IX

ORIX Corporation: FY2025 Financial Summary (Form 6-K)

Business Context and Reporting Period

This filing covers the consolidated financial results for ORIX Corporation for the fiscal year ended March 31, 2025. The report was filed with the SEC on May 12, 2025, and includes unaudited U.S. GAAP financial information. ORIX operates globally across financing, investment, life insurance, banking, asset management, real estate, and energy sectors.

Key Financial Metrics

Balance Sheet and Cash Flow

• Total Assets: Increased 3% to ¥16,866,251 million, driven by growth in cash, installment loans, and reinsurance recoverables.
• Total Liabilities: Increased 3% to ¥12,691,036 million, primarily due to higher deposits and long-term debt.
• Shareholders' Equity: Increased 4% to ¥4,089,782 million.
• Debt: Short-term and long-term debt totaled ¥6,282,798 million (up 1% YoY).
• Cash Flow from Operations: Positive ¥1,300,193 million (up from ¥1,243,402 million).
• Cash Flow from Investing: Used ¥1,309,695 million (down from ¥1,372,803 million outflow).
• Cash Flow from Financing: Provided ¥149,322 million (reversal of prior year outflow of ¥85,477 million).
• Liquidity: Cash, cash equivalents, and restricted cash ended at ¥1,321,983 million.

Material Changes and Segment Performance

While total revenues grew, operating income declined 8% due to increased costs of operating leases, services expenses, and significant write-downs of long-lived assets (¥25,933 million vs. ¥1,724 million in the prior year). Segment performance was mixed:

• PE Investment and Concession: Profits surged 125% to ¥98,872 million, driven by gains on sales of subsidiaries and equity method investments.
• Banking and Credit: Profits dropped 70% to ¥29,291 million, largely due to the absence of one-time gains from the partial sale of ORIX Credit Corporation recorded in the prior year.
• Environment and Energy: Turned to a loss of ¥4,923 million (from a profit of ¥38,072 million) due to increased write-downs of long-lived assets and higher service expenses.
• Corporate Financial Services: Profits increased 9% to ¥90,329 million.
• Insurance: Profits increased 5% to ¥74,399 million.

Guidance, Outlook, and Corporate Actions

• Dividends: Annual dividend for FY2025 set at ¥120.01 per share (Interim: ¥62.17; Year-end: ¥57.84), representing a 39.0% payout ratio. For FY2026, the forecast is the higher of a 39% payout ratio or ¥120.01 per share.
• Share Repurchase: Board approved a repurchase of up to 40 million shares (approx. 3.5% of outstanding shares) with a total budget of up to ¥100 billion for the period May 19, 2025, to March 31, 2026.
• Share Cancellation Policy: The maximum limit for treasury shares held was reduced from 5% to 2% of total issued shares to optimize capital efficiency.
• Outlook: Forecast for FY2026 Net Income Attributable to ORIX Shareholders is ¥380,000 million (up 8.1% YoY).
• Management Changes: Two new outside directors (Mami Yunoki, Miwa Seki) were nominated. Two outside directors (Michael Cusumano, Sakie Akiyama) and one executive officer (Satoshi Matsui) are retiring effective June 25, 2025.

Investor Verification Checklist

• Write-downs: Verify the specific assets impacted by the ¥25.9 billion increase in write-downs of long-lived assets, particularly in the Environment and Energy segment.
• Banking Segment Volatility: Assess the sustainability of the Banking and Credit segment's profit recovery given the prior year's one-time gain exclusion.
• Comprehensive Income: Investigate the 38.7% drop in Comprehensive Income, driven largely by unrealized losses on investment securities and foreign currency translation adjustments.
• Share Repurchase Execution: Monitor the execution of the ¥100 billion buyback program and its impact on EPS and treasury share ratios.
• PFIC Status: Confirm the implications of the company's potential status as a Passive Foreign Investment Company (PFIC) for U.S. tax holders.