Segment Information

12 Months Ended

Mar. 31, 2020

34. Segment Information

Based on the nature of major products and services, customer base, and management organizations, our business are organized into six operating segments: Corporate Financial Services, Maintenance Leasing, Real Estate, Investment and Operation, Retail and Overseas Business.

Financial information about the operating segments reported below is that which is available by segment and regularly reviewed by the chief operating decision maker to make decisions about resource allocations and assess performance.

Types of products and services of the six segments are as follows.


Corporate Financial Services	:	Finance and fee business

Maintenance Leasing	:	Automobile leasing and rentals, car-sharing; test and measurement instruments and IT-related equipment rentals and leasing

Real Estate	:	Real estate development, rental and management; facility operation; real estate investment management

Investment and Operation	:	Environment and energy, private equity and concession

Retail	:	Life insurance, banking and card loan

Overseas Business	:	Asset management, aircraft- and ship-related operations, private equity and finance

In fiscal 2019, the Company had made

DAIKYO

a wholly-owned subsidiary, to complement their respective real estate business and to jointly aim for medium- and long-term growth as a comprehensive real estate group. Accordingly, the segment classification of DAIKYO had been shifted from Investment and Operation segment to Real Estate segment since the previous fiscal year. As a result of this change, the segment data of the previous fiscal year has been retrospectively restated.

Financial information of the segments for fiscal 2018, 2019 and 2020 is as follows:


Year ended March 31, 2018	Millions of yen
Year ended March 31, 2018	Corporate Financial Services		Maintenance Leasing		Real Estate			Investment and Operation			Retail			Overseas Business		Total
Revenues	¥	115,837	¥	275,933	¥	489,752		¥	1,083,505		¥	428,697		¥	479,619	¥	2,873,343
Finance revenues		30,737		14,247		2,072			9,274			72,929			98,426		227,685
Interest expense		5,019		3,242		2,285			5,670			4,026			51,536		71,778
Depreciation and amortization		10,404		131,829		18,218			18,460			21,642			70,109		270,662
Other significant non-cash items:
Provision for doubtful receivables and probable loan losses		1,072		192		(8	)		(927	)		11,244			5,783		17,356
Write-downs of long-lived assets		32		29		4,187			27			0			1,250		5,525
Increase (Decrease) in policy liabilities and policy account balances		0		0		0			0			(53,512	)		0		(53,512	)
Equity in net income (loss) of affiliates and gains (losses) on sales of subsidiaries and affiliates and liquidation losses, net		2,681		102		35,461			49,315			6			11,749		99,314
Segment profits		49,275		40,162		74,395			84,097			74,527			106,622		429,078
Segment assets		991,818		847,190		801,969			674,617			3,174,505			2,608,819		9,098,918
Long-lived assets		41,252		482,563		509,450			257,266			43,878			507,715		1,842,124
Expenditures for long-lived assets		3,764		170,727		69,693			47,841			174			286,730		578,929
Investment in affiliates		16,845		1,996		100,219			156,896			702			314,569		591,227


Year ended March 31, 2019	Millions of yen
Year ended March 31, 2019	Corporate Financial Services			Maintenance Leasing			Real Estate		Investment and Operation			Retail			Overseas Business		Total
Revenues	¥	95,212		¥	288,211		¥	529,064	¥	615,151		¥	428,904		¥	490,730	¥	2,447,272
Finance revenues		28,829			14,352			2,065		9,063			76,693			111,634		242,636
Interest expense		4,067			3,026			2,249		7,054			4,080			62,821		83,297
Depreciation and amortization		11,096			139,897			17,299		21,223			25,774			73,123		288,412
Other significant non-cash items:
Provision for doubtful receivables and probable loan losses		1,106			336			23		(187	)		11,541			9,564		22,383
Write-downs of long-lived assets		0			712			1,553		43			0			110		2,418
Increase (Decrease) in policy liabilities and policy account balances		0			0			0		0			10,109			0		10,109
Equity in net income (loss) of affiliates and gains (losses) on sales of subsidiaries and affiliates and liquidation losses, net		(416	)		1,329			16,845		15,707			(17	)		32,840		66,288
Segment profits		25,482			38,841			89,247		38,170			84,211			125,444		401,395
Segment assets		959,725			873,775			720,221		733,612			3,571,437			3,138,928		9,997,698
Long-lived assets		39,856			500,435			424,833		282,895			29,406			524,662		1,802,087
Expenditures for long-lived assets		2,781			195,443			73,321		40,818			2			308,808		621,173
Investment in affiliates		16,276			33			107,072		161,966			631			556,682		842,660

Year ended March 31, 2020	Millions of yen
Year ended March 31, 2020	Corporate Financial Services			Maintenance Leasing			Real Estate		Investment and Operation			Retail			Overseas Business		Total
Revenues	¥	97,007		¥	336,438		¥	466,639	¥	451,197		¥	454,751		¥	486,328	¥	2,292,360
Finance revenues		28,522			30,820			3,249		7,618			81,089			126,352		277,650
Interest expense		3,563			2,837			1,557		9,061			4,489			68,010		89,517
Depreciation and amortization		10,938			144,836			15,487		25,301			27,848			71,408		295,818
Other significant non-cash items:
Provision for doubtful receivables and probable loan losses		1,119			349			14		(30	)		11,971			11,002		24,425
Write-downs of long-lived assets		0			11			303		2,106			0			623		3,043
Increase (Decrease) in policy liabilities and policy account balances		0			0			0		0			70,120			0		70,120
Equity in net income (loss) of affiliates and gains (losses) on sales of subsidiaries and affiliates and liquidation losses, net		659			(14	)		28,743		35,463			3			77,029		141,883
Segment profits		14,611			33,724			76,857		55,715			80,387			156,433		417,727
Segment assets		948,268			889,615			749,694		847,082			4,183,894			3,287,445		10,905,998
Long-lived assets		92,434			529,757			470,888		411,636			28,911			470,720		2,004,346
Expenditures for long-lived assets		2,109			190,093			68,608		33,787			0			253,226		547,823
Investment in affiliates		18,328			19			91,835		150,856			400			560,162		821,600

The accounting policies of the segments are almost the same as those described in Note 1 “Significant Accounting and Reporting Policies” except for the treatment of income tax expenses, net income attributable to the noncontrolling interests, net income attributable to the redeemable noncontrolling interests. Net income

attributable to noncontrolling interests and redeemable noncontrolling interests are not included in segment profits or losses because the management evaluates segments’ performance based on profits or losses

(pre-tax)

attributable to ORIX Corporation Shareholders. Income taxes are not included in segment profits or losses because the management evaluates segments’ performance on a

pre-tax

basis. Additionally, net income attributable to the noncontrolling interests, net income attributable to the redeemable noncontrolling interests, which are recognized net of tax in the accompanying consolidated statements of income, are adjusted to profit or loss before income taxes, when calculating segment profits or losses. Most of selling, general and administrative expenses, including compensation costs that are directly related to the revenue generating activities of each segment, have been accumulated by and charged to each segment. Gains and losses that management does not consider for evaluating the performance of the segments, such as write-downs of certain long-lived assets and certain foreign exchange gains or losses (included in other (income) and expense) are excluded from the segment profits or losses, and are regarded as corporate items.

Assets attributed to each segment are net investment in leases, installment loans, investment in operating leases, investment in securities, property under facility operations, investment in affiliates, inventories, advances for finance lease and operating lease (included in other assets), advances for property under facility operations (included in other assets), goodwill, intangible assets acquired in business combinations (included in other assets) and servicing assets (included in other assets). It should be noted that the depreciation expenses of office facilities are included in each segment profit and loss while the corresponding assets are not allocated to each segment’s assets. However, the amount is not significant.

Certain line items presented in the consolidated statements of income have been changed starting from fiscal 2019. For further information, see Note 1 “Significant Accounting and Reporting Policies (ah) Reclassifications.”

From fiscal 2019, consolidated VIEs for securitizing financial assets such as lease receivables and loan receivables, which had been excluded from segment revenues, segment profits and segment assets until the previous fiscal year, are included in segment revenues, segment profits and segment assets of each segment. As a result of this change, segment amounts as of the end of and for the previous fiscal year have been retrospectively reclassified.

The New Lease Standard has been adopted since April 1, 2019. This adoption has resulted in a gross up of ROU assets of

investment

in operating leases and property under facility operations related to operating leases of land, office and equipment, where the Company is the lessee, as segment assets in all of our segments except for Retail segment. In addition, segment revenues and segment expenses mainly in Corporate Financial Service segment and Maintenance Leasing segment increased as a result of a gross up of revenues and expenses of certain lessor costs. For further information, see Note 1 “Significant Accounting and Reporting Policies (ag) New accounting pronouncements.”

The reconciliation of segment totals to consolidated financial statement amounts is as follows. Significant items to be reconciled are segment revenues, segment profits and segment assets. Other items do not have a significant difference between segment amounts and consolidated amounts.


	Millions of yen
	2018			2019			2020
Segment revenues:
Total revenues for segments	¥	2,873,343		¥	2,447,272		¥	2,292,360
Revenues related to corporate assets		8,531			8,655			8,559
Revenues from inter-segment transactions		(19,103	)		(21,063	)		(20,590	)

Total consolidated revenues	¥	2,862,771		¥	2,434,864		¥	2,280,329

Segment profits:
Total segment profits	¥	429,078		¥	401,395		¥	417,727
Corporate losses		(4,329	)		(10,012	)		(10,395	)
Net income attributable to the noncontrolling interests and net income attributable to the redeemable noncontrolling interests		10,752			4,347			5,229

Total consolidated income before income taxes	¥	435,501		¥	395,730		¥	412,561

Segment assets:
Total segment assets	¥	9,098,918		¥	9,997,698		¥	10,905,998
Cash and cash equivalents, restricted cash		1,405,117			1,283,580			1,135,284
Allowance for doubtful receivables on finance leases and probable loan losses		(54,672	)		(58,011	)		(56,836	)
Trade notes, accounts and other receivable		294,773			280,590			312,744
Other corporate assets		681,846			671,060			770,338

Total consolidated assets	¥	11,425,982		¥	12,174,917		¥	13,067,528

The following information represents geographical revenues and income before income taxes, which are attributed to geographic areas, based on the country location of the Company and its subsidiaries.


	Millions of yen
	Fiscal Year ended March 31, 2018
	Japan		The Americas*1		Other*2		Total
Total Revenues	¥	2,377,729	¥	208,264	¥	276,778	¥	2,862,771
Income before Income Taxes		320,511		74,105		40,885		435,501

	Millions of yen
	Fiscal Year ended March 31, 2019
	Japan		The Americas*1		Other*2		Total
Total Revenues	¥	1,948,868	¥	205,233	¥	280,763	¥	2,434,864
Income before Income Taxes		274,431		70,935		50,364		395,730

	Millions of yen
	Fiscal Year ended March 31, 2020
	Japan		The Americas*1		Other*2		Total
Total Revenues	¥	1,792,790	¥	201,578	¥	285,961	¥	2,280,329
Income before Income Taxes		260,323		74,086		78,152		412,561

*1	Mainly the United States

*2	Mainly Asia, Europe, Australasia and Middle East

Revenues from one customer that exceeds 10% of consolidated revenue for fiscal 2018 consist of approximately ¥3 million in Corporate Financial Services Segment and ¥320,446 million in Investment and Operation Segment. No single customer accounted for 10% or more of the Company’s total revenues for fiscal 2019 and 2020.

Disaggregation of revenues for revenues from contracts with customers, by goods or services category and geographical location is as follows:


	Millions of yen
	Fiscal Year ended March 31, 2019
	Reportable segments														Corporate revenue and intersegment transactions			Total revenues
	Corporate Financial Services		Maintenance Leasing		Real Estate		Investment and Operation		Retail		Overseas Business		Total		Corporate revenue and intersegment transactions			Total revenues
Goods or services category
Sales of goods	¥	4,379	¥	5,392	¥	8,063	¥	436,044	¥	0	¥	6,798	¥	460,676	¥	1,353		¥	462,029
Real estate sales		0		0		133,426		0		0		710		134,136		0			134,136
Asset management and servicing		0		0		5,523		454		163		185,787		191,927		(107	)		191,820
Automobile related services		486		61,398		0		204		0		16,994		79,082		(359	)		78,723
Facilities operation		0		0		100,940		0		0		3,066		104,006		(1	)		104,005
Environment and energy services		2,815		0		188		129,166		0		1,004		133,173		(930	)		132,243
Real estate management and brokerage		0		0		105,278		0		0		0		105,278		(2,216	)		103,062
Real estate contract work		0		0		83,182		0		0		0		83,182		(965	)		82,217
Other		35,958		9,153		4,513		39,081		3,448		20,544		112,697		(5,356	)		107,341

Total revenues from contracts with customers		43,638		75,943		441,113		604,949		3,611		234,903		1,404,157		(8,581	)		1,395,576

Geographical location
Japan		43,638		75,610		441,113		603,957		3,611		6,749		1,174,678		(4,886	)		1,169,792
The Americas		0		0		0		0		0		114,614		114,614		0			114,614
Other		0		333		0		992		0		113,540		114,865		(3,695	)		111,170

Total revenues from contracts with customers		43,638		75,943		441,113		604,949		3,611		234,903		1,404,157		(8,581	)		1,395,576

Other revenues*		51,574		212,268		87,951		10,202		425,293		255,827		1,043,115		(3,827	)		1,039,288

Segment revenues/Total revenues	¥	95,212	¥	288,211	¥	529,064	¥	615,151	¥	428,904	¥	490,730	¥	2,447,272	¥	(12,408	)	¥	2,434,864


	Millions of yen
	Fiscal Year ended March 31, 2020
	Reportable segments														Corporate revenue and intersegment transactions			Total revenues
	Corporate Financial Services		Maintenance Leasing		Real Estate		Investment and Operation		Retail		Overseas Business		Total		Corporate revenue and intersegment transactions			Total revenues
Goods or services category
Sales of goods	¥	5,707	¥	5,829	¥	4,261	¥	266,271	¥	0	¥	4,131	¥	286,199	¥	1,359		¥	287,558
Real estate sales		0		0		117,969		0		0		984		118,953		0			118,953
Asset management and servicing		0		0		7,453		383		167		173,948		181,951		(100	)		181,851
Automobile related services		488		60,704		0		232		0		16,950		78,374		(387	)		77,987
Facilities operation		0		0		68,934		0		0		363		69,297		0			69,297
Environment and energy services		2,911		0		0		138,380		0		963		142,254		(722	)		141,532
Real estate management and brokerage		0		0		106,234		0		0		0		106,234		(2,124	)		104,110
Real estate contract work		0		0		89,522		0		0		0		89,522		(556	)		88,966
Other		36,340		10,630		3,921		34,942		4,147		17,313		107,293		(3,234	)		104,059

Total revenues from contracts with customers		45,446		77,163		398,294		440,208		4,314		214,652		1,180,077		(5,764	)		1,174,313

Geographical location
Japan		45,446		76,462		398,294		436,500		4,314		5,704		966,720		(2,079	)		964,641
The Americas		0		0		0		0		0		99,979		99,979		0			99,979
Other		0		701		0		3,708		0		108,969		113,378		(3,685	)		109,693

Total revenues from contracts with customers		45,446		77,163		398,294		440,208		4,314		214,652		1,180,077		(5,764	)		1,174,313

Other revenues*		51,561		259,275		68,345		10,989		450,437		271,676		1,112,283		(6,267	)		1,106,016

Segment revenues/Total revenues	¥	97,007	¥	336,438	¥	466,639	¥	451,197	¥	454,751	¥	486,328	¥	2,292,360	¥	(12,031	)	¥	2,280,329

*	Other revenues include revenues that are not in the scope of revenue from contracts with customers, such as life insurance premiums and related investment income, operating leases, finance revenues that include interest income, and others.