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 2016.

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 10, 2016, which includes unaudited consolidated financial information prepared in accordance with generally accepted accounting principles in the United States as of March 31, 2016 and September 30, 2016 and for the three and six months ended September 30, 2015 and 2016.

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 10, 2016	By	/s/ Kazuo Kojima
		Kazuo Kojima
		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 10, 2016, which includes unaudited consolidated financial information prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) as of March 31, 2016 and September 30, 2016 and for the three and six months ended September 30, 2015 and 2016.

2. Significant differences between U.S. GAAP and generally accepted accounting principles in Japan (“Japanese GAAP”) are stated in Note 1 “Overview of Accounting Principles Utilized” of the notes to Consolidated Financial Statements.

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.

The Company believes that it may have been a “passive foreign investment company” for U.S. federal income tax purposes in the year to which these consolidated financial results relate by reason of the composition of its assets and the nature of its income. In addition, the Company may be a PFIC for the foreseeable future. Assuming that the Company is a PFIC, a U.S. holder of the shares or ADSs of the Company will be 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, 2015			Six  months ended September  30, 2016			Fiscal  year ended March 31, 2016
Total revenues	¥	1,170,194		¥	1,221,125		¥	2,369,202
Income before income taxes		250,745			219,235			391,302
Net income attributable to ORIX Corporation shareholders		161,298			142,150			260,169
Comprehensive Income attributable to ORIX Corporation shareholders		141,697			86,686			223,574
ORIX Corporation shareholders’ equity		2,249,232			2,364,960			2,310,431
Total assets		11,076,457			10,782,692			10,992,918
Earnings per share for net income attributable to ORIX Corporation shareholders
Basic (yen)		123.23			108.57			198.73
Diluted (yen)		123.11			108.47			198.52
ORIX Corporation shareholders’ equity ratio (%)		20.3			21.9			21.0
Cash flows from operating activities		218,586			330,969			510,562
Cash flows from investing activities		(68,205	)		20,168			(552,529	)
Cash flows from financing activities		(26,861	)		(101,729	)		(48,001	)
Cash and cash equivalents at end of period		949,121			961,830			730,420
	Millions of yen (except  for per share amounts)
	Three months ended September 30, 2015			Three months ended September 30, 2016
Total revenues	¥	564,070		¥	633,180
Net income attributable to ORIX Corporation shareholders		79,788			65,381
Earnings per share for net income attributable to ORIX Corporation shareholders
Basic (yen)		60.95			49.94

Notes:	1.	Consumption tax is excluded from the stated amount of total revenues.
	2.	Prior-year amounts have been adjusted for the retrospective application of Accounting Standards Update 2015-03 (“Simplifying the Presentation of Debt Issuance Costs”—ASC 835-30 (“Interest—Imputation of Interest”)) on April 1, 2016.

(2) Overview of Activities

During the six months ended September 30, 2016, no significant changes were made in the Company and its subsidiaries’ operations. Additionally, there were no changes of principal subsidiaries and affiliates.

2. Risk Factors

Investing in the Company’s 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, 2016 and the other information in that annual report, including, but not limited to, the Company’s consolidated financial statements and related notes and “Item 11. Quantitative and Qualitative Disclosures about Market Risk.” The Company’s business activities, financial condition and results of operations and the trading prices of the Company’s securities could be adversely affected by any of those factors or other factors.

3. Material Contracts

Not applicable.

– 2 –

4. Analysis of Financial Results and Condition

The following discussion provides management’s explanation of factors and events that have significantly affected the Company’s financial condition and results of operations. Also included is management’s assessment of factors and trends that could have a material effect on the Company’s 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

While the economy of the United States has been recovering moderately and the economy of Europe remains at flat area, the economies of emerging and resource-rich countries have bottomed out and the world economy as a whole has been unstable. Against the backdrop of monetary easing measures in several countries, interest rates remain low worldwide. In addition, there are political and geopolitical tensions in certain regions that need to be monitored carefully.

The Japanese economy remains at a standstill due primarily to low corporate earnings caused in part by the appreciation of the yen and weakening personal consumption.

Financial Highlights

Financial Results for the Six Months Ended September 30, 2016

Total revenues	¥1,221,125 million (Up 4% year on year)
Total expenses	¥1,054,776 million (Up 7% year on year)
Income before income taxes	¥219,235 million (Down 13% year on year)
Net income attributable to ORIX Corporation Shareholders	¥142,150 million (Down 12% year on year)
Earnings per share for net income attributable to ORIX Corporation Shareholders
(Basic)	¥108.57 (Down 12% year on year)
(Diluted)	¥108.47 (Down 12% year on year)
ROE (Annualized) *1	12.2% (14.7% during the same period in the previous fiscal year)
ROA (Annualized) *2	2.61% (2.87% during the same period in the previous fiscal year)

Note: Prior-year amounts have been adjusted for the retrospective application of Accounting Standards Update 2015-03
(“Simplifying the Presentation of Debt Issuance Costs”—ASC 835-30 (“Interest—Imputation of Interest”)) on April 1, 2016.

*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, 2016 increased 4% to ¥1,221,125 million compared to ¥1,170,194 million during the same period of the previous fiscal year. Life insurance premiums and related investment income increased mainly due to increases in insurance premiums and investment income in ORIX Life Insurance Corporation (hereinafter, “ORIX Life Insurance”), and an improvement in investment income from assets under variable annuity and variable life insurance contracts originally held by Hartford Life Insurance K.K. (hereinafter, “HLIKK”) compared to the same period of the previous fiscal year during which the investment income decreased with deterioration of market environment. HLIKK was merged into ORIX Life Insurance on July 1, 2015. In addition, sales of goods and real estate increased due primarily to revenues generated by subsidiaries in the principal investment business. On the other hand, gains on investment securities and dividends decreased due to a decrease in gains on investment securities. In addition, services income decreased due to the partial divestment of Houlihan Lokey Inc. (hereinafter, “Houlihan Lokey”) shares in connection with its initial public offering in the United States and its becoming an equity method affiliate in the previous fiscal year.

– 3 –

Total expenses increased 7% to ¥1,054,776 million compared to ¥987,714 million during the same period of the previous fiscal year. Life insurance costs increased due to a provision of liability reserve in line with the aforementioned improvement in investment income from assets under variable annuity and variable life insurance contracts. Costs of goods and real estate sold increased in line with the aforementioned revenue increase. On the other hand, selling, general and administrative expenses decreased compared to the same period of the previous fiscal year in line with Houlihan Lokey becoming an equity method affiliate in the previous fiscal year as mentioned above.

Gains on sales of subsidiaries and affiliates and liquidation losses, net decreased compared to the same period of the previous fiscal year due to a gain from the aforementioned partial divestment of Houlihan Lokey shares and its becoming an equity method affiliate in the previous fiscal year.

As a result of the foregoing, income before income taxes for the six months ended September 30, 2016 decreased 13% to ¥219,235 million compared to ¥250,745 million during the same period of the previous fiscal year, and net income attributable to ORIX Corporation shareholders decreased 12% to ¥142,150 million compared to ¥161,298 million during the same period of the previous fiscal year.

– 4 –

Segment Information

Total revenues and profits by segment for the six months ended September 30, 2015 and 2016 are as follows:

	Millions of yen
	Six months  ended September 30, 2015					Six months  ended September 30, 2016					Change (revenues)						Change (profits)
	Segment Revenues			Segment Profits		Segment Revenues			Segment Profits		Amount			Percent (%)			Amount			Percent (%)
Corporate Financial Services	¥	52,712		¥	21,564	¥	51,995		¥	19,874	¥	(717	)		(1	)	¥	(1,690	)		(8	)
Maintenance Leasing		135,924			23,117		134,820			19,655		(1,104	)		(1	)		(3,462	)		(15	)
Real Estate		109,047			33,717		104,084			35,447		(4,963	)		(5	)		1,730			5
Investment and Operation		493,525			36,450		539,042			52,041		45,517			9			15,591			43
Retail		102,401			32,062		151,095			35,507		48,694			48			3,445			11
Overseas Business		277,843			97,881		240,643			51,510		(37,200	)		(13	)		(46,371	)		(47	)
Total		1,171,452			244,791		1,221,679			214,034		50,227			4			(30,757	)		(13	)
Difference between Segment Total and Consolidated Amounts		(1,258	)		5,954		(554	)		5,201		704			—			(753	)		(13	)
Total Consolidated Amounts	¥	1,170,194		¥	250,745	¥	1,221,125		¥	219,235	¥	50,931			4		¥	(31,510	)		(13	)

Total assets by segment as of March 31, 2016 and September 30, 2016 are as follows:

	Millions of yen
	March 31, 2016				September 30, 2016				Change
	Segment Assets		Composition ratio  (%)		Segment Assets		Composition ratio  (%)		Amount			Percent (%)
Corporate Financial Services	¥	1,049,867		9.6	¥	1,034,377		9.6	¥	(15,490	)		(1	)
Maintenance Leasing		731,329		6.7		724,168		6.7		(7,161	)		(1	)
Real Estate		739,592		6.7		705,062		6.6		(34,530	)		(5	)
Investment and Operation		704,156		6.4		695,780		6.5		(8,376	)		(1	)
Retail		3,462,772		31.5		3,325,370		30.8		(137,402	)		(4	)
Overseas Business		2,284,733		20.7		2,051,463		19.0		(233,270	)		(10	)
Total		8,972,449		81.6		8,536,220		79.2		(436,229	)		(5	)
Difference between Segment Total and Consolidated Amounts		2,020,469		18.4		2,246,472		20.8		226,003			11
Total Consolidated Amounts	¥	10,992,918		100.0	¥	10,782,692		100.0	¥	(210,226	)		(2	)

Note: Prior-year amounts have been adjusted for the retrospective application of Accounting Standards Update 2015-03 (“Simplifying the Presentation of Debt Issuance Costs”—ASC 835-30 (“Interest—Imputation of Interest”)) on April 1, 2016.

Total segment profits for the six months ended September 30, 2016 decreased 13% to ¥214,034 million compared to ¥244,791 million during the same period of the previous fiscal year. While segment profits increased significantly in the Investment and Operation segment and secondarily in the Real Estate and Retail segments, segment profits for each of the other segments decreased.

Segment information for the six months ended September 30, 2016 is as follows:

– 5 –

Corporate Financial Services Segment: Lending, leasing and fee business

The Japanese economy remains at a standstill due to low corporate earnings caused in part by the appreciation of the yen and weakening personal consumption. The balance of outstanding loans at financial institutions continues to increase and interest rates on loans remain low levels.

Segment revenues decreased 1% to ¥51,995 million compared to ¥52,712 million during the same period of the previous fiscal year due to a decrease in gains on investment securities, and a decrease in finance revenues in line with the decreased average investment, despite an increase in services income resulting primarily from revenue generated by Yayoi Co., Ltd. and stable fee business to domestic small-and medium-sized enterprise customers.

Segment expenses increased due primarily to an increase in selling, general and administrative expenses compared to the same period of the previous fiscal year. As a result, segment profits decreased 8% to ¥19,874 million compared to ¥21,564 million during the same period of the previous fiscal year.

Segment assets decreased 1% to ¥1,034,377 million compared to the end of the previous fiscal year due primarily to decreases in installment loans and investment in securities.

	Six months ended September 30, 2015			Six months ended September 30, 2016		Change
						Amount			Percent (%)
	(Millions of yen, except percentage data)
Segment Revenues:
Finance revenues	¥	16,845		¥	15,538	¥	(1,307	)		(8	)
Operating leases		12,357			12,210		(147	)		(1	)
Services income		17,400			20,070		2,670			15
Sales of goods and real estate, and other		6,110			4,177		(1,933	)		(32	)
Total Segment Revenues		52,712			51,995		(717	)		(1	)
Segment Expenses:
Interest expense		3,685			3,125		(560	)		(15	)
Provision for doubtful receivables and probable loan losses and write-downs of long-lived assets and securities		(847	)		353		1,200			—
Other than the above		28,677			30,406		1,729			6
Total Segment Expenses		31,515			33,884		2,369			8
Segment Operating Income		21,197			18,111		(3,086	)		(15	)
Equity in Net income of Affiliates, and others		367			1,763		1,396			380
Segment Profits	¥	21,564		¥	19,874	¥	(1,690	)		(8	)
	As of March 31, 2016			As of September 30, 2016		Change
						Amount			Percent (%)
	(Millions of yen, except percentage data)
Investment in direct financing leases	¥	431,603		¥	430,795	¥	(808	)		(0	)
Installment loans		411,824			401,421		(10,403	)		(3	)
Investment in operating leases		28,695			29,722		1,027			4
Investment in securities		36,542			31,583		(4,959	)		(14	)
Property under facility operations		11,294			12,199		905			8
Inventories		53			46		(7	)		(13	)
Advances for investment in operating leases		1,737			1,888		151			9
Investment in affiliates		22,755			22,528		(227	)		(1	)
Advances for property under facility operations		304			124		(180	)		(59	)
Goodwill and other intangible assets acquired in business combinations		105,060			104,071		(989	)		(1	)
Total Segment Assets	¥	1,049,867		¥	1,034,377	¥	(15,490	)		(1	)

– 6 –

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

While demand in corporate capital investment is gradually increasing, concerns about decreasing profitability and uncertainty in the economic outlook interfere with new investment. The volume of new auto leases in Japan decreased slightly compared to the previous fiscal year.

Segment revenues decreased 1% to ¥134,820 million from ¥135,924 million during the same period of the previous fiscal year due to less gains on sales in operating leases revenues, despite an increase in rental revenues, which are also included in operating leases revenues.

Segment expenses increased due primarily to increases in costs of operating leases in line with increased average investment asset balance in the auto-business and selling, general and administrative expenses. Segment profits decreased 15% to ¥19,655 million compared to ¥23,117 million during the same period of the previous fiscal year.

Segment assets decreased 1% to ¥724,168 million compared to the end of the previous fiscal year primarily due to a decrease in leasing assets in line with the securitization, despite an increase in new auto-leases in the auto-business.

	Six months ended September 30, 2015			Six months ended September 30, 2016		Change
						Amount			Percent (%)
	(Millions of yen, except percentage data)
Segment Revenues:
Finance revenues	¥	6,253		¥	6,378	¥	125			2
Operating leases		94,426			93,312		(1,114	)		(1	)
Services income		33,184			33,250		66			0
Sales of goods and real estate, and other		2,061			1,880		(181	)		(9	)
Total Segment Revenues		135,924			134,820		(1,104	)		(1	)
Segment Expenses:
Interest expense		1,750			1,710		(40	)		(2	)
Provision for doubtful receivables and probable loan losses and write-downs of long-lived assets and securities		(89	)		169		258			—
Other than the above		111,172			113,311		2,139			2
Total Segment Expenses		112,833			115,190		2,357			2
Segment Operating Income		23,091			19,630		(3,461	)		(15	)
Equity in Net income of Affiliates, and others		26			25		(1	)		(4	)
Segment Profits	¥	23,117		¥	19,655		¥(3,462	)		(15	)
	As of March  31, 2016			As of September  30, 2016		Change
						Amount			Percent (%)
	(Millions of yen, except percentage data)
Investment in direct financing leases	¥	245,257		¥	254,634	¥	9,377			4
Investment in operating leases		481,031			464,640		(16,391	)		(3	)
Investment in securities		1,214			1,174		(40	)		(3	)
Property under facility operations		718			710		(8	)		(1	)
Inventories		374			466		92			25
Advances for investment in operating leases		314			294		(20	)		(6	)
Investment in affiliates		1,996			1,826		(170	)		(9	)
Goodwill and other intangible assets acquired in business combinations		425			424		(1	)		(0	)
Total Segment Assets	¥	731,329		¥	724,168	¥	(7,161	)		(1	)

– 7 –

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

The real estate market has remained active due primarily to the quantitative easing policies implemented by the Bank of Japan, including the adoption of negative interest rates. Land prices remain high and vacancy rates in the Japanese office building market continue to show improvements especially in the Greater Tokyo Area. Furthermore, we are seeing increases in the occupancy rates and average daily rates of hotels and Japanese inns. Meanwhile, we are also seeing a trend where by sales prices of condominiums are no longer raising.

Segment revenues decreased 5% to ¥104,084 million compared to ¥109,047 million during the same period of the previous fiscal year primarily due to a decrease in financial revenues compared to the same period of the previous fiscal year during which the sale of large scale rental properties was recognized in finance revenues and also due to a decrease in sales of real estate, despite an increase in gains on sales of rental properties, which are included in operating leases revenues.

Segment expenses decreased compared to the same period of the previous fiscal year primarily due to decreases in costs of operating leases in line with a decrease in assets and the cost of sales of real estate.

As a result of the foregoing, segment profits increased 5% to ¥35,447 million compared to ¥33,717 million during the same period of the previous fiscal year.

Segment assets decreased 5% to ¥705,062 million compared to the end of the previous fiscal year primarily due to a decrease in investment in operating leases, which resulted from sales of rental properties.

	Six months ended September 30, 2015		Six months ended September 30, 2016		Change
					Amount			Percent (%)
	(Millions of yen, except percentage data)
Segment Revenues:
Finance revenues	¥	5,491	¥	830	¥	(4,661	)		(85	)
Operating leases		36,736		43,294		6,558			18
Services income		57,482		55,889		(1,593	)		(3	)
Sales of goods and real estate, and other		9,338		4,071		(5,267	)		(56	)
Total Segment Revenues		109,047		104,084		(4,963	)		(5	)
Segment Expenses:
Interest expense		2,603		1,676		(927	)		(36	)
Provision for doubtful receivables and probable loan losses and write-downs of long-lived assets and securities		817		630		(187	)		(23	)
Other than the above		73,157		67,767		(5,390	)		(7	)
Total Segment Expenses		76,577		70,073		(6,504	)		(8	)
Segment Operating Income		32,470		34,011		1,541			5
Equity in Net income of Affiliates, and others		1,247		1,436		189			15
Segment Profits	¥	33,717	¥	35,447	¥	1,730			5
	As of March  31, 2016		As of September  30, 2016		Change
					Amount			Percent (%)
	(Millions of yen, except percentage data)
Investment in direct financing leases	¥	21,541	¥	24,433	¥	2,892			13
Installment loans		5,821		5,576		(245	)		(4	)
Investment in operating leases		375,050		348,364		(26,686	)		(7	)
Investment in securities		5,861		3,882		(1,979	)		(34	)
Property under facility operations		177,510		179,889		2,379			1
Inventories		3,597		3,117		(480	)		(13	)
Advances for investment in operating leases		38,486		22,454		(16,032	)		(42	)
Investment in affiliates		91,010		91,023		13			0
Advances for property under facility operations		8,829		14,558		5,729			65
Goodwill and other intangible assets acquired in business combinations		11,887		11,766		(121	)		(1	)
Total Segment Assets	¥	739,592	¥	705,062	¥	(34,530	)		(5	)

– 8 –

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

While the Japanese government is reassessing its renewable energy purchase program, the significance of renewable energy in the mid- to long- term 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, overseas markets for mergers and acquisitions (hereinafter “M&A”) have been sluggish, but the number of out bound cross-border M&A transactions by Japanese companies has increased.

Segment revenues increased 9% to ¥539,042 million compared to ¥493,525 million during the same period of the previous fiscal year due to increases in sales of goods and services income generated by subsidiaries in the principal investment business and environment and energy-related business.

Segment expenses increased compared to the same period of the previous fiscal year due to an increase in expenses in line with the aforementioned revenues expansion and recognition of write-downs of securities.

As a result of the foregoing and the recognition of gains on sales of shares of subsidiaries and affiliates and the recognition of a bargain purchase gain from the acquisition of a subsidiary, segment profits increased 43% to ¥52,041 million compared to ¥36,450 million during the same period of the previous fiscal year.

Segment assets decreased 1% to ¥695,780 million compared to the end of the previous fiscal year primarily due to a decrease in investment in affiliates, despite increases in inventories and property under facility operations in the environment and energy-related business.

	Six months ended September 30, 2015			Six months ended September 30, 2016		Change
						Amount			Percent (%)
	(Millions of yen, except percentage data)
Segment Revenues:
Finance revenues	¥	6,507		¥	5,304	¥	(1,203	)		(18	)
Gains on investment securities and dividends		9,705			6,216		(3,489	)		(36	)
Sales of goods and real estate		338,282			377,408		39,126			12
Services income		134,056			145,581		11,525			9
Operating leases, and other		4,975			4,533		(442	)		(9	)
Total Segment Revenues		493,525			539,042		45,517			9
Segment Expenses:
Interest expense		1,792			2,481		689			38
Provision for doubtful receivables and probable loan losses and write-downs of long-lived assets and securities		(644	)		5,478		6,122			—
Other than the above		464,672			514,137		49,465			11
Total Segment Expenses		465,820			522,096		56,276			12
Segment Operating Income		27,705			16,946		(10,759	)		(39	)
Equity in Net income of Affiliates, and others		8,745			35,095		26,350			301
Segment Profits	¥	36,450		¥	52,041	¥	15,591			43
	As of March  31, 2016			As of September  30, 2016		Change
						Amount			Percent (%)
	(Millions of yen, except percentage data)
Investment in direct financing leases	¥	21,133		¥	24,807	¥	3,674			17
Installment loans		75,996			64,762		(11,234	)		(15	)
Investment in operating leases		24,378			25,206		828			3
Investment in securities		71,705			59,868		(11,837	)		(17	)
Property under facility operations		130,568			161,357		30,789			24
Inventories		98,016			112,976		14,960			15
Advances for investment in operating leases		404			1,117		713			176
Investment in affiliates		108,237			65,330		(42,907	)		(40	)
Advances for property under facility operations		38,628			37,335		(1,293	)		(3	)
Goodwill and other intangible assets acquired in business combinations		135,091			143,022		7,931			6
Total Segment Assets	¥	704,156		¥	695,780	¥	(8,376	)		(1	)

– 9 –

Retail Segment: Life insurance, banking and card loan business

The life insurance business in Japan is currently affected by macroeconomic factors such as domestic population decline, we are seeing increasing numbers of companies develop new products in response to the rising demand for medical insurance. On the other hand, we are seeing suspensions of the sales of certain products and an increase in insurance premiums on new contracts due to the Bank of Japan’s adoption of negative interest rate policy. In the consumer finance sector, banks and other lenders are expanding their assets to further secure new revenue streams, and competition in the lending business continues to intensify in the current low interest rate environment.

Segment revenues increased 48% to ¥151,095 million compared to ¥102,401 million during the same period of the previous fiscal year due to increases in insurance premiums and investment income in ORIX Life Insurance, and an improvement in investment income from assets under variable annuity and variable life insurance contracts originally held by HLIKK compared to the same period of the previous fiscal year during which the investment income decreased with deterioration of market environment.

Segment expenses increased compared to the same period of the previous fiscal year due to a provision of liability reserve in line with the aforementioned improvement in investment income from assets under variable annuity and variable life insurance contracts.

As a result of the foregoing, segment profits increased 11% to ¥35,507 million compared to ¥32,062 million during the same period of the previous fiscal year.

Segment assets decreased 4% to ¥3,325,370 million compared to the end of the previous fiscal year due primarily to a large decrease in investment in securities held by HLIKK, offsetting an increase in installment loans in the banking business.

	Six months ended September 30, 2015		Six months ended September 30, 2016		Change
					Amount			Percent (%)
	(Millions of yen, except percentage data)
Segment Revenues:
Finance revenues	¥	27,172	¥	28,900	¥	1,728			6
Life insurance premiums and related investment income		71,171		116,430		45,259			64
Services income, and other		4,058		5,765		1,707			42
Total Segment Revenues		102,401		151,095		48,694			48
Segment Expenses:
Interest expense		2,369		2,105		(264	)		(11	)
Provision for doubtful receivables and probable loan losses and write-downs of long-lived assets and securities		3,508		4,953		1,445			41
Other than the above		65,257		108,531		43,274			66
Total Segment Expenses		71,134		115,589		44,455			62
Segment Operating Income		31,267		35,506		4,239			14
Equity in Net income of Affiliates, and others		795		1		(794	)		(100	)
Segment Profits	¥	32,062	¥	35,507	¥	3,445			11
	As of March 31, 2016		As of September 30, 2016		Change
					Amount			Percent (%)
	(Millions of yen, except percentage data)
Investment in direct financing leases	¥	1,198	¥	783	¥	(415	)		(35	)
Installment loans		1,496,407		1,609,114		112,707			8
Investment in operating leases		52,359		51,934		(425	)		(1	)
Investment in securities		1,893,631		1,645,240		(248,391	)		(13	)
Investment in affiliates		911		850		(61	)		(7	)
Goodwill and other intangible assets acquired in business combinations		18,266		17,449		(817	)		(4	)
Total Segment Assets	¥	3,462,772	¥	3,325,370	¥	(137,402	)		(4	)

– 10 –

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

While the economy of the United States has been recovering moderately and the economy of Europe remains at flat area, the economies of emerging and resource-rich countries have bottomed out and the world economy as a whole has been unstable. Against the backdrop of monetary easing measures in several countries, interest rates remain low worldwide. In addition, there are political and geopolitical tensions in certain regions that need to be monitored carefully.

Segment revenues decreased 13% to ¥240,643 million compared to ¥277,843 million during the same period of the previous fiscal year due to decreases in gains on investment securities and services income resulting primarily from the deconsolidation of Houlihan Lokey as well as the recent appreciation of the yen, despite an increase in sales of goods in the Americas.

Segment expenses decreased compared to the same period of the previous fiscal year primarily due to the deconsolidation of Houlihan Lokey and the recent appreciation of the yen.

As a result of the foregoing and due to the recognition of a gain on the partial divestment of Houlihan Lokey shares during the same period of previous fiscal year, segment profits decreased 47% to ¥51,510 million compared to ¥97,881 million during the same period of the previous fiscal year.

Segment assets decreased 10% to ¥2,051,463 million compared to the end of the previous fiscal year due to a decrease in investment in operating leases of aircraft-related operations and yen appreciation.

	Six  months ended September 30, 2015		Six months ended September 30, 2016		Change
					Amount			Percent (%)
	(Millions of yen, except percentage data)
Segment Revenues:
Finance revenues	¥	36,212	¥	37,926	¥	1,714			5
Gains on investment securities and dividends		15,670		5,595		(10,075	)		(64	)
Operating leases		43,994		43,528		(466	)		(1	)
Services income		137,987		105,872		(32,115	)		(23	)
Sales of goods and real estate, and other		43,980		47,722		3,742			9
Total Segment Revenues		277,843		240,643		(37,200	)		(13	)
Segment Expenses:
Interest expense		15,718		17,217		1,499			10
Provision for doubtful receivables and probable loan losses and write-downs of long-lived assets and securities		4,866		2,947		(1,919	)		(39	)
Other than the above		206,882		176,972		(29,910	)		(14	)
Total Segment Expenses		227,466		197,136		(30,330	)		(13	)
Segment Operating Income		50,377		43,507		(6,870	)		(14	)
Equity in Net income of Affiliates, and others		47,504		8,003		(39,501	)		(83	)
Segment Profits	¥	97,881	¥	51,510	¥	(46,371	)		(47	)
	As of March  31, 2016		As of September  30, 2016		Change
					Amount			Percent (%)
	(Millions of yen, except percentage data)
Investment in direct financing leases	¥	351,010	¥	311,438	¥	(39,572	)		(11	)
Installment loans		407,870		358,455		(49,415	)		(12	)
Investment in operating leases		375,401		325,088		(50,313	)		(13	)
Investment in securities		383,227		355,261		(27,966	)		(7	)
Property under facility operations		23,762		21,540		(2,222	)		(9	)
Inventories		37,782		33,068		(4,714	)		(12	)
Advances for investment in operating leases		5,302		6,545		1,243			23
Investment in affiliates		305,674		276,690		(28,984	)		(9	)
Advances for property under facility operations		39		46		7			18
Goodwill and other intangible assets acquired in business combinations		394,666		363,332		(31,334	)		(8	)
Total Segment Assets	¥	2,284,733	¥	2,051,463	¥	(233,270	)		(10	)

– 11 –

(2) Financial Condition

	As of March  31, 2016			As  of September 30, 2016			Change
							Amount			Percent (%)
	(Millions of yen except per share, ratios and percentages)
Total assets	¥	10,992,918		¥	10,782,692		¥	(210,226	)		(2	)
(Segment assets)		8,972,449			8,536,220			(436,229	)		(5	)
Total liabilities		8,512,632			8,251,453			(261,179	)		(3	)
(Short- and long-term debt)		4,286,542			4,013,914			(272,628	)		(6	)
(Deposits)		1,398,472			1,490,216			91,744			7
ORIX Corporation shareholders’ equity		2,310,431			2,364,960			54,529			2
ORIX Corporation shareholders’ equity per share (yen)*1		1,764.34			1,807.08			42.74			2
ORIX Corporation shareholders’ equity ratio*2		21.0	%		21.9	%		—			—
D/E ratio (Debt-to-equity ratio) (Short-and long-term debt (excluding deposits) / ORIX Corporation shareholders’ equity)		1.9	x		1.7	x		—			—

Note: Prior-year amounts have been adjusted for the retrospective application of Accounting Standards Update 2015-03
(“Simplifying the Presentation of Debt Issuance Costs”—ASC 835-30 (“Interest—Imputation of Interest”)) on April 1, 2016.

*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 shareholders’ equity to total assets.

Total assets decreased 2% to ¥10,782,692 million compared to ¥10,992,918 million as of March 31, 2016. In addition to the recent appreciation of the yen, investment in operating leases decreased primarily due to sales of aircraft in the Overseas Business segment and sales of real estate in Japan, and investment in securities decreased primarily due to sales of assets held by HLIKK. In addition, investment in affiliates decreased primarily due to sales of shares of affiliates in the Investment and Operation segment. Segment assets decreased 5% to ¥8,536,220 million compared to March 31, 2016.

We manage the balance of interest-bearing liabilities at an appropriate level taking into account the condition of assets and liquidity on-hand as well as the domestic and overseas financial environment. As a result, long- and short-term debt decreased and deposits increased compared to March 31, 2016. In addition, policy liabilities and policy account balances decreased due to the surrender of variable annuity and variable life insurance contracts held by HLIKK.

Shareholders’ equity increased 2% to ¥2,364,960 million compared to March 31, 2016 primarily due to an increase in retained earnings, despite a decrease in foreign currency translation adjustments included in accumulated other comprehensive income in line with the appreciation of the yen.

– 12 –

(3) Liquidity and Capital Resources

We require capital resources for working capital, 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 resistant to sudden negative events 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. When implementing our management plan, we adjust our funding based on changes in the external environment and our needs in light of our business activities, and endeavor to maintain flexibility in our funding activities. We endeavor to diversify our funding sources, promote longer liability maturities, disperse interest and principal repayment dates, maintain sufficient liquidity, optimize the balance of liabilities and equity and reinforce our funding stability.

Our funding is 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 ¥5,504,130 million as of September 30, 2016. Borrowings are 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, 2016. Procurement from the capital markets is 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 and diversify our funding sources, during the six months ended September 30, 2016, we issued US$, Korean won, Indian rupee, and Malaysian ringgit denominated straight bonds and medium-term notes outside Japan. We procured financing through a subordinated syndicated loan (hybrid loan) which has similar characteristics to capital. We intend to continue to strengthen our financial condition, while maintaining appropriately diverse funding.

Short-term and long-term debt and deposits

(a) Short-term debt

	Millions of yen
	March 31, 2016		September 30, 2016
Borrowings from financial institutions	¥	247,263	¥	194,857
Commercial paper		102,361		13,959
Total short-term debt	¥	349,624	¥	208,816

Short-term debt as of September 30, 2016 was ¥208,816 million, which accounted for 5% of the total amount of short and long-term debt (excluding deposits) as compared to 8% as of March 31, 2016.

While the amount of short-term debt as of September 30, 2016 was ¥208,816 million, the sum of cash and cash equivalents and the unused amount of committed credit facilities as of September 30, 2016 was ¥1,318,176 million.

(b) Long-term debt

	Millions of yen
	March 31, 2016		September 30, 2016
Borrowings from financial institutions	¥	2,723,320	¥	2,574,209
Bonds		875,575		834,324
Medium-term notes		62,491		108,220
Payables under securitized lease, loan receivables and other assets		275,532		288,345
Total long-term debt	¥	3,936,918	¥	3,805,098

Note: Prior-year amounts have been adjusted for the retrospective application of Accounting Standards Update 2015-03
(“Simplifying the Presentation of Debt Issuance Costs”—ASC835-30 (“Interest—Imputation of Interest”)) on April 1, 2016.

– 13 –

The balance of long-term debt as of September 30, 2016 was ¥3,805,098 million, which accounted for 95% of the total amount of short and long-term debt (excluding deposits) as compared to 92% as of March 31, 2016.

(c) Deposits

	Millions of yen
	March 31, 2016		September 30, 2016
Deposits	¥	1,398,472	¥	1,490,216

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, 2016 increased by ¥231,410 million to ¥961,830 million compared to March 31, 2016.

Cash flows provided by operating activities were ¥330,969 million in the six months ended September 30, 2016, up from ¥218,586 million during the same period of the previous fiscal year, primarily resulting from a decrease in a previous decrease in policy liabilities and policy account balances, partially offset by a decrease in a previous decrease in trading securities as compared to the same period of the previous fiscal year.

Cash flows provided by investing activities were ¥20,168 million in the six months ended September 30, 2016 compared to the cash outflows of ¥68,205 million during the same period of the previous fiscal year. This change was primarily due to a decrease in purchases of available-for-sale securities, partially offset by a decrease in proceeds from redemption of available-for-sale securities as compared to the same period of the previous fiscal year.

Cash flows used in financing activities were ¥101,729 million in the six months ended September 30, 2016 up from ¥26,861 million during the same period of the previous fiscal year, primarily resulting from a decrease in repayment of debt with maturities longer than three months, partially offset by a decrease in proceeds from debt with maturities longer than three months and a decrease in debt with maturities of three months or less as compared to the same period of the previous fiscal year.

(5) Challenges to be addressed

There were no significant changes for the six months ended September 30, 2016.

(6) Research and Development Activity

There were no significant changes in research and development activities for the six months ended September 30, 2016.

(7) Major facilities

We have finished the construction of a solar power station in Tsu-city, Mie prefecture, Japan. The aggregate book value of the solar power station was ¥17 billion as of September 30, 2016. In addition, we have finished the construction of a building in Taito-ku, Tokyo, Japan. The aggregate book value of the building was ¥13 billion as of September 30, 2016.

Except for this, there were no significant changes in major facilities for the six months ended September 30, 2016.

– 14 –

5. 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 Capital Reserve

The number of issued shares, the amount of common stock and capital reserve for the three months ended September 30, 2016 is as follows:

In thousands		Millions of yen
Number of issued shares		Common stock		Capital reserve
Increase, net	September 30, 2016	Increase, net	September 30, 2016	Increase, net	September 30, 2016
0	1,324,058	¥0	¥220,469	¥0	¥247,648

(2) List of Major Shareholders

The following is a list of major shareholders based on our share registry as of September 30, 2016:

Name	Number of shares held (in thousands)		Percentage  of total shares issued
Address
Japan Trustee Services Bank, Ltd. (Trust Account)		117,733		8.89	%
1-8-11, Harumi, Chuo-ku, Tokyo
The Master Trust Bank of Japan, Ltd. (Trust Account)		72,359		5.46
2-11-3, Hamamatsu-cho, Minato-ku, Tokyo
JP MORGAN CHASE BANK 380055		61,422		4.63
270 PARK AVENUE, NEW YORK, NY 10017, UNITED STATES OF AMERICA
Japan Trustee Services Bank, Ltd. (Trust Account 9)		38,234		2.88
1-8-11, Harumi, Chuo-ku, Tokyo
THE CHASE MANHATTAN BANK 385036		32,357		2.44
360 N. CRESCENT DRIVE BEVERLY HILLS, CA 90210 U.S.A.
STATE STREET BANK AND TRUST COMPANY		28,423		2.14
ONE LINCOLN STREET, BOSTON MA USA 02111
THE BANK OF NEW YORK MELLON SA/NV 10		22,815		1.72
RUE MONTOYERSTRAAT 46, 1000 BRUSSELS, BELGIUM
CITIBANK, N.A.-NY, AS DEPOSITARY BANK FOR DEPOSITARY SHARE HOLDERS		21,601		1.63
388 GREENWICH STREET NEW YORK, NY 10013 USA
Japan Trustee Services Bank, Ltd. (Trust Account 7)		19,129		1.44
1-8-11, Harumi, Chuo-ku, Tokyo
STATE STREET BANK AND TRUST COMPANY 505225		18,645		1.40
P.O. BOX 351 BOSTON MASSACHUSETTS 02101 U.S.A.
		432,724		32.68	%

Note: 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.

6. Directors and Executive Officers

Between the filing date of Form 20-F for the fiscal year ended March 31, 2016 and September 30, 2016, there were no changes of directors and executive officers.

– 15 –

7. Financial Information

(1) Condensed Consolidated Balance Sheets (Unaudited)

		Millions of yen
Assets		March 31, 2016			September 30, 2016
Cash and Cash Equivalents		¥	730,420		¥	961,830
Restricted Cash			80,979			83,917
Investment in Direct Financing Leases			1,190,136			1,154,239
Installment Loans			2,592,233			2,643,455
The amounts which are measured at fair value by electing the fair value option under ASC 825 are as follows:
March 31, 2016	¥20,673 million
September 30, 2016	¥23,188 million
Allowance for Doubtful Receivables on Direct Financing Leases and Probable Loan Losses			(60,071	)		(55,788	)
Investment in Operating Leases			1,349,199			1,272,737
Investment in Securities			2,344,792			2,049,704
The amounts which are measured at fair value by electing the fair value option under ASC 825 are as follows:
March 31, 2016	¥27,367 million
September 30, 2016	¥24,466 million
Property under Facility Operations			327,016			360,561
Investment in Affiliates			530,667			458,330
Trade Notes, Accounts and Other Receivable			294,638			262,487
Inventories			139,950			149,795
Office Facilities			120,173			120,534
Other Assets			1,352,786			1,320,891
The amounts which are measured at fair value by electing the fair value option under ASC 825 are as follows:
March 31, 2016	¥37,855 million
September 30, 2016	¥37,554 million
Total Assets		¥	10,992,918		¥	10,782,692

Notes:	1.	Prior-year amounts have been adjusted for the retrospective application of Accounting Standards Update 2015-03 (“Simplifying the Presentation of Debt Issuance Costs”—ASC 835-30 (“Interest—Imputation of Interest”)) on April 1, 2016.
	2.	The assets of consolidated variable interest entities (VIEs) that can be used only to settle obligations of those VIEs are below:

	Millions of yen
	March 31, 2016		September 30, 2016
Cash and Cash Equivalents	¥	4,697	¥	6,895
Investment in Direct Financing Leases (Net of Allowance for Doubtful Receivables on Direct Financing Leases and Probable Loan Losses)		134,604		121,404
Installment Loans (Net of Allowance for Doubtful Receivables on Direct Financing Leases and Probable Loan Losses)		195,702		206,046
Investment in Operating Leases		227,340		212,805
Property under Facility Operations		79,697		99,170
Investment in Affiliates		65,059		63,889
Other		93,410		110,104
	¥	800,509	¥	820,313

– 16 –

	Millions of yen
Liabilities and Equity	March 31, 2016			September 30, 2016
Liabilities:
Short-Term Debt	¥	349,624		¥	208,816
Deposits		1,398,472			1,490,216
Trade Notes, Accounts and Other Payable		266,216			208,198
Policy Liabilities and Policy Account Balances		1,668,636			1,618,851
The amounts which are measured at fair value by electing the fair value option under ASC 825 are as follows:
March 31, 2016            ¥795,001 million
September 30, 2016     ¥715,434 million
Current and Deferred Income Taxes		358,758			386,614
Long-Term Debt		3,936,918			3,805,098
Other Liabilities		534,008			533,660
Total Liabilities		8,512,632			8,251,453
Redeemable Noncontrolling Interests		7,467			6,843
Commitments and Contingent Liabilities
Equity:
Common Stock		220,469			220,469
Additional Paid-in Capital		257,629			257,765
Retained Earnings		1,864,241			1,975,249
Accumulated Other Comprehensive Income (Loss)		(6,222	)		(61,686	)
Treasury Stock, at Cost		(25,686	)		(26,837	)
ORIX Corporation Shareholders’ Equity		2,310,431			2,364,960
Noncontrolling Interests		162,388			159,436
Total Equity		2,472,819			2,524,396
Total Liabilities and Equity	¥	10,992,918		¥	10,782,692

Note:	1.	Prior-year amounts have been adjusted for the retrospective application of Accounting Standards Update 2015-03 (“Simplifying the Presentation of Debt Issuance Costs”—ASC 835-30 (“Interest—Imputation of Interest”)) on April 1, 2016.
	2.	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, 2016		September 30, 2016
Trade Notes, Accounts and Other Payable	¥	1,576	¥	2,639
Long-Term Debt		479,152		496,829
Other		11,778		15,187
	¥	492,506	¥	514,655

– 17 –

(2) Condensed Consolidated Statements of Income (Unaudited)

	Millions of yen
	Six months  ended September 30, 2015		Six months  ended September 30, 2016
Revenues:
Finance revenues	¥	101,244	¥	96,582
Gains on investment securities and dividends		31,317		15,207
Operating leases		191,330		196,072
Life insurance premiums and related investment income		70,492		115,736
Sales of goods and real estate		395,426		433,526
Services income		380,385		364,002
Total revenues		1,170,194		1,221,125
Expenses:
Interest expense		35,858		35,348
Costs of operating leases		122,440		121,266
Life insurance costs		31,800		71,423
Costs of goods and real estate sold		351,461		390,364
Services expense		217,880		218,993
Other (income) and expense, net		4,555		(681	)
Selling, general and administrative expenses		216,344		203,699
Provision for doubtful receivables and probable loan losses		2,948		6,743
Write-downs of long-lived assets		946		1,409
Write-downs of securities		3,482		6,212
Total expenses		987,714		1,054,776
Operating Income		182,480		166,349
Equity in Net Income of Affiliates		11,856		15,765
Gains on Sales of Subsidiaries and Affiliates and Liquidation Losses, net		56,409		32,834
Bargain Purchase Gain		0		4,287
Income before Income Taxes		250,745		219,235
Provision for Income Taxes		82,636		72,296
Net Income		168,109		146,939
Net Income Attributable to the Noncontrolling Interests		5,546		4,641
Net Income Attributable to the Redeemable Noncontrolling Interests		1,265		148
Net Income Attributable to ORIX Corporation Shareholders	¥	161,298	¥	142,150
	Yen
	Six months  ended September 30, 2015		Six months  ended September 30, 2016
Amounts per Share of Common Stock for Net Income attributable to ORIX Corporation shareholders:
Basic:	¥	123.23	¥	108.57
Diluted:	¥	123.11	¥	108.47

– 18 –

	Millions of yen
	Three months  ended September 30, 2015			Three months  ended September 30, 2016
Revenues:
Finance revenues	¥	51,617		¥	48,526
Gains on investment securities and dividends		8,384			11,201
Operating leases		95,901			91,182
Life insurance premiums and related investment income		2,178			78,964
Sales of goods and real estate		218,850			217,640
Services income		187,140			185,667
Total revenues		564,070			633,180
Expenses:
Interest expense		17,835			17,286
Costs of operating leases		62,432			61,194
Life insurance costs		(11,256	)		51,185
Costs of goods and real estate sold		196,680			197,998
Services expense		111,667			113,675
Other (income) and expense, net		6,796			718
Selling, general and administrative expenses		101,974			101,097
Provision for doubtful receivables and probable loan losses		2,337			4,049
Write-downs of long-lived assets		124			845
Write-downs of securities		1,533			6,207
Total expenses		490,122			554,254
Operating Income		73,948			78,926
Equity in Net Income of Affiliates		5,690			9,529
Gains on Sales of Subsidiaries and Affiliates and Liquidation Losses, net		47,191			12,346
Income before Income Taxes		126,829			100,801
Provision for Income Taxes		43,479			33,274
Net Income		83,350			67,527
Net Income Attributable to the Noncontrolling Interests		3,358			2,063
Net Income Attributable to the Redeemable Noncontrolling Interests		204			83
Net Income Attributable to ORIX Corporation Shareholders	¥	79,788		¥	65,381
	Yen
	Three months  ended September 30, 2015			Three months  ended September 30, 2016
Amounts per Share of Common Stock for Net Income attributable to ORIX Corporation shareholders:
Basic:	¥	60.95		¥	49.94
Diluted:	¥	60.89		¥	49.89

– 19 –

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

	Millions of yen
	Six months  ended September 30, 2015			Six months  ended September 30, 2016
Net Income	¥	168,109		¥	146,939
Other comprehensive income (loss), net of tax:
Net change of unrealized gains (losses) on investment in securities		(13,814	)		(2,853	)
Net change of defined benefit pension plans		(461	)		1,499
Net change of foreign currency translation adjustments		(3,140	)		(59,512	)
Net change of unrealized gains (losses) on derivative instruments		12			(1,800	)
Total other comprehensive income (loss)		(17,403	)		(62,666	)
Comprehensive Income		150,706			84,273
Comprehensive Income (Loss) Attributable to the Noncontrolling Interests		6,586			(1,789	)
Comprehensive Income (Loss) Attributable to the Redeemable Noncontrolling Interests		2,423			(624	)
Comprehensive Income Attributable to ORIX Corporation Shareholders	¥	141,697		¥	86,686
	Millions of yen
	Three months  ended September 30, 2015			Three months  ended September 30, 2016
Net Income	¥	83,350		¥	67,527
Other comprehensive income (loss), net of tax:
Net change of unrealized gains (losses) on investment in securities		(6,533	)		(9,625	)
Net change of defined benefit pension plans		439			202
Net change of foreign currency translation adjustments		(14,136	)		(18,308	)
Net change of unrealized gains (losses) on derivative instruments		(105	)		132
Total other comprehensive income (loss)		(20,335	)		(27,599	)
Comprehensive Income		63,015			39,928
Comprehensive Income Attributable to the Noncontrolling Interests		3,072			837
Comprehensive Income (Loss) Attributable to the Redeemable Noncontrolling Interests		(63	)		(38	)
Comprehensive Income Attributable to ORIX Corporation Shareholders	¥	60,006		¥	39,129

– 20 –

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

Six months ended September 30, 2015

	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	¥	220,056	¥	255,595		¥	1,672,585		¥	30,373		¥	(26,411	)	¥	2,152,198		¥	165,873		¥	2,318,071
Contribution to subsidiaries																0			4,405			4,405
Transaction with noncontrolling interests				(242	)											(242	)		(2,353	)		(2,595	)
Comprehensive income, net of tax:
Net income							161,298									161,298			5,546			166,844
Other comprehensive income (loss)
Net change of unrealized losses on investment in securities										(13,800	)					(13,800	)		(14	)		(13,814	)
Net change of defined benefit pension plans										(456	)					(456	)		(5	)		(461	)
Net change of foreign currency translation adjustments										(5,355	)					(5,355	)		1,057			(4,298	)
Net change of unrealized gains on derivative instruments										10						10			2			12
Total other comprehensive income (loss)																(19,601	)		1,040			(18,561	)
Total comprehensive income																141,697			6,586			148,283
Cash dividends							(47,188	)								(47,188	)		(3,476	)		(50,664	)
Exercise of stock options		402		399												801			0			801
Acquisition of treasury stock													(1	)		(1	)		0			(1	)
Disposal of treasury stock				(185	)		(31	)					329			113			0			113
Other, net				48			1,806									1,854			0			1,854
Ending Balance	¥	220,458	¥	255,615		¥	1,788,470		¥	10,772		¥	(26,083	)	¥	2,249,232		¥	171,035		¥	2,420,267
Six months ended September 30, 2016
	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	¥	220,469	¥	257,629		¥	1,864,241		¥	(6,222	)	¥	(25,686	)	¥	2,310,431		¥	162,388		¥	2,472,819
Contribution to subsidiaries																0			1,447			1,447
Transaction with noncontrolling interests				(5	)											(5	)		(53	)		(58	)
Comprehensive income, net of tax:
Net income							142,150									142,150			4,641			146,791
Other comprehensive income (loss)
Net change of unrealized losses on investment in securities										(2,798	)					(2,798	)		(55	)		(2,853	)
Net change of defined benefit pension plans										1,361						1,361			138			1,499
Net change of foreign currency translation adjustments										(52,314	)					(52,314	)		(6,426	)		(58,740	)
Net change of unrealized gains (losses) on derivative instruments										(1,713	)					(1,713	)		(87	)		(1,800	)
Total other comprehensive income (loss)																(55,464	)		(6,430	)		(61,894	)
Total comprehensive income (loss)																86,686			(1,789	)		84,897
Cash dividends							(31,141	)								(31,141	)		(2,557	)		(33,698	)
Acquisition of treasury stock													(1,235	)		(1,235	)		0			(1,235	)
Disposal of treasury stock				(56	)								84			28			0			28
Other, net				197			(1	)								196			0			196
Ending Balance	¥	220,469	¥	257,765		¥	1,975,249		¥	(61,686	)	¥	(26,837	)	¥	2,364,960		¥	159,436		¥	2,524,396

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

– 21 –

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

	Millions of yen
	Six months  ended September 30, 2015			Six months  ended September 30, 2016
Cash Flows from Operating Activities:
Net income	¥	168,109		¥	146,939
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		120,721			124,542
Provision for doubtful receivables and probable loan losses		2,948			6,743
Equity in net income of affiliates (excluding interest on loans)		(11,625	)		(14,747	)
Gains on sales of subsidiaries and affiliates and liquidation losses, net		(56,409	)		(32,834	)
Bargain purchase gain		0			(4,287	)
Gains on sales of available-for-sale securities		(27,525	)		(20,924	)
Gains on sales of operating lease assets		(24,403	)		(32,707	)
Write-downs of long-lived assets		946			1,409
Write-downs of securities		3,482			6,212
Decrease (Increase) in restricted cash		632			(438	)
Decrease in trading securities		327,205			80,346
Decrease (Increase) in inventories		12,775			(11,298	)
Decrease in trade notes, accounts and other receivable		6,613			2,024
Decrease in trade notes, accounts and other payable		(49,491	)		(26,689	)
Decrease in policy liabilities and policy account balances		(284,008	)		(49,785	)
Other, net		28,616			156,463
Net cash provided by operating activities		218,586			330,969
Cash Flows from Investing Activities:
Purchases of lease equipment		(473,809	)		(406,310	)
Principal payments received under direct financing leases		259,650			231,169
Installment loans made to customers		(533,751	)		(607,396	)
Principal collected on installment loans		497,453			489,402
Proceeds from sales of operating lease assets		128,423			150,938
Investment in affiliates, net		(12,826	)		1,746
Proceeds from sales of investment in affiliates		11,287			64,031
Purchases of available-for-sale securities		(536,860	)		(241,535	)
Proceeds from sales of available-for-sale securities		376,635			341,160
Proceeds from redemption of available-for-sale securities		212,519			73,199
Purchases of held-to-maturity securities		(253	)		(306	)
Purchases of other securities		(12,109	)		(3,328	)
Proceeds from sales of other securities		24,265			15,955
Purchases of property under facility operations		(40,953	)		(43,331	)
Acquisitions of subsidiaries, net of cash acquired		(1,725	)		(38,809	)
Sales of subsidiaries, net of cash disposed		38,648			11,796
Other, net		(4,799	)		(18,213	)
Net cash provided by (used in) investing activities		(68,205	)		20,168
Cash Flows from Financing Activities:
Net decrease in debt with maturities of three months or less		(33,305	)		(73,944	)
Proceeds from debt with maturities longer than three months		688,531			602,130
Repayment of debt with maturities longer than three months		(704,304	)		(676,080	)
Net increase in deposits due to customers		45,314			91,991
Cash dividends paid to ORIX Corporation shareholders		(47,188	)		(31,141	)
Contribution from noncontrolling interests		5,467			1,616
Cash dividends paid to redeemable noncontrolling interests		(11,272	)		0
Net increase (decrease) in call money		32,500			(10,500	)
Other, net		(2,604	)		(5,801	)
Net cash used in financing activities		(26,861	)		(101,729	)
Effect of Exchange Rate Changes on Cash and Cash Equivalents		(1,917	)		(17,998	)
Net increase in Cash and Cash Equivalents		121,603			231,410
Cash and Cash Equivalents at Beginning of Period		827,518			730,420
Cash and Cash Equivalents at End of Period	¥	949,121		¥	961,830

– 22 –

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”), except 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, 2016 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

Under U.S. GAAP, based on FASB Accounting Standards Codification (“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 for impairment at least annually. 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.

(e) Accounting for contingent consideration in business combination

Under U.S. GAAP, contingent consideration issued in a business combination that is classified as a liability is recognized at fair value at the acquisition date and subsequently remeasured to fair value, with changes in fair value recognized in earnings until the contingency is resolved.

– 23 –

Under Japanese GAAP, contingent consideration is recognized as additional acquisition cost and goodwill is additionally recognized when it becomes most probable to deliver and its fair value becomes reasonably determinable.

(f) 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.

(g) Sale of the parent’s ownership interest in subsidiaries

Under U.S. GAAP, 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, 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.

(h) 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.

(i) 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.

(j) Fair value option

Under U.S. GAAP, an entity is permitted to carry certain eligible financial assets and liabilities at fair value and to recognize changes in that item’s fair value in earnings through the election of the fair value option.

Under Japanese GAAP, there is no accounting standard for fair value option.

– 24 –

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. The Company makes estimates and assumptions to 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 recognition and measurement of impairment of long-lived assets (see (g)), the recognition and measurement of impairment of investment in securities (see (h)), the determination of the 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 recognition and measurement 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.

– 25 –

Finance Revenues—Finance revenues mainly include revenues for direct financing leases and installment loans. The policies applied to direct financing leases and installment loans are described hereinafter.

(1) Revenues from direct financing leases

Direct financing leases consist of full-payout leases for various equipment types, including office equipment, industrial machinery and transportation equipment. 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. 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) Revenues from 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.

(3) 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 non-accrual loans and lease receivables to accrual status 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.

Gains on investment securities and dividends—Gains on investment securities are recorded on a trade date basis. Dividends are recorded when right to receive dividends is established.

– 26 –

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 ¥542,868 million and ¥551,186 million as of March 31, 2016 and September 30, 2016, 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 are included in operating lease revenues.

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

Sales of goods and real estate—

(1) Sales of goods

The Company and its subsidiaries sell to their customers various types of goods, including precious metals and jewels, 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.

(2) 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.

Services income—Revenues are recognized when persuasive evidence of an arrangement exists, the service has been rendered to the customer, the transaction price is fixed or determinable and collectability is reasonably assured. The policies applied to asset management, servicing and automobile maintenance services are described hereinafter.

(1) 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 our customers. The Company and its subsidiaries receive fees for those services from our customers.

Revenues from asset management and servicing primarily include management fees, servicing fees, and performance fees. Management and servicing fees are recognized when transactions occur or services are rendered and the amounts are fixed or determinable and collectability of which is reasonably assured. 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 contracts. Certain subsidiaries recognize revenues from performance fees when earned based on the performance of the asset under management while other subsidiaries recognize revenues from performance fees on an accrual basis over the period in which services are performed. Performance fees are calculated based on the predetermined percentages on the performance of the assets under management in accordance with the contracts.

(2) Revenues from automobile maintenance services

The Company and its subsidiaries provide automobile maintenance services 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 recognized over the contract period in proportion to the estimated service costs to be incurred.

– 27 –

(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 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 the subsidiary consist of variable annuity, variable life and fixed annuity insurance contracts. The 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 sheets. 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 statements 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”) with changes in the fair value recognized in life insurance costs.

The subsidiary provides minimum guarantees to variable annuity and variable life policyholders under which it is exposed to the risk of compensating losses incurred by the policyholders to the extent contractually required. To mitigate the risk, a portion of the minimum guarantee risk related to variable annuity and variable life insurance contracts is ceded to reinsurance companies and the remaining risk is economically hedged by entering into derivative contracts (See Note 18 “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. Certain subsidiaries have elected the fair value option under ASC 825 (“Financial Instruments”) for certain reinsurance contracts relating to variable annuity and variable life insurance contracts, which is included in other assets in the consolidated balance sheets.

Policy liabilities and policy account balances for fixed annuity insurance contracts are measured based on the single-premiums plus interest based on expected rate 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 statements 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.

– 28 –

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 buildings, condominiums, golf courses and other properties under facility operations, are tested for recoverability whenever events or changes in circumstances indicate that the assets might be impaired. The assets are considered not recoverable when the undiscounted future cash flows estimated to be generated by those assets are less than the carrying amount of those assets, and 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 (“Financial Instruments”).

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.

– 29 –

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 in earnings if the Company and its subsidiaries intend to sell the debt security or it is 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. 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.

(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. 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 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 for the six months ended September 30, 2015 and 2016 were 33.0% and 33.0%, respectively. These rates are 34.3% and 33.0% for the three months ended September 30, 2015 and 2016 respectively. For the six months ended September 30, 2015, the Company and its subsidiaries in Japan were subject to a National Corporate tax of approximately 24%, an Inhabitant tax of approximately 4% and a deductible Enterprise tax of approximately 6%, which in the aggregate result in a statutory income tax rate of approximately 33.5%. For the six months ended September 30, 2016, as a result of the tax reforms as discussed in the following paragraph, the Company and its subsidiaries in Japan were subject to a National Corporate tax of approximately 24%, an Inhabitant tax of approximately 4% and a deductible Enterprise tax of approximately 4%, which in the aggregate result in a statutory income tax rate of approximately 31.7%. The effective income tax rate is different from the statutory tax rate primarily because of certain nondeductible expenses for tax purposes, non-taxable income for tax purposes, changes in valuation allowance, the effect of lower income tax rates on foreign subsidiaries and a domestic life insurance subsidiary.

– 30 –

On March 29, 2016, the 2016 tax reform bill was passed by the National Diet of Japan. From fiscal years beginning on April 1, 2016, the national corporate tax rate and local business tax rate were reduced and the local corporate tax rate was increased. The net effect of those changes was a reduction in the combined statutory income tax rate for the fiscal year beginning on April 1, 2016 from approximately 32.9% to approximately 31.7%, and a further reduction in the combined statutory income tax rate for fiscal year beginning on April 1, 2017 to approximately 31.5%. For the fiscal years beginning on or after April 1, 2018, the combined statutory income tax rate was further reduced to approximately 31.3%. In addition, tax loss carryforward rules were amended, and the deductible amount of tax losses carried forward for the fiscal year beginning on April 1, 2016 is reduced to 60% of taxable income for the year, compared to 65% pursuant to the 2015 tax reform. From the fiscal year beginning on April 1, 2017, the deductible limit of tax losses carried forward will be increased to 55% of taxable income for the year, while the tax loss carryforward period will be reduced from ten years to nine years. From the fiscal years beginning on or after April 1, 2018, the deductible limit of tax losses carried forward will remain at 50% of taxable income for the year and the tax loss carryforward period will remain at 10 years, consistent with the 2015 tax reform.

The Company and its subsidiaries file tax returns in Japan and certain foreign tax jurisdictions and 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 tax positions that meet the recognition threshold at the largest amount of tax benefit that is greater than 50 percent likely to be realized upon settlement with the taxing authority. The Company and its subsidiaries present an unrecognized tax benefit as either a reduction of a deferred tax asset, a reduction of an amount refundable or a liability, based on the intended method of settlement. The Company and its subsidiaries classify penalties and interest expense related to income taxes as part of provision for income taxes in the condensed consolidated statements of income.

The Company and certain subsidiaries have elected to file a consolidated tax return for National Corporation tax purposes.

(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 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 or loan receivables, 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).

– 31 –

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).

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 became 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, 2016 would have increased by approximately ¥24,674 million, with a corresponding decrease in retained earnings. Total ORIX Corporation shareholders’ equity would remain unchanged. Stock splits on May 19, 2000 were excluded from the above amounts because the stock splits were not considered to be stock dividends under U.S. GAAP.

– 32 –

(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.

(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 fair 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, 2016 and September 30, 2016 were ¥21,867 million and ¥28,773 million, respectively. There were ¥20,673 million and ¥23,188 million of loans held for sale as of March 31, 2016 and September 30, 2016, respectively, measured at fair value by electing the fair value option.

(r) Property under facility operations

Property under facility operations consist primarily of operating facilities (including golf courses, hotels and training facilities and senior housings) and environmental assets (including mega solar), 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 was ¥67,055 million and ¥74,061 million as of March 31, 2016 and September 30, 2016, respectively.

(s) Trade notes, accounts and other receivable

Trade notes, accounts and other receivable primarily include accounts receivables in relation to sales of assets to be leased, inventories and other assets and payment made on behalf of lessees for property tax, maintenance fees and insurance premiums in relation to direct financing lease contracts.

(t) Inventories

Inventories consist primarily of residential condominiums under development, completed residential condominiums (including those waiting to be delivered to buyers under the contract for sale), and merchandise for sale. Residential condominiums under development are carried at cost less any impairment losses, and completed residential condominiums and merchandises for sale are stated at the lower of cost or fair value less cost to sell. 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 first-in first-out (FIFO) method. As of March 31, 2016 and September 30, 2016, residential condominiums under development were ¥81,859 million and ¥88,051 million, respectively, and completed residential condominiums and merchandises for sale were ¥58,091 million and ¥61,744 million, respectively.

The company and its subsidiaries recorded ¥29 million and ¥636 million of write-downs principally on residential condominiums and merchandise for sale for the six months ended September 30, 2015 and 2016, respectively, primarily resulting from a decrease in expected sales price. The amounts of such write-downs for the three months ended September 30, 2015 and 2016 were ¥27 million and ¥587 million respectively. These write-downs were principally recorded in costs of goods and real estate sold and included in the Corporate Financial Services segment and the Investment and Operation 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 ¥45,310 million and ¥47,099 million as of March 31, 2016 and September 30, 2016, respectively.

– 33 –

(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, prepaid benefit cost, derivative assets and deferred tax assets.

(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 value 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. The Company and its subsidiaries test for impairment of goodwill and any intangible assets that have indefinite useful lives at least annually. 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.

The Company and its subsidiaries have the option to 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, the Company and/or subsidiaries determine 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 proceed to perform the first step of the two-step impairment test. The first step of goodwill impairment test, used to identify potential impairment, calculates the fair value of the reporting unit and compares the fair value with the carrying amount of the reporting unit. If the fair value of the reporting unit falls below its carrying amount, the second step of the goodwill impairment test is performed to measure the amount of impairment loss. The second step of the goodwill impairment test compares implied fair value of goodwill with its carrying amount. If the carrying amount of goodwill exceeds its implied 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.

The Company and its subsidiaries have the option to perform a qualitative assessment to determine whether it is more likely than not that an 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 was ¥332,153 million and ¥319,724 million as of March 31, 2016 and September 30, 2016, respectively.

– 34 –

The amount of other intangible assets was ¥386,334 million and ¥363,577 million as of March 31, 2016 and September 30, 2016, respectively.

(x) Trade notes, accounts and other payable

Trade notes, accounts and other payable include primarily accounts payable in relation to purchase of assets to be leased, merchandise for sale and other assets, accounts payable in relation to construction work of residential condominiums and deposits received mainly for withholding income tax.

(y) Other Liabilities

Other liabilities include primarily interest, bonus accrued expense and accrued benefit liability, advances received from lessees in relation to lease contracts, deposit received from real estate transaction and derivative liabilities.

(z) Capitalization of interest costs

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

(aa) Advertising

The costs of advertising are expensed as incurred.

(ab) Earnings per share

Basic earnings per share is computed by dividing 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.

(ac) Additional acquisition and partial sale of the parent’s ownership interest in subsidiaries

Additional acquisition of the parent’s ownership interest in subsidiaries and partial sale of such interest 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 a certain subsidiary 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”).

– 35 –

(ae) Issuance of stock by an affiliate

When an affiliate issues stocks 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.

(af) New accounting pronouncements

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.

In April 2016, Accounting Standards Update 2016-10 (“Identifying Performance Obligations and Licensing”—ASC 606 (“Revenue from Contracts with Customers”)) was issued as an amendment of the new revenue standard. This Update adds further guidance on identifying performance obligations and also improves the operability and understandability of the licensing implementation guidance. The amendments do not change the core principle of the guidance in ASC 606.

In May 2016, Accounting Standards Update 2016-12 (“Narrow-Scope Improvements and Practical Expedients”—ASC 606 (“Revenue from Contracts with Customers”)) was issued as an amendment of the new revenue standard. This Update (1) clarifies the objective of the collectibility criterion for applying paragraph 606-10-25-7; (2) permits an entity to exclude amounts collected from customers for all sales (and other similar) taxes from the transaction price; (3) specifies that the measurement date for non-cash consideration is contract inception; (4) provides a practical expedient that permits an entity to reflect the aggregate effect of all modifications that occur before the beginning of the earliest period presented when identifying the satisfied and unsatisfied performance obligations, determining the transaction price, and allocating the transaction price to the satisfied and unsatisfied performance obligations; (5) clarifies that a completed contract for purposes of transition is a contract for which all (or substantially all) of the revenue was recognized under legacy GAAP before the date of initial application, and (6) clarifies that an entity that retrospectively applies ASC 606 to each prior reporting period is not required to disclose the effect of the accounting change for the period of adoption.

These Updates are effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2017. Early adoption is permitted only for the fiscal year beginning after December 15, 2016, and interim periods within the fiscal year. An entity should apply the amendments in these Updates using either a retrospective method or a cumulative-effect method. The entity may elect some optional practical expedients when applying these Updates. The entity using the cumulative-effect method would recognize the cumulative effect of initially applying these Updates 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 these Updates will have on the Company and its subsidiaries’ results of operations or financial position.

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”—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. The Company and its subsidiaries adopted this Update on April 1, 2016. The adoption had no effect on the Company and its subsidiaries’ results of operations or financial position.

– 36 –

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. The Company and its subsidiaries adopted this Update on April 1, 2016. The adoption had no effect on the Company and its subsidiaries’ results of operations or 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 year ending after December 15, 2016 and fiscal years 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. The Company and its subsidiaries adopted this Update on April 1, 2016. The adoption had no effect on the Company and its subsidiaries’ results of operations or financial position.

In January 2015, Accounting Standards Update 2015-01 (“Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items”—ASC 225-20 (“Income Statement—Extraordinary and Unusual Items”)) was issued. This Update eliminates the concept of extraordinary items from U.S. GAAP, but does not change the current presentation and disclosure requirements for material events or transactions that are unusual in nature or infrequent in occurrence. The Company and its subsidiaries adopted this Update on April 1, 2016. The adoption had no effect on the Company and its subsidiaries’ results of operations or financial position.

In February 2015, Accounting Standards Update 2015-02 (“Amendments to the Consolidation Analysis”—ASC 810 (“Consolidation”)) was issued. This Update requires an entity to change the way to evaluate whether reporting entities should consolidate limited partnerships and similar legal entities, fees paid to a decision maker or service provider are variable interest in a VIE, and variable interests in a VIE held by related parties of the reporting entity require the reporting entity to consolidate the VIE. Additionally, the amendments in this Update rescind the indefinite deferral of FASB Statement No.167 (“Amendments to FASB Interpretation No.46(R)”), included in Accounting Standards Update 2010-10 (ASC 810 (“Consolidation”)) for certain investment companies and similar entities. The Company and its subsidiaries adopted this Update on April 1, 2016. The adoption had no effect on the Company and its subsidiaries’ results of operations or financial position. See Note 8 “Variable Interest Entities” where the required disclosure has been provided.

In April 2015, Accounting Standards Update 2015-03 (“Simplifying the Presentation of Debt Issuance Costs”—ASC 835-30 (“Interest—Imputation of Interest”)) was issued. This Update requires that debt issuance costs related to a recognized debt liability are presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, similar to the presentation of debt discounts or premiums. The Company and its subsidiaries adopted this Update retrospectively to prior period financial statements on April 1, 2016. The effect of the retrospective adoption on the financial position as of March 31, 2016 was a decrease of approximately ¥3,988 million in other assets and a decrease of approximately ¥3,988 million in long-term debt in the condensed consolidated balance sheets.

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In July 2015, Accounting Standards Update 2015-11 (“Simplifying the Measurement of Inventory”—ASC 330 (“Inventory”)) was issued. This Update applies to all inventory except for which is measured using last-in, first-out (LIFO) or the retail inventory method, and requires an entity to measure inventory at the lower of cost and net realizable value. Additionally, this Update defines net realizable value as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This Update is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2016. The amendments in this Update should be applied on a prospective basis. Early adoption is permitted. 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 or financial position.

In September 2015, Accounting Standards Update 2015-16 (“Simplifying the Accounting for Measurement—Period Adjustments”—ASC 805 (“Business Combinations”)) was issued. This Update requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The Company and its subsidiaries adopted this Update on April 1, 2016. The adoption had no effect on the Company and its subsidiaries’ results of operations or financial position.

In January 2016, Accounting Standards Update 2016-01 (“Recognition and Measurement of Financial Assets and Financial Liabilities”—ASC 825-10 (“Financial Instruments—Overall”)) was issued. This Update revises accounting related to the classification and measurement of equity investments. This Update also revises the presentation of certain fair value changes for financial liabilities measured at fair value. Additionally, this Update amends certain disclosure requirements associated with the fair value of financial instruments. This Update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early application to financial statements of fiscal years or interim periods that have not yet been issued is permitted as of the beginning of the fiscal year of adoption. The amendments in this Update should be applied by means of cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company and its subsidiaries are currently evaluating the effect that adoption of this Update will have on the Company and its subsidiaries’ results of operations or financial position.

In February 2016, Accounting Standards Update 2016-02 (ASC 842 (“Leases”)) was issued. This Update requires a lessee to recognize most leases on-balance sheet. Lessor accounting remains substantially similar to current U.S. GAAP but with some important changes. This Update is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early application is permitted. The amendments in this Update should be applied at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. The Company and its subsidiaries are currently evaluating the effect that adoption of this Update will have on the Company and its subsidiaries’ results of operations or financial position.

In March 2016, Accounting Standards Update 2016-07 (“Simplifying the Transition to the Equity Method Accounting”—ASC 323 (“Investments—Equity Method and Joint Ventures”)) was issued. This Update eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. This Update also requires that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and requires that an entity that has an available-for sale equity security that becomes qualified for the equity method of accounting recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. This Update is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The amendments in this Update should be applied prospectively. Early application is permitted. Generally, the effect of adopting this Update on the Company and its subsidiaries’ results of operations or financial position will depend on future transactions.

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In June 2016, Accounting Standards Update 2016-13 (“Measurement of Credit Losses on Financial Instruments”—ASC 326 (“Financial Instruments—Credit Losses”)) was issued. This Update significantly changes how companies measure and recognize credit impairment for many financial assets. The new current expected credit loss model requires companies to immediately recognize an estimate of credit losses expected to occur over the remaining life of the financial assets that are within the scope of this Update. This Update also makes targeted amendments to the current impairment model for available-for-sale debt securities. This Update is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The amendments in this Update should be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. Early application is permitted for fiscal year beginning after December 15, 2018, including interim periods within the fiscal year. The Company and its subsidiaries are currently evaluating the effect that adoption of this Update will have on the Company and its subsidiaries’ results of operations or financial position.

In August 2016, Accounting Standards Update 2016-15 (“Classification of Certain Cash Receipts and Cash Payments”—ASC 230 (“Statement of Cash Flows”) was issued. This Update amends ASC 230 to add or clarify guidance on the classification of certain cash receipts and cash payments in the statement of cash flows. This Update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. This Update should be applied using a retrospective transition method to each period presented. If it is impracticable to apply the amendments retrospectively for some of the issues, the amendments for those issues would be applied prospectively as of the earliest date practicable. The Company and its subsidiaries are currently evaluating the effect that the adoption of this Update will have on the Company and its subsidiaries’ Statement of Cash Flows.

In October 2016, Accounting Standards Update 2016-16 (“Intra-Entity Transfers of Assets Other Than Inventory”—ASC 740 (“Income Taxes”) was issued. This Update eliminates the exception to defer the income tax consequences of intra-entity transfers of assets other than inventory until the assets are ultimately sold to an outside party and requires the recognition of the current and deferred tax consequences when those transfers occur. This Update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. This Update should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. 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 or financial position.

In October 2016, Accounting Standards Update 2016-17 (“Interests Held through Related Parties That Are under Common Control”—ASC 810 (“Consolidation”) was issued. This Update amends the consolidation guidance on how a reporting entity that is the single decision maker of a VIE should treat indirect interests in the entity held through related parties that are under common control with the reporting entity when determining whether it is the primary beneficiary of that VIE. This Update is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The Company and its subsidiaries have already adopted the amendments in Accounting Standards Update 2015-02 and accordingly would be required to apply the amendments in this Update retrospectively to all relevant prior periods beginning with the fiscal year in which the amendments in that Update 2015-02 initially were applied. 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 or financial position.

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.

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The following table presents recorded amounts of major financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2016 and September 30, 2016:

March 31, 2016

	Millions of yen
	Total Carrying Value in Consolidated Balance Sheets			Quoted Prices in  Active Markets for Identical  Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Loans held for sale*1	¥	20,673		¥	0	¥	20,673	¥	0
Trading securities		725,821			37,592		688,229		0
Available-for-sale securities		1,347,890			99,347		1,149,021		99,522
Japanese and foreign government bond securities		497,355			988		496,367		0
Japanese prefectural and foreign municipal bond securities*2		169,534			0		169,534		0
Corporate debt securities		410,779			0		410,774		5
Specified bonds issued by SPEs in Japan		3,461			0		0		3,461
CMBS and RMBS in the Americas		97,186			0		58,693		38,493
Other asset- backed securities and debt securities		58,230			0		667		57,563
Equity securities*3		111,345			98,359		12,986		0
Other securities		17,751			0		0		17,751
Investment funds*4		17,751			0		0		17,751
Derivative assets		33,747			48		25,491		8,208
Interest rate swap agreements		93			0		93		0
Options held/written and other		8,789			0		581		8,208
Futures, foreign exchange contracts		18,294			48		18,246		0
Foreign currency swap agreements		6,571			0		6,571		0
Netting*5		(5,757	)		0		0		0
Net derivative assets		27,990			0		0		0
Other assets		37,855			0		0		37,855
Reinsurance recoverables*6		37,855			0		0		37,855
Total	¥	2,183,737		¥	136,987	¥	1,883,414	¥	163,336
Liabilities:
Derivative liabilities	¥	19,870		¥	533	¥	19,337	¥	0
Interest rate swap agreements		5,921			0		5,921		0
Options held/written and other		3,637			0		3,637		0
Futures, foreign exchange contracts		6,655			533		6,122		0
Foreign currency swap agreements		3,601			0		3,601		0
Credit derivatives held		56			0		56		0
Netting*5		(5,757	)		0		0		0
Net derivative Liabilities		14,113			0		0		0
Policy Liabilities and Policy Account Balances		795,001			0		0		795,001
Variable annuity and variable life insurance contracts*7		795,001			0		0		795,001
Total	¥	814,871		¥	533	¥	19,337	¥	795,001

– 40 –

September 30, 2016

	Millions of yen
	Total Carrying Value in Consolidated Balance Sheets		Quoted Prices in  Active Markets for Identical  Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Loans held for sale*1	¥	23,188	¥	0	¥	23,188	¥	0
Trading securities		644,463		36,400		608,063		0
Available-for-sale securities		1,139,742		80,605		953,450		105,687
Japanese and foreign government bond securities		391,281		922		390,359		0
Japanese prefectural and foreign municipal bond securities*2		133,557		0		133,557		0
Corporate debt securities		392,947		0		391,440		1,507
Specified bonds issued by SPEs in Japan		1,261		0		0		1,261
CMBS and RMBS in the Americas		79,718		0		30,930		48,788
Other asset- backed securities and debt securities		60,182		0		6,051		54,131
Equity securities*3		80,796		79,683		1,113		0
Other securities		15,321		0		0		15,321
Investment funds*4		15,321		0		0		15,321
Derivative assets		39,705		578		29,254		9,873
Interest rate swap agreements		50