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 November 2014.

Commission File Number: 001-14856

ORIX Corporation

(Translation of Registrant’s Name into English)

World Trade Center Bldg., 2-4-1 Hamamatsu-cho, Minato-ku,

Tokyo, 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 if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ¨

Table of Document(s) Submitted

1.     This is an English translation of ORIX Corporation’s quarterly financial report (shihanki houkokusho) as filed with the Kanto Financial Bureau in Japan on November 13, 2014, which includes unaudited consolidated financial information prepared in accordance with generally accepted accounting principles in the United States for the three and six months ended September 30, 2013 and 2014.

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: November 13, 2014	By	/s/ Haruyuki Urata
		Haruyuki Urata
		Director
		Deputy President and Chief Financial Officer
		ORIX Corporation

CONSOLIDATED FINANCIAL INFORMATION

Notes to Translation

1. The following is an English translation of ORIX Corporation’s quarterly financial report (shihanki houkokusho) as filed with the Kanto Financial Bureau in Japan on November 13, 2014, which includes unaudited consolidated financial information prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) for the three and six months ended September 30, 2013 and 2014.

2. Significant differences between U.S. GAAP and generally accepted accounting principles in Japan (“Japanese GAAP”) are stated in the notes of “Overview of Accounting Principles Utilized.”

In preparing its consolidated financial information, ORIX Corporation (the “Company”) and its subsidiaries have complied with U.S. GAAP.

This document may contain forward-looking statements about expected future events and financial results that involve risks and uncertainties. Such statements are based on the Company’s 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 most recent annual report on Form 20-F filed with the U.S. Securities and Exchange Commission.

This document contains non-GAAP financial measures, including adjusted long-term and interest-bearing debt, adjusted total assets and adjusted ORIX Corporation shareholders’ equity, as well as other measures and ratios calculated on the basis thereof. These non-GAAP financial measures should not be considered in isolation or as a substitute for the most directly comparable financial measures included in our consolidated financial statements presented in accordance with U.S. GAAP. Reconciliations of these non-GAAP financial measures to the most directly comparable U.S. GAAP measures are included in this document.

The Company believes that it will be considered a “passive foreign investment company” for U.S. Federal income tax purposes 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.

– 1 –

1. Information on the Company and its Subsidiaries

(1) Consolidated Financial Highlights

	Millions of yen (except for per share amounts and ratios)
	Six months ended September 30, 2013			Six months ended September 30, 2014			Fiscal year ended March 31, 2014
Total revenues	¥	609,103		¥	945,175		¥	1,341,651
Income before income taxes and discontinued operations		122,131			203,004			283,726
Net income attributable to ORIX Corporation shareholders		80,408			142,106			186,794
Comprehensive Income attributable to ORIX Corporation shareholders		85,568			150,777			223,059
ORIX Corporation shareholders’ equity		1,759,626			2,036,578			1,918,740
Total assets		8,429,989			11,215,063			9,069,392
Earnings per share for net income attributable to ORIX Corporation shareholders
Basic (yen)		64.67			108.50			147.30
Diluted (yen)		61.86			108.34			142.77
ORIX Corporation shareholders’ equity ratio (%)		20.9			18.2			21.2
Cash flows from operating activities		218,969			108,760			470,993
Cash flows from investing activities		(110,713	)		(141,111	)		(202,166	)
Cash flows from financing activities		(230,853	)		16,571			(274,579	)
Cash and cash equivalents at end of period		706,289			814,923			827,299
	Millions of yen (except for per share amounts and ratios)
	Three months ended September 30, 2013			Three months ended September 30, 2014
Total revenues	¥	333,031		¥	507,432
Net income attributable to ORIX Corporation shareholders		35,401			73,501
Earnings per share for net income attributable to ORIX Corporation shareholders
Basic (yen)		28.19			56.12

Notes	1.	Pursuant to FASB Accounting Standards Codification (“ASC”) 205-20 (“Presentation of Financial Statements— Discontinued Operations”), certain amounts in the fiscal year ended March 31, 2014 related to the operations of subsidiaries, business units, and certain properties that have been sold or are to be disposed of by sale without significant continuing involvement as of September 30, 2014 have been reclassified retrospectively.
	2.	Consumption tax is excluded from the stated amount of total revenues.

– 2 –

(2) Overview of Activities

During the six months ended September 30, 2014, no significant changes were made in the Company and its subsidiaries’ operations.

The change of principal related companies are below:

Retail Segment

During the three months ended September 30, 2014, ORIX Life Insurance Corporation (hereinafter, “ORIX Life Insurance”), a wholly owned subsidiary of the Company, completed the acquisition of the entire issued shares of Hartford Life Insurance K.K. (Head office: Minato-ku, Tokyo, Japan; business description: life insurance business and reinsurance business, etc., hereinafter, “HLIKK”) from The Hartford Life, Inc. (Head office: Simsbury, Connecticut, U.S.A.), a wholly owned second-tier subsidiary of The Hartford Financial Services Group, Inc. in order to enhance ORIX Life Insurance’s capital strength and improve the soundness of its operations with the aim of accelerating its future growth. As a result, HLIKK has become a consolidated subsidiary of the Company.

2. Risk Factors

Investing in our securities involves risks. You should carefully consider the information described herein as well as the risks described under “Risk Factors” in our Form 20-F for the fiscal year ended March 31, 2014 and the other information in that annual report, including, but not limited to, our consolidated financial statements and related notes and “Item 11. Quantitative and Qualitative Disclosures about Market Risk.” Our business activities, financial condition and results of operations and the trading prices of our securities could be adversely affected by any of those factors or other factors.

3. Material Contracts

Not applicable.

4. Analysis of Financial Results and Condition

The following discussion provides management’s explanation of factors and events that have significantly affected our financial condition and results of operations. Also included is management’s assessment of factors and trends that could have a material effect on our financial condition and results of operations in the future. However, please be advised that financial conditions and results of operations in the future may also be affected by factors other than those discussed herein. These factors and trends regarding the future were assessed as of the issue date of this quarterly financial report (shihanki houkokusho).

(1) Qualitative Information Regarding Consolidated Financial Results

Economic Environment

Since the beginning of this year, the global economy had been on a recovery path led by the U.S. economy. However, views are now divided on the world’s future economic prospects, and global stock markets are becoming more sensitive towards the results of major economic indicators.

In the United States, the job market and consumer spending are on an improving trend, while debates surrounding the timing of the interest rate hike are gaining momentum. On the other hand, we are seeing some uncertainties in the future of the European economy, and the market is paying particular attention to the future course of monetary easing policy by the European Central Bank.

In Asia, the emerging markets are experiencing different levels of growth. China’s economic growth is steadily declining towards a more sustainable level while other Asian countries are maintaining certain level of growth despite experiencing some effects from the global economy.

The Japanese economy continues to grow modestly with solid employment conditions, despite signs of weakness in some of the economic indicators due to the consumption tax hike that went into effect in April 2014.

– 3 –

Financial Highlights

Financial Results for the Six Months Ended September 30, 2014

Total revenues	¥945,175 million (Up 55% year on year)
Total expenses	¥809,000 million (Up 61% year on year)
Income before income taxes and discontinued operations	¥203,004 million (Up 66% year on year)
Net income attributable to ORIX Corporation Shareholders	¥142,106 million (Up 77% year on year)
Earnings per share for net income attributable to ORIX Corporation Shareholders
(Basic)	¥108.50 (Up 68% year on year)
(Diluted)	¥108.34 (Up 75% year on year)
ROE (Annualized) *1	14.4% (9.5% during the same period in the previous fiscal year)
ROA (Annualized) *2	2.80% (1.91% during the same period in the previous fiscal year)

*1 ROE is the ratio of net income attributable to ORIX Corporation Shareholders for the period to average ORIX Corporation Shareholders’ Equity.

*2 ROA is the ratio of net income attributable to ORIX Corporation Shareholders for the period to average Total Assets.

Total Revenues for the six months ended September 30, 2014 (hereinafter, “the second consolidated period”) increased 55% to ¥945,175 million compared to ¥609,103 million during the same period in the previous fiscal year. Compared to the same period of the previous fiscal year, life insurance premiums and related investment income increased as a result of the recognition of investment income from underlying investments related to variable annuity and variable life insurance contracts in accordance with the consolidation of Hartford Life Insurance K.K. (hereinafter, “HLIKK”), which became a consolidated subsidiary on July 1, 2014. In addition, revenues from asset management and servicing increased due to the consolidation of Robeco Groep N.V. (hereinafter, “Robeco”), which became a consolidated subsidiary on July 1, 2013. Sales of goods increased primarily due to contribution from subsidiaries acquired as a part of our private equity investments. Furthermore, other operating revenues and real estate sales increased due to contributions from DAIKYO INCORPORATED (hereinafter, “DAIKYO”), which became a consolidated subsidiary on February 27, 2014, contributions from subsidiaries acquired as a part of our private equity investments, and growth in our environment and energy-related business. In addition, brokerage commissions and net gains on investment securities increased due to the sale of shares of Monex Group Inc. On the other hand, interest on loans and investment securities decreased compared to the same period of the previous fiscal year due to decreases in the average balance of installment loans and gains from sales of loans.

Total Expenses increased 61% to ¥809,000 million compared to ¥502,116 million during the same period of the previous fiscal year. As with the abovementioned revenue increase, life insurance costs, costs of real estate sales, expenses from asset management and servicing, costs of goods sold, and other operating expenses primarily increased. Selling, general and administrative expenses also increased due primarily to an increase in consolidation of acquired companies and strong fee business in the United States. Meanwhile, interest expense decreased compared to the same period of the previous fiscal year due to a decrease in the average balance of borrowings.

Gains on sales of subsidiaries and affiliates and liquidation losses, net increased compared to the same period of the previous fiscal year primarily due to the recognition of a gain on the sale of partial equity interest STX Energy Co., Ltd. (presently GS E&R Corp., hereinafter, “STX Energy”). In addition, the acquisition of HLIKK resulted in a bargain purchase gain of ¥36,761 million due to an excess of fair value of the net assets acquired over the fair value of the consideration transferred.

As a result of the foregoing, income before income taxes and discontinued operations for the second consolidated period increased 66% to ¥203,004 million compared to ¥122,131 million during the same period of the previous fiscal year, and net income attributable to ORIX Corporation shareholders increased 77% to ¥142,106 million compared to ¥80,408 million during the same period of the previous fiscal year.

For more information about the acquisition of HLIKK, see Note 4 “Acquisitions”.

– 4 –

Segment Information

Total revenues and profits by segment for the six months ended September 30, 2013 and 2014 are as follows:

	Millions of yen
	Six months ended September 30, 2013					Six months ended September 30, 2014					Change (revenues)						Change (profits)
	Segment Revenues		Segment Profits			Segment Revenues		Segment Profits			Amount			Percent (%)			Amount			Percent (%)
Corporate Financial Services	¥	37,273	¥	11,446		¥	37,444	¥	12,646		¥	171			0		¥	1,200			10
Maintenance Leasing		125,236		20,513			131,729		21,509			6,493			5			996			5
Real Estate		99,300		8,769			92,204		15,750			(7,096	)		(7	)		6,981			80
Investment and Operation		78,683		22,215			241,251		15,323			162,568			207			(6,892	)		(31	)
Retail		103,474		28,379			181,924		77,724			78,450			76			49,345			174
Overseas Business		151,364		34,204			251,733		61,533			100,369			66			27,329			80
Total		595,330		125,526			936,285		204,485			340,955			57			78,959			63
Difference between Segment Total and Consolidated Amounts		13,773		(3,395	)		8,890		(1,481	)		(4,883	)		(35	)		1,914			—
Total Consolidated Amounts	¥	609,103	¥	122,131		¥	945,175	¥	203,004		¥	336,072			55		¥	80,873			66

Total assets by segment as of March 31, 2014 and September 30, 2014 are as follows:

	Millions of yen
	March 31, 2014				September 30, 2014				Change
	Segment Assets		Composition ratio (%)		Segment Assets		Composition ratio (%)		Amount			Percent (%)
Corporate Financial Services	¥	992,078		10.9	¥	983,575		8.8	¥	(8,503	)		(1	)
Maintenance Leasing		622,009		6.9		656,143		5.9		34,134			5
Real Estate		962,404		10.6		885,334		7.9		(77,070	)		(8	)
Investment and Operation		565,740		6.2		606,045		5.4		40,305			7
Retail		2,166,986		23.9		3,907,031		34.8		1,740,045			80
Overseas Business		1,972,138		21.8		2,090,120		18.6		117,982			6
Total		7,281,355		80.3		9,128,248		81.4		1,846,893			25
Difference between Segment Total and Consolidated Amounts		1,788,037		19.7		2,086,815		18.6		298,778			17
Total Consolidated Amounts	¥	9,069,392		100.0	¥	11,215,063		100.0	¥	2,145,671			24

Segment profits increased 63% to ¥204,485 million compared to ¥125,526 million during the same period of the previous fiscal year. The Retail, Overseas Business, and Real Estate segments made significant profit contributions and the Corporate Financial Services and Maintenance Leasing segments also displayed strong performance, while profits from the Investment and Operation segment decreased compared to the same period of the previous fiscal year.

– 5 –

Segment information for the second consolidated period is as follows:

Corporate Financial Services Segment: Lending, leasing and fee business

		Six months ended September 30, 2013		Six months ended September 30, 2014		Change Amount			Change Percent (%)
Segment Profits	(millions of yen)		11,446		12,646		1,200			10
		As of March 31, 2014		As of September 30, 2014		Change Amount			Change Percent (%)
Segment Assets	(millions of yen)		992,078		983,575		(8,503	)		(1	)

In Japan, we are seeing steady growth in capital expenditures and continued improvement in corporate revenues, despite a temporary negative impact on consumer spending and housing investment arising from the consumption tax hike that went into effect in April 2014. We are also seeing an increase in lending by financial institutions to small and medium enterprises (“SMEs”) in addition to large corporations, while the competition in the lending business continues to intensify.

Installment loan revenues decreased in line with a decrease in the average balance of installment loans. On the other hand, direct financing lease revenues remained robust due to an increase in the average balance of direct financing leases. Segment profits increased compared to the same period of the previous fiscal year due primarily to robust fee business including solar panel and life insurance sales to domestic SMEs.

Segment assets decreased compared to the end of the previous fiscal year due to a decrease in installment loans despite an increase in investment in securities.

Maintenance Leasing Segment: Automobile leasing and rentals, car sharing and precision measuring equipment and IT-related equipment rentals and leasing

			Six months ended September 30, 2013		Six months ended September 30, 2014		Change Amount		Change Percent (%)
Segment Profits	(millions of yen	)		20,513		21,509		996		5
			As of March 31, 2014		As of September 30, 2014		Change Amount		Change Percent (%)
Segment Assets	(millions of yen	)		622,009		656,143		34,134		5

The Japanese automobile leasing industry has been experiencing steady recovery in the number of new auto leases in line with Japan’s steady economic recovery, despite some temporary negative impact from the consumption tax hike that went into effect in April 2014. Furthermore, in the retail market, we are seeing new developments such as online retailers’ entry into the used car sales business.

Operating lease revenues and direct financing lease revenues increased in line with the steady expansion of assets in the automobile business, and costs of operating leases and selling, general and administrative expenses increased in line with an increase in revenues. Segment profits increased compared to the same period of the previous fiscal year as a result of an increase in profits driven by the asset growth despite a decrease in gains on sales of used cars.

Segment assets increased compared to the end of the previous fiscal year due to steady increases in investment in operating leases and investment in direct financing leases mainly in the automobile business.

– 6 –

Real Estate Segment: Real estate development, rental and financing; facility operation; REIT asset management; and real estate investment and advisory services

			Six months ended September 30, 2013		Six months ended September 30, 2014		Change Amount			Change Percent (%)
Segment Profits	(millions of yen	)		8,769		15,750		6,981			80
			As of March 31, 2014		As of September 30, 2014		Change Amount			Change Percent (%)
Segment Assets	(millions of yen	)		962,404		885,334		(77,070	)		(8	)

Office rents and vacancy rates in the Japanese office building market are continuing to show signs of improvement. In the J-REIT market, property acquisitions are increasing, and we are also seeing sales of large-scale real estates and rising sales prices due to increased competition among buyers. In addition, REITs are expanding their investment targets, as can be seen with the planned listing of the healthcare REIT that mainly invests in senior housing such as private nursing homes.

Rental and interest revenues decreased due to a decrease in asset balance and real estate sales decreased in connection with a decrease in the number of condominium units delivered mainly by ORIX Real Estate. On the other hand, gains on sales of real estate under operating leases increased. In addition, segment profits increased compared to the same period of the previous fiscal year due to decreases in losses from inventory valuation, which are included in costs of real estate sales, and write-downs of long-lived assets.

Segment assets decreased compared to the end of the previous fiscal year mainly as a result of sales of rental properties.

Investment and Operation Segment: Environment and energy-related business, principal investment and loan servicing (asset recovery)

			Six months ended September 30, 2013		Six months ended September 30, 2014		Change Amount			Change Percent (%)
Segment Profits	(millions of yen	)		22,215		15,323		(6,892	)		(31	)
			As of March 31, 2014		As of September 30, 2014		Change Amount			Change Percent (%)
Segment Assets	(millions of yen	)		565,740		606,045		40,305			7

In the Japanese environment and energy-related industry, even though the renewable energy purchase program is being reassessed, the significance of renewable energy is on the rise with investment targets expanding beyond solar power generation projects to include wind and geothermal power generation projects. In the capital markets, the fiscal year ended March 31, 2014 marked the fourth consecutive year of increase in the number of initial public offerings. Such favorable environment is continuing into this fiscal year with listings of major companies taking place both in Japan and overseas.

Segment profits decreased compared to the same period of the previous fiscal year due to a decrease in installment loan revenues in the loan servicing business and profit from DAIKYO despite solid profit contributions from the portfolio companies in the principal investment business and the environment and energy-related business.

Segment assets increased compared to the end of the previous fiscal year due to an increase in assets in the environment and energy-related business, offsetting a decrease in installment loans in the loan servicing business.

– 7 –

Retail Segment: Life insurance, banking and the card loan business

		Six months ended September 30, 2013		Six months ended September 30, 2014		Change Amount		Change Percent (%)
Segment Profits	(millions of yen)		28,379		77,724		49,345		174
		As of March 31, 2014		As of September 30, 2014		Change Amount		Change Percent (%)
Segment Assets	(millions of yen)		2,166,986		3,907,031		1,740,045		80

Although the life insurance business is being affected by macroeconomic factors such as domestic population decline, we are seeing increasing number of companies developing new products in response to the rising demand for medical insurance. In the consumer finance sector, loan demand is increasing due to the improved consumer confidence resulting from Japan’s economic recovery and consumer finance providers are enhancing their sales activities accordingly.

Segment profits increased significantly compared to the same period of the previous fiscal year due to the recognition of gain on sale of shares of Monex Group Inc. and a bargain purchase gain of ¥36,761 million resulting from the acquisition of HLIKK on July 1, 2014, in addition to an increase in installment loan revenues in the banking business and an increase in insurance premium income as a result of an increase in the number of policies in force in the life insurance business.

Segment assets increased significantly compared to the end of the previous fiscal year as a result of an increase in investment in securities due to the consolidation of HLIKK, which was acquired on July 1, 2014, in addition to an increase in assets in the banking business.

Overseas Business Segment: Leasing, lending, investment in bonds, investment banking, asset management and ship- and aircraft-related operations

		Six months ended September 30, 2013		Six months ended September 30, 2014		Change Amount		Change Percent (%)
Segment Profits	(millions of yen)		34,204		61,533		27,329		80
		As of March 31, 2014		As of September 30, 2014		Change Amount		Change Percent (%)
Segment Assets	(millions of yen)		1,972,138		2,090,120		117,982		6

In the United States, the job market and consumer spending are on an improving trend, while debates surrounding the timing of the interest rate hike are gaining momentum. On the other hand, we are seeing some uncertainties in the future of the European economy, and the market is paying particular attention to the future course of monetary easing policy by the European Central Bank. In Asia, the emerging markets are experiencing different levels of growth. China’s economic growth is steadily declining towards a more sustainable level while other countries are maintaining certain level of growth despite experiencing some effects from the global economy.

Fee revenues in the United States increased in addition to an increase in asset management revenues due primarily to the acquisition of Robeco on July 1, 2013. Furthermore, we recognized a gain on sale of partial equity interest STX Energy, which was deconsolidated by the sale. Segment profits increased significantly compared to the same period of the previous fiscal year despite an increase in selling, general, and administrative expenses due to an increase in revenues.

Segment assets increased compared to the end of the previous fiscal year due to increases in installment loans and investment in securities in the United States despite a decrease in other operating assets due to the sale of partial equity interest STX Energy, which as a result of the sale became an equity method affiliate from a consolidated subsidiary.

– 8 –

(2) Financial Condition

	As of March 31, 2014			As of September 30, 2014			Change
							Amount			Percent (%)
Total assets (millions of yen)	¥	9,069,392		¥	11,215,063		¥	2,145,671			24
(Segment assets)		7,281,355			9,128,248			1,846,893			25
Total liabilities (millions of yen)		6,921,037			8,931,551			2,010,514			29
(Short- and long-term debt)		4,168,465			4,200,244			31,779			1
(Deposits)		1,206,413			1,218,164			11,751			1
ORIX Corporation shareholders’ equity (millions of yen)		1,918,740			2,036,578			117,838			6
ORIX Corporation shareholders’ equity per share (yen)*1		1,465.31			1,556.84			91.53			6
ORIX Corporation shareholders’ equity ratio*2		21.2	%		18.2	%		(3.0)	%		—
Adjusted ORIX Corporation shareholders’ equity ratio*3		21.8	%		18.6	%		(3.2)	%		—
D/E ratio (Debt-to-equity ratio) (Short-and long-term debt (excluding deposits) / ORIX Corporation shareholders’ equity)		2.2	x		2.1	x		(0.1)	x		—
Adjusted D/E ratio*3		2.0	x		1.9	x		(0.1)	x		—

*1 ORIX Corporation shareholders’ equity per share is calculated using total ORIX Corporation shareholders’ equity.

*2 ORIX Corporation shareholders’ equity ratio is the ratio as of the period end of ORIX Corporation shareholder’s equity to total assets.

*3 Adjusted ORIX Corporation shareholders’ equity ratio and Adjusted D/E ratio are non-GAAP financial measures presented on an adjusted basis which excludes the effect of consolidating certain variable interest entities (VIEs) on our assets or liabilities and reverses the cumulative effect on our retained earnings of such consolidation, which resulted from applying the accounting standards for the consolidation of VIEs under ASU 2009-16 and ASU 2009-17, effective April 1, 2010. For a discussion of these and other non-GAAP financial measures, including a quantitative reconciliation to the most directly comparable GAAP financial measures, please see “5. Non-GAAP Financial Measures.”

Total assets increased 24% to ¥11,215,063 million compared to ¥9,069,392 million at the end of the previous fiscal year. Investment in securities and other assets increased in conjunction with the consolidation of HLIKK. In addition, installment loans increased primarily due to the purchase of loans in the United States. Meanwhile, investment in operating leases decreased due to the sales of rental properties and aircraft and other operating assets decreased as a result of STX Energy, changing from a consolidated subsidiary to an equity-method affiliate. Segment assets increased 25% compared to the end of the previous fiscal year to ¥9,128,248 million.

We manage balance of interest-bearing liabilities at an appropriate level taking into account the projection or condition of assets and liquidity on-hand as well as the domestic and overseas financial environment. As a result, short- and long-term debt and deposits increased compared to the end of the previous fiscal year. In addition, policy liabilities and policy account balances for the variable annuity and variable life insurance contracts increased in connection with the consolidation of HLIKK.

Shareholders’ equity increased 6% to ¥2,036,578 million compared to the end of the previous fiscal year primarily due to an increase in retained earnings.

– 9 –

The effects of the consolidation of HLIKK are as follows:

HLIKK primarily sold variable annuity and variable life insurance products. Variable annuity and variable life insurance products are insurance products in which insurance premiums paid by policyholders are invested using policyholders’ accounts and the amount of insurance benefits is determined based on the investment performance. The investment assets managed on behalf of policyholders primarily consist of equity securities that are categorized as trading securities, and the investment assets of ¥1,448,821 million are included in investment in securities in the condensed consolidated balance sheets as of September 30, 2014. During the three-month period ended September 30, 2014, the aggregated amount of net gains from sales of the investment assets and net valuation gains on the investment assets was ¥58,463 million and such amount is included in life insurance premiums and related investment income in the condensed consolidated statements of income. In addition, a portion of the minimum guarantee risk related to variable annuity and variable life insurance contracts are reinsured with a third party, and the amount of reinsurance recoverables due from the reinsurance contracts is included in other assets in the condensed consolidated balance sheets. We have elected the fair value option for the reinsurance contracts and changes in fair value of the reinsurance contracts are recorded in life insurance costs in the condensed consolidated statements of income. Furthermore, we entered into derivative contracts in order to economically hedge part of the minimum guarantee risk, and the related gains and losses on derivative contracts are included in life insurance premiums and related investment income in the condensed consolidated statements of income. We have also elected the fair value option for the variable annuity and variable life insurance contracts and the fair value of those contracts is recorded in policy liabilities and policy account balances in the condensed consolidated balance sheets, and changes in the fair value are recorded in life insurance costs in the condensed consolidated statements of income. The fair value of variable annuity and variable life insurance contracts is linked to the fair value of the underlying investments. Although variable annuity and variable life insurance contracts are exposed to the minimum guarantee risk, such risk is appropriately managed by entering into reinsurance and derivative contracts.

– 10 –

(3) Liquidity and Capital Resources

We require capital resources for working capital and investment and lending in our businesses. We accordingly prioritize funding stability, maintaining adequate liquidity, and reducing capital costs. We formulate and execute on funding policies that are resilient to sudden deterioration in financial markets, and then conduct funding activities in accordance with actual transitions in our assets and changes in financial markets. In preparing our management plan, we project funding activities to maintain a balanced capital structure in light of projected cash flows, asset liquidity and our own liquidity situation. In implementation, we adjust our funding plan based on changes in the external funding environment and our funding needs in light of our business activities, and endeavor to maintain flexibility in our funding activities.

We have endeavored to diversify our funding sources, promote longer liability maturities, stagger interest and principal repayment dates, and otherwise maintain sufficient liquidity and reinforce our funding stability.

Our funding was comprised of borrowings from financial institutions, direct fund procurement from capital markets, and deposits. ORIX Group’s total funding including that from short- and long-term debt and deposits on a consolidated basis was ¥5,418,408 million as of September 30, 2014.

Borrowings were procured from a diverse range of financial institutions including major banks, regional banks, foreign banks and life and casualty insurance companies. The number of financial institutions from which we procured borrowings exceeded 200 as of September 30, 2014. Procurement from the capital markets was composed of bonds, medium-term notes, commercial paper, payables under securitized leases, loan receivables and other assets (including asset backed securities). ORIX Group accepts deposits for funding purposes, with the majority of deposits attributable to ORIX Bank Corporation.

In an effort to promote longer liability maturities, during the six months ended September 30, 2014, we issued ten-year domestic straight bonds to institutional investors and ten-year and seven-year domestic straight bonds to retail investors. We intend to continue to strengthen our financial condition, while maintaining an appropriate funding mix.

Short-term and long-term debt and deposits

(a) Short-term debt

	Millions of yen
	March 31, 2014		September 30, 2014
Borrowings from financial institutions	¥	208,598	¥	187,111
Commercial paper		100,993		163,186
Total short-term debt	¥	309,591	¥	350,297

Short-term debt as of September 30, 2014 was ¥350,297 million, which accounted for 8% of the total amount of short and long-term debt (excluding deposits) as compared to 7% as of March 31, 2014.

While the amount of short-term debt as of September 30, 2014 was ¥350,297 million, the sum of cash and cash equivalents and the unused amount of committed credit facilities as of September 30, 2014 was ¥1,218,754 million.

(b) Long-term debt

	Millions of yen
	March 31, 2014		September 30, 2014
Borrowings from financial institutions	¥	2,430,225	¥	2,500,645
Bonds		1,128,788		1,063,936
Medium-term notes		46,034		48,062
Payables under securitized lease, loan receivables and other assets		253,827		237,304
Total long-term debt	¥	3,858,874	¥	3,849,947

– 11 –

The balance of long-term debt as of September 30, 2014 was ¥3,849,947 million, which accounted for 92% of the total amount of short and long-term debt (excluding deposits) as compared to 93% as of March 31, 2014. On an adjusted basis, our ratio of long-term debt to total debt (excluding deposits) was 91% as of September 30, 2014 as compared to 92% as of March 31, 2014. This ratio is a non-GAAP financial measure presented on an adjusted basis that excludes payables under securitized leases, loan receivables and other assets. For a discussion of this and other non-GAAP financial measures including reconciliations to the most directly comparable financial measures presented in accordance with GAAP, see “5. Non-GAAP Financial Measures.”

(c) Deposits

	Millions of yen
	March 31, 2014		September 30, 2014
Deposits	¥	1,206,413	¥	1,218,164

Apart from the short-term and long-term debt noted above, ORIX Bank Corporation and ORIX Asia Limited accept deposits. These deposit taking subsidiaries are regulated institutions, and loans from these subsidiaries to ORIX Group entities are subject to maximum regulatory limits.

(4) Summary of Cash Flows

Cash and cash equivalents as of September 30, 2014 decreased by ¥12,376 million to ¥814,923 million compared to March 31, 2014.

Cash flows provided by operating activities were ¥108,760 million in the six months ended September 30, 2014, down from ¥218,969 million during the same period of the previous fiscal year, primarily resulting from an increase in net income, and a decrease in trading securities, but partially offset by a net decrease in policy liabilities and policy account balances compared to net increase during the same period of the previous fiscal year, and a larger decrease in trade notes, accounts payable and other liabilities, in addition to adjustments made for gains on sales of subsidiaries and affiliates and liquidation losses, net, and bargain purchase gain compared to the same period of the previous fiscal year.

Cash flows used in investing activities were ¥141,111 million in the six months ended September 30, 2014, up from ¥110,713 million during the same period of the previous fiscal year. This change was primarily due to an increase in installment loans made to customers and a decrease in principal collected on installment loans, but partially offset by a decrease in acquisitions of subsidiaries, net of cash acquired, compared to the same period of the previous fiscal year, Robeco acquired, and an increase in proceeds from sales of available-for-sale securities.

Cash flows provided by financing activities were ¥16,571 million in the six months ended September 30, 2014, while having used ¥230,853 million during the same period of the previous fiscal year. This change was primarily due to net increase in debt with maturities of three months or less compared to net decrease during the same period of the previous fiscal year, a decrease in repayment of debt with maturities longer than three months, but partially offset by a net decrease in proceeds from debt with maturities longer than three months.

(5) Challenges to be addressed

There were no significant changes for the six months ended September 30, 2014.

(6) Research and Development Activity

There were no significant changes in research and development activity for the six months ended September 30, 2014.

(7) Employees

The number of employees as of September 30, 2014 increased 4,270 to 30,247 compared to 25,977 as of March 31, 2014 mainly due to corporate acquisitions in the Investment and Operation segment.

(8) Major facilities

There were no significant changes in major facilities for the six months ended September 30, 2014.

– 12 –

5. Non-GAAP Financial Measures

Section 4 “Analysis of Financial Results and Condition” contains certain financial measures presented on a basis not in accordance with U.S. GAAP (commonly referred to as non-GAAP financial measures), including long-term debt, ORIX Corporation shareholders’ equity and total assets, as well as other measures or ratios calculated based on those measures, presented on an adjusted basis, which excludes payables under securitized leases, loan receivables and other assets and reverses the cumulative effect on retained earnings of applying the accounting standards for the consolidation of VIEs under ASU 2009-16 and ASU 2009-17, effective April 1, 2010.

Our management believes these non-GAAP financial measures provide investors with additional meaningful comparisons between our financial condition as of September 30, 2014, as compared to prior periods. Effective April 1, 2010, we adopted ASU 2009-16 and ASU 2009-17, which changed the circumstances under which we are required to consolidate certain VIEs. Our adoption of these accounting standards caused a significant increase in our consolidated assets and liabilities and a decrease in our retained earnings without affecting the net cash flow and economic effects of our investments in such consolidated VIEs. Accordingly, our management believes that providing certain financial measures that exclude the impact of consolidating certain VIEs on our assets and liabilities as a supplement to financial information calculated in accordance with U.S. GAAP enhances understanding of the overall picture of our current financial position and enables investors to evaluate our historical financial and business trends without the large balance sheet fluctuation caused by our adoption of these accounting standards.

We provide these non-GAAP financial measures as supplemental information to our consolidated financial statements prepared in accordance with U.S. GAAP, and they should not be considered in isolation or as substitutes for the most directly comparable U.S. GAAP measures.

The tables set forth below provide reconciliations of these non-GAAP financial measures to the most directly comparable financial measures presented in accordance with U.S. GAAP as reflected in our consolidated financial statements for the periods provided.

– 13 –

		2014
		As of March 31,			As of September 30,
		(Millions of yen, except percentage data)
Total assets	(a)		9,069,392			11,215,063
Deduct: Payables under securitized leases, loan receivables and other assets*			253,827			237,304
Adjusted total assets	(b)		8,815,565			10,977,759
Short-term debt	(c)		309,591			350,297
Long-term debt	(d)		3,858,874			3,849,947
Deduct: Payables under securitized leases, loan receivables and other assets*			253,827			237,304
Adjusted long-term debt	(e)		3,605,047			3,612,643
Long- and short-term debt (excluding deposits)	(f)=(c)+(d)		4,168,465			4,200,244
Adjusted short- and long-term debt (excluding deposits)	(g)=(c)+(e)		3,914,638			3,962,940
ORIX Corporation shareholders’ equity	(h)		1,918,740			2,036,578
Deduct: The cumulative effect on retained earnings of applying the accounting standards for the consolidation of VIEs under ASU 2009-16 and ASU 2009-17, effective April 1, 2010			(5,195	)		(2,993	)
Adjusted ORIX Corporation shareholders’ equity	(i)		1,923,935			2,039,571
ORIX Corporation shareholders’ equity ratio	(h)/(a)		21.2	%		18.2	%
Adjusted ORIX Corporation shareholders’ equity ratio	(i)/(b)		21.8	%		18.6	%
D/E ratio	(f)/(h)		2.2	x		2.1	x
Adjusted D/E ratio	(g)/(i)		2.0	x		1.9	x
Long-term debt ratio	(d)/(f)		93	%		92	%
Adjusted long-term debt ratio	(e)/(g)		92	%		91	%

* These deductions represent amounts recorded as liabilities and included in long-term debt on the consolidated balance sheets.

– 14 –

6. Company Stock Information

(The following disclosure is provided for ORIX Corporation on a stand-alone basis and has been prepared based on Japanese GAAP.)

(1) Issued Shares, Common Stock and Additional Paid-in Capital

The number of issued shares, the amount of common stock and additional paid-in capital for the three months ended September 30, 2014 is as follows:

In thousands			Millions of yen
Number of issued shares			Common stock			Additional paid-in capital
Increase, net		September 30, 2014	Increase, net		September 30, 2014	Increase, net		September 30, 2014
	—	1,323,639		—	¥220,051		—	¥247,230

(2) List of Major Shareholders

The following is a list of major shareholders based on our share registry as of September 30, 2014:

Name	Number of shares held (in thousands)		Percentage of  total shares issued
Address
Japan Trustee Services Bank, Ltd. (Trust Account) 1-8-11, Harumi, Chuo-ku, Tokyo		107,535		8.12	%
JP MORGAN CHASE BANK 380055 270 PARK AVENUE, NEW YORK, NY 10017, UNITED STATES OF AMERICA		81,559		6.16
The Master Trust Bank of Japan, Ltd. (Trust Account) 2-11-3, Hamamatsu-cho, Minato-ku, Tokyo		79,247		5.98
THE CHASE MANHATTAN BANK 385036 360 N. CRESCENT DRIVE BEVERLY HILLS, CA 90210 U.S.A.		38,119		2.87
STATE STREET BANK AND TRUST COMPANY ONE LINCOLN STREET, BOSTON MA USA 02111		28,739		2.17
Japan Trustee Services Bank, Ltd. (Trust Account 9) 1-8-11, Harumi, Chuo-ku, Tokyo		24,923		1.88
STATE STREET BANK AND TRUST COMPANY 505225 P.O. BOX 351 BOSTON MASSACHUSETTS 02101 U.S.A.		22,963		1.73
THE CHASE MANHATTAN BANK, N.A. LONDON SECS LENDING OMNIBUS ACCOUNT WOOLGATE HOUSE, COLEMAN STREET LONDON EC2P 2HD, ENGLAND		22,120		1.67
THE BANK OF NEW YORK MELLON SA/NV 10 RUE MONTOYERSTRAAT 46, 1000 BRUSSELS, BELGIUM		19,461		1.47
CITIBANK, N.A.-NY, AS DEPOSITARY BANK FOR DEPOSITARY SHARE HOLDERS 388 GREENWICH STREET NEW YORK, NY 10013 USA		17,624		1.33
		442,293		33.41	%

Notes:

(a) The number of shares held in relation to a trust business may not be all inclusive and therefore is reported with reference to the names listed as shareholders.

– 15 –

(b) Capital Research and Management Company, Capital International Limited, Capital International K.K., Capital Guardian Trust Company and Capital International Inc. jointly filed a large shareholder report as required under Japanese regulations on May 9 and 13, 2014 that shows their share holdings of the Company as of April 30, 2014. The following information is not included in the List of Major Shareholders above because we were unable to confirm the reported number of shares held against our share registry as of September 30, 2014.

Name	Number of shares held (in thousands)		Percentage of total shares issued
Capital Research and Management Company		73,629		5.57	%
Capital International Limited		2,849		0.22
Capital International K.K.		6,385		0.48
Capital International Inc.		1,209		0.09
Total		84,074		6.36	%

(c) BlackRock Japan Co., Ltd., BlackRock Advisers, LLC, BlackRock Life Limited, BlackRock Asset Management Ireland Limited, BlackRock Advisors (UK) Limited, BlackRock Fund Advisors, BlackRock International Limited and BlackRock Institutional Trust Company, N.A. jointly filed a large shareholder report as required under Japanese regulations on August 6, 2014 that shows their share holdings of the Company as of July 31, 2014. The following information is not included in the List of Major Shareholders above because we were unable to confirm the reported number of shares held against our share registry as of September 30, 2014.

Name	Number of shares held (in thousands)		Percentage of total shares issued
BlackRock Japan Co., Ltd.		14,071		1.06	%
BlackRock Advisers, LLC		2,724		0.21
BlackRock Life Limited		3,988		0.30
BlackRock Asset Management Ireland Limited		5,754		0.43
BlackRock Advisors (UK) Limited		2,373		0.18
BlackRock Fund Advisors		13,793		1.04
BlackRock International Limited		2,884		0.22
BlackRock Institutional Trust Company, N.A.		20,756		1.57
Total		66,347		5.01	%

7. Directors and Executive Officers

Between the filing date of Form 20-F for the fiscal year ended March 31, 2014 and September 30, 2014, personnel changes of directors and executive officers are as follows:

(1) Change of Position

Name	New Position	Prior Position	Date of change
Tetsuro Masuko	Executive Officer Head of Real Estate Headquarters and Head of Investment Business Responsible for Special Investments Group Responsible for Finance Department President, ORIX Real Estate Corporation	Executive Officer Head of Real Estate Headquarters Responsible for Special Investments Group Responsible for Finance Department President, ORIX Real Estate Corporation	July 1, 2014

– 16 –

8. Financial Information

(1) Condensed Consolidated Balance Sheets (Unaudited)

	Millions of yen
Assets	March 31, 2014			September 30, 2014
Cash and Cash Equivalents	¥	827,299		¥	814,923
Restricted Cash		86,690			97,985
Time Deposits		7,510			25,280
Investment in Direct Financing Leases		1,094,073			1,145,763
Installment Loans		2,315,555			2,379,717
(The amounts of ¥12,631 million as of March 31, 2014 and ¥7,616 million as of September 30, 2014 are measured at fair value by electing the fair value option under ASC 825.)
Allowance for Doubtful Receivables on Direct Financing Leases and Probable Loan Losses		(84,796	)		(77,793	)
Investment in Operating Leases		1,375,686			1,342,156
Investment in Securities		1,214,576			2,985,798
(The amounts of ¥11,433 million as of March 31, 2014 and ¥17,627 million as of September 30, 2014 are measured at fair value by electing the fair value option under ASC 825.)
Other Operating Assets		312,774			272,567
Investment in Affiliates		314,300			346,590
Other Receivables		239,958			298,950
Inventories		136,105			137,472
Prepaid Expenses		61,909			70,707
Office Facilities		126,397			126,495
Other Assets		1,041,356			1,248,453
(The amount of ¥55,500 million as of September 30, 2014 is measured at fair value by electing the fair value option under ASC 825.)
Total Assets	¥	9,069,392		¥	11,215,063

Note: The assets of consolidated VIEs that can be used only to settle obligations of those VIEs are below:

	Millions of yen
	March 31, 2014		September 30, 2014
Cash and Cash Equivalents	¥	5,223	¥	3,737
Investment in Direct Financing Leases (Net of Allowance for Doubtful Receivables on Direct Financing Leases and Probable Loan Losses)		109,642		123,779
Installment Loans (Net of Allowance for Doubtful Receivables on Direct Financing Leases and Probable Loan Losses)		154,901		133,805
Investment in Operating Leases		227,062		181,437
Investment in Affiliates		11,034		10,627
Other		97,445		105,317
	¥	605,307	¥	558,702

– 17 –

	Millions of yen
Liabilities and Equity	March 31, 2014			September 30, 2014
Liabilities:
Short-Term Debt	¥	309,591		¥	350,297
Deposits		1,206,413			1,218,164
Trade Notes, Accounts Payable and Other Liabilities		443,333			443,825
Accrued Expenses		190,414			192,118
Policy Liabilities and Policy Account Balances		454,436			2,408,656
(The amount of ¥1,575,331 million as of September 30, 2014 is measured at fair value by electing the fair value option under ASC 825.)
Current and Deferred Income Taxes		299,509			304,475
Security Deposits		158,467			164,069
Long-Term Debt		3,858,874			3,849,947
Total Liabilities		6,921,037			8,931,551
Redeemable Noncontrolling Interests		53,177			58,487
Commitments and Contingent Liabilities
Equity:
Common Stock		219,546			220,051
Additional Paid-in Capital		255,449			255,827
Retained Earnings		1,467,602			1,579,309
Accumulated Other Comprehensive Income		2			8,673
Treasury Stock, at Cost		(23,859	)		(27,282	)
ORIX Corporation Shareholders’ Equity		1,918,740			2,036,578
Noncontrolling Interests		176,438			188,447
Total Equity		2,095,178			2,225,025
Total Liabilities and Equity	¥	9,069,392		¥	11,215,063

Note: The liabilities of consolidated VIEs for which creditors (or beneficial interest holders) do not have recourse to the general credit of the Company and its subsidiaries are below:

	Millions of yen
	March 31, 2014		September 30, 2014
Short-Term Debt	¥	2,180	¥	1,520
Trade Notes, Accounts Payable and Other Liabilities		3,574		4,276
Security Deposits		4,764		3,311
Long-Term Debt		394,736		349,921
Other		3,555		3,414
	¥	408,809	¥	362,442

– 18 –

(2) Condensed Consolidated Statements of Income (Unaudited)

	Millions of yen
	Six months ended September 30, 2013			Six months ended September 30, 2014
Revenues:
Direct financing leases	¥	28,387		¥	29,825
Operating leases		162,234			171,886
Interest on loans and investment securities		69,752			59,755
Brokerage commissions and net gains on investment securities		15,318			31,320
Life insurance premiums and related investment income		75,796			137,939
Real estate sales		10,976			43,914
Gains (Losses) on sales of real estate under operating leases		(924	)		9,017
Revenues from asset management and servicing		43,517			91,954
Sales of goods		34,398			119,682
Other operating revenues		169,649			249,883
Total revenues		609,103			945,175
Expenses:
Interest expense		42,277			36,727
Costs of operating leases		106,497			117,183
Life insurance costs		51,326			108,597
Costs of real estate sales		15,860			45,390
Expenses from asset management and servicing		11,837			25,056
Costs of goods sold		28,032			102,257
Other operating expenses		88,768			167,098
Selling, general and administrative expenses		137,933			194,698
Provision for doubtful receivables and probable loan losses		5,229			1,977
Write-downs of long-lived assets		11,915			6,783
Write-downs of securities		2,003			1,754
Foreign currency transaction loss, net		439			1,480
Total expenses		502,116			809,000
Operating Income		106,987			136,175
Equity in Net Income of Affiliates		10,527			10,211
Gains on Sales of Subsidiaries and Affiliates and Liquidation Losses, Net		4,617			19,857
Bargain Purchase Gain		0			36,761
Income before Income Taxes and Discontinued Operations		122,131			203,004
Provision for Income Taxes		44,213			55,673
Income from Continuing Operations	¥	77,918		¥	147,331

– 19 –

	Millions of yen
	Six months ended September 30, 2013			Six months ended September 30, 2014
Discontinued Operations:
Income from discontinued operations, net	¥	9,995		¥	463
Provision for income taxes		(3,868	)		(166	)
Discontinued operations, net of applicable tax effect		6,127			297
Net Income		84,045			147,628
Net Income Attributable to the Noncontrolling Interests		2,217			3,494
Net Income Attributable to the Redeemable Noncontrolling Interests		1,420			2,028
Net Income Attributable to ORIX Corporation Shareholders	¥	80,408		¥	142,106

Note	1.	Pursuant to ASC 205-20 (“Presentation of Financial Statements—Discontinued Operations”), 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.
	2.	Pursuant to Accounting Standards Update 2014-08 (“Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”—ASC 205 (“Presentation of Financial Statements”) and ASC 360 (“Property, Plant, and Equipment”)) which was early adopted on April 1, 2014, the results of operations for the six months ended September 30, 2014 reflected the adoption of this Update. This Update does not apply to a component or a group of components, which was disposed of or classified as held for sale before the adoption date. Therefore, in accordance with previous ASC205-20, the results of these operation of subsidiaries and businesses, which were classified as held for sale as of March 31, 2014 are reported as discontinued operations for the six months ended September 30, 2014.
	3.	Revenues and Expenses from sales of goods have been separately presented from the three-month period ended September 30, 2014 as “Sales of goods” and “Costs of goods sold,” respectively. The amounts in the previous period have been retrospectively reclassified to conform to current period presentation.

	Millions of yen
	Six months ended September 30, 2013		Six months ended September 30, 2014
Income attributable to ORIX Corporation shareholders:
Income from continuing operations	¥	74,284	¥	141,809
Discontinued operations		6,124		297
Net income attributable to ORIX Corporation shareholders	¥	80,408	¥	142,106

	Yen
	Six months ended September 30, 2013		Six months ended September 30, 2014
Amounts per Share of Common Stock for Income attributable to ORIX Corporation shareholders:
Basic:
Income from continuing operations	¥	59.74	¥	108.27
Discontinued operations		4.93		0.23
Net income attributable to ORIX Corporation shareholders	¥	64.67	¥	108.50
Diluted:
Income from continuing operations	¥	57.16	¥	108.11
Discontinued operations		4.70		0.23
Net income attributable to ORIX Corporation shareholders	¥	61.86	¥	108.34

– 20 –

	Millions of yen
	Three months ended September 30, 2013			Three months ended September 30, 2014
Revenues:
Direct financing leases	¥	14,145		¥	14,591
Operating leases		81,930			87,513
Interest on loans and investment securities		32,466			29,833
Brokerage commissions and net gains on investment securities		7,768			7,411
Life insurance premiums and related investment income		38,278			97,511
Real estate sales		9,248			11,802
Gains (Losses) on sales of real estate under operating leases		(988	)		2,745
Revenues from asset management and servicing		38,629			47,735
Sales of goods		24,231			78,373
Other operating revenues		87,324			129,918
Total revenues		333,031			507,432
Expenses:
Interest expense		19,433			17,988
Costs of operating leases		54,308			60,075
Life insurance costs		27,362			81,311
Costs of real estate sales		10,767			15,317
Expenses from asset management and servicing		11,664			12,747
Costs of goods sold		19,694			67,217
Other operating expenses		46,409			90,875
Selling, general and administrative expenses		77,977			103,768
Provision for doubtful receivables and probable loan losses		2,881			1,726
Write-downs of long-lived assets		9,144			4,045
Write-downs of securities		1,315			1,654
Foreign currency transaction loss, net		120			936
Total expenses		281,074			457,659
Operating Income		51,957			49,773
Equity in Net Income of Affiliates		6,595			5,145
Gains on Sales of Subsidiaries and Affiliates and Liquidation Losses, Net		1,651			9
Bargain Purchase Gain		0			36,761
Income before Income Taxes and Discontinued Operations		60,203			91,688
Provision for Income Taxes		23,259			16,757
Income from Continuing Operations	¥	36,944		¥	74,931

– 21 –

	Millions of yen
	Three months ended September 30, 2013			Three months ended September 30, 2014
Discontinued Operations:
Income from discontinued operations, net	¥	1,750		¥	362
Provision for income taxes		(679	)		(130	)
Discontinued operations, net of applicable tax effect		1,071			232
Net Income		38,015			75,163
Net Income Attributable to the Noncontrolling Interests		1,863			621
Net Income Attributable to the Redeemable Noncontrolling Interests		751			1,041
Net Income Attributable to ORIX Corporation Shareholders	¥	35,401		¥	73,501

Note	1.	Pursuant to ASC 205-20 (“Presentation of Financial Statements-Discontinued Operations”), 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.
	2.	Pursuant to Accounting Standards Update 2014-08 (“Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”—ASC 205 (“Presentation of Financial Statements”) and ASC 360 (“Property, Plant, and Equipment”)) which was early adopted on April 1, 2014, the results of operations for the three months ended September 30, 2014 reflected the adoption of this Update. This Update does not apply to a component or a group of components, which was disposed or classified as held for sale before the adoption date. Therefore, in accordance with previous ASC205-20, the results of these operation of subsidiaries and businesses, which were classified as held for sale as of March 31, 2014 are reported as discontinued operations for the three months ended September 30, 2014.
	3.	Revenues and Expenses from sales of goods have been separately presented from the three-month period ended September 30, 2014 as “Sales of goods” and “Costs of goods sold”, respectively. The amounts in the previous period have been retrospectively reclassified to conform to current period presentation.

	Millions of yen
	Three months ended September 30, 2013		Three months ended September 30, 2014
Income attributable to ORIX Corporation shareholders:
Income from continuing operations	¥	34,332	¥	73,269
Discontinued operations		1,069		232
Net income attributable to ORIX Corporation shareholders	¥	35,401	¥	73,501
	Yen
	Three months ended September 30, 2013		Three months ended September 30, 2014
Amounts per Share of Common Stock for Income attributable to ORIX Corporation shareholders:
Basic:
Income from continuing operations	¥	27.34	¥	55.94
Discontinued operations		0.85		0.18
Net income attributable to ORIX Corporation shareholders	¥	28.19	¥	56.12
Diluted:
Income from continuing operations	¥	26.32	¥	55.86
Discontinued operations		0.81		0.18
Net income attributable to ORIX Corporation shareholders	¥	27.13	¥	56.04

– 22 –

(3) Condensed Consolidated Statements of Comprehensive Income (Unaudited)

	Millions of yen
	Six months ended September 30, 2013			Six months ended September 30, 2014
Net Income	¥	84,045		¥	147,628
Other comprehensive income (loss), net of tax:
Net change of unrealized gains (losses) on investment in securities		6,422			(2,786	)
Net change of defined benefit pension plans		(342	)		233
Net change of foreign currency translation adjustments		2,478			15,307
Net change of unrealized gains (losses) on derivative instruments		1,033			(62	)
Total other comprehensive income		9,591			12,692
Comprehensive Income		93,636			160,320
Comprehensive Income Attributable to the Noncontrolling Interests		5,008			4,091
Comprehensive Income Attributable to the Redeemable Noncontrolling Interests		3,060			5,452
Comprehensive Income Attributable to ORIX Corporation Shareholders	¥	85,568		¥	150,777
	Millions of yen
	Three months ended September 30, 2013			Three months ended September 30, 2014
Net Income	¥	38,015		¥	75,163
Other comprehensive income (loss), net of tax:
Net change of unrealized gains (losses) on investment in securities		6,107			3,313
Net change of defined benefit pension plans		(277	)		323
Net change of foreign currency translation adjustments		(7,101	)		26,280
Net change of unrealized gains (losses) on derivative instruments		483			220
Total other comprehensive income (loss)		(788	)		30,136
Comprehensive Income		37,227			105,299
Comprehensive Income Attributable to the Noncontrolling Interests		3,239			3,312
Comprehensive Income Attributable to the Redeemable Noncontrolling Interests		409			5,270
Comprehensive Income Attributable to ORIX Corporation Shareholders	¥	33,579		¥	96,717

– 23 –

(4) Condensed Consolidated Statements of Changes in Equity (Unaudited)

Six months ended September 30, 2013

	Millions of yen
	ORIX Corporation Shareholders’ Equity
	Common Stock		Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total ORIX Corporation Shareholders’ Equity			Noncontrolling Interests			Total Equity
Beginning Balance	¥	194,039	¥	229,600	¥	1,305,044		¥	(36,263	)	¥	(48,824	)	¥	1,643,596		¥	43,977		¥	1,687,573
Contribution to subsidiaries															0			2,166			2,166
Transaction with noncontrolling interests				24											24			(582	)		(558	)
Comprehensive income, net of tax:
Net income						80,408									80,408			2,217			82,625
Other comprehensive income (loss)
Net change of unrealized gains (losses) on investment in securities									5,991						5,991			431			6,422
Net change of defined benefit pension plans									(346	)					(346	)		4			(342	)
Net change of foreign currency translation adjustments									(1,500	)					(1,500	)		2,338			838
Net change of unrealized gains (losses) on derivative instruments									1,015						1,015			18			1,033
Total other comprehensive income															5,160			2,791			7,951
Total comprehensive income															85,568			5,008			90,576
Cash dividends						(15,878	)								(15,878	)		(1,356	)		(17,234	)
Conversion of convertible bond		13,307		13,086											26,393			0			26,393
Exercise of stock options		230		218											448			0			448
Acquisition of treasury stock												(8	)		(8	)		0			(8	)
Acquisition of Robeco						(5,471	)					24,880			19,409			25,607			45,016
Other, net				104		(134	)					104			74			0			74
Ending Balance	¥	207,576	¥	243,032	¥	1,363,969		¥	(31,103	)	¥	(23,848	)	¥	1,759,626		¥	74,820		¥	1,834,446

Six months ended September 30, 2014

	Millions of yen
	ORIX Corporation Shareholders’ Equity
	Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total ORIX Corporation Shareholders’ Equity			Noncontrolling Interests			Total Equity
Beginning Balance	¥	219,546	¥	255,449		¥	1,467,602		¥	2		¥	(23,859	)	¥	1,918,740		¥	176,438		¥	2,095,178
Contribution to subsidiaries																0			23,585			23,585
Transaction with noncontrolling interests				39												39			(13,675	)		(13,636	)
Comprehensive income, net of tax:
Net income							142,106									142,106			3,494			145,600
Other comprehensive income (loss)
Net change of unrealized gains (losses) on investment in securities										(3,352	)					(3,352	)		566			(2,786	)
Net change of defined benefit pension plans										101						101			132			233
Net change of foreign currency translation adjustments										11,942						11,942			(59	)		11,883
Net change of unrealized gains (losses) on derivative instruments										(20	)					(20	)		(42	)		(62	)
Total other comprehensive income																8,671			597			9,268
Total comprehensive income																150,777			4,091			154,868
Cash dividends							(30,117	)								(30,117	)		(1,992	)		(32,109	)
Exercise of stock options		505		491												996			0			996
Acquisition of treasury stock													(3,423	)		(3,423	)		0			(3,423	)
Other, net				(152	)		(282	)								(434	)		0			(434	)
Ending Balance	¥	220,051	¥	255,827		¥	1,579,309		¥	8,673		¥	(27,282	)	¥	2,036,578		¥	188,447		¥	2,225,025

Changes in the redeemable noncontrolling interests are not included in this table. For further information, see Note 10 “Redeemable Noncontrolling Interests.”

– 24 –

(5) Condensed Consolidated Statements of Cash Flows (Unaudited)

	Millions of yen
	Six months ended September 30, 2013			Six months ended September 30, 2014
Cash Flows from Operating Activities:
Net income	¥	84,045		¥	147,628
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		99,458			109,601
Provision for doubtful receivables and probable loan losses		5,229			1,977
Equity in net income of affiliates (excluding interest on loans)		(10,421	)		(10,092	)
Gains on sales of subsidiaries and affiliates and liquidation losses, net		(4,617	)		(19,857	)
Bargain Purchase Gain		0			(36,761	)
Gains on sales of available-for-sale securities		(11,793	)		(19,160	)
Gains (Losses) on sales of real estate under operating leases		924			(9,017	)
Gains on sales of operating lease assets other than real estate		(9,427	)		(9,886	)
Write-downs of long-lived assets		11,915			6,783
Write-downs of securities		2,003			1,754
Decrease (Increase) in restricted cash		14,478			(9,878	)
Decrease in trading securities		6,898			168,438
Decrease in inventories		10,305			7,344
Decrease (Increase) in other receivables		7,060			(24,565	)
Decrease in trade notes, accounts payable and other liabilities		(124	)		(37,752	)
Decrease in accrued expenses		(10,502	)		(1,302	)
Increase (Decrease) in policy liabilities and policy account balances		12,154			(171,037	)
Other, net		11,384			14,542
Net cash provided by operating activities		218,969			108,760
Cash Flows from Investing Activities:
Purchases of lease equipment		(428,197	)		(417,745	)
Principal payments received under direct financing leases		230,028			231,315
Installment loans made to customers		(465,310	)		(564,920	)
Principal collected on installment loans		688,509			506,353
Proceeds from sales of operating lease assets		101,244			131,540
Investment in affiliates, net		(52,272	)		(28,647	)
Proceeds from sales of investment in affiliates		15,116			7,320
Purchases of available-for-sale securities		(489,267	)		(563,590	)
Proceeds from sales of available-for-sale securities		209,437			326,113
Proceeds from redemption of available-for-sale securities		275,509			244,019
Purchases of held-to-maturity securities		(2,622	)		(230	)
Purchases of other securities		(9,074	)		(18,048	)
Proceeds from sales of other securities		8,828			23,577
Purchases of other operating assets		(11,841	)		(29,111	)
Acquisitions of subsidiaries, net of cash acquired		(193,970	)		(19,115	)
Sales of subsidiaries, net of cash disposed		0			47,600
Other, net		13,169			(17,542	)
Net cash used in investing activities		(110,713	)		(141,111	)
Cash Flows from Financing Activities:
Net increase (decrease) in debt with maturities of three months or less		(95,299	)		36,338
Proceeds from debt with maturities longer than three months		715,675			613,868
Repayment of debt with maturities longer than three months		(862,174	)		(621,993	)
Net increase in deposits due to customers		30,986			11,735
Cash dividends paid to ORIX Corporation shareholders		(15,878	)		(30,117	)
Net increase (decrease) in call money		(5,000	)		10,000
Other, net		837			(3,260	)
Net cash provided by (used in) financing activities		(230,853	)		16,571
Effect of Exchange Rate Changes on Cash and Cash Equivalents		2,590			3,404
Net decrease in Cash and Cash Equivalents		(120,007	)		(12,376	)
Cash and Cash Equivalents at Beginning of Period		826,296			827,299
Cash and Cash Equivalents at End of Period	¥	706,289		¥	814,923

– 25 –

Notes to Consolidated Financial Statements

1. Overview of Accounting Principles Utilized

In preparing the accompanying consolidated financial statements, ORIX Corporation (the “Company”) and its subsidiaries have complied with accounting principles generally accepted in the United States of America (“U.S. GAAP”), modified for the accounting for stock splits (see Note 2 (n)).

These statements include all adjustments (consisting of normal recurring accruals) that we considered necessary to present a fair statement of our results of operations, financial position and cash flows. The results reported in these condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our March 31, 2014 consolidated financial statements on Form 20-F.

Since the Company listed on the New York Stock Exchange in September 1998, the Company has filed the annual report (Form 20-F) including the consolidated financial statements with the Securities and Exchange Commission.

Significant differences between U.S. GAAP and generally accepted accounting principles in Japan (“Japanese GAAP”) are as follows:

(a) Initial direct costs

Under U.S. GAAP, certain initial direct costs to originate leases or loans are being deferred and amortized as yield adjustments over the life of related direct financing leases or loans by using interest method.

Under Japanese GAAP, those initial direct costs are recognized as expenses when they are incurred.

(b) Operating leases

Under U.S. GAAP, revenues from operating leases are recognized on a straight-line basis over the contract terms. Also operating lease assets are depreciated over their estimated useful lives mainly on a straight-line basis.

Japanese GAAP allows for operating lease assets to be depreciated using mainly either a declining-balance basis or a straight-line basis.

(c) Accounting for life insurance operations

Based on ASC 944 (“Financial Services—Insurance”), certain costs related directly to the successful acquisition of new (or renewal of) insurance contracts, or deferred policy acquisition costs, are being deferred and amortized over the respective policy periods in proportion to anticipated premium revenue.

Under Japanese GAAP, such costs are recorded as expenses currently in earnings in each accounting period.

In addition, under U.S. GAAP, although policy liabilities for future policy benefits are established using the net level premium method, based on actuarial estimates of the amount of future policyholder benefits, under Japanese GAAP, these are calculated by the methodology which relevant authorities accept.

(d) Accounting for goodwill and other intangible assets in business combination

Under U.S. GAAP, goodwill and intangible assets that have indefinite useful lives are not amortized, but assessed at least annually for impairment. Additionally, if events or changes in circumstances indicate that the asset might be impaired, the Company and its subsidiaries test for impairment when such events or changes occur.

Under Japanese GAAP, goodwill is amortized over an appropriate period up to 20 years.

– 26 –

(e) Accounting for pension plans

Under U.S. GAAP, the Company and its subsidiaries apply ASC 715 (“Compensation—Retirement Benefits”) and record pension costs based on the amounts determined using actuarial methods. The net actuarial gain (loss) is amortized using a corridor test.

Under Japanese GAAP, the net actuarial gain (loss) is fully amortized over a certain term within the average remaining service period of employees.

(f) Reporting on discontinued operations

Under U.S. GAAP, in accordance with ASC 205-20 (“Presentation of Financial Statements—Discontinued Operations”), the financial results of discontinued operations and disposal gain or loss, net of applicable income tax effects, are presented as a separate line item from continuing operations in the consolidated statements of income. Results of these discontinued operations from prior periods are reclassified as income from discontinued operations in each prior period presented in the accompanying consolidated statements of income and consolidated statements of cash flows.

Under Japanese GAAP, there are no rules on reporting discontinued operations and the amounts are not presented separately from continuing operations.

(g) Presentation of net income in the consolidated statements of income

Under U.S. GAAP, net income consists of net income attributable to the parent and net income attributable to the noncontrolling interests. Each of them is separately stated in the consolidated statements of income.

Under Japanese GAAP, net income attributable to the minority interests is not included in net income.

(h) Partial sale and additional acquisition of the parent’s ownership interest in subsidiaries

Under U.S. GAAP, a partial sale and an additional acquisition of the parent’s ownership interest in subsidiaries where the parent continues to retain control of that subsidiary are accounted for as equity transactions. On the other hand, in a transaction that results in the loss of control, the gain or loss recognized in income includes the realized gain or loss related to the portion of ownership interest sold and the gain or loss on the remeasurement to fair value of the interest retained.

Under Japanese GAAP, a partial sale of the parent’s ownership interest where the parent continues to retain control is accounted for as a profit-loss transaction and an additional acquisition of the parent’s ownership interest is accounted for as a business combination. In addition, in a transaction that results in the loss of control, only the realized gain or loss related to the portion of ownership interest sold is recognized in income and the gain or loss on the remeasurement to fair value of the interest retained is not recognized.

(i) Classification in consolidated statements of cash flows

Classification in the statements of cash flows under U.S. GAAP is based on ASC 230 (“Statement of Cash Flows”), which differs from Japanese GAAP. As significant differences, purchase of lease equipment and principal payments received under direct financing leases, proceeds from sales of operating lease assets, installment loans made to customers and principal collected on installment loans (excluding issues and collections of loans held for sale) are included in “Cash Flows from Investing Activities” under U.S. GAAP while they are classified as “Cash Flows from Operating Activities” under Japanese GAAP.

(j) Securitization of financial assets

Under U.S. GAAP, an enterprise is required to perform analysis to determine whether or not to consolidate special-purpose entities (“SPEs”) for securitization under the VIE’s consolidation rules. As a result of the analysis, if it is determined that the enterprise transferred financial assets in a securitization transaction to an SPE that needs to be consolidated, the transaction is not accounted for as a sale but accounted for as a secured borrowing.

Under Japanese GAAP, an SPE that meets certain conditions may be considered not to be a subsidiary of the transferor. Therefore, if an enterprise transfers financial assets to this type of SPE in a securitization transaction, the transferee SPE is not required to be consolidated, and the enterprise accounts for the transaction as a sale and recognizes a gain or loss on the sale into earnings when control over the transferred assets is surrendered.

(k) Fair value option

Under U.S. GAAP, an entity is permitted to elect at specified election dates to measure eligible financial assets and liabilities at their fair value and to report subsequent changes in the fair value in earnings.

Under Japanese GAAP, there is no such rule for electing the fair value option.

– 27 –

2. Significant Accounting and Reporting Policies

(a) Principles of consolidation

The consolidated financial statements include the accounts of the Company and all of its subsidiaries. Investments in affiliates, where the Company has the ability to exercise significant influence by way of 20% - 50% ownership or other means, are accounted for by using the equity method. Where the Company holds majority voting interests but noncontrolling shareholders have substantive participating rights to decisions that occur as part of the ordinary course of their business, the equity method is applied pursuant to ASC 810-10-25-2 to 14 (“Consolidation—The Effect of Noncontrolling Rights on Consolidation”). In addition, the consolidated financial statements also include variable interest entities to which the Company and its subsidiaries are primary beneficiaries pursuant to ASC 810 (“Consolidation”).

A lag period of up to three months is used on a consistent basis for recognizing the results of certain subsidiaries and affiliates.

All significant intercompany accounts and transactions have been eliminated in consolidation.

(b) Use of estimates

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company has identified ten areas where it believes assumptions and estimates are particularly critical to the financial statements. These are the selection of valuation techniques and determination of assumptions used in fair value measurements (see Note 3), the determination and periodic reassessment of the unguaranteed residual value for direct financing leases and operating leases (see (d)), the determination and reassessment of insurance policy liabilities and deferred policy acquisition costs (see (e)), the determination of the allowance for doubtful receivables on direct financing leases and probable loan losses (see (f)), the determination of impairment of long-lived assets (see (g)), the determination of impairment of investment in securities (see (h)), the determination of valuation allowance for deferred tax assets and the evaluation of tax positions (see (i)), the assessment and measurement of effectiveness in hedging relationship using derivative financial instruments (see (k)), the determination of benefit obligation and net periodic pension cost (see (l)) and the determination of impairment of goodwill and intangible assets that have indefinite useful lives (see (w)).

(c) Foreign currencies translation

The Company and its subsidiaries maintain their accounting records in their functional currency. Transactions in foreign currencies are recorded in the entity’s functional currency based on the prevailing exchange rates on the transaction date.

The financial statements of overseas subsidiaries and affiliates are translated into Japanese yen by applying the exchange rates in effect at the end of each fiscal period to all assets and liabilities. Income and expenses are translated at the average rates of exchange prevailing during the fiscal period. The currencies in which the operations of the overseas subsidiaries and affiliates are conducted are regarded as the functional currencies of these companies. Foreign currency translation adjustments reflected in accumulated other comprehensive income (loss) arise from the translation of foreign currency financial statements into Japanese yen.

(d) Recognition of revenues

Revenues are recognized when persuasive evidence of an arrangement exists, the service has been rendered or the goods have been delivered to the customer, the transaction price is fixed or determinable and collectability is reasonably assured.

In addition to the aforementioned general policy, the policies as specifically described hereinafter are applied for each of the major revenue items.

– 28 –

Leases—The Company and its subsidiaries lease various assets to customers under direct financing or operating lease arrangements. Classification of a lease arrangement into either a direct financing lease or an operating lease is dependent upon the specific conditions of the arrangement. Revenue recognition policies applied for direct financing leases and operating leases are specifically described in sections following this paragraph. In providing leasing services, the Company and its subsidiaries execute supplemental services, such as paying insurance and handling taxes on leased assets on behalf of lessees. In some cases, automobile maintenance services are also provided to lessees. Where under terms of the lease or related maintenance agreements the Company and its subsidiaries bear the favorable or unfavorable variability of cost, revenues and expenses are recorded on a gross basis. For those arrangements in which the Company and its subsidiaries do not have substantial risks and rewards of ownership, but instead serve as an agent in collecting from lessees and remitting payments to third parties, the Company and its subsidiaries record revenues net of third-party services costs. Revenues from automobile maintenance services are taken into income over the contract period in proportion to the estimated service costs to be incurred and are recorded in other operating revenues in the accompanying consolidated statements of income.

(1) Recognition of revenues for direct financing leases

Direct financing leases consist of full-payout leases for various equipment types, including office equipment, industrial machinery and transportation equipment. The excess of aggregate lease rentals plus the estimated unguaranteed residual value over the cost of the leased equipment constitutes the unearned lease income to be taken into income over the lease term by using the interest method. The estimated residual values represent estimated proceeds from the disposition of equipment at the time the lease is terminated. Estimates of unguaranteed residual values are based on market values of used equipment, estimates of when and how much equipment will become obsolete, and actual recovery being experienced for similar used equipment. Initial direct costs are being deferred and amortized as a yield adjustment over the life of the related lease by using interest method. The unamortized balance of initial direct costs is reflected as a component of investment in direct financing leases.

(2) Recognition of revenues for operating leases

Revenues from operating leases are recognized on a straight-line basis over the contract terms. Investment in operating leases is recorded at cost less accumulated depreciation, which was ¥449,435 million and ¥476,946 million as of March 31, 2014 and September 30, 2014, respectively. Operating lease assets are depreciated over their estimated useful lives mainly on a straight-line basis. Depreciation expenses are included in costs of operating leases. Gains or losses arising from dispositions of operating lease assets, except real estate under operating leases, are included in operating lease revenues. With respect to some sales of real estate under operating leases such as commercial buildings, the Company or its subsidiaries may retain an interest in some cash flows of the real estate in the form of management or operation of the real estate.

Estimates of residual values are based on market values of used equipment, estimates of when and how much equipment will become obsolete and actual recovery being experienced for similar used equipment.

Installment loans—Interest income on installment loans is recognized on an accrual basis. Certain direct loan origination costs, net of origination fees, are being deferred and amortized over the contractual term of the loan as an adjustment of the related loan’s yield using the interest method.

Interest payments received on impaired loans other than purchased loans are recorded as interest income unless the collection of the remaining investment is doubtful at which time payments received are recorded as reductions of principal. For purchased loans, although the acquired assets may remain loans in legal form, collections on these loans often do not reflect the normal historical experience of collecting delinquent accounts, and the need to tailor individual collateral-realization strategies often makes it difficult to reliably estimate the amount, timing, or nature of collections. Accordingly, the Company and its subsidiaries use the cost recovery method of income recognition for such purchased loans regardless of whether impairment is recognized or not.

– 29 –

Non-accrual policy—In common with all classes, past-due financing receivables are receivables for which principal or interest is past-due 30 days or more. Loans whose terms have been modified are not classified as past-due financing receivables if the principals and interests are not past-due 30 days or more in accordance with the modified terms. The Company and its subsidiaries suspend accruing revenues on past-due installment loans and direct financing leases when principal or interest is past-due 90 days or more, or earlier, if management determines that their collections are doubtful based on factors such as individual debtors’ creditworthiness, historical loss experience, current delinquencies and delinquency trends. Accrued but uncollected interest is reclassified to investment in direct financing leases or installment loans in the accompanying consolidated balance sheets and becomes subject to the allowance for doubtful receivables and probable loan loss process. Cash repayments received on non-accrual loans are applied first against past due interest and then any surpluses are applied to principal in view of the conditions of the contract and obligors. The Company and its subsidiaries return to accrual status non-accrual loans and lease receivables when it becomes probable that the Company and its subsidiaries will be able to collect all amounts due according to the contractual terms of these loans and receivables, as evidenced by continual payments from the debtors. The period of such continual payments before returning to accrual status varies depending on factors that we consider are relevant in assessing the debtor’s creditworthiness, such as the debtor’s business characteristics and financial conditions as well as relevant economic conditions and trends.

Brokerage commissions and net gains on investment securities—Brokerage commissions and net gains on investment securities are recorded on a trade date basis.

Real estate sales—Revenues from the sales of real estate are recognized when a contract is in place, a closing has taken place, the buyer’s initial and continuing investment is adequate to demonstrate a commitment to pay for the property and the Company and its subsidiaries do not have a substantial continuing involvement in the property.

Revenues from asset management and servicing—The Company and its subsidiaries provide to our customers investment management services for investments in financial assets, and asset management as well as maintenance and administrative services for investments in real estate properties. The Company and its subsidiaries also perform servicing on behalf of their customers. The Company and its subsidiaries receive fees for those services from our customers.

Revenues from asset management services and servicing are recognized in the consolidated statements of income when transactions occur or services are rendered and the amounts are fixed or determinable and collectability of which is reasonably assured. Certain subsidiaries recognize revenues from performance fees when earned based on the performance of the asset under management. Another subsidiary recognizes revenues from performance fees on an accrual basis over the period in which services are performed.

Revenues from asset management and servicing primarily include management fee income and performance fee income. Management fees are calculated based on the predetermined percentages of the market value of the assets under management or net assets of the investment funds in accordance with the contracts. Performance fees are calculated based on the predetermined percentages on the performance of the assets under management in accordance with the contracts.

Sales of goods—The Company and its certain subsidiaries sell to their customers various types of goods, including precious metals and jewels, glass-wool insulation for housing and building and aftermarket parts and accessories for vehicles. Revenues from such sales of goods are recognized when persuasive evidence of an arrangement exists, delivery has occurred, and collectability is reasonably assured. Delivery is considered to have occurred when the customer has taken title to the goods and assumed the risks and rewards of ownership. Revenues are recognized net of estimated sales returns and incentives.

– 30 –

(e) Insurance and reinsurance transactions

Premium income from life insurance policies, net of premiums on reinsurance ceded, is recognized as earned premiums when due.

Life insurance benefits are recorded as expenses when they are incurred. Policy liabilities and policy account balances for future policy benefits are measured using the net level premium method, based on actuarial estimates of the amount of future policyholder benefits. The policies are characterized as long-duration policies and mainly consist of whole life, term life, endowments, medical insurance and individual annuity insurance contracts. For policies other than individual annuity insurance contracts, computation of policy liabilities necessarily includes assumptions about mortality, morbidity, lapse rates, future yields on related investments and other factors applicable at the time the policies are written. A certain life insurance subsidiary continually evaluates the potential for changes in the estimates and assumptions applied in determining policy liabilities, both positive and negative and uses the results of these evaluations both to adjust recorded liabilities and to adjust underwriting criteria and product offerings.

The insurance contracts sold by a certain subsidiary consist of variable annuity, variable life and fixed annuity insurance contracts. A certain subsidiary manages investment assets on behalf of variable annuity and variable life policyholders, which consist of equity securities and are included in investments in securities in the consolidated balance sheet. These investment assets are measured at fair value with realized and unrealized gains or losses recognized in life insurance premiums and related investment income in the consolidated statement of income. The subsidiary elected the fair value option for the entire variable annuity and variable life insurance contracts in accordance with ASC 825 (“Financial Instruments”) and changes in the fair value are recognized in life insurance costs.

The subsidiary provides minimum guarantees to variable annuity and variable life policyholders where it is exposed to the risk of compensating losses incurred by the policyholders to the extent required by the contracts. A portion of the minimum guarantee risk related to variable annuity and variable life insurance contracts is ceded to the reinsurance companies and the remaining risk is economically hedged by entering into derivative contracts (See Note 19 “Derivative financial instruments and hedging”). The reinsurance contracts do not relieve the subsidiary from the obligation as the primary obligor to compensate certain losses incurred by the policyholders, and the default of the reinsurance companies may impose additional losses on the subsidiary. The subsidiary has elected the fair value option under ASC 825 (“Financial Instruments”) for certain reinsurance recoverables relating to variable annuity and variable life insurance contracts, which is included in other assets in the consolidated balance sheet.

Policy liabilities and policy account balances for fixed annuity insurance contracts are measured based on the accumulation of account deposits plus credited interest and fair value adjustments relating to the acquisition of a subsidiary, less withdrawals, expenses and other charges. The credited interest is recorded in life insurance costs in the consolidated statement of income.

ASC 944 (“Financial Services—Insurance”) requires insurance companies to defer certain costs related directly to the successful acquisition of new or renewal insurance contracts, or deferred policy acquisition costs, and amortize them over the respective policy periods in proportion to anticipated premium revenue. These deferred policy acquisition costs consist primarily of first-year commissions, except for recurring policy maintenance costs and certain variable costs and expenses for underwriting policies.

(f) Allowance for doubtful receivables on direct financing leases and probable loan losses

The allowance for doubtful receivables on direct financing leases and probable loan losses is maintained at a level which, in the judgment of management, is appropriate to provide for probable losses inherent in lease and loan portfolios. The allowance is increased by provision charged to income and is decreased by charge-offs, net of recoveries.

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Developing the allowance for doubtful receivables on direct financing leases and probable loan losses is subject to numerous estimates and judgments. In evaluating the appropriateness of the allowance, management considers various factors, including the business characteristics and financial conditions of the obligors, current economic conditions and trends, prior charge-off experience, current delinquencies and delinquency trends, future cash flows expected to be received from the direct financing leases and loans and value of underlying collateral and guarantees. Impaired loans are individually evaluated for a valuation allowance based on the present value of expected future cash flows, the loan’s observable market price or the fair value of the collateral securing the loans if the loans are collateral-dependent. For non-impaired loans, including loans that are not individually evaluated for impairment, and direct financing leases, the Company and its subsidiaries evaluate prior charge-off experience segmented by the debtors’ industries and the purpose of the loans, and then develop the allowance for doubtful receivables on direct financing leases and probable loan losses considering the prior charge-off experience and current economic conditions.

The Company and its subsidiaries charge off doubtful receivables when the likelihood of any future collection is believed to be minimal considering debtors’ creditworthiness and the liquidation status of collateral.

(g) Impairment of long-lived assets

The Company and its subsidiaries have followed ASC 360 (“Property, Plant, and Equipment”). Under ASC 360, long-lived assets to be held and used in operations, including tangible assets and intangible assets being amortized, consisting primarily of office building, condominiums, golf courses and other operating assets, shall be tested for recoverability whenever events or changes in circumstances indicate that the assets might be impaired. When the undiscounted future cash flows estimated to be generated by those assets are less than the carrying amount of those assets, the net carrying amount of assets not recoverable is reduced to fair value if lower than the carrying amount. The Company and its subsidiaries determine the fair value using appraisals prepared by independent third party appraisers or our own staff of qualified appraisers based on recent transactions involving sales of similar assets or other valuation techniques such as discounted cash flows methodologies using future cash flows estimated to be generated from operation of the existing assets or completion of development projects, as appropriate.

(h) Investment in securities

Trading securities are reported at fair value with unrealized gains and losses included in income.

Available-for-sale securities are reported at fair value, and unrealized gains or losses are recorded in accumulated other comprehensive income (loss), net of applicable income taxes, except investments which are recorded at fair value with unrealized gains and losses included in income by electing the fair value option under ASC 825 (“Financial Instruments”).

Held-to-maturity securities are recorded at amortized cost.

Other securities are recorded at cost or carrying value that reflects equity income and loss based on the Company’s share, except investments which are recorded at fair value with unrealized gains and losses included in income by electing the fair value option under ASC 825.

For available-for-sale securities, the Company and its subsidiaries generally recognize losses related to equity securities for which the fair value has been significantly below the acquisition cost (or current carrying value if an adjustment has been made in the past) for more than six months. Also, the Company and its subsidiaries charge against income losses related to equity securities in situations where, even though the fair value has not remained significantly below the carrying value for six months, the decline in the fair value of an equity security is based on the issuer’s specific economic conditions and not just general declines in the related market and where it is considered unlikely that the fair value of the equity security will recover within six months.

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For debt securities, where the fair value is less than the amortized cost, the Company and its subsidiaries consider whether those securities are other-than-temporarily impaired using all available information about their collectability. The Company and its subsidiaries do not consider a debt security to be other-than-temporarily impaired if (1) the Company and its subsidiaries do not intend to sell the debt security, (2) it is not more likely than not that the Company and its subsidiaries will be required to sell the debt security before recovery of its amortized cost basis and (3) the present value of estimated cash flows will fully cover the amortized cost of the security. On the other hand, the Company and its subsidiaries consider a debt security to be other-than-temporarily impaired if any of the above mentioned three conditions are not met. When the Company and its subsidiaries deem a debt security to be other-than-temporarily impaired, the Company and its subsidiaries recognize the entire difference between the amortized cost and the fair value of the debt securities if the Company and its subsidiaries intend to sell the debt security or it is more likely than not that the Company and its subsidiary will be required to sell the debt security before recovery of its amortized cost basis less any current-period credit loss. However, if the Company and its subsidiaries do not intend to sell the debt security and it is not more likely than not that the Company and its subsidiaries will be required to sell the debt security before recovery of its amortized cost basis less any current-period credit loss, the Company and its subsidiaries separate the difference between the amortized cost and the fair value of the debt securities into the credit loss component and the non-credit loss component. The credit loss component is recognized in earnings, and the non-credit loss component is recognized in other comprehensive income (loss), net of applicable income taxes.

For other securities, when the Company and its subsidiaries determine the decline in value is other than temporary the Company and its subsidiaries reduce the carrying value of the security to the fair value and charge against income losses related to these other securities in situations.

(i) Income taxes

The Company, in general, determines its provision for income taxes for quarterly periods by applying the current estimate of the effective tax rate for the full fiscal year to the actual year-to-date income before income taxes and discontinued operations. The estimated effective tax rate is determined by dividing the estimated provision for income taxes for the full fiscal year by the estimated income before income taxes and discontinued operations for the full fiscal year.

At the fiscal year end, income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in income in the period that includes the enactment date. A valuation allowance is recognized if, based on the weight of available evidence, it is “more likely than not” that some portion or all of the deferred tax asset will not be realized.

The effective income tax rates including discontinued operations for the six months ended September 30, 2013 and 2014 were 36.4% and 27.4%, respectively. These rates are 38.6% and 18.3% for the three months ended September 30, 2013 and 2014, respectively. For the six months ended September 30, 2013, the Company and its subsidiaries in Japan are subject to a National Corporate tax of approximately 28%, an Inhabitant tax of approximately 5% and a deductible Enterprise tax of approximately 8%, which in the aggregate result in a statutory income tax rate of approximately 38.3%. For the six months ended September 30, 2014, as a result of the tax reforms as discussed in the following paragraph, the National Corporation tax was reduced from approximately 28% to approximately 26% and accordingly, the statutory income tax rate was reduced to approximately 35.9%. The effective income tax rate is different from the statutory tax rate primarily because of certain non-deductible expenses for tax purposes, non-taxable income for tax purposes, the effect of lower income tax rates on foreign subsidiaries and life insurance subsidiaries in Japan, a change in valuation allowance and the bargain purchase gain.

On March 20, 2014, the bill for reconstruction funding and the bill for local corporate tax were approved by the National Diet of Japan. For the fiscal year beginning on April 1, 2014, special corporate tax for reconstruction will not be charged, and as a result, the statutory income tax rate for the fiscal year beginning on April 1, 2014 was reduced from approximately 38.3% to approximately 35.9%. In addition, from fiscal years beginning on or after October 1, 2014, the statutory national income tax rate was increased from approximately 23.6% to approximately 24.6% and the statutory local income tax rate was reduced from approximately 12.3% to approximately 11.3%, while total statutory income tax rate remains at 35.9%.

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The Company and its subsidiaries have followed ASC 740 (“Income Taxes”). According to ASC 740, the Company and its subsidiaries recognize the financial statement effects of a tax position taken or expected to be taken in a tax return when it is more likely than not, based on the technical merits, that the position will be sustained upon tax examination, including resolution of any related appeals or litigation processes, and measure the tax position that meets the recognition threshold at the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement with the taxing authority. The Company and its subsidiaries present an unrecognized tax benefit as a reduction of a deferred tax asset for a net operating loss carryforward, or similar tax loss or tax credit carryforward, rather than as a liability. The Company and its subsidiaries classify penalties and interest expense related to income taxes as part of provision for income taxes in the consolidated statements of income.

(j) Securitized assets

The Company and its subsidiaries have securitized and sold to investors various financial assets such as lease receivables and loan receivables. In the securitization process, the assets to be securitized (“the assets”) are sold to trusts or SPEs that issue asset-backed beneficial interests and securities to the investors.

In accordance with ASC 860 (“Transfers and Servicing”) and ASC 810 (“Consolidation”), trusts or SPEs used in securitization transactions are consolidated if the Company and its subsidiaries are the primary beneficiary of the trusts or SPEs, and the transfers of the financial assets to those consolidated trusts and SPEs are not accounted for as sales. Assets held by consolidated trusts or consolidated SPEs continue to be accounted for as lease receivables and loan receivable, as they were before the transfer, and asset-backed beneficial interests and securities issued to the investors are accounted for as debt. When the Company and its subsidiaries have transferred financial assets to a transferee that is not subject to consolidation, the Company and its subsidiaries account for the transfer as a sale if control over the transferred assets is surrendered.

A certain subsidiary originates and sells loans into the secondary market, while retaining the obligation to service those loans. In addition, it undertakes obligations to service loans originated by others. The subsidiary recognizes servicing assets if it expects the benefit of servicing to more than adequately compensate it for performing the servicing or recognizes servicing liabilities if it expects the benefit of servicing to less than adequately compensate it. These servicing assets and liabilities are initially recognized at fair value and subsequently accounted for using the amortization method whereby the assets and liabilities are amortized in proportion to and over the period of estimated net servicing income or net servicing loss. On a quarterly basis, servicing assets and liabilities are evaluated for impairment or increased obligations. The fair value of servicing assets and liabilities is estimated using an internal valuation model, or by obtaining an opinion of value from an independent third-party vendor. Both methods are based on calculating the present value of estimated future net servicing cash flows, taking into consideration discount rates, prepayments and servicing costs. The internal valuation model is validated at least semiannually through third-party valuations.

(k) Derivative financial instruments

The Company and its subsidiaries apply ASC 815 (“Derivatives and Hedging”), and all derivatives held by the Company and its subsidiaries are recognized on the consolidated balance sheets at fair value. The accounting treatment of subsequent changes in the fair value depends on their use, and whether they qualify as effective “hedges” for accounting purposes. Derivatives that are not hedges must be adjusted to fair value through the consolidated statements of income. If a derivative is a hedge, then depending on its nature, changes in its fair value will be either offset against change in the fair value of hedged assets or liabilities through the consolidated statements of income, or recorded in other comprehensive income (loss).

If a derivative is held as a hedge of the variability of fair value related to a recognized asset or liability or an unrecognized firm commitment (“fair value” hedge), changes in the fair value of the derivative are recorded in earnings along with the changes in the fair value of the hedged item.

If a derivative is held as a hedge of the variability of cash flows related to a forecasted transaction or a recognized asset or liability (“cash flow” hedge), changes in the fair value of the derivative are recorded in other comprehensive income (loss) to the extent that the derivative is effective as a hedge, until earnings are affected by the variability in cash flows of the designated hedged item.

If a derivative is held as a hedge of a foreign-currency fair-value or cash-flow hedge (“foreign currency” hedge), changes in the fair value of the derivative are recorded in either earnings or other comprehensive income (loss), depending on whether the hedged transaction is a fair-value hedge or a cash-flow hedge. However, if a derivative is used as a hedge of a net investment in a foreign operation, changes in its fair value, to the extent effective as a hedge, are recorded in the foreign currency translation adjustments account within other comprehensive income (loss).

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Changes in the fair value of derivatives that are held for trading purposes or held for the purpose of economic hedges, and the ineffective portion of changes in fair value of derivatives that qualify as a hedge, are recorded in earnings.

For all hedging relationships that are designated and qualify as hedging, at inception the Company and its subsidiaries formally document the details of the hedging relationship and the hedged activity. The Company and its subsidiaries also formally assess, both at the hedge’s inception and on an ongoing basis, the effectiveness of the hedge relationship. The Company and its subsidiaries cease hedge accounting prospectively when the derivative no longer qualifies for hedge accounting.

(l) Pension plans

The Company and certain subsidiaries have contributory and non-contributory pension plans covering substantially all of their employees. The Company and its subsidiaries apply ASC 715 (“Compensation—Retirement Benefits”), and the costs of pension plans are accrued based on amounts determined using actuarial methods, with assumptions of discount rate, rate of increase in compensation level, expected long-term rate of return on plan assets and others.

The Company and its subsidiaries also recognize the funded status of pension plans, measured as the difference between the fair value of plan assets and the benefit obligation, on the consolidated balance sheets. Changes in that funded status are recognized in the year in which the changes occur through other comprehensive income (loss), net of applicable income taxes.

(m) Stock-based compensation

The Company and its subsidiaries apply ASC 718 (“Compensation—Stock Compensation”). ASC 718 requires, with limited exception, that the cost of employee services received in exchange for an award of equity instruments be measured based on the grant-date fair value. The costs are recognized over the requisite employee service period.

(n) Stock splits

Stock splits implemented prior to October 1, 2001 had been accounted for by transferring an amount equivalent to the par value of the shares from additional paid-in capital to common stock as required by the Japanese Commercial Code (the “Code”) before amendment. However, no such reclassification was made for stock splits when common stock already included a portion of the proceeds from shares issued at a price in excess of par value. This method of accounting was in conformity with accounting principles generally accepted in Japan.

As a result of a revision to the Code before amendment effective on October 1, 2001 and the Companies Act implemented on May 1, 2006, the above-mentioned method of accounting required by the Code has become unnecessary.

In the United States, stock splits in comparable circumstances are considered to be stock dividends and are accounted for by transferring from retained earnings to common stock and additional paid-in capital amounts equal to the fair market value of the shares issued. Common stock is increased by the par value of the shares and additional paid-in capital is increased by the excess of the market value over par value of the shares issued. Had such stock splits made prior to October 1, 2001 been accounted for in this manner, additional paid-in capital as of September 30, 2014 would have increased by approximately ¥24,674 million, with a corresponding decrease in retained earnings. Total ORIX Corporation shareholders’ equity would remain unchanged. A stock split on May 19, 2000 and April 1, 2013 was excluded from the above amounts because the stock split was not considered to be a stock dividend under U.S. GAAP.

(o) Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits placed with banks and short-term highly liquid investments with original maturities of three months or less.

(p) Restricted cash

Restricted cash consists of trust accounts under securitization programs and real estate, deposits related to servicing agreements, deposits collected on the underlying assets and applied to non-recourse loans and others.

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(q) Installment loans

Certain loans, for which the Company and its subsidiaries have the intent and ability to sell to outside parties in the foreseeable future, are considered held for sale and are carried at the lower of cost or market value determined on an individual basis, except loans held for sale for which the fair value option under ASC 825 (“Financial Instruments”) was elected. A subsidiary elected the fair value option under ASC 825 on its loans held for sale originated on or after October 1, 2011. The subsidiary enters into forward sale agreements to offset the change in the fair value of loans held for sale, and the election of the fair value option allows the subsidiary to recognize both the change in the fair value of the loans and the change in the fair value of the forward sale agreements due to changes in interest rates in the same accounting period.

Loans held for sale are included in installment loans and the outstanding balances of these loans as of March 31, 2014 and September 30, 2014 were ¥14,267 million and ¥9,244 million, respectively. There were ¥12,631 million and ¥7,616 million of loans held for sale as of March 31, 2014 and September 30, 2014, respectively, measured at fair value by electing the fair value option.

(r) Other operating assets

Other operating assets consist primarily of operating facilities (including golf courses, hotels, training facilities and senior housing), which are stated at cost less accumulated depreciation, and depreciation is calculated mainly on a straight-line basis over the estimated useful lives of the assets. Accumulated depreciation were ¥62,182 million and ¥64,875 million as of March 31, 2014 and September 30, 2014, respectively.

(s) Other receivables

Other receivables primarily include payments made on behalf of lessees for property tax, maintenance fees and insurance premiums in relation to direct financing lease contracts, accounts receivables in relation to sales of assets to be leased, residential condominiums and other assets, accrued revenue in relation to business operations and derivative assets.

(t) Inventories

Inventories primarily consist of advance and/or progress payments for development of residential condominiums for sale, completed residential condominiums (including those waiting to be delivered to buyers under the contract for sale), and merchandises for sale. Advance and/or progress payments for development of residential condominiums for sale are carried at cost less any impairment losses, and completed residential condominiums and merchandises for sale are stated at the lower of cost or market. The cost of inventories that are unique and not interchangeable is determined on the specific identification method and the cost of other inventories is principally determined on the average cost method. As of March 31, 2014, and September 30, 2014, advance and/or progress payments for development of residential condominiums for sale were ¥111,813 million and ¥92,925 million, respectively, and completed residential condominiums and merchandises for sale were ¥24,291 million and ¥44,547 million, respectively.

For the six months ended September 30, 2013 and 2014, subsidiaries recorded ¥5,650 million and ¥3,054 million of write-downs principally on advance and/or progress payments for development of residential condominiums for sale, resulting from an increase in development costs and/or a decrease in expected sales price. The amounts of such write-downs for the three months ended September 30, 2013 and 2014 were ¥2,393 million and ¥3,054 million, respectively. These write-downs were principally recorded in costs of real estate sales and included in the Real Estate segment.

(u) Office facilities

Office facilities are stated at cost less accumulated depreciation. Depreciation is calculated on a declining-balance basis or straight-line basis over the estimated useful lives of the assets. Accumulated depreciation was ¥39,747 million and ¥41,139 million as of March 31, 2014 and September 30, 2014, respectively.

(v) Other assets

Other assets consist primarily of the excess of purchase prices over the net assets acquired in acquisitions (goodwill) and other intangible assets (see (w)), reinsurance recoverables in relation to reinsurance contracts (see (e)), deferred insurance policy acquisition costs which are amortized over the contract periods (see (e)), leasehold deposits, advance payments made in relation to purchases of assets to be leased and construction of real estate for operating lease, and deferred tax assets.

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(w) Goodwill and other intangible assets

The Company and its subsidiaries have followed ASC 805 (“Business Combinations”) and ASC 350 (“Intangibles”).

ASC 805 requires that all business combinations be accounted for using the acquisition method. It also requires that intangible assets acquired in a business combination be recognized apart from goodwill if the intangible assets meet one of two criteria—either the contractual-legal criterion or the separability criterion. Goodwill is measured as an excess of the aggregate of consideration transferred and the fair value of noncontrolling interests over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed in the business combination measured at fair value. The Company and its subsidiaries would recognize a bargain purchase gain when the amount of recognized net assets exceeds the sum of consideration transferred and the fair of noncontrolling interests. In a business combination achieved in stages, the Company and its subsidiaries remeasure their previously held equity interest at their acquisition-date fair value and recognize the resulting gain or loss, if any, in earnings.

ASC 350 establishes how intangible assets (other than those acquired in a business combination) should be accounted for upon acquisition. It also addresses how goodwill and other intangible assets should be accounted for subsequent to their acquisition. Goodwill and intangible assets that have indefinite useful lives are not amortized but tested at least annually for impairment. Additionally, if events or changes in circumstances indicate that the asset might be impaired, we test for impairment when such events or changes occur. Under ASC 350, the Company and its subsidiaries may perform a qualitative assessment to determine whether to calculate the fair value of a reporting unit under the first step of the two-step goodwill impairment test. If, after assessing the totality of events or circumstances, it is determined that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then the Company and/or subsidiaries do not perform the two-step impairment test. However, if the Company and/or subsidiaries conclude otherwise, the Company and/or subsidiaries perform the first step of the two-step impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying amount of the reporting unit. If the fair value of the reporting unit falls below its carrying amount, then the Company and/or subsidiaries perform the second step of the goodwill impairment test by comparing the fair value of goodwill with its carrying amount. If the carrying amount of goodwill exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. The Company and its subsidiaries test the goodwill either at the operating segment level or one level below the operating segments. The Company and its subsidiaries perform the qualitative assessment for some goodwill but bypass the qualitative assessment and proceed directly to the first step of the two-step impairment test for other goodwill.

According to ASC350, the Company and its subsidiaries may perform a qualitative assessment to determine whether it is more likely than not that the indefinite-lived intangible asset is impaired. If, after assessing the totality of events and circumstances, the Company and/or subsidiaries conclude that it is not more likely than not that the indefinite-lived asset is impaired, then the Company and/or subsidiaries do not perform the quantitative impairment test. However, if the Company and/or subsidiaries conclude otherwise, the Company and/or subsidiaries calculate the fair value of the indefinite-lived intangible asset and perform the quantitative impairment test. If the carrying amount of the indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. The Company and its subsidiaries perform the qualitative assessment for some indefinite-lived intangible assets but bypass the qualitative assessment and perform the quantitative assessment for other indefinite-lived intangible assets.

Intangible assets with finite lives are amortized over their useful lives and tested for impairment in accordance with ASC 360 (“Property, Plant, and Equipment”).

The amount of goodwill is ¥366,375 million and ¥323,128 million as of March 31, 2014 and September 30, 2014, respectively.

The amount of other intangible assets is ¥323,225 million and ¥381,402 million as of March 31, 2014 and September 30, 2014, respectively.

(x) Trade notes, accounts payable and other liabilities

Trade notes, accounts payable and other liabilities include accounts payables, guarantee liabilities, and derivative liabilities.

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(y) Capitalization of interest costs

The Company and its subsidiaries capitalized interest costs related to specific long-term development projects.

(z) Advertising

The costs of advertising are expensed as incurred.

(aa) Discontinued operations

In April 2014, Accounting Standards Update 2014-08 (“Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”—ASC 205 (“Presentation of Financial Statements”) and ASC 360 (“Property, Plant, and Equipment”)) was issued. This Update requires an entity to report a disposal or a classification as held for sale of a component of an entity or a group of components of an entity in discontinued operations if it represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. The Company and its subsidiaries early adopted this Update on April 1, 2014. In accordance with this Update, the Company and its subsidiaries report a disposal of a component or a group of components of the Company and its subsidiaries in discontinued operations if the disposal represents a strategic shift which has (or will have) a major effect on the company and its subsidiaries’ operations and financial results when the component or group of components is disposed by sale or classified as held for sale on or after April 1, 2014.

During the six months ended September 30, 2013 and the three months ended September 30, 2013, the Company and its subsidiaries have followed ASC 205-20 (“Presentation of Financial Statements—Discontinued Operations”) prior to the early adoption of the amendments. Under ASC 205-20 prior to the early adoption of the amendments, the scope of discontinued operations includes the operating results of any component of an entity with its own identifiable operations and cash flow and in which operations the Company and its subsidiaries will not have significant continuing involvement. Included in reported discontinued operations are the operating results of operations for the subsidiaries, the business units and certain properties sold or to be disposed of by sale without significant continuing involvements, which results of operations for prior periods presented have also been reclassified as discontinued operations in the accompanying consolidated statements of income and consolidated statements of cash flows. During the six months ended September 30, 2013 and the three months ended September 30, 2013, where the Company and its subsidiaries have significant continuing involvement in the operations from the real estate under operating leases which have been disposed of, the gains or losses arising from such disposition are separately disclosed as gains on sales of real estate under operating leases, whereas if the Company and its subsidiaries have no significant continuing involvement in the operations from such disposed real estate, the gains or losses are reported as income from discontinued operations, net.

Accounting Standards Update 2014-08 do not apply to a disposal or a classification as held for sale of a component or a group of components of the Company and its subsidiaries which have previously been reported in the financial statements. Accordingly, during the six months ended September 30, 2014 and the three months ended September 30, 2014, the Company and its subsidiaries continue to report gains on sales and the results of operations of subsidiaries, business units, and certain rental properties, which was classified as held for sale at March 31, 2014, as income from discontinued operations in the accompanying consolidated statements of income in accordance with ASC 205-20 prior to the early adoption of the amendments.

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(ab) Earnings per share

Basic earnings per share is computed by dividing income attributable to ORIX Corporation shareholders from continuing operations and net income attributable to ORIX Corporation shareholders by the weighted average number of shares of outstanding common stock in each period and diluted earnings per share, which reflects the potential dilution that could occur if securities or other contracts issuing common stock were exercised or converted into common stock. Earnings per share is adjusted for any stock splits and stock dividends retrospectively.

(ac) Partial sale and additional acquisition of the parent’s ownership interest in subsidiaries

A partial sale and an additional acquisition of the parent’s ownership interest in subsidiaries where the parent continues to retain control of that subsidiary are accounted for as equity transactions. On the other hand, in a transaction that results in the loss of control, the gain or loss recognized in income includes the realized gain or loss related to the portion of ownership interest sold and the gain or loss on the remeasurement to fair value of the interest retained.

(ad) Redeemable noncontrolling interests

Noncontrolling interests in certain subsidiaries are redeemable preferred shares which are subject to call and put rights upon certain shareholder events. As redemption of the noncontrolling interest is not solely in the control of the subsidiary, it is recorded between Liabilities and Equity on the consolidated balance sheets at its estimated redemption value in accordance with provisions including EITF Topic No. D-98 (ASC 480-10-s99-3A) (“Classification and Measurement of Redeemable Securities”).

(ae) Issuance of stock by an affiliate

When an affiliate issues stock to unrelated third parties, the Company and its subsidiaries’ ownership interest in the affiliate decreases. In the event that the price per share is more or less than the Company and its subsidiaries’ average carrying amount per share, the Company and its subsidiaries adjust the carrying amount of its investment in the affiliate and recognize gain or loss in the consolidated statements of income in the year in which the change in ownership interest occurs.

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(af) New accounting pronouncements

In February 2013, Accounting Standards Update 2013-04 (“Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date”—ASC 405 (“Liabilities”)) was issued. This Update requires an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date, as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. The Company and its subsidiaries adopted this Update on April 1, 2014. The adoption had no effect on the Company and its subsidiaries’ results of operations or financial position.

In March 2013, Accounting Standards Update 2013-05 (“Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity”—ASC 830 (“Foreign Currency Matters”)) was issued. This Update requires that when a reporting entity (parent) ceases to have a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity, the parent release any related cumulative translation adjustment into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. This Update continues to require an entity to release a pro rata portion of the cumulative translation adjustment into net income upon a partial sale of an equity method investment that is a foreign entity. This Update requires an acquirer to release any related cumulative translation adjustment into net income when the acquirer obtains a controlling financial interest in a foreign entity that was previously an equity method affiliate in a business combination achieved in stages. The Company and its subsidiaries adopted this Update on April 1, 2014. The adoption had no effect on the Company and its subsidiaries’ results of operations or financial position.

In April 2013, Accounting Standards Update 2013-07 (“Liquidation Basis of Accounting”—ASC 205 (“Presentation of Financial Statements”)) was issued. This Update requires an entity to prepare its financial statements using the liquidation basis of accounting when liquidation is imminent and provides principles for the recognition and measurement of assets and liabilities and requirements for financial statements prepared using the liquidation basis of accounting. The Company and its subsidiaries adopted this Update on April 1, 2014. The adoption had no effect on the Company and its subsidiaries’ results of operations or financial position.

In June 2013, Accounting Standards Update 2013-08 (“Amendments to the Scope, Measurement, and Disclosure Requirements”—ASC 946 (“Financial Services—Investment Companies”)) was issued. This Update changes the approach to the investment company assessment, clarifies the characteristics of an investment company, and provides comprehensive guidance for assessing whether an entity is an investment company. This Update requires an investment company to measure noncontrolling ownership interests in other investment companies at fair value rather than using the equity method of accounting. This Update requires an investment company to disclose the additional information about an entity’s status as an investment company and financial support provided or contractually required to be provided by an investment company to its investees. The Company and its subsidiaries adopted this Update on April 1, 2014. The adoption had no material effect on the Company and its subsidiaries’ results of operations or financial position.

In July 2013, Accounting Standards Update 2013-11 (“Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists”—ASC 740 (“Income Taxes”)) was issued. This Update requires an entity to present an unrecognized tax benefit as a reduction of a deferred tax asset for a net operating loss carryforward, or similar tax loss or tax credit carryforward, rather than as a liability, with certain exceptions. The Company and its subsidiaries adopted this Update on April 1, 2014. The adoption had no effect on the Company and its subsidiaries’ results of operations or financial position.

– 40 –

In January 2014, Accounting Standards Update 2014-04 (“Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure”—ASC 310-40 (“Receivables—Troubled Debt Restructurings by Creditors”)) was issued. This Update clarifies when a creditor is considered to have received physical possession resulting from an in substance repossession or foreclosure of residential real estate property collateralizing a consumer mortgage loan. Additionally, this Update requires an entity to disclose the amount of foreclosed residential real estate property and the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure. This Update is effective for fiscal years, and interim periods within those annual periods beginning after December 15, 2014. The amendments should be applied on either a prospective basis or a modified retrospective basis. Early adoption is permitted. The adoption is not expected to have a material effect on the Company and its subsidiaries’ results of operations or financial position.

In April 2014, Accounting Standards Update 2014-08 (“Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”—ASC 205 (“Presentation of Financial Statements”) and ASC 360 (“Property, Plant, and Equipment”)) was issued. This Update requires an entity to report a disposal (or a classification as held for sale) of a component of an entity or a group of components of an entity in discontinued operations if it represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. This Update requires an entity to present, for each comparative period, the assets and liabilities of discontinued operations separately in the asset and liability sections, respectively, of the statement of financial position. Furthermore, this Update requires additional disclosures about discontinued operations and a disposal of an individually significant component that does not qualify for discontinued operations. The Company and its subsidiaries early adopted this Update on April 1, 2014. The adoption had no material effect on the Company and its subsidiaries’ results of operations or financial position.

In May 2014, Accounting Standards Update 2014-09 (“Revenue from Contracts with Customers”—ASC 606 (“Revenue from Contracts with Customers”)) was issued. The core principle of this Update is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply a five-step model to determine when to recognize revenue, and in what amount. The five steps to apply the model are:

• Identify the contract(s) with a customer

• Identify the performance obligations in the contract

• Determine the transaction price

• Allocate the transaction price to the performance obligations in the contract

• Recognize revenue when (or as) the entity satisfies a performance obligation

This Update requires an entity to disclose more information about contracts with customers than under the current disclosure requirements. The Update is effective for fiscal years, and interim periods within those years beginning after December 15, 2016. Early adoption is prohibited. An entity should apply the amendments in this Update using either a retrospective method or a cumulative-effect method. The entity using the retrospective method may elect some optional expedients to simplify a full retrospective basis. The entity using the cumulative-effect method would recognize the cumulative effect of initially applying this Update as an adjustment to the opening balance of retained earnings or net assets at the date of initial application. The Company and its subsidiaries are currently evaluating the effect that the adoption of this Update will have on the Company and its subsidiaries’ results of operations and financial position.

In June 2014, Accounting Standards Update 2014-11 (“Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures”—ASC 860 (“Transfers and Servicing”)) was issued. This Update requires an entity to account for repurchase-to-maturity transactions as secured borrowings. This Update eliminates the guidance on repurchase financing transactions in ASC 860-10-40-42 through 40-47 and requires the transferor and transferee to symmetrically account for the initial transfer of the financial asset as a sale (provided that derecognition conditions are met) and purchase, respectively. Additionally, this Update requires new disclosure requirements related to certain transfers of financial assets that are accounted for as sales and certain transfers accounted for as secured borrowings. This Update is effective for fiscal years, and interim periods within those annual periods beginning after December 15, 2014. Early adoption is prohibited. Generally, the effect of adopting this Update on the Company and its subsidiaries’ results of operations or financial position will depend on future transactions.

– 41 –

In June 2014, Accounting Standards Update 2014-12 (“Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period a consensus of the FASB Emerging Issues Task Force”—ASC 718 (“Compensation—Stock Compensation”)) was issued. This Update requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. This Update is effective for fiscal years, and interim periods within those annual periods beginning after December 15, 2015. The amendments in this Update should be applied on either a prospective basis or a modified retrospective basis. Early adoption is permitted. The adoption is not expected to have a material effect on the Company and its subsidiaries’ results of operations and financial position.

In August 2014, Accounting Standards Update 2014-13 (“Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity”—ASC 810 (“Consolidation”)) was issued. This Update permits the parent of the consolidated collateralized financing entity (“CFE”) within the scope of this Update to measure the CFE’s financial assets and liabilities based on either the fair value of the financial assets or financial liabilities, whichever has the more observable inputs. This Update is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2015. Early adoption is permitted as of the beginning of a fiscal year. An entity should apply the amendments in this Update using either a modified retrospective approach or a full retrospective approach. The Company and its subsidiaries are currently evaluating the effect that the adoption of this Update will have on the Company and its subsidiaries’ results of operations and financial position.

In August 2014, Accounting Standards Update 2014-14 (“Classification of Certain Government—Guaranteed Mortgage Loans Upon Foreclosure”—ASC 310-40 (“Receivables—Troubled Debt Restructurings by Creditors”)) was issued. This Update requires creditors to classify certain foreclosed government guaranteed mortgage loans as a receivable from the guarantor that is measured at the amount expected to be recovered under the guarantee, without treating the guarantee as a separate unit of account. This Update is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2014. An entity should apply the amendments in this Update using either a prospective transition method or a modified retrospective transition method. The transition method must be consistent with that applied by the entity for Accounting Standards Update 2014-04 (“Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure”—ASC 310-40 (“Receivables—Troubled Debt Restructurings by Creditors”)). Early adoption is permitted only if the entity has already adopted Accounting Standards Update 2014-04. The adoption is not expected to have a material effect on the Company and its subsidiaries’ results of operations and financial position.

In August 2014, Accounting Standards Update 2014-15 (“Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”—ASC 205-40 (“Presentation of Financial Statements—Going Concern”)) was issued. This Update requires an entity to perform a going concern assessment by evaluating their ability to meet obligations for a look-forward period of one year from the financial statement issuance date (or date the financial statements are available to be issued). Disclosures are required if it is probable an entity will be unable to meet its obligations within the look-forward period. Incremental substantial doubt disclosure is required if the probability is not mitigated by management’s plans. This Update is effective for the first fiscal years ending after December 15, 2016 and interim periods thereafter. Early adoption is permitted. The Update only relates to certain disclosure requirements and the adoption will have no effect on the Company and its subsidiaries’ results of operations or financial position.

In November 2014, Accounting Standards Update 2014-16 (“Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity”—ASC 815 (“Derivatives and Hedging”)) was issued. This Update requires an issuer or an investor of hybrid financial instruments issued in the form of a share to determine whether the nature of the host contract is more akin to debt or to equity by considering the economic characteristics and risks of the entire hybrid financial instrument, including the embedded derivative feature that is being evaluated for separate accounting from the host contract. This Update is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2015. Early adoption, including adoption in an interim period, is permitted. The amendments in this Update should be applied on a modified retrospective basis to all existing hybrid financial instruments in the form of a share as of the beginning of the fiscal year of adoption. Retrospective application is permitted to all relevant prior periods. The Company and its subsidiaries are currently evaluating the effect that the adoption of this Update will have on the Company and its subsidiaries’ results of operations and financial position.

(ag) Reclassifications

Revenues and Expenses from sales of goods have been separately presented from the three-month period ended September 30, 2014 as, “Sales of goods” and “Costs of goods sold,” respectively. The amounts in the previous period have been retrospectively reclassified to conform to current period presentation.

– 42 –

3. Fair Value Measurements

The Company and its subsidiaries adopted ASC 820 (“Fair Value Measurement”). This Codification Section defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.

This Codification Section classifies and prioritizes inputs used in valuation techniques to measure fair value into the following three levels:

Level 1:	Inputs of quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.
Level 2:	Inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly or indirectly.
Level 3:	Unobservable inputs for the assets or liabilities.

This Codification Section differentiates between those assets and liabilities required to be carried at fair value at every reporting period (“recurring”) and those assets and liabilities that are only required to be adjusted to fair value under certain circumstances (“nonrecurring”). The Company and its subsidiaries mainly measure certain loans held for sale, trading securities, available-for-sale securities, certain investment funds, derivatives, certain reinsurance recoverables, certain contingent consideration, and variable annuity and variable life insurance contracts at fair value on a recurring basis.

– 43 –

The following table presents recorded amounts of major financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2014 and September 30, 2014:

March 31, 2014

	Millions of yen
	Total carrying value  in Consolidated Balance Sheets		Quoted prices in active markets for identical assets or liabilities (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Financial Assets:
Loans held for sale*1	¥	12,631	¥	0	¥	12,631	¥	0
Trading securities		16,079		275		15,804		0
Available-for-sale securities		881,606		230,618		566,987		84,001
Japanese and foreign government bond securities		360,360		114,989		245,371		0
Japanese prefectural and foreign municipal bond securities		96,697		0		96,697		0
Corporate debt securities		201,386		0		200,725		661
Specified bonds issued by SPEs in Japan		6,772		0		0		6,772
CMBS and RMBS in the U.S.		17,833		0		0		17,833
Other asset-backed securities		47,798		0		613		47,185
Other debt securities		11,550		0		0		11,550
Equity securities*2		139,210		115,629		23,581		0
Other securities		6,317		0		0		6,317
Investment funds*3		6,317		0		0		6,317
Derivative assets		12,437		8		9,943		2,486
Interest rate swap agreements		2,528		0		2,528		0
Options written and other		5,486		0		3,000		2,486
Futures, foreign exchange contracts		860		8		852		0
Foreign currency swap agreements		3,534		0		3,534		0
Credit derivatives written		29		0		29		0
	¥	929,070	¥	230,901	¥	605,365	¥	92,804
Financial Liabilities:
Derivative liabilities	¥	16,646	¥	28	¥	16,618	¥	0
Interest rate swap agreements		634		0		634		0
Options written and other		3,605		0		3,605		0
Futures, foreign exchange contracts		4,966		28		4,938		0
Foreign currency swap agreements		7,176		0		7,176		0
Credit derivatives held		265		0		265		0
Accounts payable		2,833		0		0		2,833
Contingent consideration		2,833		0		0		2,833
	¥	19,479	¥	28	¥	16,618	¥	2,833

– 44 –

September 30, 2014

	Millions of yen
	Total carrying value  in Consolidated Balance Sheets		Quoted prices in active markets for identical assets or liabilities (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Financial Assets:
Loans held for sale *1	¥	7,616	¥	0	¥	7,616	¥	0
Trading securities		1,463,900		50,062		1,413,838		0
Available-for-sale securities		1,222,973		117,040		1,029,140		76,793
Japanese and foreign government bond securities		520,371		0		520,371		0
Japanese prefectural and foreign municipal bond securities		153,603		0		153,603		0
Corporate debt securities		292,547		0		292,391		156
Specified bonds issued by SPEs in Japan		6,340		0		0		6,340
CMBS and RMBS in the U.S.		47,241		0		37,981		9,260
Other asset-backed securities		49,771		0		654		49,117
Other debt securities		11,920		0		0		11,920
Equity securities *2		141,180		117,040		24,140		0
Other securities		9,105		0		0		9,105
Investment funds *3		9,105		0		0		9,105
Derivative assets		23,083		146		7,381		15,556
Interest rate swap agreements		1,348		0		1,348		0
Options held/written and other		16,409		0		853		15,556
Futures, foreign exchange contracts		1,324		146		1,178		0
Foreign currency swap agreements		4,002		0		4,002		0
Other assets		55,500		0		0		55,500
Reinsurance recoverables *4		55,500		0		0		55,500
	¥	2,782,177	¥	167,248	¥	2,457,975	¥	156,954
Financial Liabilities:
Derivative liabilities	¥	36,286	¥	1,168	¥	35,118	¥	0
Interest rate swap agreements		851		0		851		0
Options written and other		3,495		0		3,495		0
Futures, foreign exchange contracts		23,522		1,168		22,354		0
Foreign currency swap agreements		8,154		0		8,154		0
Credit derivatives held		264		0		264		0
Accounts payable		5,912		0		0		5,912
Contingent consideration		5,912		0		0		5,912
Policy Liabilities and Policy Account Balances		1,575,331		0		0		1,575,331
Variable annuity and variable life insurance contracts *5		1,575,331		0		0		1,575,331
	¥	1,617,529	¥	1,168	¥	35,118	¥	1,581,243

*1 A subsidiary elected the fair value option under ASC 825 (“Financial Instrument”) on the loans held for sale originated on or after October 1, 2011. These loans are multi-family and seniors housing loans and are sold to Federal National Mortgage Association (“Fannie Mae”) or institutional investors. Included in “Other operating revenues” in the consolidated statements of income are losses from the change in the fair value of the loans of ¥465 million and ¥56 million for the six months ended September 30, 2013 and 2014. Included in “Other operating revenues” in the consolidated statements of income are gains of ¥229 million and losses of ¥55 million from the change in the fair value of the loans for the three months ended September 30, 2013 and 2014, respectively. No gains or losses were recognized in earnings during the six months ended September 30, 2013 and 2014, attributable to changes in instrument-specific credit risk. The amounts of aggregate unpaid principal balance and aggregate fair value of the loans held for sale at March 31, 2014, are ¥12,024 million and ¥12,631 million, respectively, and the amount of the aggregate fair value exceeds the amount of aggregate unpaid principal balance by ¥607 million. The amounts of aggregate unpaid principal balance and aggregate fair value of the loans held for sale as of September 30, 2014, are ¥7,029 million and ¥7,616 million, respectively, and the amount of the aggregate fair value exceeds the amount of aggregate unpaid principal balance by ¥587 million. As of March 31, 2014 and September 30, 2014, there are no loans that are 90 days or more past due, in non-accrual status, or both.

– 45 –

*2 A subsidiary elected the fair value option under ASC 825 (“Financial Instruments”) for investments in equity securities included in available-for-sale securities. Included in “Brokerage commissions and net gains on investment securities” in the consolidated statements of income were gains of ¥236 million and ¥16 million from the change in the fair value of those investments for the six months and three months ended September 30, 2014. The amounts of aggregate fair value elected the fair value option were ¥5,116 million and ¥8,522 million as of March 31, 2014 and September 30, 2014, respectively.

*3 Certain subsidiaries elected the fair value option under ASC 825 (“Financial Instruments”) for investments in some funds. Included in “Brokerage commissions and net gains on investment securities” in the consolidated statements of income were gains from the change in the fair value of those investments of ¥395 million and ¥507 million for the six months ended September 30, 2013 and 2014. Included in “Brokerage commissions and net gains on investment securities” in the consolidated statements of income were gains from the change in the fair value of those investments of ¥207 million and ¥339 million for the three months ended September 30, 2013 and 2014. The amounts of aggregate investment funds and aggregate fair value are ¥6,317 million and ¥9,105 million as of March 31, 2014 and September 30, 2014, respectively.

*4 Certain subsidiaries elected the fair value option under ASC 825 (“Financial Instruments”) for certain reinsurance recoverables held by the subsidiary acquired during the three months ended September 30, 2014. The fair value of the reinsurance recoverables elected for the fair value option in other assets was ¥55,500 million as of September 30, 2014. For the effect of changes in the fair value of those reinsurance recoverables on earnings during the six and three months ended September 30, 2014, see Note 15 “Life Insurance Operations”.

*5 A subsidiary elected the fair value option under ASC 825 (“Financial Instruments”) for the entire variable annuity and variable life insurance contracts held by a subsidiary acquired during the three months ended September 30, 2014 in order to match the earnings recognized for the changes in fair value of policy liabilities and policy account balances with earnings recognized for gains or losses from the investment assets managed on behalf of variable annuity and variable life policyholders, derivative contracts and the changes in fair value of reinsurance contracts. The fair value of the variable annuity and variable life insurance contracts elected for the fair value option in policy liabilities and policy account balances was ¥1,575,331 million as of September 30, 2014. For the effect of changes in the fair value of the variable annuity and variable life insurance contracts on earnings during the six and three months ended September 30, 2014, see Note 15 “Life Insurance Operations”.

– 46 –

Changes in economic conditions or valuation methodologies may require the transfer of assets and liabilities from one fair value level to another. In such instances, the Company and its subsidiaries recognize the transfer at the beginning of the quarter during which the transfers occur. For the six months ended September 30, 2013 and 2014, there were no transfers between Level 1 and Level 2.

The following table presents the reconciliation for financial assets and liabilities (net) measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months ended September 30, 2013 and 2014:

Six months ended September 30, 2013

	Millions of yen
	Balance at April 1, 2013		Gains or losses (realized/unrealized)									Purchases		Sales			Settlements			Transfers in and/ or out of Level 3 (net)		Balance at September 30, 2013			Change in unrealized gains or losses included in earnings for assets and liabilities still held at September 30, 2013 *1
			Included in earnings *1			Included in other comprehensive income *2			Total
Available-for-sale securities	¥	136,978	¥	4,039		¥	2,203		¥	6,242		¥	16,831	¥	(11,445	)	¥	(84,841	)	¥	0	¥	63,765		¥	142
Corporate debt securities		6,524		411			(366	)		45			0		(1,325	)		(4,582	)		0		662			22
Specified bonds issued by SPEs in Japan		63,244		295			797			1,092			0		(22	)		(49,581	)		0		14,733			51
CMBS and RMBS in the U.S.		24,338		2,365			283			2,648			1,021		(9,656	)		(9,179	)		0		9,172			(94	)
Other asset-backed securities		34,561		968			560			1,528			15,810		(442	)		(21,499	)		0		29,958			163
Other debt securities		8,311		0			929			929			0		0			0			0		9,240			0
Other securities		5,800		379			226			605			1,566		(386	)		(3	)		0		7,582			379
Investment funds		5,800		379			226			605			1,566		(386	)		(3	)		0		7,582			379
Derivative assets and liabilities (net)		2,099		(2,584	)		0			(2,584	)		0		0			(1,706	)		0		(2,191	)		(2,584	)
Options held/written and other		2,099		(2,584	)		0			(2,584	)		0		0			(1,706	)		0		(2,191	)		(2,584	)

– 47 –

Six months ended September 30, 2014

	Millions of yen
	Balance at April 1, 2014		Gains or losses (realized/unrealized)								Purchases *3		Sales			Settlements *4			Transfers in and/ or out of Level 3 (net)			Balance at September 30, 2014		Change in unrealized gains or losses included in earnings for assets and liabilities still held at September 30, 2014 *1
			Included in earnings *1			Included in other comprehensive income *2		Total
Available-for-sale securities	¥	84,001	¥	(1,300	)	¥	4,549	¥	3,249		¥	26,344	¥	(628	)	¥	(15,735	)	¥	(20,438	)	¥	76,793	¥	(378	)
Corporate debt securities		661		7			4		11			0		(15	)		(501	)		0			156		0
Specified bonds issued by SPEs in Japan		6,772		3			84		87			700		0			(1,219	)		0			6,340		3
CMBS and RMBS in the U.S.		17,833		(56	)		1,332		1,276			12,743		0			(2,154	)		(20,438	)		9,260		18
Other asset-backed securities		47,185		(1,254	)		2,759		1,505			12,901		(613	)		(11,861	)		0			49,117		(399	)
Other debt securities		11,550		0			370		370			0		0			0			0			11,920		0
Other securities		6,317		475			448		923			5,202		(3,337	)		0			0			9,105		475
Investment funds		6,317		475			448		923			5,202		(3,337	)		0			0			9,105		475
Derivative assets and liabilities (net)		2,486		(8,807	)		0		(8,807	)		23,959		0			(2,082	)		0			15,556		(8,807	)
Options held/written and other		2,486		(8,807	)		0		(8,807	)		23,959		0			(2,082	)		0			15,556		(8,807	)
Other assets		0		(11,375	)		0		(11,375	)		67,030		0			(155	)		0			55,500		(11,375	)
Reinsurance recoverables *5		0		(11,375	)		0		(11,375	)		67,030		0			(155	)		0			55,500		(11,375	)
Accounts payable		2,833		(3,126	)		0		(3,126	)		0		0			(47	)		0			5,912		(3,126	)
Contingent consideration		2,833		(3,126	)		0		(3,126	)		0		0			(47	)		0			5,912		(3,126	)
Policy Liabilities and Policy Account Balances		0		(31,746	)		0		(31,746	)		1,765,444		0			(221,859	)		0			1,575,331		(31,746	)
Variable annuity and variable life insurance contracts *6		0		(31,746	)		0		(31,746	)		1,765,444		0			(221,859	)		0			1,575,331		(31,746	)

*1 Principally, gains and losses from available-for-sale securities are included in “brokerage commissions and net gains on investment securities”, “write-downs of securities” or “life insurance premiums and related investment income”; other securities are included in “brokerage commissions and net gains on investment securities” and derivative assets and liabilities (net) are included in “other operating revenues/expenses,” and gains from accounts payable are included in “other operating revenues” respectively. Also, for available-for-sale securities, amortization of interest recognized in interest on loans and investment securities is included in these columns.

*2 Unrealized gains and losses from available-for-sale securities are included in “net change of unrealized gains (losses) on investment in securities”.

*3 Increases resulting from an acquisition of a subsidiary and insurance contracts ceded to reinsurance companies are included.

*4 Decreases resulting from the receipts of reimbursements for benefits, and decreases resulting from insurance payouts to variable annuity and variable life policyholders due to death, surrender and maturity of the investment period are included.

*5 “Included in earnings” in the above table includes changes in the fair value of reinsurance recoverables recorded in life insurance costs and reinsurance premiums, net of reinsurance benefits received, recorded in life insurance premiums and related investment income.

*6 “Included in earnings” in the above table is recorded in life insurance costs and includes changes in the fair value of policy liabilities and policy account balances resulting from gains or losses on the underlying investment assets managed on behalf of variable annuity and variable life policyholders, and the changes in the minimum guarantee risks relating to variable annuity and variable life insurance contracts as well as insurance costs recognized for insurance and annuity payouts as a result of insured events.

There were no transfers in or out of Level 3 in the six months ended September 30, 2013. For the six months ended September 2014, CMBS totaling ¥20,438 million were transferred from level 3 to level 2, since the inputs such as trading price and/or bit price became observable due to the market returning to active and the bonds invested being more liquid with actual observable trades and/or active dealer bids.

– 48 –

Changes in economic conditions or valuation methodologies may require the transfer of assets and liabilities from one fair value level to another. In such instances, the Company and its subsidiaries recognize the transfer at the beginning of the quarter during which the transfers occur. For the three months ended September 30, 2013 and 2014, there were no transfers between Level 1 and Level 2.

The following table presents the reconciliation for financial assets and liabilities (net) measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended September 30, 2013 and 2014:

Three months ended September 30, 2013

	Millions of yen
	Balance at June 30, 2013		Gains or losses (realized/unrealized)							Purchases		Sales			Settlements			Transfers in and/ or out of Level 3 (net)		Balance at September 30, 2013		Change in unrealized gains or losses included in earnings for assets and liabilities still held at September 30, 2013 *1
			Included in earnings *1		Included in other comprehensive income *2			Total
Available-for-sale securities	¥	92,535	¥	1,936	¥	395		¥	2,331	¥	4,485	¥	(1,823	)	¥	(33,763	)	¥	0	¥	63,765	¥	(171	)
Corporate debt securities		5,264		136		(37	)		99		0		(122	)		(4,579	)		0		662		12
Specified bonds issued by SPEs in Japan		25,469		230		773			1,003		0		(22	)		(11,717	)		0		14,733