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, 2006.

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, 2006 – June 30, 2006) filed with the Tokyo Stock Exchange on Thursday, August 10, 2006.

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 11, 2006	By	/s/ Shunsuke Takeda
		Shunsuke Takeda
		Director
		Vice Chairman and CFO
		ORIX Corporation

Consolidated Financial Results

April 1, 2006 – June 30, 2006

August 10, 2006

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 115.24 to $1.00, the approximate exchange rate prevailing at June 30, 2006.

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, 2006 to June 30, 2006

(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, 2006 and 2005, and the Year Ended March 31, 2006

(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
June 30, 2006	273,839	26.9	%	70,024	40.6	%	79,779	36.3	%
June 30, 2005	215,776	4.8	%	49,791	56.8	%	58,513	56.7	%
March 31, 2006	943,431	—		216,914	—		251,726	—


	Net Income	Year-on-Year Change		Basic Earnings Per Share	Diluted Earnings Per Share
June 30, 2006	47,103	24.6	%	523.51	504.02
June 30, 2005	37,789	60.6	%	432.08	409.74
March 31, 2006	166,388	—		1,883.89	1,790.30



1.	Equity in Net Income of Affiliates was a net gain of JPY 9,074 million for the three months ended June 30, 2006, a net gain of JPY 7,263 million for the three months ended June 30, 2005 and a net gain of JPY 32,080 million for the year ended March 31, 2006.
2.	The average number of shares was 89,974,819 for the three months ended June 30, 2006, 87,458,625 for the three months ended June 30, 2005 and 88,321,649 for the year ended March 31, 2006.
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 4, Affiliates 0	Deletions: Consolidated Subsidiaries 2, Affiliates 3



*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 and Discontinued Operations.”

(2) Performance Highlights - Financial Position (Unaudited)


	Total Assets	Shareholders’ Equity	Shareholders’ Equity Ratio		Shareholders’ Equity Per Share
June 30, 2006	7,223,560	986,502	13.7	%	10,955.86
June 30, 2005	6,185,171	764,603	12.4	%	8,731.00
March 31, 2006	7,242,455	953,646	13.2	%	10,608.97

1.	The number of outstanding shares was 90,043,371 as of June 30, 2006, 87,573,268 as of June 30, 2005 and 89,890,579 as of March 31, 2006.

(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, 2006	116,129	(178,906	)	(33,282	)	149,498
June 30, 2005	29,099	(100,677	)	73,104		147,147
March 31, 2006	136,003	(799,357	)	762,528		245,856

2. Forecasts for the Year Ending March 31, 2007 (Unaudited)

Forecasts for the year ending March 31, 2007 have not been changed since the public release on May 12, 2006.


Fiscal Year	Total Revenues	Income before Income Taxes	Net Income
March 31, 2007	1,100,000	295,000	177,000



Note :		Basic Earnings Per Share is forecasted to be JPY 1,965.72.

Summary of Consolidated Financial Results

1. Three Months Ended June 30, 2006

Financial Highlights


Income before Income Taxes*		79,779 million yen (Up 36% year on year)
Net Income		47,103 million yen (Up 25% year on year)
Earnings Per Share (Basic)		523.51 yen (Up 21% year on year)
Earnings Per Share (Diluted)		504.02 yen (Up 23% year on year)
Shareholders’ Equity Per Share		10,955.86 yen (Up 3% on March 31, 2006)
ROE (Annualized)		19.4% (June 30, 2005: 20.3%)
ROA (Annualized)		2.60% (June 30, 2005: 2.47%)

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

Revenues: 273,839 million yen (Up 27% year on year)

Revenues increased 27% to 273,839 million yen compared with the same period of the previous fiscal year. Although “life insurance premiums and related investment income” decreased year on year, revenues from “direct financing leases,” “operating leases,” “interest on loans and investment securities,” “brokerage commissions and net gains on investment securities,” “real estate sales,” “gains on sales of real estate under operating leases,” and “other operating revenues” were up compared to the same period of the previous fiscal year.

Revenues from “direct financing leases” increased 7% to 23,791 million yen compared to the same period of the previous fiscal year. In Japan, revenues from “direct financing leases” were down 4% to 15,597 million yen compared to 16,263 million yen in the same period of the previous fiscal year due to the lower level of operating assets. Overseas, revenues were up 38% to 8,194 million yen compared to 5,947 million yen in the same period of the previous fiscal year due to the depreciation of the yen against the dollar in The Americas segment and the expansion of the leasing operations in the Asia, Oceania and Europe segment.

Revenues from “operating leases” increased 22% to 63,409 million yen compared to the same period of the previous fiscal year. In Japan, although revenues from the precision measuring and other equipment rental operations were flat year on year, there was an increase in automobile and real estate operating leases that resulted in a 20% increase to 47,716 million yen compared to 39,844 million yen in the same period of the previous fiscal year. Overseas, revenues were up 31% to 15,693 million yen compared to 11,971 million yen in the same period of the previous fiscal year due to the expansion of automobile operating leases and the recognition of gains on the sale of operating lease assets.

Revenues from “interest on loans and investment securities” increased 20% to 43,219 million yen compared to the same period of the previous fiscal year. In Japan, “interest on loans and investment securities” increased 17% to 33,910 million yen compared to 29,011 million yen in the same period of the previous fiscal year due to an expansion of revenues associated with loans to corporate customers, including non-recourse loans. Overseas, revenues were up 32% to 9,309 million yen compared to 7,053 million yen in the same period of the previous fiscal year due to the contribution from loans to corporate customers in The Americas segment.

Revenues from “brokerage commissions and net gains on investment securities” increased 24% to 10,450 million yen compared to the same period of the previous fiscal year. Brokerage commissions were up 66% year on year due to the steady stock market in Japan. Net gains on investment securities were up 16% year on year due mainly to the strong results of the venture capital operations in Japan and contribution from revenues of securities investments in The Americas segment.

- 1 -

“Life insurance premiums and related investment income” were down 2% year on year to 29,669 million yen. Life insurance premiums were flat year on year, while life insurance related investment income decreased year on year.

“Real estate sales” increased 51% year on year to 29,025 million yen due to an increase in the number of condominiums sold to buyers from 414 units in the first quarter of the previous fiscal year to 780 units in the first quarter of this fiscal year.

“Gains on sales of real estate under operating leases” (refer to the (Note) below) increased 96% year on year to 11,410 million yen due to an increase in sales of office buildings and other real estate under operating leases.

“Other operating revenues” increased 50% year on year to 62,866 million yen. In Japan, revenues were up 21% to 49,598 million yen compared to 41,136 million yen in the same period of the previous fiscal year due to increases in revenues associated with our integrated facilities management operations, automobile maintenance service operations, and contribution of servicing fees from our loan servicing operations. Overseas, revenues largely increased to 13,268 million yen compared to 845 million yen in the same period of the previous fiscal year due to the contribution from the beginning of the first quarter of this fiscal year of an investment bank Houlihan Lokey Howard & Zukin (HLHZ) that entered the ORIX Group in the fourth quarter of the previous fiscal year and is included in The Americas segment.

Note: 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: 203,815 million yen (Up 23% year on year)

Expenses increased 23% to 203,815 million yen compared with the same period of the previous fiscal year. Although “life insurance costs,” “provision for doubtful receivables and probable loan losses,” and “write-downs of securities” were down year on year, “interest expense,” “costs of operating leases,” “costs of real estate sales,” “other operating expenses,” and “selling, general and administrative expenses” increased year on year.

“Interest expense” was up 31% year on year to 18,550 million yen. In Japan, “interest expense” increased 17% year on year due to the higher average debt levels. Overseas, “interest expense” increased 50% year on year due to the higher average debt levels and higher interest rates.

“Costs of operating leases” were up 16% year on year to 39,083 million yen accompanying the increase in the average balance of investment in operating leases.

“Life insurance costs” decreased slightly year on year to 27,071 million yen.

“Costs of real estate sales” were up 37% year on year to 22,910 million yen along with the increase in “real estate sales.”

“Other operating expenses” were up 18% year on year to 32,571 million yen along with the increase in “other operating revenues.”

“Selling, general and administrative expenses” were up 44% year on year to 59,003 million yen due to an increase in personnel and related expenses associated with HLHZ, which is included in The Americas segment and entered the ORIX Group in the fourth quarter of the previous fiscal year, as well as an increase in the number of employees in the Corporate Financial Services and Automobile Operations segments in an effort to further expand our sales platform in Japan.

- 2 -

“Provision for doubtful receivables and probable loan losses” was down 43% year on year to 2,670 million yen due to a lower occurrence of new non-performing assets despite an increase in operating assets and some reversals of the provision for doubtful receivables and probable loan losses.

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

“Write-downs of securities” were down 13% year on year to 1,559 million yen.

Net Income: 47,103 million yen (Up 25% year on year)

“Operating income” was up 41% year on year to 70,024 million yen.

“Equity in net income of affiliates” was up 25% to 9,074 million yen compared to the same period of the previous fiscal year due to the increase in profits from equity method affiliates in Japan and overseas.

“Gains on sales of subsidiaries and affiliates and liquidation loss” were down 53% year on year to 681 million yen.

“Income before income taxes, minority interests in earnings of subsidiaries and discontinued operations” increased 36% year on year to 79,779 million yen.

“Minority interests in earnings of subsidiaries, net” more than doubled year on year to 896 million yen as a result of the minority interests in earnings of HLHZ that entered the ORIX Group in the fourth quarter of the previous fiscal year and is included in The Americas segment.

“Income from continuing operations” increased 35% year on year to 46,171 million yen.

“Discontinued operations (refer to the (Note) on page 2), net of applicable tax effect” decreased 73% year on year to 932 million yen.

As a result, “net income” increased 25% year on year to 47,103 million yen.

Operating Assets: 5,981,441 million yen (Up 2% on March 31, 2006)

Operating assets were up 2% on March 31, 2006 to 5,981,441 million yen. While “investment in direct financing leases” and “investment in operating leases” were flat on March 31, 2006, “installment loans,” “investment in securities,” and “other operating assets” were up.

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

Segment profits for the “Corporate Financial Services” and “Automobile Operations” segments were almost flat year on year; declined for the “Rental Operations,” “Life Insurance,” and “The Americas” segments; and increased for the “Real Estate-Related Finance,” “Real Estate,” “Other,” and “Asia, Oceania and Europe” segments.

Operations in Japan

Corporate Financial Services Segment

Segment revenues were up 14% year on year to 26,248 million yen due mainly to the expansion of loans to corporate customers.

- 3 -

Although segment revenues increased, segment profits were almost flat year on year at 11,143 million yen due to an increase in “selling, general and administrative expenses” as a result of upfront costs associated with an increase in the number of employees in an effort to expand our sale and marketing base.

Segment assets increased 5% on March 31, 2006 to 1,690,050 million yen due mainly to an increase in loans to corporate customers and direct financing leases.

Automobile Operations Segment

Segment revenues increased 14% year on year to 36,627 million yen. Although the automobile rental operations were up slightly compared to the same period of the previous fiscal year, the automobile leasing operations were steady due to an increase in operating leases and revenues associated with maintenance services.

Segment profits were flat year on year at 6,258 million yen. Expenses increased along with the increase in revenues from operating leases and maintenance services and due to an increase in “selling, general and administrative expenses” associated with an increase in the number of employees in an effort to further develop our customer base focusing on increasing our automobile-related business to individuals.

Segment assets increased 3% on March 31, 2006 to 526,245 million yen due to the expansion of the automobile leasing operations that also include operating leases.

Rental Operations Segment

Segment revenues were down 3% year on year to 15,351 million yen due to the recognition of losses on the sale of investment securities although precision measuring and other equipment rentals were flat compared to the same period of the previous fiscal year.

Segment profits decreased 22% to 1,269 million yen compared to 1,634 million yen in the same period of the previous fiscal year accompanying the decrease in segment revenues.

Segment assets were down 2% on March 31, 2006 to 121,039 million yen.

Real Estate-Related Finance Segment

Segment revenues increased 17% year on year to 18,180 million yen due to a contribution from revenues associated with corporate loans, including non-recourse loans, and the loan servicing operations and the steady performance of the housing loan operations.

Segment profits increased 54% to 10,598 million yen compared to 6,892 million yen in the same period of the previous fiscal year due to the higher segment revenues and decrease in “provision for doubtful receivables and probable loan losses” as a result of a lower occurrence of new non-performing assets.

Segment assets increased 1% on March 31, 2006 to 1,234,172 million yen.

Real Estate Segment

Segment revenues increased 36% year on year to 70,231 million yen due to an increase in revenues associated with condominium sales as more condominiums were sold to buyers in the first quarter of this fiscal year compared with the same period of the previous fiscal year as well as a year on year increase in sales associated with real estate under operating leases.

Segment profits increased 62% to 20,709 million yen compared to 12,781 million yen in the same period of the previous fiscal year in line with the increase in segment revenues.

Segment assets were flat on March 31, 2006 to 689,273 million yen.

- 4 -

Life Insurance Segment

Segment revenues were down 2% year on year to 29,530 million yen as a result of a decrease in life insurance related investment income, while life insurance premiums were flat compared to the same period of the previous fiscal year.

Segment profits decreased 30% year on year to 1,139 million yen compared to 1,632 million yen in the same period of the previous fiscal year due to lower segment revenues.

Segment assets increased 4% on March 31, 2006 to 509,171 million yen.

Other Segment

Segment revenues increased 24% year on year to 30,588 million yen due to an increase in gains on investment securities at the venture capital operations, revenues associated with the securities operations, and steady trend in revenues at the card loan operations.

Segment profits increased 34% to 10,996 million yen compared to 8,198 million yen in the same period of the previous fiscal year. While “gains on the sales of subsidiaries and affiliates and liquidation loss” decreased year on year, the higher segment revenues led to the higher segment profits.

Segment assets were down 2% on March 31, 2006 to 657,583 million yen due to a decrease in loans related to margin trading at the securities brokerage operations.

Overseas Operations

The Americas Segment

Segment revenues were up 87% year on year to 23,855 million yen due to the contribution from the beginning of the first quarter of this fiscal year of HLHZ that entered the ORIX Group in the fourth quarter of the previous fiscal year and the increase in revenues associated with corporate loans.

Segment profits decreased 28% to 5,167 million yen compared to 7,152 million yen in the same period of the previous fiscal year due to the decrease in sales of real estate under operating leases and “equity in net income of affiliates.”

Segment assets were flat on March 31, 2006 to 442,100 million yen.

Asia, Oceania and Europe Segment

Segment revenues were up 18% year on year to 23,941 million yen due to the steady performance of the automobile leasing operations that include operating leases, as well as the recognition of gains on the sale of operating lease assets.

Segment profits increased 54% to 11,624 million yen compared to 7,569 million yen in the same period of the previous fiscal year due to an increase in segment revenues and the steady performance of “equity in net income of affiliates.”

Segment assets were up 6% on March 31, 2006 to 597,567 million yen due to the increase in installment loans and the purchase of a real estate company in Australia in the first quarter of this fiscal year.

- 5 -

2. Summary of Cash Flows (Three Months Ended June 30, 2006)

Cash and cash equivalents decreased by 96,358 million yen to 149,498 million yen compared to March 31, 2006.

“Cash flows from operating activities” provided 116,129 million yen in the first quarter of this fiscal year and provided 29,099 million yen in the first quarter of the previous fiscal year due primarily to inflows associated with the increase in net income and decrease in restricted cash.

“Cash flows from investing activities” used 178,906 million yen in the first quarter of this fiscal year and used 100,677 million yen in the first quarter of the previous fiscal year. There were higher net cash outflows in the first quarter of this fiscal year compared with the first quarter of the previous fiscal year as “installment loans made to customers” exceeded “principal collected on installment loans” and the purchase of investment securities exceeded the proceeds from the sales and maturities of investment securities.

“Cash flows from financing activities” used 33,282 million yen in the first quarter of this fiscal year and provided 73,104 million yen in the first quarter of the previous fiscal year due to a decrease in debt accompanying the increase in cash inflows from operating activities in the first quarter of this fiscal year.

- 6 -

Consolidated Financial Highlights

(For the Three Months Ended June 30, 2006 and 2005, and the Year Ended March 31, 2006)

(Unaudited)


	(millions of JPY, except for per share data)
	June 30, 2006		Change from March 31, 2006		Year-on-year Change		June 30, 2005		Year-on-year Change		March 31, 2006		Year-on-year Change
Operating Assets
Investment in Direct Financing Leases	1,437,711		100	%	98	%	1,470,338		101	%	1,437,491		99	%
Installment Loans	3,036,818		104	%	124	%	2,440,842		110	%	2,926,036		123	%
Investment in Operating Leases	721,127		100	%	125	%	574,801		109	%	720,096		116	%
Investment in Securities	692,559		101	%	117	%	593,911		103	%	682,798		116	%
Other Operating Assets	93,226		101	%	102	%	91,677		135	%	91,856		111	%

Total	5,981,441		102	%	116	%	5,171,569		107	%	5,858,277		114	%

Operating Results
Total Revenues	273,839		—		127	%	215,776		105	%	943,431		102	%
Income before Income Taxes, Minority Interests in Earnings of Subsidiaries and Discontinued Operations	79,779		—		136	%	58,513		157	%	251,726		163	%
Net Income	47,103		—		125	%	37,789		161	%	166,388		182	%
Earnings Per Share
Net Income
Basic	523.51		—		121	%	432.08		154	%	1,883.89		173	%
Diluted	504.02		—		123	%	409.74		159	%	1,790.30		179	%
Shareholders’ Equity Per Share	10,955.86		103	%	125	%	8,731.00		123	%	10,608.97		127	%

Financial Position
Shareholders’ Equity	986,502		103	%	129	%	764,603		129	%	953,646		131	%
Number of Outstanding Shares (’000)	90,043		100	%	103	%	87,573		105	%	89,891		103	%
Long- and Short-Term Debt and Deposits	4,890,505		99	%	115	%	4,236,166		109	%	4,925,753		119	%
Total Assets	7,223,560		100	%	117	%	6,185,171		109	%	7,242,455		119	%
Shareholders’ Equity Ratio	13.7	%	—		—		12.4	%	—		13.2	%	—
Return on Equity (annualized)	19.4	%	—		—		20.3	%	—		19.8	%	—
Return on Assets (annualized)	2.60	%	—		—		2.47	%	—		2.50	%	—

New Business Volumes
Direct Financing Leases
New Receivables Added	201,398		—		103	%	196,181		104	%	888,912		103	%
New Equipment Acquisitions	179,126		—		102	%	175,106		105	%	800,802		104	%
Installment Loans	465,075		—		128	%	363,952		118	%	1,834,192		119	%
Operating Leases	62,308		—		127	%	48,932		120	%	317,645		128	%
Investment in Securities	56,900		—		111	%	51,178		113	%	235,932		96	%
Other Operating Transactions	24,027		—		79	%	30,376		103	%	132,017		102	%

- 7 -

Condensed Consolidated Statements of Income

(For the Three Months Ended June 30, 2006 and 2005, and the Year Ended March 31, 2006)

(Unaudited)


	(millions of JPY, millions of US$)
	Three Months ended June 30, 2006		Year-on-year Change (%)	Three Months ended June 30, 2005		Year-on-year Change (%)	Year ended March 31, 2006		Year-on-year Change (%)	U.S. dollars June 30, 2006
Total Revenues :	273,839		127	215,776		105	943,431		102	2,376

Direct Financing Leases	23,791		107	22,210		104	98,645		112	206
Operating Leases	63,409		122	51,815		106	213,397		109	550
Interest on Loans and Investment Securities	43,219		120	36,064		121	161,350		119	375
Brokerage Commissions and Net Gains on Investment Securities	10,450		124	8,443		164	48,826		144	91
Life Insurance Premiums and Related Investment Income	29,669		98	30,229		100	138,118		101	257
Real Estate Sales	29,025		151	19,214		88	74,943		61	252
Gains on Sales of Real Estate under Operating Leases	11,410		196	5,820		486	8,970		577	99
Other Operating Revenues	62,866		150	41,981		121	199,182		129	546

Total Expenses :	203,815		123	165,985		95	726,517		92	1,768

Interest Expense	18,550		131	14,207		104	62,408		114	161
Costs of Operating Leases	39,083		116	33,567		102	135,436		110	339
Life Insurance Costs	27,071		99	27,239		97	117,622		96	235
Costs of Real Estate Sales	22,910		137	16,664		81	65,904		58	199
Other Operating Expenses	32,571		118	27,529		131	128,188		124	283
Selling, General and Administrative Expenses	59,003		144	40,902		113	187,818		110	512
Provision for Doubtful Receivables and Probable Loan Losses	2,670		57	4,720		54	16,477		42	23
Write-downs of Long-Lived Assets	—		—	—		—	8,336		71	—
Write-downs of Securities	1,559		87	1,800		123	4,540		92	13
Foreign Currency Transaction Loss (Gain), Net	398		—	(643	)	374	(212	)	—	3

Operating Income	70,024		141	49,791		157	216,914		165	608

Equity in Net Income of Affiliates	9,074		125	7,263		153	32,080		160	78
Gains on Sales of Subsidiaries and Affiliates and Liquidation Loss	681		47	1,459		174	2,732		82	6

Income before Income Taxes, Minority Interests in Earnings of Subsidiaries and Discontinued Operations	79,779		136	58,513		157	251,726		163	692

Provision for Income Taxes	32,712		137	23,851		148	97,559		143	284

Income before Minority Interests in Earnings of Subsidiaries	47,067		136	34,662		163	154,167		178	408

Minority Interests in Earnings of Subsidiaries, Net	896		233	384		52	3,247		131	7

Income from Continuing Operations	46,171		135	34,278		167	150,920		179	401

Discontinued Operations:
Income from Discontinued Operations, Net	1,643			5,878			25,420			14
Provision for Income Taxes	(711	)		(2,367	)		(9,952	)		(6	)

Discontinued Operations, Net of Applicable Tax Effect	932		27	3,511		117	15,468		216	8

Net Income	47,103		125	37,789		161	166,388		182	409


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.

- 8 -

Condensed Consolidated Balance Sheets

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

(Unaudited)


	(millions of JPY, millions of US$)
	June 30, 2006		March 31, 2006		U.S. dollars June 30, 2006
Assets

Cash and Cash Equivalents	149,498		245,856		1,297
Restricted Cash	85,709		172,805		744
Time Deposits	780		5,601		7
Investment in Direct Financing Leases	1,437,711		1,437,491		12,476
Installment Loans	3,036,818		2,926,036		26,352
Allowance for Doubtful Receivables on Direct Financing Leases and Probable Loan Losses	(92,220	)	(97,002	)	(800	)
Investment in Operating Leases	721,127		720,096		6,257
Investment in Securities	692,559		682,798		6,010
Other Operating Assets	93,226		91,856		809
Investment in Affiliates	327,025		316,773		2,838
Other Receivables	170,149		165,657		1,476
Inventories	143,894		140,549		1,249
Prepaid Expenses	44,259		40,676		384
Office Facilities	91,349		91,797		793
Other Assets	321,676		301,466		2,791

Total Assets	7,223,560		7,242,455		62,683

Liabilities and Shareholders’ Equity
Short-Term Debt	1,174,667		1,336,414		10,193
Deposits	344,887		353,284		2,993
Trade Notes, Accounts Payable and Other Liabilities	359,484		334,008		3,119
Accrued Expenses	70,206		89,043		609
Policy Liabilities	497,596		503,708		4,318
Current and Deferred Income Taxes	234,032		250,997		2,031
Security Deposits	149,642		150,836		1,298
Long-Term Debt	3,370,951		3,236,055		29,252

Total Liabilities	6,201,465		6,254,345		53,813


Minority Interests	35,593		34,464		309

Common Stock	89,172		88,458		774
Additional Paid-in Capital	108,573		106,729		942
Retained Earnings:
Legal Reserve	2,220		2,220		19
Retained Earnings	772,397		733,386		6,703
Accumulated Other Comprehensive Income	18,408		27,603		160
Treasury Stock, at Cost	(4,268	)	(4,750	)	(37	)

Total Shareholders’ Equity	986,502		953,646		8,561

Total Liabilities and Shareholders’ Equity	7,223,560		7,242,455		62,683


	June 30, 2006		March 31, 2006		U.S. dollars June 30, 2006
Note : Accumulated Other Comprehensive Income
Net unrealized gains on investment in securities	46,372		50,856		402
Minimum pension liability adjustments	(620	)	(632	)	(5	)
Foreign currency translation adjustments	(30,759	)	(26,132	)	(267	)
Net unrealized gains on derivative instruments	3,415		3,511		30

- 9 -

Condensed Consolidated Statements of Shareholders’ Equity

(For the Three Months Ended June 30, 2006 and 2005, and the Year Ended March 31, 2006)

(Unaudited)


	(millions of JPY, millions of US$)
	Three Months ended June 30, 2006		Three Months ended June 30, 2005		Year ended March 31, 2006		U.S. dollars June 30, 2006
Common Stock:
Beginning balance	88,458		73,100		73,100		768
Issuance during the year	714		839		15,358		6

Ending balance	89,172		73,939		88,458		774

Additional Paid-in Capital:
Beginning balance	106,729		91,045		91,045		926
Issuance during the year and other, net	1,844		838		15,684		16

Ending balance	108,573		91,883		106,729		942

Legal Reserve:
Beginning balance	2,220		2,220		2,220		19

Ending balance	2,220		2,220		2,220		19

Retained Earnings:
Beginning balance	733,386		570,494		570,494		6,364
Cash dividends	(8,092	)	(3,496	)	(3,496	)	(70	)
Net income	47,103		37,789		166,388		409

Ending balance	772,397		604,787		733,386		6,703

Accumulated Other Comprehensive Income (Loss):
Beginning balance	27,603		(1,873	)	(1,873	)	240
Net change of unrealized gains on investment in securities	(4,484	)	(2,969	)	10,706		(39	)
Net change of minimum pension liability adjustments	12		(82	)	458		0
Net change of foreign currency translation adjustments	(4,627	)	3,652		13,478		(40	)
Net change of unrealized gains on derivative instruments	(96	)	559		4,834		(1	)

Ending balance	18,408		(713	)	27,603		160

Treasury Stock:
Beginning balance	(4,750	)	(7,653	)	(7,653	)	(41	)
Net (increase) decrease	482		140		2,903		4

Ending balance	(4,268	)	(7,513	)	(4,750	)	(37	)

Total Shareholders’ Equity:
Beginning balance	953,646		727,333		727,333		8,276
Increase, net	32,856		37,270		226,313		285

Ending balance	986,502		764,603		953,646		8,561

Summary of Comprehensive Income :
Net income	47,103		37,789		166,388		409
Other comprehensive income	(9,195	)	1,160		29,476		(80	)

Comprehensive income	37,908		38,949		195,864		329

- 10 -

Condensed Consolidated Statements of Cash Flows

(For the Three Months Ended June 30, 2006 and 2005, and the Year Ended March 31, 2006)

(Unaudited)


	(millions of JPY, millions of US$)
	Three Months ended June 30, 2006		Three Months ended June 30, 2005		Year ended March 31, 2006		U.S. dollars June 30, 2006
Cash Flows from Operating Activities:
Net income	47,103		37,789		166,388		409
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	34,745		32,190		136,621		302
Provision for doubtful receivables and probable loan losses	2,670		4,720		16,477		23
Decrease in policy liabilities	(6,112	)	(13,134	)	(47,172	)	(53	)
Gains from securitization transactions	(297	)	(1,001	)	(7,139	)	(3	)
Equity in net income of affiliates	(9,074	)	(7,263	)	(32,080	)	(78	)
Gains on sales of subsidiaries and affiliates and liquidation loss	(681	)	(1,459	)	(2,732	)	(6	)
Minority interests in earnings of subsidiaries, net	896		384		3,247		7
Gains on sales of available-for-sale securities	(5,614	)	(4,439	)	(10,401	)	(49	)
Gains on sales of real estate under operating leases	(11,410	)	(5,820	)	(8,970	)	(99	)
Gains on sales of operating lease assets other than real estate	(4,220	)	(1,261	)	(7,184	)	(37	)
Write-downs of long-lived assets	—		—		8,336		—
Write-downs of securities	1,559		1,800		4,540		13
Decrease (increase) in restricted cash	86,996		675		(119,202	)	755
Decrease (increase) in trading securities	6,159		(4,468	)	(9,091	)	53
Increase in inventories	(1,803	)	(1,819	)	(56,596	)	(16	)
Increase in prepaid expenses	(3,629	)	(5,358	)	(2,316	)	(31	)
Increase (decrease) in accrued expenses	(18,835	)	(15,316	)	2,755		(163	)
Increase in security deposits	39		5,246		48,597		0
Other, net	(2,363	)	7,633		51,925		(19	)

Net cash provided by operating activities	116,129		29,099		136,003		1,008


Cash Flows from Investing Activities:
Purchases of lease equipment	(255,216	)	(223,658	)	(1,136,538	)	(2,215	)
Principal payments received under direct financing leases	168,417		155,765		670,781		1,461
Net proceeds from securitization of lease receivables, loan receivables and securities	19,410		32,912		194,806		168
Installment loans made to customers	(465,075	)	(363,952	)	(1,834,192	)	(4,036	)
Principal collected on installment loans	332,352		276,031		1,200,337		2,884
Proceeds from sales of operating lease assets	49,844		55,391		130,992		433
Investment in and dividends received from affiliates, net	(2,225	)	(32,277	)	10,754		(19	)
Purchases of available-for-sale securities	(42,290	)	(44,387	)	(201,123	)	(367	)
Proceeds from sales of available-for-sale securities	18,495		40,544		166,251		160
Maturities of available-for-sale securities	6,310		11,489		38,706		55
Purchases of other securities	(14,490	)	(6,791	)	(34,634	)	(126	)
Proceeds from sales of other securities	5,568		3,392		23,142		48
Purchases of other operating assets	(1,746	)	(9,419	)	(25,630	)	(15	)
Acquisitions of subsidiaries, net of cash acquired	(10,145	)	—		(38,837	)	(88	)
Sales of subsidiaries, net of cash disposed	529		1,500		2,664		5
Other, net	11,356		2,783		33,164		100

Net cash used in investing activities	(178,906	)	(100,677	)	(799,357	)	(1,552	)


Cash Flows from Financing Activities:
Net increase (decrease) in debt with maturities of three months or less	(123,791	)	3,196		326,285		(1,074	)
Proceeds from debt with maturities longer than three months	452,161		474,104		2,102,054		3,924
Repayment of debt with maturities longer than three months	(366,202	)	(414,752	)	(1,697,828	)	(3,178	)
Net increase (decrease) in deposits due to customers	(8,367	)	12,235		16,628		(73	)
Issuance of common stock	526		1,677		5,975		5
Dividends paid	(8,092	)	(3,496	)	(3,496	)	(70	)
Net increase in call money	20,000		—		10,000		174
Other, net	483		140		2,910		3

Net cash provided by (used in) financing activities	(33,282	)	73,104		762,528		(289	)


Effect of Exchange Rate Changes on Cash and Cash Equivalents	(299	)	241		1,302		(3	)

Net Increase (Decrease) in Cash and Cash Equivalents	(96,358	)	1,767		100,476		(836	)
Cash and Cash Equivalents at Beginning of Period	245,856		145,380		145,380		2,133

Cash and Cash Equivalents at End of Period	149,498		147,147		245,856		1,297

- 11 -

Segment Information

(For the Three Months Ended June 30, 2006 and 2005, and the Year Ended March 31, 2006)

(Unaudited)


	(millions of JPY)
	Three months ended June 30, 2006				Three months ended June 30, 2005					Year ended March 31, 2006
	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		11,143	1,690,050	23,093		11,379		1,544,319	97,683		48,661		1,616,574
Automobile Operations	36,627		6,258	526,245	32,253		6,280		461,148	130,775		26,661		509,149
Rental Operations	15,351		1,269	121,039	15,765		1,634		115,660	67,066		9,911		123,532
Real Estate-Related Finance	18,180		10,598	1,234,172	15,493		6,892		977,407	69,472		33,384		1,223,063
Real Estate	70,231		20,709	689,273	51,495		12,781		478,389	198,780		28,650		682,166
Life Insurance	29,530		1,139	509,171	30,093		1,632		548,898	137,468		13,212		491,857
Other	30,588		10,996	657,583	24,589		8,198		495,998	111,854		41,657		668,689

Sub-Total	226,755		62,112	5,427,533	192,781		48,796		4,621,819	813,098		202,136		5,315,030
Overseas Operations
The Americas	23,855		5,167	442,100	12,773		7,152		406,247	70,223		34,701		441,285
Asia, Oceania and Europe	23,941		11,624	597,567	20,220		7,569		514,018	88,914		31,956		562,654

Sub-Total	47,796		16,791	1,039,667	32,993		14,721		920,265	159,137		66,657		1,003,939

Segment Total	274,551		78,903	6,467,200	225,774		63,517		5,542,084	972,235		268,793		6,318,969

Difference between Segment totals and Consolidated Amounts	(712	)	876	756,360	(9,998	)	(5,004	)	643,087	(28,804	)	(17,067	)	923,486

Consolidated Amounts	273,839		79,779	7,223,560	215,776		58,513		6,185,171	943,431		251,726		7,242,455


	(millions of US$)
	U.S. dollars June 30, 2006
	Segment Revenues		Segment Profits	Segment Assets
Operations in Japan
Corporate Financial Services	228		97	14,666
Automobile Operations	318		54	4,567
Rental Operations	133		11	1,050
Real Estate-Related Finance	158		92	10,710
Real Estate	609		180	5,981
Life Insurance	256		10	4,418
Other	266		95	5,706

Sub-Total	1,968		539	47,098
Overseas Operations
The Americas	207		45	3,836
Asia, Oceania and Europe	208		101	5,186

Sub-Total	415		146	9,022

Segment Total	2,383		685	56,120

Difference between Segment totals and Consolidated Amounts	(7	)	7	6,563

Consolidated Amounts	2,376		692	62,683


*Note:		Since the Company evaluates the performance for the segments based on profits before income taxes, tax expenses are not included in the segment profits. In addition, results of discontinued operations are included in “Segment Revenues” and “Segment Profits” of each segment, if any. Such amounts are eliminated in “Difference between Segment totals and Consolidated Amounts.”

- 12 -

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