SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

For the month of August 2022.

Commission File Number: 001-14856

ORIX Corporation

(Translation of Registrant’s Name into English)

World Trade Center Bldg., SOUTH TOWER, 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  ☒        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 August 10, 2022, which includes unaudited consolidated financial information prepared in accordance with generally accepted accounting principles in the United States for the three months ended June 30, 2021 and 2022.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ORIX Corporation
Date: August 10, 2022	By	/s/ HITOMARO YANO
		Hitomaro Yano
		Executive Officer Head of Treasury and Accounting Headquarters
		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 August 10, 2022, which includes unaudited consolidated financial information prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) for the three months ended June 30, 2021 and 2022.

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)
	Three months ended June 30, 2021			Three months ended June 30, 2022			Fiscal year ended March 31, 2022
Total revenues	¥	608,813		¥	657,813		¥	2,520,365
Income before income taxes		100,056			85,015			504,876
Net income attributable to ORIX Corporation shareholders		65,216			61,862			312,135
Comprehensive Income attributable to ORIX Corporation shareholders		81,293			98,180			382,219
ORIX Corporation shareholders’ equity		3,047,532			3,293,726			3,261,419
Total assets		13,581,966			14,622,486			14,270,672
Earnings per share for net income attributable to ORIX Corporation shareholders
Basic (yen)		53.65			51.90			259.37
Diluted (yen)		53.61			51.85			259.07
ORIX Corporation shareholders’ equity ratio (%)		22.4			22.5			22.9
Cash flows from operating activities		223,672			(31,746	)		1,103,370
Cash flows from investing activities		(120,756	)		(226,961	)		(808,846	)
Cash flows from financing activities		(47,650	)		138,552			(306,618	)
Cash, Cash Equivalents and Restricted Cash at end of Period		1,136,008			994,992			1,091,812

Note: Consumption tax is excluded from the stated amount of total revenues.

(2) Overview of Activities

During the three months ended June 30, 2022, 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, 2022 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 the factors or other factors.

– 2 –

3. 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

Financial Highlights

Financial Results for the Three Months Ended June 30, 2022

Total revenues	¥657,813 million (Up 8% year on year)
Total expenses	¥574,520 million (Up 13% year on year)
Income before income taxes	¥85,015 million (Down 15% year on year)
Net income attributable to ORIX Corporation Shareholders	¥61,862 million (Down 5% year on year)
Earnings per share for net income attributable to ORIX Corporation Shareholders
(Basic)	¥51.90 (Down 3% year on year)
(Diluted)	¥51.85 (Down 3% year on year)
ROE (Annualized) *1	7.5% (8.6% during the same period in the previous fiscal year)
ROA (Annualized) *2	1.71% (1.92% during the same period in the previous fiscal year)

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

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

Total revenues for the three months ended June 30, 2022 increased 8% to ¥657,813 million compared to ¥608,813 million during the same period of the previous fiscal year due to increases in services income, life insurance premiums and related investment income, operating leases revenues and sales of goods and real estate despite a decrease in gains (losses) on investment securities and dividends.

Total expenses increased 13% to ¥574,520 million compared to ¥506,834 million during the same period of the previous fiscal year due to increases in life insurance costs, services expense and costs of goods and real estate sold.

Equity in net income (loss) of affiliates resulted in losses of ¥1,381 million (losses of ¥4,920 million in the same period of the previous fiscal) year, and gains on sales of subsidiaries and affiliates and liquidation losses, net increased by ¥106 million to ¥3,103 million compared to the same period of the previous fiscal year.

Due to the above results, income before income taxes for the three months ended June 30, 2022 decreased 15% to ¥85,015 million compared to ¥100,056 million during the same period of the previous fiscal year and net income attributable to ORIX Corporation shareholders decreased 5% to ¥61,862 million compared to ¥65,216 million during the same period of the previous fiscal year.

– 3 –

Segment Information

Our operating segments, used by the chief operating decision maker to make decisions about resource allocations and assess performance, are organized into ten segments based on our business management organization which is classified by the nature of major products and services, customer base, regulations, and business areas. The ten segments are Corporate Financial Services and Maintenance Leasing, Real Estate, PE Investment and Concession, Environment and Energy, Insurance, Banking and Credit, Aircraft and Ships, ORIX USA, ORIX Europe, and Asia and Australia.

Since April 1, 2022, a portion of interest expenses and a portion of selling, general and administrative expenses, which were initially included in the difference between segment total profits and consolidated amounts, have been charged directly to their respective segments. As a result of these changes, segment data for the three months ended June 30, 2021 has been retrospectively restated.

Total revenues and profits by segment for the three months ended June 30, 2021 and 2022 are as follows:

	Millions of yen
	Three months ended June 30, 2021					Three months ended June 30, 2022					Change (revenues)						Change (profits)
	Segment Revenues		Segment Profits			Segment Revenues		Segment Profits			Amount			Percent (%)			Amount			Percent (%)
Corporate Financial Services and Maintenance Leasing	¥	109,792	¥	17,202		¥	104,125	¥	15,725		¥	(5,667	)		(5	)	¥	(1,477	)		(9	)
Real Estate		96,762		10,592			96,865		11,938			103			0			1,346			13
PE Investment and Concession		99,624		158			121,778		2,187			22,154			22			2,029			—
Environment and Energy		29,329		4,343			46,801		4,592			17,472			60			249			6
Insurance		109,181		15,147			127,542		10,890			18,361			17			(4,257	)		(28	)
Banking and Credit		22,826		12,180			20,041		7,236			(2,785	)		(12	)		(4,944	)		(41	)
Aircraft and Ships		8,463		(4,954	)		14,564		5,416			6,101			72			10,370			—
ORIX USA		47,694		24,900			35,582		6,039			(12,112	)		(25	)		(18,861	)		(76	)
ORIX Europe		50,456		13,396			43,697		9,301			(6,759	)		(13	)		(4,095	)		(31	)
Asia and Australia		34,648		8,512			45,001		12,617			10,353			30			4,105			48
Total		608,775		101,476			655,996		85,941			47,221			8			(15,535	)		(15	)
Difference between Segment Total and Consolidated Amounts		38		(1,420	)		1,817		(926	)		1,779			—			494			—
Total Consolidated Amounts	¥	608,813	¥	100,056		¥	657,813	¥	85,015		¥	49,000			8		¥	(15,041	)		(15	)

Total assets by segment as of March 31, 2022 and June 30, 2022 are as follows:

	Millions of yen
	March 31, 2022				June 30, 2022				Change
	Segment Assets		Composition Ratio (%)		Segment Assets		Composition Ratio (%)		Amount			Percent (%)
Corporate Financial Services and Maintenance Leasing	¥	1,516,795		11	¥	1,486,080		10	¥	(30,715	)		(2	)
Real Estate		910,101		6		904,248		6		(5,853	)		(1	)
PE Investment and Concession		353,581		2		368,704		3		15,123			4
Environment and Energy		703,608		5		731,133		5		27,525			4
Insurance		2,072,145		14		2,082,153		14		10,008			0
Banking and Credit		2,687,156		19		2,691,467		18		4,311			0
Aircraft and Ships		684,098		5		723,184		5		39,086			6
ORIX USA		1,364,142		10		1,554,481		11		190,339			14
ORIX Europe		401,869		3		409,786		3		7,917			2
Asia and Australia		1,306,089		9		1,375,656		9		69,567			5
Total		11,999,584		84		12,326,892		84		327,308			3
Difference between Segment Total and Consolidated Amounts		2,271,088		16		2,295,594		16		24,506			1
Total Consolidated Amounts	¥	14,270,672		100	¥	14,622,486		100	¥	351,814			2

– 4 –

Segment information for the three months ended June 30, 2022 is as follows:

Corporate Financial Services and Maintenance Leasing: Finance and fee business; leasing and rental of automobiles, electronic measuring instruments and ICT-related equipment

In corporate financial services, we are engaged in financial businesses with a focus on profitability, and fee businesses by providing life insurance and environment and energy-related products and services to domestic small and medium-sized enterprise customers, as well as business succession support and M&A broking. In the automobile-related businesses, we aim to increase market share in small and medium-sized enterprises and individual customers, as well as large corporate customers by enhancing our competitive advantages stemming from our industry-leading number of fleets under management and one-stop automobile-related services. In the rental business operated by ORIX Rentec Corporation, we are not only providing electronic measuring instruments and ICT-related equipment lending, but also developing new services relating to robots, drones, etc.

Segment profits decreased 9% to ¥15,725 million compared to the same period of the previous fiscal year due to a decrease in services income resulting from the sale of the business of Yayoi Co., Ltd. in the three months ended March 31,2022, and a decrease in gains on investment securities and dividends resulting from a falling in the stock prices of an investee.

Segment assets decreased 2% to ¥1,486,080 million compared to the end of the previous fiscal year due to decreases in net investment in leases and installment loans.

	Three months ended June 30, 2021			Three months ended June 30, 2022			Change
							Amount			Percent (%)
	(Millions of yen, except percentage data)
Segment Revenues:
Finance revenues	¥	13,923		¥	15,657		¥	1,734			12
Gains on investment securities and dividends		(53	)		(1,753	)		(1,700	)		—
Operating leases		62,918			62,671			(247	)		(0	)
Sales of goods and real estate		3,261			1,359			(1,902	)		(58	)
Services income		29,743			26,191			(3,552	)		(12	)
Total Segment Revenues		109,792			104,125			(5,667	)		(5	)
Segment Expenses:
Interest expense		1,486			1,343			(143	)		(10	)
Costs of operating leases		48,132			46,554			(1,578	)		(3	)
Costs of goods and real estate sold		2,260			903			(1,357	)		(60	)
Services expense		14,269			14,632			363			3
Selling, general and administrative expenses		21,971			20,986			(985	)		(4	)
Provision for credit losses, and write-downs of long-lived assets and securities		589			250			(339	)		(58	)
Other		3,893			3,918			25			1
Total Segment Expenses		92,600			88,586			(4,014	)		(4	)
Segment Operating Income		17,192			15,539			(1,653	)		(10	)
Equity in Net income (Loss) of Affiliates and others		10			186			176			—
Segment Profits	¥	17,202		¥	15,725		¥	(1,477	)		(9	)
	As of March 31, 2022			As of June 30, 2022			Change
							Amount			Percent (%)
	(Millions of yen, except percentage data)
Net investment in leases	¥	580,161		¥	564,417		¥	(15,744	)		(3	)
Installment loans		325,482			313,240			(12,242	)		(4	)
Investment in operating leases		517,233			517,406			173			0
Investment in securities		34,987			33,147			(1,840	)		(5	)
Property under facility operations		17,199			16,887			(312	)		(2	)
Inventories		594			642			48			8
Advances for finance lease and operating lease		1,800			827			(973	)		(54	)
Investment in affiliates		16,929			17,266			337			2
Goodwill, intangible assets acquired in business combinations		22,410			22,248			(162	)		(1	)
Total Segment Assets	¥	1,516,795		¥	1,486,080		¥	(30,715	)		(2	)

– 5 –

Real Estate: Real estate development, rental and management; facility operations; real estate asset management

In our real estate business, we aim to promote portfolio rebalancing by selling rental properties in favorable market conditions while investing in real estate development projects that can generate added value. We are also expanding our asset management business, which is less affected by volatility in the real estate market, and our housing-related business with a focus on residential condominiums. Our real estate business also operates hotels and Japanese inns, and we aim to improve profitability by attracting customers in response to diversifying customer needs. In the future, we will promote the innovation and the efficiency of our business through digital transformation, and develop businesses that take advantage of our strengths in a diverse value chain that includes real estate development and rental, asset management, facility operations, residential condominiums management, office building management, construction contracting, and real estate brokerage.

Segment profits increased 13% to ¥11,938 million compared to the same period of the previous fiscal year due to an increase in services income from operating facilities, partially offset by a decrease in sales of goods and real estate at DAIKYO INCORPORATED and its subsidiaries.

Segment assets decreased 1% to ¥904,248 million compared to the end of the previous fiscal year due to a decrease in investment in operating leases, despite an increase in inventories.

	Three months ended June 30, 2021			Three months ended June 30, 2022			Change
							Amount			Percent (%)
	(Millions of yen, except percentage data)
Segment Revenues:
Finance revenues	¥	1,461		¥	1,408		¥	(53	)		(4	)
Operating leases		15,902			17,401			1,499			9
Sales of goods and real estate		29,856			22,342			(7,514	)		(25	)
Services income		49,638			55,927			6,289			13
Other		(95	)		(213	)		(118	)		—
Total Segment Revenues		96,762			96,865			103			0
Segment Expenses:
Interest expense		682			682			0			—
Costs of operating leases		6,177			6,304			127			2
Costs of goods and real estate sold		24,166			18,266			(5,900	)		(24	)
Services expense		48,054			51,198			3,144			7
Selling, general and administrative expenses		8,520			9,224			704			8
Provision for credit losses, and write-downs of long-lived assets and securities		11			76			65			591
Other		(739	)		(1,471	)		(732	)		—
Total Segment Expenses		86,871			84,279			(2,592	)		(3	)
Segment Operating Income		9,891			12,586			2,695			27
Equity in Net income (Loss) of Affiliates and others		701			(648	)		(1,349	)		—
Segment Profits	¥	10,592		¥	11,938		¥	1,346			13
	As of March 31, 2022			As of June 30, 2022			Change
							Amount			Percent (%)
	(Millions of yen, except percentage data)
Net investment in leases	¥	62,498		¥	62,115		¥	(383	)		(1	)
Investment in operating leases		300,460			289,736			(10,724	)		(4	)
Investment in securities		4,289			4,007			(282	)		(7	)
Property under facility operations		155,750			153,880			(1,870	)		(1	)
Inventories		97,667			101,834			4,167			4
Advances for finance lease and operating lease		112,309			110,449			(1,860	)		(2	)
Investment in affiliates		113,178			116,732			3,554			3
Advances for property under facility operations		6,857			8,926			2,069			30
Goodwill, intangible assets acquired in business combinations		57,093			56,569			(524	)		(1	)
Total Segment Assets	¥	910,101		¥	904,248		¥	(5,853	)		(1	)

– 6 –

PE Investment and Concession: Private equity investment; concession

In the private equity business, we aim to enhance the corporate value of investees and to earn sustainable gains on sales through rebalancing our portfolio. We aim to expand investment in focused industries and increase value through rollups and alliances with existing investees as a starting point. At the same time, we seek business opportunities created by changes in the industrial structure and explore diversified investment methods. In the concession business, we aim to strengthen our operations in the three airports in Kansai (Kansai International Airport, Osaka International Airport and Kobe Airport), and proactively engage in the operation of public infrastructures other than airports.

Segment profits increased by ¥2,029 million to ¥2,187 million as compared to ¥158 million of segment profits in the same period of the previous fiscal year due to increases in operating leases revenues and services income, and a decrease in equity in net loss of affiliates at our three airports in Kansai in our concession business.

Segment assets increased 4% to ¥368,704 million compared to the end of the previous fiscal year due to the acquisition of a subsidiary that resulted in an increase of investment in securities and goodwill, intangible assets acquired in business combinations, despite a decrease in property under facility operations at a certain investee.

	Three months ended June 30, 2021			Three months ended June 30, 2022			Change
							Amount			Percent  (%)
	(Millions of yen, except percentage data)
Segment Revenues:
Finance revenues	¥	81		¥	78		¥	(3	)		(4	)
Gains on investment securities and dividends		401			55			(346	)		(86	)
Operating leases		7,899			8,872			973			12
Sales of goods and real estate		84,442			105,184			20,742			25
Services income		6,801			7,589			788			12
Total Segment Revenues		99,624			121,778			22,154			22
Segment Expenses:
Interest expense		851			489			(362	)		(43	)
Costs of operating leases		5,789			5,828			39			1
Costs of goods and real estate sold		71,746			91,702			19,956			28
Services expense		4,825			4,868			43			1
Selling, general and administrative expenses		12,550			13,045			495			4
Provision for credit losses, and write-downs of long-lived assets and securities		149			23			(126	)		(85	)
Other		386			645			259			67
Total Segment Expenses		96,296			116,600			20,304			21
Segment Operating Income		3,328			5,178			1,850			56
Equity in Net income (Loss) of Affiliates and others		(3,170	)		(2,991	)		179			—
Segment Profits	¥	158		¥	2,187		¥	2,029			—
	As of March 31, 2022			As of June 30, 2022			Change
							Amount			Percent  (%)
	(Millions of yen, except percentage data)
Net investment in leases	¥	1,689		¥	1,596		¥	(93	)		(6	)
Investment in operating leases		43,686			49,636			5,950			14
Investment in securities		12,129			17,579			5,450			45
Property under facility operations		40,725			32,772			(7,953	)		(20	)
Inventories		39,554			42,066			2,512			6
Investment in affiliates		43,498			41,012			(2,486	)		(6	)
Advances for property under facility operations		1,323			518			(805	)		(61	)
Goodwill, intangible assets acquired in business combinations		170,977			183,525			12,548			7
Total Segment Assets	¥	353,581		¥	368,704		¥	15,123			4

– 7 –

Environment and Energy: Domestic and overseas renewable energy; electric power retailing; ESCO services; sales of solar panels and battery energy storage system; recycling and waste management

In the environment and energy business, we aim to increase services revenue as a comprehensive energy service provider by promoting our renewable energy business and electric power retailing business. In our solar power generation business, we have owned and operated one of the largest solar power capacities in total in Japan. In the recycling and waste management business, we are making new investments in facilities with the aim of further expansion of business. We intend to accelerate our renewable energy business overseas by utilizing the expertise we have gained in the domestic market.

Segment profits increased 6% to ¥4,592 million compared to the same period of the previous fiscal year due to a profit contribution from a renewable energy business subsidiary in Spain, and an increase in services income resulting from higher revenues from electricity sales, despite an equity in net loss of affiliates resulting from seasonal factors at an investee engaged in renewable energy business in India.

Segment assets increased 4% to ¥731,133 million compared to the end of the previous fiscal year due to increases in goodwill, intangible assets acquired in business combinations, property under facility operations, and investment in affiliates, primarily resulting from foreign exchange effects.

	Three months ended June 30, 2021			Three months ended June 30, 2022			Change
							Amount			Percent  (%)
	(Millions of yen, except percentage data)
Segment Revenues:
Finance revenues	¥	239		¥	268		¥	29			12
Services income		28,300			45,795			17,495			62
Other		790			738			(52	)		(7	)
Total Segment Revenues		29,329			46,801			17,472			60
Segment Expenses:
Interest expense		1,120			2,194			1,074			96
Services expense		20,423			32,556			12,133			59
Selling, general and administrative expenses		2,614			4,157			1,543			59
Provision for credit losses, and write-downs of long-lived assets and securities		(1	)		36			37			—
Other		450			443			(7	)		(2	)
Total Segment Expenses		24,606			39,386			14,780			60
Segment Operating Income		4,723			7,415			2,692			57
Equity in Net income (Loss) of Affiliates and others		(380	)		(2,823	)		(2,443	)		—
Segment Profits	¥	4,343		¥	4,592		¥	249			6
	As of March 31, 2022			As of June 30, 2022			Change
							Amount			Percent  (%)
	(Millions of yen, except percentage data)
Net investment in leases	¥	7,910		¥	7,628		¥	(282	)		(4	)
Installment loans		711			752			41			6
Investment in operating leases		279			274			(5	)		(2	)
Investment in securities		961			1,151			190			20
Property under facility operations		330,598			338,913			8,315			3
Inventories		356			415			59			17
Advances for finance lease and operating lease		6			0			(6	)		—
Investment in affiliates		204,260			211,719			7,459			4
Advances for property under facility operations		57,520			60,789			3,269			6
Goodwill, intangible assets acquired in business combinations		101,007			109,492			8,485			8
Total Segment Assets	¥	703,608		¥	731,133		¥	27,525			4

– 8 –

Insurance: Life insurance

In the life insurance business, we sell life insurance through agents, banks and other financial institutions, face-to-face sales through our own consulting services, and online sales. With “simple-to-understand” and “providing reasonable guarantee at reasonable price” as the concepts of product development, we aim to expand the number of new life insurance contracts and increase life insurance premium income by constantly incorporating our customer needs while expanding the product lineup.

Segment profits decreased 28% to ¥10,890 million compared to the same period of the previous fiscal year due to an increase in life insurance costs as a result of increased payouts to policy holders, despite an increase in life insurance premiums and related investment income in line with an increase in insurance contracts.

Segment assets totaled ¥2,082,153 million, remaining relatively unchanged compared to the end of the previous fiscal year.

	Three months ended June 30, 2021			Three months ended June 30, 2022			Change
							Amount			Percent  (%)
	(Millions of yen, except percentage data)
Segment Revenues:
Finance revenues	¥	62		¥	74		¥	12			19
Life insurance premiums and related investment income		108,631			126,832			18,201			17
Other		488			636			148			30
Total Segment Revenues		109,181			127,542			18,361			17
Segment Expenses:
Interest expense		138			63			(75	)		(54	)
Life insurance costs		80,052			101,878			21,826			27
Selling, general and administrative expenses		13,845			14,708			863			6
Provision for credit losses, and write-downs of long-lived assets and securities		1			(0	)		(1	)		—
Other		(1	)		1			2			—
Total Segment Expenses		94,035			116,650			22,615			24
Segment Operating Income		15,146			10,892			(4,254	)		(28	)
Equity in Net income (Loss) of Affiliates and others		1			(2	)		(3	)		—
Segment Profits	¥	15,147		¥	10,890			¥    (4,257	)		(28	)
	As of March 31, 2022			As of June 30, 2022			Change
							Amount			Percent  (%)
	(Millions of yen, except percentage data)
Installment loans	¥	17,983		¥	18,255		¥	272			2
Investment in operating leases		28,296			28,219			(77	)		(0	)
Investment in securities		2,021,134			2,030,958			9,824			0
Goodwill, intangible assets acquired in business combinations		4,732			4,721			(11	)		(0	)
Total Segment Assets	¥	2,072,145		¥	2,082,153		¥	10,008			0

– 9 –

Banking and Credit: Banking; consumer finance

In the banking business, we aim to increase finance revenues mainly by origination of real estate investment loans, which is the core of our banking business. In the consumer finance business, we aim to increase finance revenues by providing loans directly to our customers with our expertise in credit screening. We also aim to increase guarantee fees income by expanding guarantees against loans disbursed by other financial institutions. In the mortgage bank business, we aim to expand our market share by expanding our agency network and strengthening our product lineup.

Segment profits decreased 41% to ¥7,236 million compared to the same period of the previous fiscal year due to the absence of gains on investment securities and dividends at ORIX Bank Corporation recorded in the same period of the previous fiscal year, and an increase in advertising expenses at ORIX Credit Corporation recorded in the first consolidated period.

Segment assets totaled ¥2,691,467 million, remaining relatively unchanged compared to the end of the previous fiscal year.

	Three months ended June 30, 2021		Three months ended June 30, 2022			Change
						Amount			Percent  (%)
	(Millions of yen, except percentage data)
Segment Revenues:
Finance revenues	¥	19,096	¥	18,828		¥	(268	)		(1	)
Gains on investment securities and dividends		2,276		(530	)		(2,806	)		—
Services income		1,454		1,743			289			20
Total Segment Revenues		22,826		20,041			(2,785	)		(12	)
Segment Expenses:
Interest expense		1,305		1,369			64			5
Services expense		2,019		2,169			150			7
Selling, general and administrative expenses		6,530		8,304			1,774			27
Provision for credit losses, and write-downs of long-lived assets and securities		786		1,228			442			56
Other		7		(265	)		(272	)		—
Total Segment Expenses		10,647		12,805			2,158			20
Segment Operating Income		12,179		7,236			(4,943	)		(41	)
Equity in Net income (Loss) of Affiliates and others		1		0			(1	)		—
Segment Profits	¥	12,180	¥	7,236		¥	(4,944	)		(41	)
	As of March 31, 2022		As of June 30, 2022			Change
						Amount			Percent  (%)
	(Millions of yen, except percentage data)
Installment loans	¥	2,397,532	¥	2,396,096		¥	(1,436	)		(0	)
Investment in securities		277,786		283,550			5,764			2
Investment in affiliates		67		50			(17	)		(25	)
Goodwill, intangible assets acquired in business combinations		11,771		11,771			0			—
Total Segment Assets	¥	2,687,156	¥	2,691,467		¥	4,311			0

– 10 –

Aircraft and Ships: Aircraft investment and management; ship-related finance and investment

In the aircraft-related business, we are focusing on a wide range of profit opportunities, including operating leases of owned aircraft, sale of aircraft to investors, and asset management services for aircraft owned by domestic and overseas investors. We aim for medium- and long-term growth by further enhancing our presence in the global aircraft-leasing market including through mutually complementary relationships with Avolon Holdings Limited. In the ship-related business, we flexibly replace assets while closely monitoring the market environment, and aim to achieve goals such as an increase of commission income by arranging investment in ships for domestic corporate investors. In the future, we aim to expand our business by collaborating with excellent partners based on our expertise in finance and investment.

Segment profits increased by ¥10,370 million to ¥5,416 million as compared to losses of ¥4,954 million of segment profits in the same period of the previous fiscal year due to a decrease in equity in net loss of affiliates at Avolon Holdings Limited, and an increase in operating leases revenues in our ship-related businesses.

Segment assets increased 6% to ¥723,184 million compared to the end of the previous fiscal year due to an increase in investment in affiliates, primarily resulting from foreign exchange effects.

	Three months ended June 30, 2021			Three months ended June 30, 2022			Change
							Amount			Percent  (%)
	(Millions of yen, except percentage data)
Segment Revenues:
Finance revenues	¥	375		¥	1,020		¥	645			172
Operating leases		6,797			11,092			4,295			63
Services income		1,291			2,452			1,161			90
Total Segment Revenues		8,463			14,564			6,101			72
Segment Expenses:
Interest expense		3,095			3,314			219			7
Costs of operating leases		4,533			3,965			(568	)		(13	)
Services expense		230			447			217			94
Selling, general and administrative expenses		1,723			1,898			175			10
Provision for credit losses, and write-downs of long-lived assets and securities		(0	)		(0	)		0			—
Other		(1,377	)		(31	)		1,346			—
Total Segment Expenses		8,204			9,593			1,389			17
Segment Operating Income		259			4,971			4,712			—
Equity in Net income (Loss) of Affiliates and others		(5,213	)		445			5,658			—
Segment Profits	¥	(4,954	)	¥	5,416		¥	10,370			—
	As of March 31, 2022			As of June 30, 2022			Change
							Amount			Percent  (%)
	(Millions of yen, except percentage data)
Installment loans	¥	81,695		¥	88,310		¥	6,615			8
Investment in operating leases		271,910			264,057			(7,853	)		(3	)
Investment in securities		0			0			0			—
Inventories		113			0			(113	)		—
Investment in affiliates		320,058			359,885			39,827			12
Goodwill, intangible assets acquired in business combinations		10,322			10,932			610			6
Total Segment Assets	¥	684,098		¥	723,184		¥	39,086			6

– 11 –

ORIX USA: Finance, investment and asset management in the Americas

ORIX Corporation USA provides various types of finance services such as corporate finance, real estate finance, private equity investment, and investment in bonds to our clients in response to their needs. We aim to expand such asset businesses by making the most of our expertise in them. We are also engaged in expanding the function of our asset management and servicing platform to increase stable fee revenues. With the expansion of both principal investments and assets under management, we aim for the growth of profits along with improvement of capital efficiency.

Segment profits decreased 76% to ¥6,039 million compared to the same period of the previous fiscal year, primarily due to the absence of gains on investment securities and dividends resulting from the sales of investees recorded in the same period of the previous fiscal year.

Segment assets increased 14% to ¥1,554,481 million compared to the end of the previous fiscal year, primarily due to foreign exchange effects.

	Three months ended June 30, 2021			Three months ended June 30, 2022			Change
							Amount			Percent  (%)
	(Millions of yen, except percentage data)
Segment Revenues:
Finance revenues	¥	22,250		¥	23,088		¥	838			4
Gains on investment securities and dividends		18,864			1,576			(17,288	)		(92	)
Services income		5,856			10,055			4,199			72
Other		724			863			139			19
Total Segment Revenues		47,694			35,582			(12,112	)		(25	)
Segment Expenses:
Interest expense		4,176			6,426			2,250			54
Services expense		978			1,393			415			42
Selling, general and administrative expenses		18,275			21,132			2,857			16
Provision for credit losses, and write-downs of long-lived assets and securities		(1,755	)		(1,464	)		291			—
Other		(485	)		2,054			2,539			—
Total Segment Expenses		21,189			29,541			8,352			39
Segment Operating Income		26,505			6,041			(20,464	)		(77	)
Equity in Net income (Loss) of Affiliates and others		(1,605	)		(2	)		1,603			—
Segment Profits	¥	24,900		¥	6,039		¥	(18,861	)		(76	)
	As of March 31, 2022			As of June 30, 2022			Change
							Amount			Percent  (%)
	(Millions of yen, except percentage data)
Net investment in leases	¥	475		¥	522		¥	47			10
Installment loans		717,183			832,338			115,155			16
Investment in operating leases		4,653			4,048			(605	)		(13	)
Investment in securities		367,190			408,642			41,452			11
Property under facility operations and servicing assets		79,000			86,843			7,843			10
Inventories		685			851			166			24
Advances for finance lease and operating lease		945			1,315			370			39
Investment in affiliates		45,337			54,391			9,054			20
Goodwill, intangible assets acquired in business combinations		148,674			165,531			16,857			11
Total Segment Assets	¥	1,364,142		¥	1,554,481		¥	190,339			14

– 12 –

ORIX Europe: Asset management of global equity and fixed income

Under ORIX Corporation Europe N.V. (hereinafter, “OCE”) as the holding company, Robeco Institutional Asset Management B.V. (hereinafter, “Robeco”) and Transtrend B.V. headquartered in the Netherlands, Boston Partners Global Investors, Inc. and Harbor Capital Advisors, Inc. headquartered in the United States are engaged in the asset management business through investments in stocks, bonds, etc. In addition to the focus on expanding the existing businesses by leveraging the expertise of Robeco, a pioneer in sustainable investment, we aim to increase assets under management with expanding products and investment strategies through M&A activities. ORIX Europe is also engaged in capturing a wide range of business opportunities as the strategic business location of ORIX Group in Europe.

Segment profits decreased 31% to ¥9,301 million compared to the same period of the previous fiscal year due to a decrease in gains on investment securities and dividends resulting from weaker market conditions.

Segment assets increased 2% to ¥409,786 million compared to the end of the previous fiscal year, primarily due to foreign exchange effects, despite a decrease in investment in securities.

	Three months ended June 30, 2021			Three months ended June 30, 2022			Change
							Amount			Percent  (%)
	(Millions of yen, except percentage data)
Segment Revenues:
Finance revenues	¥	9		¥	73		¥	64			711
Gains on investment securities and dividends		1,893			(6,181	)		(8,074	)		—
Services income		48,554			49,805			1,251			3
Total Segment Revenues		50,456			43,697			(6,759	)		(13	)
Segment Expenses:
Interest expense		(146	)		83			229			—
Services expense		12,849			12,417			(432	)		(3	)
Selling, general and administrative expenses		22,286			24,299			2,013			9
Other		1,561			(2,273	)		(3,834	)		—
Total Segment Expenses		36,550			34,526			(2,024	)		(6	)
Segment Operating Income		13,906			9,171			(4,735	)		(34	)
Equity in Net income (Loss) of Affiliates and others		(510	)		130			640			—
Segment Profits	¥	13,396		¥	9,301		¥	(4,095	)		(31	)
	As of March 31, 2022			As of June 30, 2022			Change
							Amount			Percent  (%)
	(Millions of yen, except percentage data)
Investment in securities	¥	82,770		¥	78,354		¥	(4,416	)		(5	)
Investment in affiliates		2,221			2,453			232			10
Goodwill, intangible assets acquired in business combinations		316,878			328,979			12,101			4
Total Segment Assets	¥	401,869		¥	409,786		¥	7,917			2

– 13 –

Asia and Australia: Finance and investment businesses in Asia and Australia

Our overseas subsidiaries are well-versed in business practices and laws and regulations that vary from region to region, and are primarily engaged in financial services such as leasing and lending. Our overseas subsidiaries also invest in private equity in Asian countries, particularly in China. We will further enhance the functions of our overseas subsidiaries and further invest in targeted markets in order to expand our business with an emphasis on profitability.

Segment profits increased 48% to ¥12,617 million compared to the same period of the previous fiscal year due to an increase in gains on sales of subsidiaries and affiliates resulting from the sale of an investee, and an increase in operating leases revenues in South Korea and Australia.

Segment assets increased 5% to ¥1,375,656 million compared to the end of the previous fiscal year, primarily due to foreign exchange effects, despite a decrease in installment loans in Greater China.

	Three months ended June 30, 2021		Three months ended June 30, 2022		Change
					Amount			Percent  (%)
	(Millions of yen, except percentage data)
Segment Revenues:
Finance revenues	¥	11,253	¥	13,706	¥	2,453			22
Gains on investment securities and dividends		818		1,151		333			41
Operating leases		19,323		25,178		5,855			30
Services income		3,253		4,521		1,268			39
Other		1		445		444			—
Total Segment Revenues		34,648		45,001		10,353			30
Segment Expenses:
Interest expense		4,814		6,321		1,507			31
Costs of operating leases		14,366		18,284		3,918			27
Services expense		2,278		3,114		836			37
Selling, general and administrative expenses		6,950		8,470		1,520			22
Provision for credit losses, and write-downs of long-lived assets and securities		58		242		184			317
Other		296		460		164			55
Total Segment Expenses		28,762		36,891		8,129			28
Segment Operating Income		5,886		8,110		2,224			38
Equity in Net income (Loss) of Affiliates and others		2,626		4,507		1,881			72
Segment Profits	¥	8,512	¥	12,617	¥	4,105			48
	As of March 31, 2022		As of June 30, 2022		Change
					Amount			Percent  (%)
	(Millions of yen, except percentage data)
Net investment in leases	¥	405,043	¥	437,052	¥	32,009			8
Installment loans		321,994		317,721		(4,273	)		(1	)
Investment in operating leases		286,214		309,723		23,509			8
Investment in securities		48,052		52,358		4,306			9
Property under facility operations		1,084		1,129		45			4
Inventories		483		526		43			9
Advances for finance lease and operating lease		3,919		5,605		1,686			43
Investment in affiliates		232,471		244,344		11,873			5
Goodwill, intangible assets acquired in business combinations		6,829		7,198		369			5
Total Segment Assets	¥	1,306,089	¥	1,375,656	¥	69,567			5

– 14 –

(2) Financial Condition

	As of March 31, 2022			As of June 30, 2022			Change
							Amount			Percent  (%)
	(Millions of yen except per share, ratios and percentages)
Total assets	¥	14,270,672		¥	14,622,486		¥	351,814			2
(Segment assets)		11,999,584			12,326,892			327,308			3
Total liabilities		10,899,271			11,218,327			319,056			3
(Short- and long-term debt)		4,866,685			5,307,129			440,444			9
(Deposits)		2,276,158			2,265,925			(10,233	)		(0	)
ORIX Corporation shareholders’ equity		3,261,419			3,293,726			32,307			1
ORIX Corporation shareholders’ equity per share (yen)*1		2,732.88			2,770.03			37.15			1
ORIX Corporation shareholders’ equity ratio*2		22.9	%		22.5	%		—			—
D/E ratio (Debt-to-equity ratio) (Short-and long-term debt (excluding deposits) / ORIX Corporation shareholders’ equity)		1.5x			1.6x			—			—

*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 increased 2% to ¥14,622,486 million compared to the balance as of March 31, 2022 due to increases in other assets, installment loans and investments in affiliates being offset by a decrease in cash and cash equivalents. In addition, segment assets increased 3% to ¥12,326,892 million compared to the balance as of March 31, 2022.

Total liabilities increased 3% to at ¥11,218,327 million compared to the balance as of March 31, 2022 due to an increase in short- and long-term debt being offset by decreases in trade notes, accounts and other payable and current and deferred income taxes.

Shareholders’ equity increased 1% to ¥3,293,726 million compared to the balance as of March 31, 2022.

– 15 –

(3) Liquidity and Capital Resources

ORIX Group formulates funding policies that are designed to maintain and improve procurement stability and reduce liquidity risk. As a concrete measure to maintain and improve procurement stability while engaging in activities such as borrowing, capital market procurement and securitization of assets, we are diversifying our procurement methods and our country and investor base. To reduce liquidity risk, we are prolonging our borrowings from financial institutions and issuing long-term corporate bonds domestically and internationally with dispersed redemption periods. We are also holding cash and entering into committed credit facilities agreements. In order to maintain an appropriate level of liquidity at hand, we conduct stress tests from the perspective of both procurement stability and financial efficiency and review the necessary levels accordingly.

The Company continues to closely monitor the effects of COVID-19, the Russia-Ukraine crisis and increased inflation around the world on the liquidity and capital resources of the ORIX Group.

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-term and long-term debt and deposits on a consolidated basis was ¥7,573,054 million as of June 30, 2022. 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 was about 200 as of June 30, 2022. Our debt from capital markets is mainly composed of bonds, MTNs, CP, and securitization of loans receivables and other assets. The majority of deposits are attributable to ORIX Bank Corporation.

Short-term and long-term debt and deposits

(a) Short-term debt

	Millions of yen
	March 31, 2022		June 30, 2022
Borrowings from financial institutions	¥	399,589	¥	416,848
Commercial paper		40,050		174,330
Total short-term debt	¥	439,639	¥	591,178

Short-term debt as of June 30, 2022 was ¥591,178 million, which accounted for 11% of the total amount of short-term and long-term debt (excluding deposits) as compared to 9% as of March 31, 2022.

While the amount of short-term debt as of June 30, 2022 was ¥591,178 million, the sum of cash and cash equivalents and the unused amount of committed credit facilities as of June 30, 2022 was ¥1,385,825 million maintaining a sufficient level of liquidity.

(b) Long-term debt

	Millions of yen
	March 31, 2022		June 30, 2022
Borrowings from financial institutions	¥	3,240,763	¥	3,384,935
Bonds		997,654		1,084,530
Medium-term notes		32,279		78,609
Payables under securitized loan receivables and other assets		156,350		167,877
Total long-term debt	¥	4,427,046	¥	4,715,951

The balance of long-term debt as of June 30, 2022 was ¥4,715,951 million, which accounted for 89% of the total amount of short-term and long-term debt (excluding deposits) as compared to 91% as of March 31, 2022.

(c) Deposits

	Millions of yen
	March 31, 2022		June 30, 2022
Deposits	¥	2,276,158	¥	2,265,925

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.

– 16 –

(4) Summary of Cash Flows

Cash, cash equivalents and restricted cash as of June 30, 2022 decreased by ¥96,820 million to ¥994,992 million compared to March 31, 2022.

Cash flows used in operating activities were outflow of ¥31,746 million in the three months ended June 30, 2022, compared to the inflow of ¥223,672 million during the same period of the previous fiscal year. This change resulted primarily from a decrease in a decrease in trade notes, accounts and other receivable, an increase in payment of income taxes resulting from the sale of the business of Yayoi Co., Ltd. in the three months ended March 31, 2022, and other. Cash outflow resulting from payment of income taxes is included in other, net.

Cash flows used in investing activities were outflow of ¥226,961 million in the three months ended June 30, 2022, up from ¥120,756 million during the same period of the previous fiscal year. This change resulted primarily from an increase in purchases of available-for-sale debt securities.

Cash flows used in financing activities were inflow of ¥138,552 million in the three months ended June 30, 2022, compared to the outflow of ¥47,650 million during the same period of the previous fiscal year. This change resulted primarily from an increase in proceeds from debt with maturities longer than three months and a decrease in repayment of debt with maturities longer than three months.

(5) Management Policy and Strategy

There were no significant changes for the three months ended June 30, 2022.

(6) Challenges to be addressed on a priority basis

There were no significant changes for the three months ended June 30, 2022.

(7) Research and Development Activity

There were no significant changes in research and development activities for the three months ended June 30, 2022.

(8) Major Facilities

There were no significant changes in major facilities for the three months ended June 30, 2022.

4. Material Contracts

Not applicable.

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 June 30, 2022 is as follows:

In thousands		Millions of yen
Number of issued shares		Common stock		Capital reserve
Increase, net	June 30, 2022	Increase, net	June 30, 2022	Increase, net	June 30, 2022
0	1,258,277	¥0	¥221,111	¥0	¥248,290

(2) List of Major Shareholders

Not applicable (this item is not subject to disclosure in the quarterly report for the three months ended June 30, 2022).

6. Directors and Executive Officers

Between the filing date of Form 20-F for the fiscal year ended March 31, 2022 and June 30, 2022, there were no changes of directors and executive officers.

– 17 –

7. Financial Information

(1) Condensed Consolidated Balance Sheets (Unaudited)

		Millions of yen
Assets		March 31, 2022			June 30, 2022
Cash and Cash Equivalents		¥	954,827		¥	855,444
Restricted Cash			136,985			139,548
Net Investment in Leases			1,057,973			1,073,525
Installment Loans			3,862,604			3,966,734
The amounts which are measured at fair value by electing the fair value option are as follows:
March 31, 2022	¥151,601 million
June 30, 2022	¥222,298 million
Allowance for Credit Losses			(69,459	)		(65,775	)
Investment in Operating Leases			1,463,202			1,472,825
Investment in Securities			2,852,349			2,912,772
The amounts which are measured at fair value by electing the fair value option are as follows:
March 31, 2022	¥19,353 million
June 30, 2022	¥24,799 million
The amounts which are associated to available-for-sale debt securities are as follows:
March 31, 2022
Amortized Cost	¥2,276,425 million
Allowance for Credit Losses	¥(153) million
June 30, 2022
Amortized Cost	¥2,441,199 million
Allowance for Credit Losses	¥(163) million
Property under Facility Operations			561,846			560,873
Investment in Affiliates			978,033			1,047,867
Trade Notes, Accounts and Other Receivable			359,949			399,780
Inventories			139,563			146,455
Office Facilities			240,421			246,750
Other Assets			1,732,379			1,865,688
The amounts which are measured at fair value by electing the fair value option are as follows:
March 31, 2022	¥5,214 million
June 30, 2022	¥5,732 million
Total Assets		¥	14,270,672		¥	14,622,486

Note:     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, 2022		June 30, 2022
Cash and Cash Equivalents	¥	3,899	¥	4,149
Installment Loans (Net of Allowance for Credit Losses)		212,371		232,422
Investment in Operating Leases		101,881		83,177
Property under Facility Operations		210,307		206,496
Investment in Affiliates		51,877		51,706
Other		95,613		102,491
	¥	675,948	¥	680,441

– 18 –

	Millions of yen
Liabilities and Equity	March 31, 2022			June 30, 2022
Liabilities:
Short-Term Debt	¥	439,639		¥	591,178
Deposits		2,276,158			2,265,925
Trade Notes, Accounts and Other Payable		291,422			263,285
Policy Liabilities and Policy Account Balances		1,963,623			2,005,240
The amounts which are measured at fair value by electing the fair value option are as follows:
March 31, 2022                                 ¥198,905 million
June 30, 2022                                    ¥180,791 million
Current and Deferred Income Taxes		461,181			341,566
Long-Term Debt		4,427,046			4,715,951
Other Liabilities		1,040,202			1,035,182
Total Liabilities		10,899,271			11,218,327
Redeemable Noncontrolling Interests		0			674
Commitments and Contingent Liabilities
Equity:
Common Stock		221,111			221,111
Additional Paid-in Capital		260,479			260,653
Retained Earnings		2,909,317			2,915,475
Accumulated Other Comprehensive Income (Loss)		(16,041	)		20,277
Treasury Stock, at Cost		(113,447	)		(123,790	)
ORIX Corporation Shareholders’ Equity		3,261,419			3,293,726
Noncontrolling Interests		109,982			109,759
Total Equity		3,371,401			3,403,485
Total Liabilities and Equity	¥	14,270,672		¥	14,622,486

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

	Millions of yen
	March 31, 2022		June 30, 2022
Trade Notes, Accounts and Other Payable	¥	2,251	¥	2,384
Long-Term Debt		431,312		428,546
Other		38,891		38,909
	¥	472,454	¥	469,839

– 19 –

(2) Condensed Consolidated Statements of Income (Unaudited)

	Millions of yen
	Three months ended June 30, 2021			Three months ended June 30, 2022
Revenues:
Finance revenues	¥	68,302		¥	73,843
Gains (Losses) on investment securities and dividends		24,129			(5,640	)
Operating leases		113,466			126,199
Life insurance premiums and related investment income		108,098			126,277
Sales of goods and real estate		119,104			131,298
Services income		175,714			205,836
Total revenues		608,813			657,813
Expenses:
Interest expense		16,919			21,898
Costs of operating leases		79,754			81,888
Life insurance costs		79,763			101,566
Costs of goods and real estate sold		99,068			112,430
Services expense		105,896			122,537
Other (income) and expense		3,511			1,730
Selling, general and administrative expenses		122,085			132,082
Provision for credit losses		(255	)		248
Write-downs of long-lived assets		87			108
Write-downs of securities		6			33
Total expenses		506,834			574,520
Operating Income		101,979			83,293
Equity in Net Income (Loss) of Affiliates		(4,920	)		(1,381	)
Gains on Sales of Subsidiaries and Affiliates and Liquidation Losses, net		2,997			3,103
Income before Income Taxes		100,056			85,015
Provision for Income Taxes		29,456			20,727
Net Income		70,600			64,288
Net Income Attributable to the Noncontrolling Interests		5,384			2,426
Net Income Attributable to ORIX Corporation Shareholders	¥	65,216		¥	61,862
	Yen
	Three months ended June 30, 2021			Three months ended June 30, 2022
Amounts per Share of Common Stock for Net Income Attributable to ORIX Corporation Shareholders:
Basic:	¥	53.65		¥	51.90
Diluted:		53.61			51.85

– 20 –

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

	Millions of yen
	Three months ended June 30, 2021			Three months ended June 30, 2022
Net Income	¥	70,600		¥	64,288
Other comprehensive income (loss), net of tax:
Net change of unrealized gains (losses) on investment in securities		6,381			(81,373	)
Net change of debt valuation adjustments		(24	)		(16	)
Net change of defined benefit pension plans		(47	)		(165	)
Net change of foreign currency translation adjustments		9,041			114,119
Net change of unrealized gains on derivative instruments		892			10,931
Total other comprehensive income		16,243			43,496
Comprehensive Income		86,843			107,784
Comprehensive Income Attributable to the Noncontrolling Interests		5,550			9,566
Comprehensive Income Attributable to the Redeemable Noncontrolling Interests		0			38
Comprehensive Income Attributable to ORIX Corporation Shareholders	¥	81,293		¥	98,180

– 21 –

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

Three months ended June 30, 2021

	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
Balance at March 31, 2021	¥	221,111	¥	259,361	¥	2,744,588		¥	(84,650	)	¥	(111,954	)	¥	3,028,456		¥	74,688		¥	3,103,144
Cumulative effect of adopting Accounting Standards Update 2019-12						215									215			0			215
Balance at April 1, 2021	¥	221,111	¥	259,361	¥	2,744,803		¥	(84,650	)	¥	(111,954	)	¥	3,028,671		¥	74,688		¥	3,103,359
Contribution to subsidiaries															0			754			754
Transaction with noncontrolling interests				20											20			(1,134	)		(1,114	)
Comprehensive income, net of tax:
Net income						65,216									65,216			5,384			70,600
Other comprehensive income (loss)
Net change of unrealized gains (losses) on investment in securities									6,381						6,381			0			6,381
Net change of debt valuation adjustments									(24	)					(24	)		0			(24	)
Net change of defined benefit pension plans									(46	)					(46	)		(1	)		(47	)
Net change of foreign currency translation adjustments									8,903						8,903			138			9,041
Net change of unrealized gains on derivative instruments									863						863			29			892
Total other comprehensive income															16,077			166			16,243
Total comprehensive income															81,293			5,550			86,843
Cash dividends						(52,438	)								(52,438	)		(12,139	)		(64,577	)
Acquisition of treasury stock												(10,217	)		(10,217	)		0			(10,217	)
Other, net				204								(1	)		203			0			203
Balance at June 30, 2021	¥	221,111	¥	259,585	¥	2,757,581		¥	(68,573	)	¥	(122,172	)	¥	3,047,532		¥	67,719		¥	3,115,251

Three months ended June 30, 2022

	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
Balance at March 31, 2022	¥	221,111	¥	260,479		¥	2,909,317		¥	(16,041	)	¥	(113,447	)	¥	3,261,419		¥	109,982		¥	3,371,401
Contribution to subsidiaries																0			472			472
Transaction with noncontrolling interests				(14	)											(14	)		(2,179	)		(2,193	)
Comprehensive income, net of tax:
Net income							61,862									61,862			2,426			64,288
Other comprehensive income (loss)
Net change of unrealized gains (losses) on investment in securities										(81,373	)					(81,373	)		0			(81,373	)
Net change of debt valuation adjustments										(16	)					(16	)		0			(16	)
Net change of defined benefit pension plans										(167	)					(167	)		2			(165	)
Net change of foreign currency translation adjustments										107,676						107,676			6,405			114,081
Net change of unrealized gains on derivative instruments										10,198						10,198			733			10,931
Total other comprehensive income																36,318			7,140			43,458
Total comprehensive income																98,180			9,566			107,746
Cash dividends							(55,704	)								(55,704	)		(8,082	)		(63,786	)
Acquisition of treasury stock													(10,343	)		(10,343	)		0			(10,343	)
Other, net				188												188			0			188
Balance at June 30, 2022	¥	221,111	¥	260,653		¥	2,915,475		¥	20,277		¥	(123,790	)	¥	3,293,726		¥	109,759		¥	3,403,485

Note: Changes in the redeemable noncontrolling interests are not included in this table. For further information, see Note 12 “Redeemable Noncontrolling Interests.”

– 22 –

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

	Millions of yen
	Three months ended June 30, 2021			Three months ended June 30, 2022
Cash Flows from Operating Activities:
Net income	¥	70,600		¥	64,288
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		81,687			82,178
Principal payments received under net investment in leases		110,191			121,535
Provision for credit losses		(255	)		248
Equity in net loss of affiliates (excluding interest on loans)		5,222			1,791
Gains on sales of subsidiaries and affiliates and liquidation losses, net		(2,997	)		(3,103	)
Gains on sales of securities other than trading		(5,242	)		(1,722	)
Gains on sales of operating lease assets		(13,032	)		(19,491	)
Write-downs of long-lived assets		87			108
Write-downs of securities		6			33
Decrease in trading securities		21,173			19,378
(Increase) Decrease in inventories		5,622			(5,674	)
Decrease in trade notes, accounts and other receivable		36,123			11,163
Decrease in trade notes, accounts and other payable		(37,832	)		(19,578	)
Increase in policy liabilities and policy account balances		27,239			41,617
Other, net		(74,920	)		(324,517	)
Net cash provided by (used in) operating activities		223,672			(31,746	)
Cash Flows from Investing Activities:
Purchases of lease equipment		(182,774	)		(206,416	)
Installment loans made to customers		(294,513	)		(260,568	)
Principal collected on installment loans		300,191			313,465
Proceeds from sales of operating lease assets		45,320			74,051
Investment in affiliates, net		(5,313	)		(10,801	)
Proceeds from sales of investment in affiliates		7,530			9,259
Purchases of available-for-sale debt securities		(104,909	)		(199,446	)
Proceeds from sales of available-for-sale debt securities		84,867			101,071
Proceeds from redemption of available-for-sale debt securities		17,769			12,544
Purchases of equity securities other than trading		(16,132	)		(18,403	)
Proceeds from sales of equity securities other than trading		42,271			16,354
Purchases of property under facility operations		(5,372	)		(17,011	)
Acquisitions of subsidiaries, net of cash acquired		(379	)		(27,140	)
Sales of subsidiaries, net of cash disposed		555			(1,137	)
Other, net		(9,867	)		(12,783	)
Net cash used in investing activities		(120,756	)		(226,961	)
Cash Flows from Financing Activities:
Net increase in debt with maturities of three months or less		118,751			78,592
Proceeds from debt with maturities longer than three months		266,582			348,994
Repayment of debt with maturities longer than three months		(344,237	)		(209,877	)
Net decrease in deposits due to customers		(27,152	)		(11,189	)
Cash dividends paid to ORIX Corporation shareholders		(52,438	)		(55,704	)
Acquisition of treasury stock		(10,217	)		(10,343	)
Contribution from noncontrolling interests		2,213			760
Purchases of shares of subsidiaries from noncontrolling interests		(1,293	)		(21	)
Net increase in call money		12,500			5,000
Other, net		(12,359	)		(7,660	)
Net cash provided by (used in) financing activities		(47,650	)		138,552
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash		1,167			23,335
Net increase (decrease) in Cash, Cash Equivalents and Restricted Cash		56,433			(96,820	)
Cash, Cash Equivalents and Restricted Cash at Beginning of Period		1,079,575			1,091,812
Cash, Cash Equivalents and Restricted Cash at End of Period	¥	1,136,008		¥	994,992

Note: The following tables provide information about Cash, Cash Equivalents and Restricted Cash which are included in the Company’s consolidated balance sheets as of June 30, 2021 and June 30, 2022, respectively.

	Millions of yen
	June 30, 2021		June 30, 2022
Cash and Cash Equivalents	¥	1,002,653	¥	855,444
Restricted Cash		133,355		139,548
Cash, Cash Equivalents and Restricted Cash	¥	1,136,008	¥	994,992

– 23 –

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 generally accepted accounting principles in the United States (“U.S. GAAP”).

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 consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year. These consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our March 31, 2022 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, initial direct costs of sales-type leases and direct financing leases are mainly being deferred and amortized as a yield adjustment over the life of the related lease using the interest method. Initial direct costs of operating leases are being deferred and amortized on a straight-line basis over the life of the related lease. Initial direct costs of loans are mainly being deferred and amortized over the term of the related loans using the interest method.

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

(b) Allowance for credit losses

Under U.S. GAAP, the allowance for credit losses to financial assets not individually evaluated is accounted for estimating all credit losses expected to occur in future over the remaining life. And for the credit losses over the remaining life resulting from off-balance sheet credit exposures, the allowance is recognized.

Under Japanese GAAP, the allowance for loan losses to financial receivables, etc. not individually evaluated is accounted for based on the prior charge-off experience to the outstanding balance of financial receivables at the reporting date.

(c) Operating leases

Under U.S. GAAP, revenues from operating leases are recognized on a straight-line basis over the contract terms. 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.

(d) Accounting for life insurance operations

Under U.S. GAAP, certain costs related directly to the successful acquisition of new (or renewal of) insurance contracts are 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, 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.

(e) Accounting for goodwill and other intangible assets in business combinations

Under U.S. GAAP, goodwill and indefinite-lived intangible assets 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.

– 24 –

(f) Accounting for pension plans

Under U.S. GAAP, the net actuarial gain (loss) is amortized using the corridor approach.

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

(g) Partial 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) Consolidated statements of cash flows

Classification in the statements of cash flows under U.S. GAAP differs from that under Japanese GAAP. As significant differences, purchase of lease equipment, 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.

Under U.S. GAAP, in addition, restricted cash is required to be added to the balance of cash and cash equivalents.

(i) Transfer of financial assets

Under U.S. GAAP, an entity is required to perform analysis to determine whether or not to consolidate trusts or special purpose companies, collectively called special purpose entities (“SPEs”) for securitization under the VIE’s consolidation rules. If it is determined from the analysis that the enterprise transferred financial assets in a securitization transaction to a SPE that needs to be consolidated, the transaction is not accounted for as a sale.

In addition, if the transferor transfers a portion of financial assets, the transaction is not accounted for as a sale but accounted for as a secured borrowing unless each interest held by the transferor and transferee meets the definition of a participating interest and the transfer of a portion of financial assets meets criteria for derecognition of transferred financial assets.

Under Japanese GAAP, a 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.

In addition, if the transferor transfers a portion of financial assets, the enterprise accounts for the transaction as a sale and recognizes a gain or loss on the sale into earnings when the transfer of a portion of financial assets meets criteria for derecognition of transferred financial assets.

(j) Investment in securities

Under U.S. GAAP, unrealized gains and losses from all equity securities are generally recognized in income. In addition, credit losses on available-for-sale debt securities are recognized in earnings through an allowance, and unrealized gains and losses on available-for-sale debt securities related to other factors than credit losses are recognized in other comprehensive income (loss), net of applicable income taxes.

Under Japanese GAAP, such unrealized gains and losses from securities other than trading or held-to-maturity are recognized in other comprehensive income (loss), net of applicable income taxes.

(k) 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. The portion of the total change in the fair value of the financial liability that results from a change in the instrument-specific credit risk is to be recognized in other comprehensive income (loss), net of applicable income taxes.

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

– 25 –

(l) Lessee’s lease

Under U.S. GAAP, right-of-use (hereinafter, “ROU”) assets and lease liabilities from the lessee’s lease transaction are generally recognized on the balance sheet.

Under Japanese GAAP, operating leases from the lessee’s lease transaction are off-balance sheet.

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. VIEs, for which the Company and its subsidiaries are the primary beneficiaries, are also included in the consolidated financial statements.

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. On the other hand, additional acquisition of the parent’s ownership interest in subsidiaries and partial sale of such interest where the parent continues to retain control of the subsidiary are accounted for as equity transactions.

Investments in affiliates, of which the Company has 20% – 50% ownership or has the ability to exercise significant influence, are accounted for by using the equity method. When the Company holds majority voting interests of an entity but noncontrolling shareholders hold substantive participating rights to make decisions on activities that occur over the ordinary course of the business, the equity method is applied. Investments in affiliates are recorded at cost plus/minus the Company and its subsidiaries’ portion of equity in undistributed earnings. If the value of an investment has declined and is judged to be other-than-temporary, the investment is written down to its fair value.

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

A certain overseas subsidiary consolidates subsidiaries determined as investment companies under ASC 946 (“Financial Services – Investment Companies”). Investments held by the investment company subsidiaries are carried at fair value with changes in fair value recognized in earnings.

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, the determination and periodic reassessment of the unguaranteed residual value for finance leases and operating leases, the determination and reassessment of insurance policy liabilities and deferred policy acquisition costs, the determination of the allowance for credit losses (including the allowance for off-balance sheet credit exposures), the recognition and measurement of impairment of long-lived assets, the recognition and measurement of impairment of investment in securities, the determination of the valuation allowance for deferred tax assets and the evaluation of tax positions, the assessment and measurement of effectiveness in hedging relationship using derivative financial instruments, the determination of benefit obligation and net periodic pension cost and the recognition and measurement of impairment of goodwill and other intangible assets.

In addition, we carefully considered the future outlook regarding the spread of the COVID-19 etc. As of June 30, 2022, there were no significant changes in the forecast assumed at the end of the previous fiscal year, and there was no significant impact on our accounting estimates. However, the outlook for future outbreaks of COVID-19 etc. and the resulting global economic slowdown is uncertain and may change rapidly. Therefore, our accounting estimates may change over time.

– 26 –

(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. Monetary assets and liabilities in foreign currencies are recorded in the entity’s functional currency based on the prevailing exchange rates at the end of each fiscal year.

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 year to all assets and liabilities. Income and expenses are translated at the average rates of exchange prevailing during the fiscal year. 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 other comprehensive income (loss), net of applicable income taxes, arise from the translation of foreign currency financial statements into Japanese yen.

(d) Revenue recognition

The Company and its subsidiaries recognize revenues from only contracts with customers, such as sales of goods and real estate, and services income, revenues are recognized to depict the transfer of promised goods or services to customers in the amounts that reflect the consideration to which the entity expects to be entitled in exchange for those goods or services. Revenues are recognized net of discount, incentives and estimated sales returns. In case that the Company and its subsidiaries receive payment from customers before satisfying performance obligations, the amounts are recognized as contract liabilities. In transactions that involve third parties, if the Company and its subsidiaries control the goods or services before they are transferred to the customers, revenue is recognized on gross amount as the principal.

Excluding the aforementioned policy, the policies as specifically described hereinafter are applied for each of revenue items.

Finance Revenues—Finance revenues mainly include revenues from finance leases, installment loans, and financial guarantees.

(1) Revenues from finance leases

Lessor leases consist of leases for various equipment types, including office equipment, industrial machinery, transportation equipment and real estates. Net investment in leases includes sales-type leases and direct financing leases which are full-payout leases. Leases not qualifying as sales-type leases or direct financing leases are accounted for as operating leases. Interest income on net investment in leases is recognized over the life of each respective lease using the interest method. When lease payment is variable, it is accounted for as income in profit or loss in the period when the changes in facts and circumstances on which the variable payment is based occur. When providing leasing services, the Company and its subsidiaries simultaneously conduct supplementary businesses, such as handling taxes and paying insurance on leased assets on behalf of lessees. The compensations for those lessor costs received from lessees are recognized in revenues from finance leases and those costs are recognized in other (income) and expense. The estimated unguaranteed residual value represents estimated proceeds from the disposition of equipment at the time the lease is terminated. Estimates of residual values are determined 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. Initial direct costs of sales-type leases and direct financing leases 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 of sales-type leases and direct financing leases is reflected as a component of net investment in 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 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.

(3) Revenues from financial guarantees

At the inception of a guarantee, fair value for the guarantee is recognized as a liability in the consolidated balance sheets. The Company and its subsidiaries recognize revenue mainly over the term of guarantee by a systematic and rational amortization method as the Company and the subsidiaries are released from the risk of the obligation.

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(4) Non-accrual policy

In common with all classes, for net investment in leases and installment loans, 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 net investment in 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. However, delinquencies during the relevant period of past-due financing receivables are out of the scope of the suspension of revenue recognition unless their collections are doubtful when the government issues a request for grace of repayment within a maximum of 6 months due to reasons that cannot be attributed to the obligor, such as a disaster, or when similar requests are made by public bodies. Accrued but uncollected interest is reclassified to net investment in leases or installment loans in the accompanying consolidated balance sheets and becomes subject to the allowance for credit losses 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 net investment in leases 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 debtors’ creditworthiness, such as the debtors’ business characteristics and financial conditions as well as relevant economic conditions and trends.

Operating leases—Revenues from operating leases are recognized on a straight-line basis over the contract terms. When lease payment is variable, it is accounted for as income in profit or loss in the period when the changes in facts and circumstances on which the variable payment is based occur. In principle, any conditions changed from original lease agreement should be accounted for as a lease modification. However, if lessees applied for COVID-19 related rent concessions and changes of lease payments do not result in a substantial increase to the rights of the lessor or the obligations of the lessee, the concessions are eligible to be applied for the practical expedient. The Company and its subsidiaries applied the practical expedient when accounting for eligible rent concessions mentioned above. Taking lessees’ future business performance into consideration, the Company and its subsidiaries applied the practical expedient by the following 3 approaches: recognize revenue under the original lease contract, recognize revenue under the conditions changed by rent concessions or only recognize revenue when receiving the lease payments.

In providing leasing services, the Company and its subsidiaries simultaneously conduct supplementary businesses, such as handling taxes and paying insurance on leased assets on behalf of lessees. The compensations for those lessor costs received from lessees are recognized in operating lease revenues and those costs are recognized in costs of operating leases. Investment in operating leases is recorded at cost less accumulated depreciation, which was ¥819,839 million and ¥833,266 million as of March 31, 2022 and June 30, 2022, respectively. In addition, 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. Initial direct costs of operating leases are being deferred and amortized as a straight-line basis over the life of the related lease. The unamortized balance of initial direct costs is reflected as investment in operating leases.

(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.

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The insurance contracts sold by the subsidiary include 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 investment 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 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. 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 for certain reinsurance contracts relating to variable annuity and variable life insurance contracts, which are 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 the subsidiary, less withdrawals, expenses and other charges. The credited interest is recorded in life insurance costs in the consolidated statements of income.

Certain costs related directly to the successful acquisition of new or renewal insurance contracts, or deferred policy acquisition costs are deferred and amortized over the respective policy periods in proportion to anticipated premium revenue. These deferred policy acquisition costs consist primarily of agent commissions, except for recurring policy maintenance costs and certain variable costs and expenses for underwriting policies.

(f) Allowance for credit losses

The allowance for credit losses estimates all credit losses expected to occur in future over the remaining life of net investment in leases, financial assets measured at amortized cost, such as installment loans, held-to-maturity debt securities and other receivables, and is recognized adequately based on the management judgement. Expected prepayments are reflected in the remaining life. The allowance for credit losses is increased by provision charged to income and is decreased by charge-offs, net of recoveries mainly.

Developing the allowance for credit 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, prior charge-off experience, current delinquencies and delinquency trends, value of underlying collateral and guarantees, current economic and business conditions and expected outlook in the future.

The Company and its subsidiaries estimate the allowance for credit losses by using various methods according to these estimates and judgments. When certain financial assets have similar risk characteristics to other financial assets, these financial assets are collectively evaluated as a pool. On the contrary, when financial assets do not have similar risk characteristics to other financial assets, the financial assets are evaluated individually. The Company and its subsidiaries select the most appropriate calculation method based on available information, such as the nature and related risk characteristics on financial assets, the prior charge-off experience and future forecast scenario with correlated economic indicators.

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, etc.

In addition, if the entity has a present contractual obligation to extend the credit and the obligation is not unconditionally cancelable by the entity, credit losses related the loan commitments of card loans and installment loans and financial guarantees are in the scope of the allowance for credit losses. For the loan commitments of card loans and installment loans, credit losses are recognized on the loan commitments for the portion expected to be drawn. For financial guarantees, the allowance is recognized for the contingent obligation which generates credit risk exposures. These allowance for off-balance sheet credit exposures is measured using the same measurement objectives as the allowance for loans and net investment leases, considering quantitative and qualitative factors including historical loss experience, current economic and business conditions and reasonable and supportable forecasts. The allowance for off-balance sheet credit exposure is accounted for in other liabilities on the consolidated balance sheets.

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(g) Impairment of long-lived assets

The Company and its subsidiaries perform a recoverability test for long-lived assets to be held and used in operations, including tangible assets and intangible assets being depreciated or amortized, consisting primarily of office buildings, condominiums, aircraft, ships, mega solar facilities and other properties under facility operations, whenever events or changes in circumstances indicated 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. The 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, and others 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

Equity securities are generally reported at fair value with unrealized gains and losses included in income. Equity securities without readily determinable fair values are recorded at fair value at its cost minus impairment, if any, plus or minus changes resulting from observable price changes under the election of the measurement alternative, except for investments which are valued at net asset value per share.

Equity securities elected to apply the measurement alternative are written down to its fair value with losses included in income if a qualitative assessment indicates that the investment is impaired and the fair value of the investment is less than its carrying value.

In addition, investments included in equity securities that are accounted for under the equity method are recorded at fair value with unrealized gains and losses included in income if certain subsidiaries elect the fair value option.

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

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

For available-for-sale debt securities, if the fair value is less than the amortized cost, the debt securities are impaired. The Company and its subsidiaries identify per each impaired security whether the decline of fair value is due to credit losses component or non-credit losses component. Impairment related to credit losses is recognized in earnings through an allowance for credit losses. Impairment related to other factors than credit losses is recognized in other comprehensive income (loss), net of applicable income taxes. In estimating an allowance for credit losses, the Company and its subsidiaries consider that credit losses exist when the present value of estimated cash flows is less than the amortized cost basis. When the Company and its subsidiaries intend to sell the debt securities for which an allowance for credit losses is previously established or it is more likely than not that the Company and its subsidiaries will be required to sell the debt securities before recovery of the amortized cost basis, the allowance for credit losses is fully written off and the amortized cost is reduced to the fair value after recognizing additional impairment in earnings. In addition, the Company and its subsidiaries recognize in earnings the full difference between the amortized cost and the fair value of the debt securities by direct write-down, without any allowance for credit losses, if the debt securities are expected to be sold and the fair value is less than the amortized cost.

Held-to-maturity debt securities are recorded at amortized cost. Held-to-maturity debt securities are in the scope of ASC 326 (“Financial Instruments—Credit Losses”) (hereinafter, “Credit Losses Standard”), see Note 2 “Significant Accounting and Reporting Policies (f) Allowance for credit losses.”

(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.

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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 for tax loss 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. The Company and its subsidiaries release to earnings stranded income tax effects in accumulated other comprehensive income (loss) resulting from changes in tax laws or rates or changes in judgment about realization of a valuation allowance on a specific identification basis when the individual items are completely sold or terminated. 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 three months ended June 30, 2021 and 2022 were approximately 29.4% and 24.4%, respectively. 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 31.5%. 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 tax rates on certain subsidiaries and the effect of investor taxes on earnings of subsidiaries. The Company and its certain subsidiaries have applied Japanese Group Relief System for National Corporation tax purposes.

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 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 consolidated statements of income.

(j) Securitized assets

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

SPEs used in securitization transactions are consolidated if the Company and its subsidiaries are the primary beneficiary of the SPEs, and the transfers of the financial assets to those consolidated SPEs are not accounted for as sales. Assets held by 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.

The Company and certain subsidiaries originate and sell loans into the secondary market, while retaining the obligation to service those loans. In addition, a certain subsidiary 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.

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(k) Derivative financial instruments

The Company and its subsidiaries recognize all derivatives 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 for the purpose of economic hedge that are not qualified for hedge accounting are adjusted to fair value through the consolidated statements of income. If derivatives are qualified for hedge accounting, then depending on its nature, changes in its fair value will be either offset against changes in the fair value of hedged assets or liabilities through the consolidated statements of income, or recorded in other comprehensive income (loss), net of applicable income taxes.

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), net of applicable income taxes, 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 net investment in a foreign operation, changes in the fair value of the derivative are recorded in the foreign currency translation adjustments account within other comprehensive income (loss), net of applicable income taxes.

The Company and its subsidiaries select either the amortization approach or the fair value approach, depending on the type of hedging activity, for the initial value of the component excluded from the assessment of effectiveness, and recognize it through the consolidated statements of income. When the amortization approach is adopted, the change in fair value is recognized in earnings using a systematic and rational method over the life of the hedging instrument and then any difference between the change in fair value and the amount recognized in earnings is recognized in other comprehensive income (loss), net of applicable income taxes. When the fair value approach is adopted, the change in the fair value is immediately recognized through the consolidated statements of income.

For all hedging relationships that are designated and qualified for hedge accounting, at the inception of the hedge, the Company and its subsidiaries formally document the details of the hedging relationship and the hedging activity. The Company and its subsidiaries 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. Among the plans, the costs of defined benefit 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

In principle, the Company and its subsidiaries measure stock-based compensation expense as consideration for services provided by employees based on the fair value on the grant date. The costs are recognized over the requisite service period.

(n) 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.

(o) Installment loans

Certain loans, for which the Company and its subsidiaries have the intent and ability to sell to outside parties in the foreseeable future, are considered held for sale and are carried at the lower of cost or market value determined on an individual basis, except loans held for sale for which the fair value option was elected. A subsidiary elected the fair value option on its loans held for sale. 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.

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Loans held for sale are included in installment loans, and the outstanding balances of these loans as of March 31, 2022 and June 30, 2022 were ¥155,680 million and ¥228,406 million, respectively. There were ¥151,601 million and ¥222,298 million of loans held for sale as of March 31, 2022 and June 30, 2022, respectively, measured at fair value by electing the fair value option.

(p) Property under facility operations

Property under facility operations consist primarily of operating facilities (including hotels and training facilities) and environmental assets (including mega solar facilities and coal-biomass co-fired power plants), 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 ¥147,459 million and ¥153,667 million as of March 31, 2022 and June 30, 2022, respectively.

(q) 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 merchandise 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 average method. As of March 31, 2022 and June 30, 2022, residential condominiums under development were ¥62,414 million and ¥73,080 million, respectively, and completed residential condominiums and merchandise for sale were ¥77,149 million and ¥73,375 million, respectively.

The Company and its subsidiaries recorded ¥44 million and ¥487 million of write-downs principally on completed residential condominiums and merchandise for sale for the three months ended June 30, 2021 and 2022, respectively, primarily resulting from a decrease in expected sales price. These write-downs were recorded in costs of goods and real estate sold and included in Real Estate segment and PE Investment and Concession segment.

(r) 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 ¥73,063 million and ¥74,611 million as of March 31, 2022 and June 30, 2022, respectively.

(s) Right-of-use assets

The Company and its subsidiaries record the Right-of-use assets (hereinafter, “ROU assets”) recognized from the lessee’s lease transaction as investment in operating leases, property under facility operations and office facilities. Lease liabilities are included in other liabilities.

ROU assets are consisted of the amount of the initial measurement of the lease liability and any lease payments made to the lessor at or before the commencement date and stated at cost less accumulated amortization. The initial measurement of the lease liability is at the present value of the lease payments not yet paid, discounted using the lessee’s incremental borrowing rate at lease commencement. ROU assets of finance leases are amortized mainly on a straight-line basis over the lease term. ROU assets of operating leases are amortized over the lease term by the fixed term operating cost minus the interest cost. Amortization of ROU assets of finance leases and operating leases expenses are included in costs of operating leases, services expense and selling, general and administrative expenses.

(t) Other assets

Other assets consist primarily of goodwill and other intangible assets in acquisitions, reinsurance recoverables in relation to reinsurance contracts, deferred insurance policy acquisition costs which are amortized over the contract periods, leasehold deposits, advance payments made in relation to construction of real estate under operating leases and property under facility operations, prepaid benefit cost, prepaid expenses for property tax, maintenance fees and insurance premiums in relation to lease contracts, servicing assets, derivative assets, contract assets related to real estate contract works and deferred tax assets.

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(u) Business combinations

The Company and its subsidiaries account for all business combinations using the acquisition method. The Company and its subsidiaries recognize intangible assets acquired in a business combination apart from goodwill if the intangible assets meet one of two criteria—either the contractual-legal criterion or the separately identifiable 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.

(v) Goodwill and other intangible assets

The Company and its subsidiaries perform an impairment test for goodwill and any indefinite-lived intangible assets 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 whenever 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 quantitative goodwill impairment test. The Company and its subsidiaries perform the qualitative assessment for some goodwill but bypass the qualitative assessment and proceed directly to the quantitative impairment test for other goodwill. For the goodwill for which the qualitative assessment is performed, if, after assessing the totality of events or circumstances, the Company and/or its 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 its subsidiaries do not perform the quantitative goodwill impairment test. However, if the Company and/or its subsidiaries conclude otherwise or determine to bypass the qualitative assessment, the Company and/or its subsidiaries proceed to perform the quantitative goodwill impairment test. The quantitative goodwill impairment test 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, an impairment loss is recognized in an amount equal to the difference. 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 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. The Company and its subsidiaries perform the qualitative assessment for some indefinite-lived intangible assets but bypass the qualitative assessment and perform the quantitative impairment test for other indefinite-lived intangible assets. For those indefinite-lived intangible assets for which the qualitative assessment is performed, if, after assessing the totality of events and circumstances, the Company and/or its subsidiaries conclude that it is not more likely than not that the indefinite-lived intangible asset is impaired, then the Company and/or its subsidiaries do not perform the quantitative impairment test. However, if the Company and/or its subsidiaries conclude otherwise or determine to bypass the qualitative assessment, the Company and/or its 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.

Intangible assets with finite lives are amortized over their useful lives and tested for impairment. The Company and its subsidiaries perform a recoverability test for the intangible assets whenever events or changes in circumstances indicate that the assets might be impaired. The intangible 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 amount of goodwill was ¥488,856 million and ¥532,593 million as of March 31, 2022 and June 30, 2022, respectively.

The amount of other intangible assets was ¥403,621 million and ¥410,937 million as of March 31, 2022 and June 30, 2022, respectively.

(w) Other Liabilities

Other liabilities include primarily lease liabilities recognized from the lessee’s lease transaction, accrued expenses related to interest and bonus, accrued benefit liability, advances received from lessees in relation to lease contracts, deposits received from real estate transaction, contract liabilities mainly related to automobile maintenance services and software services, and derivative liabilities and allowance for credit losses on off-balance sheet credit exposures.

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(x) 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. Diluted earnings per share is calculated by reflecting the potential dilution that could occur if securities or other contracts issuing common stock were exercised or converted into common stock.

(y) Redeemable noncontrolling interests

Noncontrolling interests in a certain subsidiary are redeemable interests which are subject to call and put rights upon certain equity holder 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.

(z) New accounting pronouncements

In August 2018, Accounting Standards Update 2018-12 (“Targeted Improvements to the Accounting for Long-Duration Contracts”—ASC 944 (“Financial Services—Insurance”)) was issued, and the original effective date was deferred by two years by related amendments which were issued thereafter. These updates change the recognition, measurement, presentation and disclosure requirements for long-duration contracts issued by an insurance entity. These updates require an insurance entity to review and, if there is a change, update cash flow assumptions at least annually and to update discount rate used for liability for future policy benefits at each reporting date for nonparticipating traditional long-duration and limited-payment contracts. The effect of updating the discount rate is recognized in other comprehensive income (loss). These updates also require market risk benefits to be measured at fair value, and simplify amortization of deferred acquisition costs. Furthermore, these updates require additional disclosures for long-duration contracts. These updates are effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Early application is permitted. For the liability for future policy benefits and deferred acquisition costs, these updates are applied to contracts in force as of beginning of the earliest period presented (hereinafter, “the transition date” of these updates) on a modified retrospective basis, and an insurance entity may elect to apply retrospectively. For the market risk benefits, these updates are applied retrospectively at the transition date, and the difference between fair value and carrying value requires an adjustment to retained earnings at the transition date. The cumulative effect of changes in the instrument-specific credit risk between contract inception date and the transition date should be recognized in accumulated other comprehensive income at the transition date. The Company and its subsidiaries will adopt these updates on April 1, 2023. 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, as well as changes in disclosures required by these updates.

In March 2020, Accounting Standards Update 2020-04 (“Facilitation of the Effects of Reference Rate Reform on Financial Reporting”—ASC 848 (“Reference Rate Reform”)) was issued, and related amendments were issued thereafter. These updates provide companies with optional expedients and exceptions to contract, hedging relationships and other transactions that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. These updates are effective as of March 12, 2020 through December 31, 2022. The Company and its subsidiaries adopted certain optional expedients to relevant contract modifications and hedge accounting relationships from the three months ended December 31, 2021, mainly in order to ease the administrative burden of accounting for contract modifications that replace a reference rate impacted by reference rate reform. The adoption of these updates had no material impact on the Company and its subsidiaries’ results of operations or financial position. Also, we do not expect a material impact in future reporting periods.

In July 2021, Accounting Standards Update 2021-05 (“Lessors—Certain Leases with Variable Lease Payments”—ASC 842 (“Leases”)) was issued as the amendments to ASC 842 (“Leases”). This update requires that lessors classify and account for a lease with variable lease payments that do not depend on a reference index or a rate as an operating lease if classifying the lease as a sales-type lease or a direct financing lease would result in the recognition of a selling loss at lease commencement. The Company and its subsidiaries adopted this update on April 1, 2022 using the option to apply the amendments prospectively to leases that commence or are modified on or after the date that an entity first applies the amendments. The adoption of this update had no material effect on the Company and its subsidiaries’ results of operations or financial position.

In October 2021, Accounting Standards Update 2021-08 (“Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”—ASC 805 (“Business Combinations”)) was issued. This update requires us to apply ASC 606 (“Revenue from Contracts with Customers”) to recognize and measure contract assets and contract liabilities acquired in a business combination. This update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022 and early adoption is permitted. This update is applied prospectively to business combinations occurring on or after the date that an entity first applies the amendments. The Company and its subsidiaries will adopt this update on April 1, 2023. 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.

– 35 –

In November 2021, Accounting Standards Update 2021-10 (“Disclosures by Business Entities about Government Assistance”—ASC 832 (“Government Assistance”)) was issued. This update requires annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy to other accounting guidance. The annual disclosure shall include; (1) information about the nature of the transactions and the related accounting policy used to account for the transactions, (2) the line items on the consolidated balance sheet and consolidated income statement that are affected by the transactions, and the amounts applicable to each financial statement line item, and (3) significant terms and conditions of the transactions, including commitments and contingencies. This update is effective for fiscal years beginning after December 15, 2021, and early adoption is permitted. The Company and its subsidiaries adopted this update that require the annual disclosure on April 1 2022. Since this update relates to disclosure requirements, the adoption had no effect on the Company and its subsidiaries’ results of operations or financial position.

In March 2022, Accounting Standards Update 2022-02 (“Troubled Debt Restructurings and Vintage Disclosures”—ASC 326 (“Financial Instruments—Credit Losses”)) was issued. This update eliminates the recognition and measurement guidance on troubled debt restructuring (hereinafter, “TDR”) and, instead, requires that an entity evaluate whether certain modifications on contractual terms made to borrowers experiencing financial difficulty should be accounted for as a new loan or a continuation of an existing loan. Additionally, enhanced disclosures for certain modifications made to borrowers experiencing financial difficulty are newly required. In addition, this update also requires that an entity disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20 (“Financial Instruments—Credit Losses—Measured at Amortized Cost”) in the existing vintage disclosure, where an entity discloses the amortized cost basis by credit quality indicator and class of financing receivable by year of origination. This update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022 and early adoption is permitted. This update should be applied prospectively from the beginning of the fiscal year of adoption, including interim periods, except for the optional transition method related to the recognition and measurement of TDRs for which an entity may elect to apply a modified retrospective transition method, resulting in a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company and its subsidiaries will adopt this update on April 1, 2023. 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, as well as changes in disclosures required by this update.

In June 2022, Accounting Standards Update 2022-03 (“Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”—ASC 820 (“Fair Value Measurement”)) was issued. This update clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value of an equity security. This update also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. This update also requires new disclosures for equity securities subject to contractual sale restrictions. The new disclosure shall include; (1) the fair value of equity securities subject to contractual sale restrictions reflected in the balance sheet, (2) the nature and remaining duration of the restrictions, and (3) the circumstances that could cause a lapse in the restrictions. This update is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted. This Update should be applied prospectively for fair value measurement and disclosures from the adoption of the amendments. The Company and its subsidiaries will adopt this update on April 1, 2024. 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, as well as changes in disclosures required by this update.

– 36 –

3. Fair Value Measurements

The Company and its subsidiaries classify and prioritize 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.

The Company and its subsidiaries differentiate 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 debt securities, available-for-sale debt securities, certain equity securities, derivatives, certain reinsurance recoverables, and variable annuity and variable life insurance contracts at fair value on a recurring basis.

– 37 –

The following tables present recorded amounts of major financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2022 and June 30, 2022:

March 31, 2022

	Millions of yen
	Total Carrying Value in Consolidated Balance Sheets			Quoted Prices in Active Markets for Identical Assets or Liabilities (Level  1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Loans held for sale*1	¥	151,601		¥	0	¥	151,601	¥	0
Trading debt securities		2,503			0		2,503		0
Available-for-sale debt securities:		2,174,891			1,095		2,032,736		141,060
Japanese and foreign government bond securities*2		832,613			1,095		831,518		0
Japanese prefectural and foreign municipal bond securities		325,604			0		322,551		3,053
Corporate debt securities*3		849,560			0		848,863		697
CMBS and RMBS in the Americas		28,732			0		28,732		0
Other asset-backed securities and debt securities		138,382			0		1,072		137,310
Equity securities*4*5		385,271			112,200		160,099		112,972
Derivative assets:		51,366			292		46,214		4,860
Interest rate swap agreements		9,570			0		9,570		0
Options held/written and other		25,664			0		20,804		4,860
Futures, foreign exchange contracts		16,006			292		15,714		0
Foreign currency swap agreements		126			0		126		0
Netting*6		(20,333	)		0		0		0
Net derivative assets		31,033			0		0		0
Other assets:		5,214			0		0		5,214
Reinsurance recoverables*7		5,214			0		0		5,214
Total	¥	2,770,846		¥	113,587	¥	2,393,153	¥	264,106
Liabilities:
Derivative liabilities:	¥	105,705		¥	2,026	¥	95,047	¥	8,632
Interest rate swap agreements		8,182			0		8,182		0
Options held/written and other		21,562			0		12,930		8,632
Futures, foreign exchange contracts		71,443			2,026		69,417		0
Foreign currency swap agreements		4,518			0		4,518		0
Netting*6		(20,333	)		0		0		0
Net derivative Liabilities		85,372			0		0		0
Policy Liabilities and Policy Account Balances:		198,905			0		0		198,905
Variable annuity and variable life insurance contracts*8		198,905			0		0		198,905
Total	¥	304,610		¥	2,026	¥	95,047	¥	207,537

– 38 –

June 30, 2022

	Millions of yen
	Total Carrying Value in Consolidated Balance Sheets			Quoted Prices in Active Markets for Identical Assets or Liabilities (Level  1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Loans held for sale*1	¥	222,298		¥	0	¥	222,298	¥	0
Trading debt securities		3,083			0		3,083		0
Available-for-sale debt securities:		2,227,838			3,912		2,047,007		176,919
Japanese and foreign government bond securities*2		775,805			1,473		774,332		0
Japanese prefectural and foreign municipal bond securities		356,237			0		352,828		3,409
Corporate debt securities*3		883,148			2,439		880,084		625
CMBS and RMBS in the Americas		38,659			0		38,659		0
Other asset-backed securities and debt securities		173,989			0		1,104		172,885
Equity securities*4*5		367,333			99,579		143,019		124,735
Derivative assets:		83,274			830		75,424		7,020
Interest rate swap agreements		15,461			0		15,461		0
Options held/written and other		49,601			0		42,581		7,020
Futures, foreign exchange contracts		17,836			830		17,006		0
Foreign currency swap agreements		376			0		376		0
Netting*6		(22,304	)		0		0		0
Net derivative assets		60,970			0		0		0
Other assets:		5,732			0		0		5,732
Reinsurance recoverables*7		5,732			0		0		5,732
Total	¥	2,909,558		¥	104,321	¥	2,490,831	¥	314,406
Liabilities:
Derivative liabilities:	¥	104,740		¥	204	¥	79,735	¥	24,801
Interest rate swap agreements		4,118			0		4,118		0
Options held/written and other		42,528			0		17,727		24,801
Futures, foreign exchange contracts		52,200			204		51,996		0
Foreign currency swap agreements		5,894			0		5,894		0
Netting*6		(22,304	)		0		0		0
Net derivative Liabilities		82,436			0		0		0
Policy Liabilities and Policy Account Balances:		180,791			0		0		180,791
Variable annuity and variable life insurance contracts*8		180,791			0		0		180,791
Total	¥	285,531		¥	204	¥	79,735	¥	205,592

*1 A certain subsidiary elected the fair value option on certain loans held for sale. These loans are multi-family and seniors housing loans and are sold to Federal National Mortgage Association (“Fannie Mae”), Federal Home Loan Mortgage Corporation (“Freddie Mac”) and institutional investors. Included in “Other (income) and expense” in the consolidated statements of income were a gain of ¥1,594 million and a loss of ¥3,699 million from the change in the fair value of the loans for the three months ended June 30, 2021 and 2022, respectively. No gains or losses were recognized in earnings during the three months ended June 30, 2021 and 2022 attributable to changes in instrument-specific credit risk. The amounts of aggregate unpaid principal balance and aggregate fair value of the loans held for sale as of March 31, 2022, were ¥151,672 million and ¥151,601 million, respectively, and the amount of the aggregate fair value was less than the amount of aggregate unpaid principal balance by ¥71 million. The amounts of aggregate unpaid principal balance and aggregate fair value of the loans held for sale as of June 30, 2022, were ¥226,295 million and ¥222,298 million, respectively, and the amount of the aggregate fair value was less than the amount of aggregate unpaid principal balance by ¥3,997 million. As of March 31, 2022 and June 30, 2022, there were no loans that are 90 days or more past due or, in non-accrual status.

– 39 –

*2 A certain subsidiary elected the fair value option for investments in foreign government bond securities included in available-for-sale debt securities. Included in “Gains on investment securities and dividends” in the consolidated statements of income were a gain of ¥31 million and a loss of ¥8 million from the change in the fair value of those investments for the three months ended June 30, 2021 and 2022, respectively. There were no such investments elected the fair value option as of March 31, 2022. The amount of aggregate fair value elected the fair value option was ¥256 million as of June 30, 2022.

*3 A certain subsidiary elected the fair value option for investments in foreign corporate debt securities included in available-for-sale debt securities. Included in “Gains on investment securities and dividends” in the consolidated statements of income were a gain of ¥42 million and a loss of ¥652 million from the change in the fair value of those investments for the three months ended June 30, 2021 and 2022, respectively. The amounts of aggregate fair value elected the fair value option were ¥7,644 million and ¥10,355 million as of March 31, 2022 and June 30, 2022, respectively.

*4 Certain subsidiaries elected the fair value option for certain investments in investment funds, and others included in equity securities. Included in “Gains on investment securities and dividends” and “Life insurance premiums and related investment income” in the consolidated statements of income were gains of ¥337 million and a ¥540 million from the change in the fair value of those investments for the three months ended June 30, 2021 and 2022, respectively. The amounts of aggregate fair value elected the fair value option were ¥11,709 million and ¥14,188 million as of March 31, 2022 and June 30, 2022, respectively.

*5 The amounts of investment funds measured at net asset value per share which are not included in the above tables were ¥25,999 million and ¥33,643 million as of March 31, 2022 and June 30, 2022, respectively.

*6 It represents the amount offset under counterparty netting of derivative assets and liabilities.

*7 Certain subsidiaries elected the fair value option for certain reinsurance contracts held. The fair value of the reinsurance contracts elected for the fair value option in other assets were ¥5,214 million and ¥5,732 million as of March 31, 2022 and June 30, 2022, respectively. For the effect of changes in the fair value of those reinsurance contracts on earnings during the three months ended June 30, 2021 and 2022, see Note 17 “Life Insurance Operations.”

*8 Certain subsidiaries elected the fair value option for the entire variable annuity and variable life insurance contracts held. The fair value of the variable annuity and variable life insurance contracts elected for the fair value option in policy liabilities and policy account balances were ¥198,905 million and ¥180,791 million as of March 31, 2022 and June 30, 2022, respectively. For the effect of changes in the fair value of the variable annuity and variable life insurance contracts on earnings during the three months ended June 30, 2021 and 2022, see Note 17 “Life Insurance Operations.”

– 40 –

The following tables present the reconciliation of financial assets and liabilities (net) measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended June 30, 2021 and 2022:

Three months ended June 30, 2021

	Millions of yen
	Balance at April 1, 2021		Gains or losses (realized/unrealized)									Purchases *3		Sales			Settlements *4			Transfers in and/ or out of Level 3 (net)		Balance at June 30, 2021		Change in unrealized gains or losses included in earnings for assets and liabilities still held at June 30, 2021 *1			Change in unrealized gains or losses included in other comprehensive income for assets and liabilities still held at June 30, 2021 *2
			Included in earnings *1			Included in other comprehensive income *2			Total
Available-for-sale debt securities	¥	133,457	¥	(10	)	¥	433		¥	423		¥	7,411	¥	(5	)	¥	(9,748	)	¥	0	¥	131,538	¥	36		¥	494
Japanese prefectural and foreign municipal bond securities		2,761		0			(3	)		(3	)		0		0			0			0		2,758		0			(3	)
Corporate debt securities		1,021		0			0			0			0		0			(120	)		0		901		0			0
Other asset-backed securities and debt securities		129,675		(10	)		436			426			7,411		(5	)		(9,628	)		0		127,879		36			497
Equity securities		91,410		11,362			(4	)		11,358			11,352		(25,879	)		(128	)		0		88,113		1,227			(4	)
Investment funds, and others		91,410		11,362			(4	)		11,358			11,352		(25,879	)		(128	)		0		88,113		1,227			(4	)
Derivative assets and liabilities (net)		13,790		5,208			14			5,222			0		0			0			0		19,012		5,208			14
Options held/written and other		13,790		5,208			14			5,222			0		0			0			0		19,012		5,208			14
Other asset		6,297		(722	)		0			(722	)		569		0			(266	)		0		5,878		(722	)		0
Reinsurance recoverables *5		6,297		(722	)		0			(722	)		569		0			(266	)		0		5,878		(722	)		0
Policy Liabilities and Policy Account Balances		266,422		(3,559	)		(33	)		(3,592	)		0		0			(25,491	)		0		244,523		(3,559	)		(33	)
Variable annuity and variable life insurance contracts *6		266,422		(3,559	)		(33	)		(3,592	)		0		0			(25,491	)		0		244,523		(3,559	)		(33	)

– 41 –

Three months ended June 30, 2022

	Millions of yen
	Balance at April 1, 2022			Gains or losses (realized/unrealized)									Purchases *3		Sales			Settlements *4			Transfers in and/ or out of Level 3 (net)		Balance at June 30, 2022			Change in unrealized gains or losses included in earnings for assets and liabilities still held at June 30, 2022 *1			Change in unrealized gains or losses included in other comprehensive income for assets and liabilities still held at June 30, 2022 *2
				Included in earnings  *1			Included in other comprehensive income *2			Total
Available-for-sale debt securities	¥	141,060		¥	5,618		¥	3,310		¥	8,928		¥	34,171	¥	(5,678	)	¥	(1,562	)	¥	0	¥	176,919		¥	5,604		¥	3,532
Japanese prefectural and foreign municipal bond securities		3,053			0			356			356			0		0			0			0		3,409			0			356
Corporate debt securities		697			0			(1	)		(1	)		0		0			(71	)		0		625			0			(0	)
Other asset-backed securities and debt securities		137,310			5,618			2,955			8,573			34,171		(5,678	)		(1,491	)		0		172,885			5,604			3,176
Equity securities		112,972			1,335			12,811			14,146			1,879		(3,104	)		(1,158	)		0		124,735			819			12,808
Investment funds, and others		112,972			1,335			12,811			14,146			1,879		(3,104	)		(1,158	)		0		124,735			819			12,808
Derivative assets and liabilities (net)		(3,772	)		(12,805	)		(1,204	)		(14,009	)		0		0			0			0		(17,781	)		(12,805	)		(1,204	)
Options held/written and other		(3,772	)		(12,805	)		(1,204	)		(14,009	)		0		0			0			0		(17,781	)		(12,805	)		(1,204	)
Other asset		5,214			337			0			337			311		0			(130	)		0		5,732			337			0
Reinsurance recoverables *5		5,214			337			0			337			311		0			(130	)		0		5,732			337			0
Policy Liabilities and Policy Account Balances		198,905			9,475			(23	)		9,452			0		0			(8,662	)		0		180,791			9,475			(23	)
Variable annuity and variable life insurance contracts *6		198,905			9,475			(23	)		9,452			0		0			(8,662	)		0		180,791			9,475			(23	)

*1 Principally, gains and losses from available-for-sale debt securities are included in “Gains on investment securities and dividends”, “Write-downs of securities” or “Life insurance premiums and related investment income”; equity securities are included in “Gains on investment securities and dividends” and “Life insurance premiums and related investment income” and derivative assets and liabilities (net) are included in “Other (income) and expense” respectively. Additionally, for available-for-sale debt securities, amortization of interest recognized in finance revenues is included in these columns.

*2 Unrealized gains and losses from available-for-sale debt securities are included in “Net change of unrealized gains (losses) on investment in securities” and “Net change of foreign currency translation adjustments”, unrealized gains and losses from equity securities and derivative assets and liabilities (net) are included mainly in “Net change of foreign currency translation adjustments”, unrealized gains and losses from policy liabilities and policy account balances are included in “Net change of debt valuation adjustments.”

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

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

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

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

There were no transfers in or out of Level 3 in the three months ended June 30, 2021 and 2022.

– 42 –

The following tables present recorded amounts of assets measured at fair value on a nonrecurring basis during year ended March 31, 2022 and the three months ended June 30, 2022. These assets are measured at fair value on a nonrecurring basis mainly to recognize impairment:

Year ended March 31, 2022

	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	¥	235	¥	0	¥	235	¥	0
Real estate collateral-dependent loans (net of allowance for credit losses)		6,972		0		0		6,972
Investment in operating leases, property under facility operations, office facilities and other assets		59,847		0		262		59,585
Certain equity securities		9,451		0		9,451		0
Certain investments in affiliates		2,846		0		0		2,846
Certain reporting units including goodwill		192		0		0		192
Certain intangible assets acquired in business combinations		98,014		0		0		98,014
	¥	177,557	¥	0	¥	9,948	¥	167,609
Three months ended June 30, 2022
	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	¥	473	¥	0	¥	473	¥	0
Real estate collateral-dependent loans (net of allowance for credit losses)		1,973		0		0		1,973
Investment in operating leases, property under facility operations, office facilities and other assets		635		0		9		626
Certain equity securities		149		0		149		0
	¥	3,230	¥	0	¥	631	¥	2,599
		&nbs