Income Taxes (Tables)

12 Months Ended

Mar. 31, 2020

Income Tax Disclosure [Abstract]

Income before Income Taxes and Provision for Income Taxes

Income before income taxes and the provision for income taxes in fiscal 2018, 2019 and 2020 are as follows:

	Millions of yen
	2018			2019			2020
Income before income taxes:
Japan	¥	296,577		¥	254,352		¥	223,327
Overseas		138,924			141,378			189,234
	¥	435,501		¥	395,730		¥	412,561
Provision for income taxes:
Current—
Japan	¥	85,514		¥	83,995		¥	55,577
Overseas		22,810			19,824			35,370
		108,324			103,819			90,947
Deferred—
Japan		5,960			(51,795	)		9,643
Overseas		(372	)		16,667			5,247
		5,588			(35,128	)		14,890
Provision for income taxes	¥	113,912		¥	68,691		¥	105,837

Reconciliations of Differences between Tax Provision Computed and Consolidated Provisions for Income Taxes

Reconciliations of the differences between the tax provision computed at the statutory rate and the consolidated provision for income taxes in fiscal 2018, 2019 and 2020 are as follows:

	Millions of yen
	2018			2019			2020
Income before income taxes	¥	435,501		¥	395,730		¥	412,561
Tax provision computed at statutory rate	¥	138,054		¥	124,655		¥	129,957
Increases (reductions) in taxes due to:
Change in valuation allowance		(6,971	)		(329	)		2,505
Nondeductible expenses		3,000			4,431			4,319
Nontaxable income		(4,464	)		(15,176	)		(3,612	)
Effect of lower tax rates on certain subsidiaries		(5,713	)		(17,950	)		(24,862	)
Effect of investor taxes on earnings of subsidiaries		3,831			(26,756	)		3,039
Effect of the tax law and rate changes		(16,232	)		(1,264	)		(6,642	)
Other, net		2,407			1,080			1,133
Provision for income taxes	¥	113,912		¥	68,691		¥	105,837

Total Income Tax Recognized

Total income taxes recognized in fiscal 2018, 2019 and 2020 was allocated as follows:

	Millions of yen
	2018			2019			2020
Provision for income taxes	¥	113,912		¥	68,691		¥	105,837
Income taxes allocated to other comprehensive income (loss):
Net change of unrealized gains (losses) on investment in securities		(11,084	)		4,013			(7,016	)
Net change of debt valuation adjustments		0			90			340
Net change of defined benefit pension plans		(911	)		(2,864	)		448
Net change of foreign currency translation adjustments		(1,517	)		729			10,276
Net change of unrealized gains (losses) on derivative instruments		139			(1,258	)		(2,163	)
Direct adjustments to shareholders’ equity		(2	)		0			0
Total income taxes	¥	100,537		¥	69,401		¥	107,722

Deferred Tax Assets and Liabilities

The tax effects of temporary differences giving rise to the deferred tax assets and liabilities at March 31, 2019 and 2020 are as follows:

	Millions of yen
	2019			2020
Assets:
Net operating loss carryforwards	¥	14,246		¥	22,471
Allowance for doubtful receivables on finance leases and probable loan losses		16,336			14,557
Investment in securities		5,045			11,305
Accrued expenses		21,498			18,978
Investment in operating leases		13,134			11,654
Property under facility operations		8,642			8,091
Installment loans		4,737			4,353
Unrealized losses on investment in securities		0			4,877
Lease liabilities		0			78,697
Other		58,689			56,169
		142,327			231,152
Less: valuation allowance		(13,156	)		(15,369	)
		129,171			215,783
Liabilities:
Investment in direct financing leases		10,819			0
Net investment in Leases		0			8,594
Investment in operating leases		97,653			105,667
Unrealized gains on investment in securities		6,971			4,687
Deferred insurance policy acquisition costs		56,132			62,321
Policy liabilities and policy account balances		38,227			42,949
Property under facility operations		11,594			17,352
Other intangible assets		97,426			97,383
Undistributed earnings		42,329			47,878
Prepaid benefit cost		8,932			8,837
Advances paid		7,681			10,218
Right-of-use assets		0			79,642
Other		31,278			31,318
		409,042			516,846
Net deferred tax liability	¥	279,871		¥	301,063

Net deferred tax assets and liabilities at March 31, 2019 and 2020 are reflected in the accompanying consolidated balance sheets under the following captions:

	Millions of yen
	2019		2020
Other assets	¥	33,962	¥	27,084
Income taxes: Deferred		313,833		328,147
Net deferred tax liability	¥	279,871	¥	301,063

Net Operating Loss Carryforwards Expire Date

The Company and certain subsidiaries have net operating loss carryforwards of ¥171,725 million at March 31, 2020, which expire as follows:

Years ending March 31,	Millions of yen
2021	¥	12,549
2022		5,656
2023		8,847
2024		16,888
2025		10,882
Thereafter		90,681
Indefinite period		26,222
Total	¥	171,725