segment profits decreased 7% to 5,826 million yen compared to 6,258 million yen in the same period of the previous fiscal year due to the increase in expenses accompanying an increase in revenues from operating leases and maintenance services, in addition to the increase in expenses associated with the opening of new stores and purchases in anticipation of the cyclical upturn in the market in the automobile rental operations.

Segment assets increased 3% on March 31, 2007 to 525,613 million yen due to the expansion of operating lease assets.

Rental Operations Segment:

Segment revenues were up 20% year on year to 18,489 million yen due to the increase in revenues from operating leases including precision measuring equipment.

Segment profits more than doubled to 2,840 million yen compared to 1,269 million yen in the same period of the previous fiscal year as there were no losses on the sale of investment securities, which were recorded in the same period of the previous fiscal year, and due to an increase in segment revenues.

Segment assets were flat on March 31, 2007 at 120,183 million yen due to a decrease in investment in direct financing leases, despite an increase in operating lease assets.

Real Estate-Related Finance Segment:

Segment revenues increased 19% year on year to 21,578 million yen due to an expansion of revenues associated with corporate loans, including non-recourse loans, and contributions from the loan servicing operations, despite the absence of revenues from real estate sales, which were recorded in the same period of the previous fiscal year.

Segment profits decreased 3% to 10,246 million yen compared to 10,598 million yen in the same period of the previous fiscal year due to the absence of gains from real estate sales, which were recorded in the same period of the previous fiscal year, in addition to the increases in “provision for doubtful receivables and probable loan losses” and “interest expense,” despite an increase in segment revenues.

Segment assets increased 12% on March 31, 2007 to 1,695,282 million yen due mainly to an increase in corporate loans, including non-recourse loans.

Real Estate Segment:

Segment revenues decreased 12% year on year to 61,607 million yen due to a decrease in the number of condominiums sold to buyers, in addition to the decrease in revenues from sales of real estate under operating leases, despite an increase in revenues associated with real estate rental activities, including office buildings, and management operations, including golf courses and training facilities.

Segment profits decreased 12% to 18,252 million yen compared to 20,709 million yen in the same period of the previous fiscal year due to the decrease in segment revenues mentioned above, despite an increase in the contribution from residential condominiums developed through certain joint ventures which were accounted for by the equity method. The total number of condominiums sold to buyers increased from 811 units in the first quarter of the previous fiscal year to 830 units in the first quarter of this fiscal year.

Segment assets increased 5% on March 31, 2007 to 946,009 million yen due mainly to the expansion of operating assets, including operating lease assets.

Life Insurance Segment:

Although revenues from life insurance premiums were flat year on year, segment revenues were up 9% year on year to 32,175 million yen due to an increase in life insurance related investment income.

Segment profits almost tripled to 2,856 million yen compared to 1,139 million yen in the same period of the previous fiscal year due to an increase in segment revenues.

Segment assets increased 3% on March 31, 2007 to 527,156 million yen.

Other Segment:

Although gains on investment securities at the venture capital operations decreased, segment revenues were flat year on year at 30,930 million yen due to the contribution from the beginning of this fiscal year from companies in which we invested in the previous fiscal year.

Segment profits increased 20% to 12,828 million yen compared to 10,666 million yen in the same period of the previous fiscal year due to an increase in contributions from equity method affiliates in Japan.

Segment assets increased 3% on March 31, 2007 to 794,607 million yen.

Overseas Operations

The Americas Segment:

Segment revenues increased 2% year on year to 24,307 million yen due mainly to the increase in revenues associated with corporate loans.

Segment profits increased 5% to 5,413 million yen compared to 5,167 million yen in the same period of the previous fiscal year accompanying the increase in segment revenues.

Segment assets increased 7% on March 31, 2007 to 520,187 million yen due mainly to the increase in corporate loans.

Asia, Oceania and Europe Segment:

Although gains on sales of operating lease assets decreased, segment revenues were up 55% year on year to 36,999 million yen due to the expansion of operating leases, including automobile leasing, and the recognition of real estate sales and ship-related revenues.

Segment profits increased 8% to 12,594 million yen compared to 11,624 million yen in the same period of the previous fiscal year accompanying the increase in segment revenues.

Segment assets were up 8% on March 31, 2007 to 677,987 million yen due mainly to the increase in operating lease assets and investment in affiliates.

2.	Analysis of Financial Condition

Analysis of Assets, Liabilities, Shareholders’ Equity

Operating Assets: 7,065,573 million yen (Up 6% on March 31, 2007)

Operating assets were up 6% on March 31, 2007 to 7,065,573 million yen. All operating assets including “investment in direct financing leases,” “installment loans,” “investment in operating leases,” “investment in securities” and “other operating assets” increased on March 31, 2007.

Summary of Cash Flows

Cash and cash equivalents decreased by 25,940 million yen to 189,223 million yen compared to March 31, 2007.

“Cash flows from operating activities” used 74,086 million yen in the first quarter of this fiscal year and provided 116,129 million yen in the first quarter of the previous fiscal year. This was due to the increased outflows from “increase in inventories” and “decrease in accrued expenses.”

“Cash flows from investing activities” used 395,447 million yen in the first quarter of this fiscal year and used 178,906 million yen in the first quarter of the previous fiscal year due mainly to the increase in outflows associated with the increase in “installment loans made to customers,” as a result of the expansion of loans to corporate customers, and “purchases of available-for-sale securities.”

“Cash flows from financing activities” provided 442,426 million yen in the first quarter of this fiscal year and used 33,282 million yen in the first quarter of the previous fiscal year due to the increase in debt accompanying the increase in operating assets.

Consolidated Financial Highlights

(For the Three Months Ended June 30, 2006 and 2007, and the Year Ended March 31, 2007) (Unaudited)


							(millions of JPY, except for per share data)

Operating Assets	June 30, 2006		Year-on-year Change		June 30, 2007		Year-on-year Change		Relationship to March 31, 2007		March 31, 2007		Year-on-year Change
Investment in Direct Financing Leases	1,437,711		98	%	1,288,317		90	%	102	%	1,258,404		88	%
Installment Loans	3,036,818		124	%	3,707,066		122	%	106	%	3,490,326		119	%
Investment in Operating Leases	721,127		125	%	912,310		127	%	106	%	862,049		120	%
Investment in Securities	692,559		117	%	999,500		144	%	114	%	875,581		128	%
Other Operating Assets	93,226		102	%	158,380		170	%	104	%	152,106		166	%

Total	5,981,441		116	%	7,065,573		118	%	106	%	6,638,466		113	%

Operating Results
Total Revenues	270,212		127	%	284,019		105	%	—		1,141,474		123	%
Income before Income Taxes, Minority Interests in Earnings of Subsidiaries, Discontinued Operations and Extraordinary Gain	78,990		136	%	70,854		90	%	—		316,304		127	%
Net Income	47,103		125	%	45,778		97	%	—		196,506		118	%
Earnings Per Share
Net Income
Basic	523.51		121	%	501.27		96	%	—		2,177.10		116	%
Diluted	504.02		123	%	488.19		97	%	—		2,100.93		117	%
Shareholders’ Equity Per Share	10,955.86		125	%	13,629.34		124	%	104	%	13,089.83		123	%

Financial Position
Shareholders’ Equity	986,502		129	%	1,247,341		126	%	104	%	1,194,234		125	%
Number of Outstanding Shares (thousands of shares)	90,043		103	%	91,519		102	%	100	%	91,234		101	%
Long-and Short-Term Debt and Deposits	4,890,505		115	%	5,970,723		122	%	109	%	5,483,922		111	%
Total Assets	7,223,560		117	%	8,724,936		121	%	106	%	8,207,187		113	%
Shareholders’ Equity Ratio	13.7	%	—		14.3	%	—		—		14.6	%	—
Return on Equity (annualized)	19.4	%	—		15.0	%	—		—		18.3	%	—
Return on Assets (annualized)	2.60	%	—		2.16	%	—		—		2.54	%	—

New Business Volumes
Direct Financing Leases
New Receivables Added	201,398		103	%	187,493		93	%	—		720,840		81	%
New Equipment Acquisitions	179,126		102	%	163,998		92	%	—		636,723		80	%
Installment Loans	465,075		128	%	638,727		137	%	—		2,226,282		121	%
Operating Leases	62,308		127	%	97,358		156	%	—		348,561		110	%
Investment in Securities	56,900		111	%	175,621		309	%	—		331,055		140	%
Other Operating Transactions	24,027		79	%	31,311		130	%	—		215,409		163	%

Condensed Consolidated Statements of Income

(For the Three Months Ended June 30, 2006 and 2007, and the Year Ended March 31, 2007)

(Unaudited)


							(millions of JPY, millions of US$)

	Three Months ended June 30, 2006		Year -on- year Change (%)	Three Months ended June 30, 2007		Year -on- year Change (%)	Year ended March 31, 2007		Year -on- year Change (%)	U.S. dollars Three Months ended June 30, 2007
Total Revenues :	270,212		127	284,019		105	1,141,474		123	2,304

Direct financing leases	23,174		107	19,471		84	90,355		94	158
Operating leases	62,305		123	70,716		113	256,091		122	574
Interest on loans and investment securities	42,832		120	54,423		127	201,531		126	441
Brokerage commissions and net gains on investment securities	10,450		124	7,999		77	70,684		145	65
Life insurance premiums and related investment income	29,669		98	32,552		110	132,835		96	264
Real estate sales	29,025		151	17,354		60	87,178		116	141
Gains on sales of real estate under operating leases	11,410		196	5,830		51	22,958		256	47
Other operating revenues	61,347		152	75,674		123	279,842		145	614

Total Expenses :	200,977		123	231,020		115	859,078		120	1,874

Interest expense	17,759		132	24,901		140	81,491		138	202
Costs of operating leases	38,657		117	45,804		118	164,693		123	371
Life insurance costs	27,071		99	26,974		100	115,565		98	219
Costs of real estate sales	22,910		137	15,610		68	73,999		112	127
Other operating expenses	31,409		119	42,059		134	147,693		120	341
Selling, general and administrative expenses	58,583		145	66,673		114	253,467		136	541
Provision for doubtful receivables and probable loan losses	2,631		56	7,128		271	13,798		85	58
Write-downs of long-lived assets	—		—	—		—	2,316		28	—
Write-downs of securities	1,559		87	1,767		113	5,592		123	14
Foreign currency transaction loss, net	398		—	104		26	464		—	1

Operating Income	69,235		141	52,999		77	282,396		132	430

Equity in Net Income of Affiliates	9,074		125	17,848		197	31,946		100	145
Gains on Sales of Subsidiaries and Affiliates and Liquidation Losses	681		47	7		1	1,962		72	0

Income before Income Taxes, Minority Interests in Earnings of Subsidiaries, Discontinued Operations and Extraordinary Gain	78,990		136	70,854		90	316,304		127	575

Provision for Income Taxes	32,413		137	28,620		88	126,452		131	232

Income before Minority Interests in Earnings of Subsidiaries, Discontinued Operations and Extraordinary Gain	46,577		136	42,234		91	189,852		124	343

Minority Interests in Earnings of Subsidiaries, Net	885		241	956		108	4,781		148	8

Income from Continuing Operations	45,692		135	41,278		90	185,071		124	335

Discontinued Operations:
Income from discontinued operations, net	2,421			7,559			17,692			61
Provision for income taxes	(1,010	)		(3,059	)		(6,830	)		(25	)

Discontinued operations, net of applicable tax effect	1,411		36	4,500		319	10,862		64	36

Extraordinary Gain, Net of Applicable Tax Effect	—		—	—		—	573		—	—

Net Income	47,103		125	45,778		97	196,506		118	371

Note:

Pursuant to FASB Statement No. 144 (“Accounting for the Impairment or Disposal of Long-Lived Assets”), the results of operations which meet the criteria for discontinued operations are reported as a separate component of income, and those related amounts that had been previously reported are reclassified.

Condensed Consolidated Balance Sheets

(As of June 30, 2006 and 2007, and March 31, 2007)

(Unaudited)


					(millions of JPY, millions of US$)

	June 30, 2006		June 30, 2007		March 31, 2007		U.S. dollars June 30, 2007
Assets
Cash and Cash Equivalents	149,498		189,223		215,163		1,535
Restricted Cash	85,709		149,104		121,569		1,210
Time Deposits	780		1,467		913		12
Investment in Direct Financing Leases	1,437,711		1,288,317		1,258,404		10,452
Installment Loans	3,036,818		3,707,066		3,490,326		30,075
Allowance for Doubtful Receivables on Direct Financing Leases and Probable Loan Losses	(92,220	)	(93,539	)	(89,508	)	(759	)
Investment in Operating Leases	721,127		912,310		862,049		7,402
Investment in Securities	692,559		999,500		875,581		8,109
Other Operating Assets	93,226		158,380		152,106		1,285
Investment in Affiliates	327,025		414,462		367,762		3,363
Other Receivables	170,149		231,297		212,324		1,876
Inventories	143,894		228,533		216,150		1,854
Prepaid Expenses	44,259		59,726		54,855		485
Office Facilities	91,349		91,384		90,682		741
Other Assets	321,676		387,706		378,811		3,145

Total Assets	7,223,560		8,724,936		8,207,187		70,785

Liabilities and Shareholders’ Equity
Short-Term Debt	1,174,667		1,446,137		1,174,391		11,732
Deposits	344,887		468,255		446,474		3,799
Trade Notes, Accounts Payable and Other Liabilities	359,484		420,456		381,110		3,411
Accrued Expenses	70,206		88,807		122,202		721
Policy Liabilities	497,596		487,887		491,946		3,958
Current and Deferred Income Taxes	234,032		285,144		320,412		2,313
Security Deposits	149,642		181,009		174,196		1,469
Long-Term Debt	3,370,951		4,056,331		3,863,057		32,909

Total Liabilities	6,201,465		7,434,026		6,973,788		60,312

Minority Interests	35,593		43,569		39,165		354

Common Stock	89,172		101,352		98,755		822
Additional Paid-in Capital	108,573		122,502		119,402		994
Retained Earnings:
Legal reserve	2,220		2,220		2,220		18
Retained earnings	772,397		957,384		921,823		7,767
Accumulated Other Comprehensive Income	18,408		66,952		55,253		543
Treasury Stock, at Cost	(4,268	)	(3,069	)	(3,219	)	(25	)

Total Shareholders’ Equity	986,502		1,247,341		1,194,234		10,119

Total Liabilities and Shareholders’ Equity	7,223,560		8,724,936		8,207,187		70,785


		June 30, 2006		June 30, 2007		March 31, 2007		U.S. dollars June 30, 2007
Note:	Accumulated Other Comprehensive Income
	Net unrealized gains on investment in securities	46,372		73,791		72,994		599
	Minimum pension liability adjustments	(620	)	—		—		—
	Defined benefit pension plans	—		3,379		3,604		27
	Foreign currency translation adjustments	(30,759	)	(11,193	)	(22,620	)	(91	)
	Net unrealized gains on derivative instruments	3,415		975		1,275		8

Condensed Consolidated Statements of Shareholders’ Equity

(For the Three Months Ended June 30, 2006 and 2007, and the Year Ended March 31, 2007) (Unaudited)


			(millions of JPY, millions of US$)

	Three Months ended June 30, 2006		Three Months ended June 30, 2007		Year ended March 31,2007		U.S. dollars Three Months ended June 30, 2007
Common Stock:
Beginning balance	88,458		98,755		88,458		801
Exercise of warrants and stock acquisition rights	263		397		2,259		3
Conversion of convertible bond	451		2,200		8,038		18

Ending balance	89,172		101,352		98,755		822


Additional Paid-in Capital:
Beginning balance	106,729		119,402		106,729		969
Exercise of warrants, stock acquisition rights and stock options	263		396		2,257		3
Conversion of convertible bond	452		1,719		6,250		14
Stock-based compensation	1,015		804		3,515		7
Other, net	114		181		651		1

Ending balance	108,573		122,502		119,402		994


Legal Reserve:
Beginning balance	2,220		2,220		2,220		18

Ending balance	2,220		2,220		2,220		18


Retained Earnings:
Beginning balance	733,386		921,823		733,386		7,479
Cash dividends	(8,092	)	(11,863	)	(8,092	)	(96	)
Net income	47,103		45,778		196,506		371
Capital transactions of equity-method investee	—		1,641		—		13
Other, net	—		5		23		0

Ending balance	772,397		957,384		921,823		7,767


Accumulated Other Comprehensive Income:
Beginning balance	27,603		55,253		27,603		448
Net change of unrealized gains on investment in securities	(4,484	)	797		22,138		6
Net change of minimum pension liability adjustments	12		—		(5	)	—
Defined benefit pension plans	—		(225	)	—		(2	)
Adjustment to initially apply FASB Statement No. 158	—		—		4,241		—
Net change of foreign currency translation adjustments	(4,627	)	11,427		3,512		93
Net change of unrealized gains on derivative instruments	(96	)	(300	)	(2,236	)	(2	)

Ending balance	18,408		66,952		55,253		543


Treasury Stock:
Beginning balance	(4,750	)	(3,219	)	(4,750	)	(26	)
Exercise of stock options	486		53		1,518		0
Other, net	(4	)	97		13		1

Ending balance	(4,268	)	(3,069	)	(3,219	)	(25	)


Total Shareholders’ Equity:
Beginning balance	953,646		1,194,234		953,646		9,689
Increase, net	32,856		53,107		240,588		430

Ending balance	986,502		1,247,341		1,194,234		10,119


Summary of Comprehensive Income:
Net income	47,103		45,778		196,506		371
Other comprehensive income	(9,195	)	11,699		23,409		95

Comprehensive income	37,908		57,477		219,915		466

Condensed Consolidated Statements of Cash Flows

(For the Three Months Ended June 30, 2006 and 2007, and the Year Ended March 31, 2007)

(Unaudited)


			(millions of JPY, millions of US$)

	Three Months ended June 30, 2006		Three Months ended June 30, 2007		Year ended March 31, 2007		U.S. dollars Three Months ended June 30, 2007
Cash Flows from Operating Activities:
Net income	47,103		45,778		196,506		371
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	34,533		39,822		153,348		323
Provision for doubtful receivables and probable loan losses	2,631		7,128		13,798		58
Decrease in policy liabilities	(6,112	)	(4,059	)	(11,762	)	(33	)
Gains from securitization transactions	(297	)	(101	)	(7,762	)	(1	)
Equity in net income of affiliates	(9,074	)	(17,848	)	(31,946	)	(145	)
Gains on sales of subsidiaries and affiliates and liquidation losses	(681	)	(7	)	(1,962	)	(0	)
Extraordinary gain	—		—		(573	)	—
Minority interests in earnings of subsidiaries, net	885		956		4,781		8
Gains on sales of available-for-sale securities	(5,614	)	(1,605	)	(49,262	)	(13	)
Gains on sales of real estate under operating leases	(11,410	)	(5,830	)	(22,958	)	(47	)
Gains on sales of operating lease assets other than real estate	(4,220	)	(4,205	)	(12,105	)	(34	)
Write-downs of long-lived assets	—		—		2,316		—
Write-downs of securities	1,559		1,767		5,592		14
Decrease (increase) in restricted cash	86,996		(27,228	)	51,299		(221	)
Increase in loans held for sale	—		(12,569	)	(52,811	)	(102	)
Decrease (increase) in trading securities	6,159		(2,007	)	11,248		(16	)
Increase in inventories	(1,803	)	(22,541	)	(85,899	)	(183	)
Increase in prepaid expenses	(3,629	)	(4,606	)	(13,708	)	(37	)
Increase (decrease) accrued expenses	(18,835	)	(35,541	)	36,594		(288	)
Increase in security deposits	39		4,916		21,182		40
Other, net	(2,101	)	(36,306	)	20,212		(295	)

Net cash provided by (used in) operating activities	116,129		(74,086	)	226,128		(601	)

Cash Flows from Investing Activities:
Purchases of lease equipment	(255,216	)	(267,020	)	(1,031,591	)	(2,166	)
Principal payments received under direct financing leases	168,417		130,379		610,780		1,058
Net proceeds from securitization of lease receivables, loan receivables and securities	19,410		20,255		275,998		164
Installment loans made to customers	(465,075	)	(619,936	)	(2,173,322	)	(5,030	)
Principal collected on installment loans	332,352		414,256		1,554,422		3,361
Proceeds from sales of operating lease assets	49,844		55,541		158,396		451
Investment in affiliates, net	(2,225	)	(10,234	)	(6,000	)	(83	)
Purchases of available-for-sale securities	(42,290	)	(161,760	)	(254,044	)	(1,312	)
Proceeds from sales of available-for-sale securities	18,495		25,077		105,829		203
Maturities of available-for-sale securities	6,310		27,722		39,252		225
Purchases of other securities	(14,490	)	(13,861	)	(76,710	)	(112	)
Proceeds from sales of other securities	5,568		12,470		73,316		101
Purchases of other operating assets	(1,746	)	(2,017	)	(50,238	)	(16	)
Acquisitions of subsidiaries, net of cash acquired	(10,145	)	(2,076	)	(19,270	)	(17	)
Sales of subsidiaries, net of cash disposed	529		—		3,019		—
Other, net	11,356		(4,243	)	(12,115	)	(35	)

Net cash used in investing activities	(178,906	)	(395,447	)	(802,278	)	(3,208	)

Cash Flows from Financing Activities:
Net increase (decrease) in debt with maturities of three months or less	(123,791	)	73,011		(111,360	)	592
Proceeds from debt with maturities longer than three months	452,161		735,045		2,230,830		5,963
Repayment of debt with maturities longer than three months	(366,202	)	(376,308	)	(1,655,581	)	(3,053	)
Net increase (decrease) in deposits due to customers	(8,367	)	21,699		93,175		176
Issuance of common stock	526		793		4,516		6
Dividends paid	(8,092	)	(11,863	)	(8,092	)	(96	)
Net increase (decrease) in call money	20,000		—		(10,000	)	—
Other, net	483		49		1,526		1

Net cash provided by (used in) financing activities	(33,282	)	442,426		545,014		3,589

Effect of Exchange Rate Changes on Cash and Cash Equivalents	(299	)	1,167		443		9

Net Increase (Decrease) in Cash and Cash Equivalents	(96,358	)	(25,940	)	(30,693	)	(211	)
Cash and Cash Equivalents at Beginning of Period	245,856		215,163		245,856		1,746

Cash and Cash Equivalents at End of Period	149,498		189,223		215,163		1,535

Segment Information

(For the Three Months Ended June 30, 2006 and 2007, and the Year Ended March 31, 2007)

(Unaudited)


											(millions of JPY, millions of US$)

	Three Months ended June 30, 2006					Three Months ended June 30, 2007					Year ended March 31, 2007
	Segment Revenues		Segment Profits		Segment Assets	Segment Revenues		Segment Profits		Segment Assets	Segment Revenues		Segment Profits		Segment Assets
Operations in Japan
Corporate Financial Services	26,248		11,473		1,703,627	29,890		7,111		1,988,400	123,328		58,231		1,861,403
Automobile Operations	36,627		6,258		526,245	37,701		5,826		525,613	146,966		28,224		510,805
Rental Operations	15,351		1,269		121,039	18,489		2,840		120,183	67,859		10,869		121,621
Real Estate-Related Finance	18,180		10,598		1,234,172	21,578		10,246		1,695,282	82,345		44,682		1,517,927
Real Estate	70,231		20,709		689,273	61,607		18,252		946,009	245,336		51,236		901,237
Life Insurance	29,530		1,139		509,171	32,175		2,856		527,156	132,060		9,921		511,051
Other	30,588		10,666		644,006	30,930		12,828		794,607	145,443		60,387		773,595

Sub-Total	226,755		62,112		5,427,533	232,370		59,959		6,597,250	943,337		263,550		6,197,639

Overseas Operations
The Americas	23,855		5,167		442,100	24,307		5,413		520,187	119,940		31,315		487,900
Asia, Oceania and Europe	23,941		11,624		597,567	36,999		12,594		677,987	103,593		37,763		625,036

Sub-Total	47,796		16,791		1,039,667	61,306		18,007		1,198,174	223,533		69,078		1,112,936

Segment Total	274,551		78,903		6,467,200	293,676		77,966		7,795,424	1,166,870		332,628		7,310,575

Difference between Segment Totals and Consolidated Amounts	(4,339	)	87		756,360	(9,657	)	(7,112	)	929,512	(25,396	)	(16,324	)	896,612

Consolidated Amounts	270,212		78,990		7,223,560	284,019		70,854		8,724,936	1,141,474		316,304		8,207,187


	U.S. dollars Three Months ended June 30, 2007
	Segment Revenues		Segment Profits		Segment Assets
Operations in Japan
Corporate Financial Services	242		58		16,132
Automobile Operations	306		47		4,264
Rental Operations	150		23		975
Real Estate-Related Finance	175		83		13,754
Real Estate	500		148		7,675
Life Insurance	261		23		4,277
Other	251		104		6,446

Sub-Total	1,885		486		53,523

Overseas Operations
The Americas	197		44		4,221
Asia, Oceania and Europe	300		102		5,500

Sub-Total	497		146		9,721

Segment Total	2,382		632		63,244

Difference between Segment Totals and Consolidated Amounts	(78	)	(57	)	7,541

Consolidated Amounts	2,304		575		70,785

Note: 1.

The results of the reported segments from the first quarter of this fiscal year reflect the revised business classification of the Company. Accordingly, leasing operations of the affiliates, which had been included in the “Other” segment, have been included in the “Corporate Financial Services” segment from the first quarter of this fiscal year. Therefore, certain related amounts that had been previously reported are reclassified.

2.	Since the Company evaluates the performance of its segments based on profits before income taxes, tax expenses are not included in segment profits. In addition, results of discontinued operations are included in “Segment Revenues” and “Segment Profits” of each segment, if any.

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