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<SEC-DOCUMENT>0000950103-01-501126.txt : 20010702
<SEC-HEADER>0000950103-01-501126.hdr.sgml : 20010702
ACCESSION NUMBER:		0000950103-01-501126
CONFORMED SUBMISSION TYPE:	20-F
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20010331
FILED AS OF DATE:		20010629

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ORIX CORP
		CENTRAL INDEX KEY:			0001070304
		STANDARD INDUSTRIAL CLASSIFICATION:	LIFE INSURANCE [6311]
		FISCAL YEAR END:			0331

	FILING VALUES:
		FORM TYPE:		20-F
		SEC ACT:		
		SEC FILE NUMBER:	001-14856
		FILM NUMBER:		1670952

	BUSINESS ADDRESS:	
		STREET 1:		3-22-8 SHIBA
		STREET 2:		MINATO-KU
		CITY:			TOYKO 105 6135 JAPAN
		STATE:			M0
		BUSINESS PHONE:		81354195000

	MAIL ADDRESS:	
		STREET 1:		3-22-8 SHIBA
		STREET 2:		MINATO-KU
		CITY:			TOKYO
</SEC-HEADER>
<DOCUMENT>
<TYPE>20-F
<SEQUENCE>1
<FILENAME>jun2601_20f.txt
<TEXT>



                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                           -------------------------

                                   FORM 20-F
(Mark One)

         [ ]  REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

                                      OR
              [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended March 31, 2001

                                      OR
            [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

               For the transition period from           to
                       Commission file number: 001-14856

                             ORIX KABUSHIKI KAISHA
            (Exact name of Registrant as specified in its charter)

                               ORIX CORPORATION
                (Translation of Registrant's name into English)
                                     Japan
                (Jurisdiction of incorporation or organization)
                            3-22-8 Shiba, Minato-ku
                             Tokyo 105-8683, Japan
                   (Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

<TABLE>
                             Title of each class                                   Name of each exchange on which registered
<S>                                                                               <C>
(1)   Common stock, par value Yen50 per share (the "Shares")                               New York Stock Exchange*

(2)   American Depository Shares ("ADSs"), each of which represents one-                   New York Stock Exchange
      half of one Share

(3)   0.375% Convertible Notes due 2005 (the "Notes")                                      New York Stock Exchange

(4)   American Depository Notes ("ADNs"), each of which represents one                     New York Stock Exchange
      Note in the principal amount of Yen2,000,000
</TABLE>

Securities registered or to be registered pursuant to Section 12(g) of the Act:
                                     None
                               (Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d)
                                  of the Act:
                                     None
                               (Title of Class)

 Indicate the number of outstanding shares of each of the issuer's classes of
  capital or common stock as of the close of the period covered by the annual
                                    report.

As of March 31, 2001, 82,388,025 Shares and 2,106,120 ADSs are outstanding.

     Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                                   Yes X              No
                                      ---               ---

      Indicate by check mark which financial statement item the Registrant has
elected to follow.
                                  Item 17        Item 18  X

*Not for trading, but only in connection with the registration of American
Depositary Shares.

================================================================================
<PAGE>

                                 --------------

                               TABLE OF CONTENTS

                                 --------------

                                                                          Page

Certain Defined Terms, Conventions and Presentation of Financial Informationii

Forward Looking Statements..................................................ii

PART I
Item 1. Identity of Directors, Senior Management and Advisers................1
Item 2. Offer Statistics and Expected Timetable..............................1
Item 3. Key Information......................................................1
Item 4. Information on the Company...........................................7
Item 5. Operating and Financial Review and Prospects........................31
Item 6. Directors, Senior Management and Employees..........................67
Item 7. Major Shareholders and Related Party Transactions...................75
Item 8. Financial Information...............................................75
Item 9. The Offer and Listing...............................................76
Item 10. Additional Information.............................................78
Item 11. Quantitative and Qualitative Disclosures About Market Risk.........83
Item 12. Description of Securities Other than Equity Securities.............87

PART II
Item 13. Defaults, Dividend Arrearages and Delinquencies....................88
Item 14. Material Modifications to the Rights of Security Holders and Use of
         Proceeds...........................................................88
Item 15. [Reserved].........................................................88
Item 16. [Reserved].........................................................88

PART III
Item 17. Financial Statements...............................................89
Item 18. Financial Statements...............................................89
Item 19. Exhibits...........................................................89


                                       i

<PAGE>

                     CERTAIN DEFINED TERMS, CONVENTIONS AND
                     PRESENTATION OF FINANCIAL INFORMATION

     As used in this Annual Report, unless the context otherwise requires,
"Company" and "ORIX" refer to ORIX Corporation and "we", "us", "our" and
similar terms refer to ORIX Corporation and its subsidiaries.

     In this annual report, "subsidiary" and "subsidiaries" refer to
consolidated subsidiaries of ORIX, companies in which ORIX owns more than 50%,
and "affiliate" and "affiliates" refer to all of our affiliates accounted for
by the equity method, companies in which ORIX owns 20-50%.

     The consolidated financial statements of ORIX have been prepared in
accordance with accounting principles generally accepted in the United States
of America ("U.S. GAAP"). Unless otherwise stated or the context otherwise
requires, all amounts in such financial statements are expressed in Japanese
yen.

     References in this Annual Report to "yen" or "Yen" are to Japanese yen and
references to "$" or "dollars" are to United States dollars. Merely for the
convenience of the reader, this Annual Report contains translations of certain
yen amounts into dollars at specified rates. These translations should not be
construed as representations that the yen amounts actually represent such
dollar amounts or could be converted into dollars at the rate indicated. Unless
otherwise stated, the translations of yen into dollars have been made at the
rate of Yen123.90=$1, which was the approximate exchange rate in Japan on March
31, 2001.

     The Company's fiscal year ends on March 31. The fiscal year ended March
31, 2001 is referred to throughout this Annual Report as fiscal 2001 or the
2001 fiscal year, and other fiscal years are referred to in a corresponding
manner. References to years not specified as being fiscal years are to calendar
years.

                           ------------------------

                           FORWARD LOOKING STATEMENTS

     This annual report contains statements that constitute "forward-looking
statements" within the meaning of Section 21(E) of the Securities Exchange Act
of 1934. When included in this Annual Report, the words, "will", "should",
"expects", "intends", "anticipates", "estimates" and similar expressions, among
others, identify forward looking statements. Such statements, which include
statements contained in "Item 5. Operating and Financial Review and Prospects."
and "Item 11. Quantitative and Qualitative Disclosure About Market Risk",
inherently are subject to a variety of risks and uncertainties that could cause
actual results to differ materially from those set forth in such statements.
These forward looking statements are made only as of the date of this Annual
Report. The Company expressly disclaims any obligation or undertaking to
release any update or revision to any forward looking statement contained
herein to reflect any change in the Company's expectations with regard thereto
or any change in events, conditions or circumstances on which any statement is
based.

                                      ii

<PAGE>


                                            Part I

Item 1. Identity of Directors, Senior Management and Advisers

     Not applicable.

Item 2. Offer Statistics and Expected Timetable

     Not applicable.

Item 3.   Key Information

     Selected Financial Data

     The following selected consolidated financial information has been derived
from our consolidated financial statements as of each of the dates and for each
of the periods indicated below. This information should be read in conjunction
with and is qualified in its entirety by reference to our consolidated
financial statements, including the notes thereto, included in this Annual
Report, which have been audited by Arthur Andersen, independent accountants.

<TABLE>
                                                                              Year ended March 31,
                                       ------------------------------------------------------------------------------------------

                                           1997           1998          1999            2000           2001            2001
                                       -----------    -----------    -----------    -----------    -----------   ----------------
                                                                                                                   (Millions of
                                                                                                                  dollars except
                                                          (Millions of yen except per share data)                 per share data)
<S>                                    <C>             <C>             <C>             <C>              <C>             <C>
Income statement data:
Total revenues......................   Yen 428,294    Yen 507,143    Yen 593,941    Yen 616,513    Yen 586,149       $ 4,731
Interest expense....................       130,743        142,177        140,846        115,038        109,289           882
Selling, general and administrative
 expenses..........................         70,902         79,671         82,395         90,961        101,156           816
Provision for doubtful receivables
 and possible loan losses...........        49,727         49,434         51,845         45,573         44,584           360
Operating income....................        26,562         31,041         31,042         52,886         57,148           461
Equity in net income (loss) of and
 gain (loss) on sales of affiliates.        10,327          7,371         (3,727)          (838)         2,088            17
Income before income taxes..........        36,889         38,412         27,315         52,048         59,236           478
Net income..........................        19,044         23,731         25,621         30,642         34,157           276
Basic earnings per share(1).........        244.64         305.33         330.43         385.27         417.77          3.37
Diluted earnings per share(1).......        244.64         305.33         330.43         377.02         400.99          3.24
Cash dividends per share............         15.00          15.00          15.00          15.00          15.00          0.12
</TABLE>





(1)  Basic earnings per share and Diluted earnings per share are retroactively
     adjusted for a stock split.

<TABLE>
                                                                             As of March 31,
                                      ----------------------------------------------------------------------------------------
                                          1997           1998           1999           2000           2001           2001
                                     -------------   -------------  -------------  -------------  -------------   ------------
                                                                                                                  (Millions of
                                                                    (Millions of yen)                               dollars)
<S>                                   <C>             <C>             <C>             <C>             <C>             <C>
Balance sheet data:
Investment in direct financing
 leases(1).........................  Yen 2,067,616   Yen 2,186,022  Yen 1,952,842  Yen 1,744,953  Yen 1,657,709     $   13,379
Installment loans(1)...............      1,700,697       1,794,825      1,761,887      1,791,439      1,846,511         14,903
                                     -------------   -------------  -------------  -------------  -------------     ----------
                                         3,768,313       3,980,847      3,714,729      3,536,392      3,504,220         28,282
Investment in operating leases.....        465,737         435,066        411,156        397,576        451,171          3,641
Investment in securities...........        434,488         500,449        576,206        758,381        942,158          7,604
Other operating assets.............         58,193          65,838         73,345         72,472        132,006          1,066
                                     -------------   -------------  -------------  -------------  -------------     ----------
Operating assets(2)................      4,726,731       4,982,200      4,775,436      4,764,821      5,029,555         40,593
</TABLE>


                                       1

<PAGE>

<TABLE>
                                                                             As of March 31,
                                      ----------------------------------------------------------------------------------------
                                          1997           1998           1999           2000           2001           2001
                                     -------------   -------------  -------------  -------------  -------------   ------------
                                                                                                                  (Millions of
                                                                    (Millions of yen)                               dollars)
<S>                                   <C>             <C>             <C>             <C>             <C>             <C>
Allowance for doubtful receivables
 on direct financing leases and
 possible loan losses..............       (117,567)       (145,741)      (132,606)      (136,939)      (141,077)        (1,139)
Other assets.......................        480,811         737,850        704,806        713,660        702,833          5,674
                                     -------------   -------------  -------------  -------------  -------------     ----------
Total assets.......................  Yen 5,089,975   Yen 5,574,309  Yen 5,347,636  Yen 5,341,542  Yen 5,591,311     $   45,128
                                     =============   =============  =============  =============  =============     ==========
Short-term debt....................  Yen 2,513,421   Yen 2,576,483  Yen 2,184,983  Yen 1,912,761  Yen 1,562,072     $   12,608
Long-term debt.....................      1,703,913       2,044,570      2,036,028      1,942,784      2,330,159         18,807
Common Stock.......................         20,180          20,180         20,180         41,688         41,820            338
Additional Paid-in Capital.........         37,093          37,303         37,464         59,285         59,885            483
Shareholders' equity...............        308,584         313,821        327,843        425,671        461,323          3,723
Numbers of shares..................     64,870,299      64,870,299     64,870,299     68,630,294     82,388,025
</TABLE>

<TABLE>
                                                         1997            1998           1999           2000             2001
                                                      -----------    -----------    ------------   -----------      ----------
<S>                                                   <C>            <C>            <C>            <C>              <C>
Selected data and ratios:(3)
Shareholders' equity ratio....................           6.06%           5.63%          6.13%          7.97%            8.25%
Return on assets..............................           0.39%           0.45%          0.47%          0.57%            0.62%
Return on equity..............................           6.51%           7.63%          7.99%          8.13%            7.70%
Allowance/investment in direct financing
 leases and installment loans.................            3.1%            3.7%           3.6%           3.9%             4.0%
</TABLE>
- ---------------
(1)  The sum of assets considered 90 or more days past due and total impaired
     assets measured pursuant to Financial Accounting Standards Boards, or FASB
     Statement 114 amounted to Yen282,377 million as of March 31, 1999,
     Yen271,177 million as of March 31, 2000 and Yen258,432 million ($2,086
     million) as of March 31, 2001. These sums included investment in direct
     financing leases considered 90 or more days past due of Yen54,051 million
     as of March 31, 1999, Yen53,743 million as of March 31, 2000 and Yen53,515
     million ($432 million) as of March 31, 2001, installment loans (excluding
     amounts attributable to treatment under FASB Statement 114) considered 90
     or more days past due of Yen98,100 million as of March 31, 1999, Yen91,513
     million as of March 31, 2000 and Yen84,827 million ($685 million) as of
     March 31, 2001, and installment loans considered impaired under the
     definition contained in FASB Statement 114 of Yen130,226 million as of
     March 31, 1999, Yen125,921 million as of March 31, 2000 and Yen120,090
     million ($969 million) as of March 31, 2001. See "Item 4. Information on
     the Company--Profile of Businesses--Direct Financing Leases" and
     "--Installment Loans and Investment Securities".

(2)  Operating assets are defined as all assets subject to regular, active
     sales and marketing activities, including the assets shown on the balance
     sheet as investment in direct financing leases, installment loans,
     investment in operating leases, investment in securities and other
     operating assets. Operating assets are calculated before allowance for
     doubtful receivables on direct financing leases and possible loan losses.

(3)  Shareholders' equity ratio is the ratio as of the period end of
     shareholders' equity to total assets. Return on assets is the ratio of net
     income for the period to average total assets during the period. Return on
     equity is the ratio of net income for the period to average shareholders'
     equity during the period. Allowance/investment in direct financing leases
     and installment loans is the ratio as of the period end of the allowance
     for doubtful receivables on direct financing leases and possible loan
     losses to the sum of investment in direct financing leases and installment
     loans.

     The following table provides the noon buying rates for Japanese yen
expressed in Japanese yen per $1.00 during the periods indicated. The noon
buying rate on June 22, 2001 was $1 = Yen124.25.

                                       2

<PAGE>


<TABLE>
<CAPTION>
                                                                              Year Ended March 31,
                                                      ----------------------------------------------------------------------
                                                         1997          1998            1999           2000           2001
                                                      ----------    ----------      ----------     ----------     ----------
                                                                              (Yen per U.S. dollar)
<S>                                                   <C>            <C>            <C>            <C>            <C>
High.............................................     Yen 124.54     Yen 133.99     Yen 147.14     Yen 124.45     Yen 125.54
Low..............................................         104.49         111.42         108.83         101.53         104.19
Average (of rates available on the last day of
each month during the period)....................         113.20         123.57         128.10         110.02         111.65
At period-end....................................         123.72         133.29         118.43         102.73         125.54
</TABLE>

     The following table provides the high and low noon buying rates for
Japanese yen per $1.00 during the months indicated.

                                           High          Low
                                          ------       ------
            2001
      January......................       118.35       114.26
      February.....................       117.62       114.88
      March........................       125.54       117.33
      April........................       126.75       121.68
      May..........................       123.67       118.88
      June (through June 22).......       124.40       119.13

Risk Factors

  Our business may continue to be adversely affected by the recession in
Japan

     Our business may continue to be adversely affected by the recession in
Japan. The recession may affect our new business origination volume, the credit
quality of our assets and margins on operating assets.

     The Japanese economy has shown slow growth or negative growth for most of
the last decade. Although from 1995 to early 1997 the economy recovered to some
extent, since 1997 recessionary conditions have prevailed. Favorable economic
statistics in some recent periods may reflect increased Government spending
rather than recovery of economic fundamentals, and may not continue.

     As a result of adverse economic conditions in Japan, we may be unable to
originate more leases and loans and our non-performing assets may increase. Our
allowance for doubtful receivables on direct financing leases and possible loan
losses may prove to be inadequate. Adverse economic conditions may prevent our
customers from meeting their financial obligations. The value of collateral
securing our loans and the value of equipment that we lease to customers may
decline. Our ability to re-lease or remarket equipment on favorable terms may
be limited by adverse economic conditions in Japan.

  Our credit losses on exposures to Japanese real estate related companies
and construction companies may exceed our allowances for these loans

     At March 31, 2001, we had loans outstanding of Yen255,863 million ($2,065
million) to real estate related companies and construction companies. Of that
amount, we maintained an allowance for possible loan losses of Yen29,714
million ($240 million). Our allowance for doubtful receivables and possible
loan losses may be inadequate to cover credit losses on our loans to real
estate related companies and construction companies.

     Japanese real estate related companies and construction companies have
been severely affected by the collapse of the bubble economy in Japan. Because
of the large declines in real estate prices, these companies have suffered
enormous losses on investments in real estate and loans secured by real estate.
Some of these losses have been recognized in the financial statements of these
companies and some have not. Companies in these sectors are suffering from
other difficult business conditions resulting from the collapse of the bubble
economy, including the

                                       3
<PAGE>

lack of liquidity in the real estate market and a decrease in major development
projects. Therefore, these companies may have difficulty paying amounts due on
loans. In addition, the value of real estate collateral securing our loans from
real estate related companies and construction companies may further decline.
This may prevent us from fully recovering our loans to those companies if they
default on their obligations.

  Our portfolio may be adversely affected if U.S. economy declines

     A considerable portion of our revenue is derived from our operations in
the United States. The US economy has shown slow growth since the second half
of fiscal 2001, accompanied by declining stock prices and corporate earnings.
Our results of operations may be adversely affected if the economic condition
in the US continues to decline. Adverse effects on our US operations might
include:

     o    an increase in provision for doubtful receivables and possible loan
          losses if business results of our US customers deteriorate;

     o    an increase in write-downs of securities if the market values of
          securities continue to decline and such declines are not expected to
          be temporary; and

     o    an increase of loss in sale or unrealized loss on real estate if the
          value of our real estate in US declines significantly.

  Adverse developments affecting other Asian economies may continue to
adversely affect our business

     The economies of Hong Kong, Indonesia, Malaysia, Korea and other Asian
countries where we operate have experienced problems since the second half of
1997. Although economic conditions in some of these countries have improved, we
may suffer losses on investments in these countries and poor operating results
on our businesses in these countries if these countries experience

     o    declines in the value of the local currency,

     o    declines in the gross domestic product,

     o    declines in corporate earnings,

     o    political turmoil, or

     o    stock market volatility.

     These and other factors could result in

     o    lower demand for our services,

     o    further deterioration of credit quality of our customers in Asian
          markets,

     o    the need to give financial support to our Asian subsidiaries or
          affiliates, or

     o    further write-offs of Asian assets.

  Changes in interest rates and currency exchange rates could adversely
affect our assets and our operating income

     We are subject to risks relating to changes in market rates of interest
and currency exchange rates.

     Significant increases in market interest rates, or the perception that an
increase may occur, could adversely affect our ability to originate new
transactions, including direct financing leases and loans, and our ability to
grow. On the other hand, a decrease in interest rates could result in faster
prepayments of loans. In addition, changes in


                                       4
<PAGE>


market interest rates could affect the interest income we receive on
interest-earning assets differently than the interest rates we pay on
interest-bearing liabilities. This could increase our interest expense more
than our revenues. An increase in market interest rates could make some of our
floating-rate loan customers default on our loans to them.

     Not all of our assets and liabilities are matched by currency. As a
consequence, rapid or significant changes in currency exchange rates could have
an adverse impact on our assets and our operating income.

  We may suffer losses on our investment portfolio

     We hold large investments in debt and equity securities, mainly of
Japanese corporations. At March 31, 2001, the book value of our investments in
securities was Yen942,158 million ($7,604 million). We may suffer losses on
these investments because of changes in market prices, defaults or other
reasons.

     7.7% of our investment securities at March 31, 2001 were marketable equity
securities, mainly common stock of Japanese listed companies. The market values
of these equity securities are volatile and have declined substantially in
recent years. Unrealized gains and losses on equity securities are generally
recorded in shareholders' equity, net of income taxes, and are not directly
charged to income. However, declines in market value on available-for-sale
securities are charged to income if we believe that these declines are other
than temporary. We recorded Yen10,848 million ($88 million) in charges of this
kind in fiscal 2001 and may have to record more charges of this kind in the
future.

     We have substantial investments in debt securities, mainly long-term
corporate bonds with fixed interest rates. We may realize losses on investments
in debt securities as a result of issuer defaults or deterioration in issuers'
credit quality. We may also realize losses on our investment portfolio if
market interest rates increase. Current market interest rates for
yen-denominated obligations are particularly low.

  We may suffer losses if we are unable to remarket leased equipment
returned to us

     We lease equipment in direct financing leases and operating leases. In
both cases there is a risk that we will suffer losses at the end of the lease
if we are unable to realize the residual value of the equipment that we
estimated at the beginning of the lease. This risk is particularly significant
in operating leases, because the lease term is much shorter than the useful
life of the equipment. If we are unable to sell or re-lease the equipment at
the end of the lease, we may not recover our investment in the equipment and we
may suffer losses. Our estimates of the residual value of equipment are based
on the current market value of used equipment and estimates of when and how
much equipment will become obsolete. If equipment values and product market
trends differ from our expectations, our estimates may prove to be wrong.

  Our allowance for doubtful receivables on direct financing leases and
possible loan losses may be insufficient

     We maintain an allowance for doubtful receivables on direct financing
leases and possible loan losses. This allowance reflects our judgment of the
loss potential, after considering factors such as:

     o    the nature and characteristics of obligors,

     o    economic conditions and trends,

     o    charge-off experience,

     o    delinquencies, and

     o    the value of underlying collateral and guarantees.

     We cannot assure you that our allowance for doubtful receivables on direct
financing leases and possible loan losses will be adequate over time to cover
credit losses in these portfolios. This allowance may turn out to be inadequate
if adverse changes in the Japanese economy or other economies in which we
compete or discrete events adversely affect specific customers, industries or
markets. If our allowance for doubtful receivables on direct


                                       5
<PAGE>


financing leases and possible loan losses is insufficient to cover these
changes or events, we could be adversely affected.

  Our access to liquidity and capital may be restricted by economic
conditions in Japan

     Our primary sources of funds are cash flow from operations, borrowings
from banks and other institutional lenders, and funding from capital markets,
such as commercial paper, medium-term notes, straight bonds, asset-

     backed securitizations and other term debt securities. A downgrade in our
credit ratings could result in an increase in our interest expense and could
have an adverse impact on our ability to access the commercial paper market or
the public and private debt markets, which could have an adverse effect on our
financial position and liquidity. Even if we are unable to access these markets
on acceptable terms, we have access to other sources of liquidity, including
bank borrowings, cash flow from our operations and sales of our assets. We
cannot assure you, however, that these other sources will be adequate if our
credit ratings are downgraded or other adverse conditions arise.

     We continue to rely significantly on short-term funding from Japanese
commercial banks. Only a portion of this funding is provided under committed
facilities. We also rely on funding sources such as capital markets, including
commercial paper and corporate bonds. We are taking steps to reduce refinancing
risks by diversifying our funding sources and increasing committed credit
facilities from Japanese banks. Despite these efforts, the risk that we will be
unable to roll over short-term funding remains.

  We may lose market share or suffer reduced interest margins if our
competitors compete with us on pricing and other terms

     We compete primarily on the basis of pricing, terms and transaction
structure. Other important competitive factors include industry experience,
client service and relationships. From time to time, our competitors seek to
compete aggressively on the basis of pricing and terms and we may lose market
share if we are unwilling to match our competitors because we want to maintain
our interest margins. Because some of our competitors are larger than us and
have access to capital at a lower cost than us, they may be better able to
maintain profitable interest margins while still reducing prices. To the extent
that we match our competitors' pricing or terms, we may experience lower
interest margins.

  We expect to be treated a passive foreign investment company

     We expect, for the purpose of U.S. federal income taxes, to be treated as
a passive foreign investment company because of the composition of our assets
and the nature of our income. If you are a U.S. person, because we are a
passive foreign investment company you will be subject to special U.S. federal
income tax rules that may have negative tax consequences and will require
annual reporting.

  If you hold fewer than 100 shares, you will not have all the rights of
shareholders with 100 or more shares

     100 shares constitute one "unit". A holder who owns fewer than 100 shares,
or ADRs evidencing fewer than 200 ADSs, will own less than a whole unit. The
Japanese Commercial Code restricts the rights of a shareholder who holds shares
of less than a whole unit. In general, holders of shares constituting less than
a unit do not have the right to vote, to bring derivative actions or to examine
the books and records of the issuer. Transfers of shares constituting less than
one unit are significantly limited. Under the unit share system, holders of
shares constituting less than a unit have the right to require us to purchase
their shares. However, holders of ADRs are unable to withdraw underlying shares
representing less than one unit. Therefore, as a practical matter, they cannot
require us to purchase these underlying shares. As a result, holders of ADRs
with shares in lots of less than one unit may not have access to the Japanese
markets through the withdrawal mechanism to sell their shares. The unit share
system does not affect the transfer of ADSs, which may be transferred in lots
of any size.

  Foreign Exchange Fluctuations May Affect the Value of the ADSs and
Dividends

     Market prices for the ADNs or ADSs may fall if the value of the yen
declines against the U.S. dollar. In addition, the amount of principal,
interest and other payments made to holders of ADNs or cash dividends and other
cash payments made to holders of ADSs would be reduced if the value of the yen
declines against the U.S. dollar.


                                       6
<PAGE>


Item 4.  Information on the Company

     General

     ORIX Corporation is a corporation (kabushiki kaisha) formed under Japanese
law. Our principal place of business is at 3-22-8 Shiba, Minatu-ko, Tokyo
105-8683, 813-5419-5000. E-mail: koho@orix.co.jp; URL: www.orix.co.jp


Corporate History

     ORIX was founded as a Japanese corporation in 1964 in Osaka, Japan as
Orient Leasing Co., Ltd., a specialist in equipment leasing. We have grown over
the succeeding decades to become one of Japan's largest and most innovative
financial services companies, providing a broad range of commercial and
consumer finance products and services.

     Our historical development has until recently closely paralleled the
expansion and globalization of the Japanese economy. Our initial expansion
occurred just prior to a period of sustained economic growth in Japan that
began in 1965 and lasted through the early 1970s.

     The Japanese leasing industry gradually matured over the course of the
1970s. During this period, we continued to grow rapidly by expanding and
diversifying our range of products and services, as well as through overseas
expansion. In 1971 we established our first overseas office in Hong Kong, which
became a base for regional expansion.

     In April 1970 ORIX listed its shares on the second section of the Osaka
Securities Exchange. From February 1973 the shares have been listed on the
first sections of the Tokyo, Osaka, and Nagoya stock exchanges.

     In 1973, to respond to the outsourcing needs of our corporate clients for
automobile management, we established ORIX Auto Leasing Corporation, which
exclusively leases automobiles. In 1976, we entered the domestic rental segment
as we established ORIX Rentec Corporation, which rents measurement equipments
to corporations.

     In the 1980s, the Japanese financial sector began a process of gradual
deregulation, while the yen became a significant international currency. New
entrants and competition within the leasing industry increased, prompting us
and other leasing companies to provide more specialized and sophisticated
services and to increase international leasing activities. During this period,
we continued to expand our range of products and services, and placed increased
emphasis on conducting our operations on a consolidated basis to make optimal
use of corporate resources. We commenced sales of leveraged leases, a field in
which we have maintained our position as a market leader. In March 1986, we
acquired ORIX Securities Corporation (then Akane Securities K.K.) and expanded
the range of our financial products and services. In 1989, we changed our name
to ORIX Corporation, reflecting our increasingly international profile and
diversification from the leasing business.

     Since the early 1990s, the Japanese economy has experienced a protracted
period of economic stagnation and, in recent years, instability within the
financial sector. However, we have continued to diversify into other financial
activities. For example, in 1990, we commenced the structuring and sale of
commodities funds within Japan and, in 1991, we entered the life insurance
business. We have also actively pursued real estate development, finance and
management operations, using our group's resources to provide total solutions
to our customers' financing needs. We have also sought to enter into Japan's
personal financial services markets. In this regard, In 1997, we established a
Personal Financial Services team.

     In April 1998, we acquired ORIX Trust and Banking Corporation (then
Yamaichi Trust & Bank, Ltd.). This acquisition provided us with a general
banking license, which includes permission to accept deposits, and a trust
business license.

     In September 1998, we became the 12th Japanese company to list its shares
on the New York Stock Exchange.


                                       7
<PAGE>


     Deregulation in Japan has produced more dynamic market environment that we
believe will bring significant changes in our principal businesses. To sustain
our position in financial services and support profitability, we are working to
augment our specialized capabilities and to exploit business opportunities
presented by this environment. For example, ORIX has reorganized its Investment
Banking Headquarters and Real Estate Finance Headquarters to ensure that the
extensive experience and sophisticated know-how gained over many years can be
effectively utilized to develop and provide value-added and specialized
services.

Capital Expenditures

     We are a financial institution with significant leasing, real estate
development and other operations based on investment in tangible assets. As
such, we are continually acquiring and building such assets as part of our
business. A detailed discussion of these activities is presented elsewhere in
this annual report, including in "Item 4. Information on the Company" and "Item
5. Operating and Financial Review and Prospects."

     We also have made a number of acquisitions of significant investments in
other companies. Some of our more significant recent transactions are described
below.

     In April 1998, we acquired all the shares of common stock of Yamaichi
Trust & Bank, Ltd. from Yamaichi Securities Company, Limited and subsequently
changed its name to ORIX Trust and Banking Corporation. Yamaichi Trust & Bank,
Ltd., had approximately Yen68 billion in assets and net assets acquired were
Yen13.5 billion.

     In July 1999, we acquired the lease and rental operations of NEC Home
Electronics Lease. Ltd., consisting primarily of direct financing lease
receivables, for approximately Yen55 billion. These operations were conducted
by ORIX Media Supply. Financing lease receivables were subsequently transferred
to ORIX, and in April 2001 we sold this subsidiary to Sogo Medical Corporation.

     In July 1999, we acquired the remaining stake in Banc One Mortgage Capital
Markets, LLC. in the U.S., previously our joint venture with Bank One
Corporation, a major U.S. bank holding company, to increase our ability of
securitization and servicing of commercial property loans. As a result,
investment in securities and installment loans increased $363 million and $149
million respectively. Banc One Mortgage Capital Markets, LLC. has been renamed
and currently operates as ORIX Real Estate Capital Markets, LLC.

     In September 2000, a consortium led by ORIX, Softbank Corporation and The
Tokio Marine and Fire Insurance Company, Ltd. purchased all the shares of
common stock of the Aozora Bank, Ltd. (then Nippon Credit Bank of Japan) from
the Japanese Deposit Insurance Corporation. We acquired 14.99% stake in the
bank, and our investment amounted to approximately Yen15 billion.

     In April 2001, we acquired the operating assets and employees of Nihon
Jisyo Corporation. The assets include office buildings and residential rental
properties owned and operated by Nihon Jisyo, land for residential subdivision
development, and shares in subsidiaries involved in building maintenance and
real estate appraisal businesses. As of March 31 2000, Nihon Jisho had assets
of Yen58 billion ($468 million).



                                       8
<PAGE>


Our Portfolio

     The following chart shows the breakdown of our portfolio of businesses as
of March 31, 2001.

<TABLE>
      Business                     Business Profile                 Major Customers        Major Operating Companies
- ----------------------   ------------------------------------    ---------------------    ----------------------------
<S>                      <C>                                     <C>                      <C>
Direct financing         Information-related and office          Middle market            ORIX Corporation
leases                   equipment                               corporate customers      ORIX Auto Leasing
                         Industrial equipment                    Shipping companies       Corporation
                         Construction and civil engineering      Airline companies        ORIX Alpha Corporation
                         machinery                                                        ORIX Asia Limited
                         Commercial services equipment                                    ORIX Financial Services, Inc.
                         Automobiles                                                      ORIX Leasing Malaysia
                         Marine vessels                                                   Berhad
                         Aircraft                                                         PT. ORIX Indonesia Finance
                                                                                          ORIX Leasing Pakistan
                                                                                          Limited
                                                                                          ORIX Australia Corporation
                                                                                          Limited
                                                                                          ORIX Europe Limited
Operating leases         Measuring and analytical                Middle market            ORIX Corporation
                         equipment                               corporate customers      ORIX Rentec Corporation
                         Automobiles                             Shipping companies       ORIX Rent-A-Car Corporation
                         Marine vessels                          Airline companies        ORIX Real Estate Corporation
                         Aircraft                                                         ORIX Australia Corporation
                         Real estate                                                      Limited
                                                                                          ORIX AVIATION SYSTEMS
                                                                                          LIMITED
Installment loans        Corporate finance                       Middle market            ORIX Corporation
                         Housing loans                           corporate customers      ORIX Trust and Banking
                         Card loans                              Consumers                Corporation
                         Other consumer loans                                             ORIX Credit Corporation
                                                                                          ORIX Club Corporation
                                                                                          ORIX Asia Limited
                                                                                          ORIX USA CORPORATION
                                                                                          ORIX Leasing Malaysia
                                                                                          Berhad
                                                                                          PT. ORIX Indonesia Finance
                                                                                          ORIX Financial Services, Inc.
                                                                                          ORIX Europe Limited
                                                                                          ORIX IRELAND LIMITED
Life insurance           Life insurance products sold            Middle market            ORIX Life Insurance
                         through agents and directly to          corporate customers      Corporation
                         consumers                               Consumers
</TABLE>

                                       9
<PAGE>

<TABLE>
      Business                     Business Profile                 Major Customers        Major Operating Companies
- ----------------------   ------------------------------------    ---------------------    ----------------------------
<S>                      <C>                                     <C>                      <C>

Other operations         Securities brokerage                    Consumers                ORIX Corporation
                         Trust banking                           Middle market            ORIX Securities Corporation
                         Securities investment                   corporate customers      ORIX COMMODITIES
                         Venture capital investment                                       Corporation
                         Securities and futures trading                                   ORIX Capital Corporation
                         Alternative investment                                           ORIX Estate Corporation
                         Commodities funds                                                ORIX Real Estate Corporation
                         Insurance agency services                                        ORIX Asset Management
                         Ship management                                                  Corporation
                         Computer software development                                    ORIX Asset Management and
                         Real estate development and                                      Loan Services Corporation
                         management                                                       ORIX Investment Corporation
                         Asset management                                                 ORIX Trust and Banking
                         Leisure facility management                                      Corporation
                         Golf course management                                           ORIX USA CORPORATION
                         Training facilities management                                   ORIX Asia Limited
                         Driving school                                                   ORIX Real Estate Capital
                         Commercial mortgage servicing                                    Markets, LLC
                         Hotel management                                                 ORIX Real Estate Equities,
                         Professional baseball team                                       Inc.
                         Environmental services                                           ORIX Investment and
                                                                                          Management Private Limited
                                                                                          ORIX Europe Limited
                                                                                          ORIX IRELAND Limited
</TABLE>


     The table below shows our significant subsidiaries, including for each
such subsidiary the name, country of incorporation or residence, and proportion
of ownership interest (direct or indirect) by ORIX.

<TABLE>
                                                                                                                 ORIX
                  Company                               Principal Business                      Country        Ownership
                  -------                               ------------------                      -------        ---------
<S>                                             <C>                                          <C>              <C>
ORIX Alpha Corporation......................    Leasing and financing furnishing and             Japan           100%
                                                equipment for retailers, hotels,
                                                restaurants, and other users
ORIX Auto Leasing Corporation...............    Auto Lessor in Japan active mainly in            Japan           100%
                                                fleet leasing but with growing business
                                                in auto leases
ORIX Rentec Corporation.....................    Rental supplier of high-precision                Japan           100%
                                                measuring equipment
ORIX Credit Corporation.....................    Consumer credit company engaged in               Japan           100%
                                                business centered on shopping credit
                                                and consumer finance
ORIX Capital Corporation....................    Management of venture capital                    Japan           100%
                                                investment funds
ORIX Rent-A-Car Corporation.................    Rent-a-car business                              Japan           100%
ORIX Securities Corporation.................    Securities house                                 Japan           100%
ORIX Estate Corporation.....................    Managing real estate and leisure                 Japan           100%
                                                facilities
ORIX COMMODITIES Corporation................    Securities and futures trading                   Japan           100%
ORIX Club Corporation.......................    Consumer loans                                   Japan           100%
ORIX Life Insurance Corporation.............    Life Insurance                                   Japan           100%
ORIX Trust and Banking Corporation..........    Trust and banking services                       Japan           100%
ORIX Real Estate Corporation................    Real estate development and                      Japan           100%
                                                management
ORIX Asset Management and Loan Services
 Corporation................................    Commercial mortgage servicing                    Japan           100%
ORIX Investment Corporation.................    Alternative investment                           Japan           100%
ORIX Asset Management Corporation...........    Asset management                                 Japan           100%
</TABLE>


                                      10
<PAGE>

<TABLE>
                                                                                                                 ORIX
                  Company                               Principal Business                      Country        Ownership
                  -------                               ------------------                      -------        ---------

<S>                                             <C>                                          <C>              <C>

Asia & Oceania
ORIX Investment and Management Private
 Limited....................................    Venture capital investment                     Singapore          100%
 ORIX Asia Limited..........................    Leasing and investment banking in              China (Hong        100%
                                                Hong Kong and throughout Southeast               Kong)
                                                Asia
 ORIX Leasing Malaysia Berhad...............    Equipment leasing and other financing          Malaysia            80%
                                                services
 PT. ORIX Indonesia Finance.................    Equipment leasing and other financing          Indonesia           83%
                                                services
 ORIX Australia Corporation Limited.........    Equipment leasing, vehicle operating           Australia          100%
                                                leases, and other financing services

Middle East & North Africa
 ORIX Leasing Pakistan Limited..............    Equipment leasing services                     Pakistan            57%

North America
 ORIX USA CORPORATION.......................    Equipment leasing, asset-based lending,        U.S.A.             100%
                                                real estate leasing, and general
                                                corporate financing
 ORIX Real Estate Equities, Inc.............    Commercial real estate development             U.S.A.             100%
                                                and investment
 ORIX Financial Services, Inc...............    Installment financing                          U.S.A.             100%
 ORIX Real Estate Capital Markets, LLC......    Commercial mortgage servicing,                 U.S.A.             100%
                                                issuance of CMBS (Commercial
                                                Mortgage Backed Securities), and real
                                                estate investment

Europe
 ORIX Europe Limited........................    Corporate and asset-based finance and          U.K.               100%
                                                investment
 ORIX IRELAND LIMITED.......................    Investment in and trade of securities          Ireland            100%
                                                and loans; general corporate finance
                                                and asset-based finance
 ORIX AVIATION SYSTEMS LIMITED..............    Operating/finance leases for aircraft          Ireland            100%
                                                and other related services
</TABLE>

The Leasing Market in Japan

     The Japanese leasing industry is highly fragmented, with 328 companies
registered with the Japan Leasing Association as of March 31, 2001. In addition
to these companies, a number of large credit companies not registered with the
Japan Leasing Association also finance installment sales, which from the
customer's perspective are economically similar to lease contracts. Except as
otherwise noted, the data below is derived from data published by the Japan
Leasing Association. Comparable data is not available for installment sales.

     In fiscal 2001, the total annual value of new lease contracts reported by
the Japan Leasing Association was Yen7,946 billion ($64 billion). The value of
new lease contracts in fiscal 2001 based on purchase costs represented 9.15% of
total private fixed investment in Japan, as estimated by the Cabinet Office, a
ministry of the Central Japanese Government. These leases include only
financing leases as defined under Japanese GAAP, and as a result do not include
installment sales contracts classified under U.S. GAAP, and by us, as direct
financing leases.


                                      11
<PAGE>


               The largest segment of financing leases in fiscal 2001 was
information-related equipment (including computers and related equipment),
which represented 39.8% of the total value of lease contracts, followed by
industrial equipment (18.6%) and commercial service equipment (15.0%).

               Small- and medium-sized companies represented 46.2% of the
total customer base in Japan as measured by value of lease contracts, while
large companies comprised 47.5% of the customer base.

               The following tables contain some additional information
regarding the Japanese leasing market. The figures for the year ended March
31, 2001 in the Annual New Lease Contracts table are preliminary estimates.
The figures for private fixed investments are estimates provided by the
Cabinet Office.

                      Lease Financings by Equipment Type

                                                  Years ended March 31,
                                    ------------------------------------------
                                    1997     1998      1999     2000      2001
                                    ----     ----      ----     ----      ----
Information-related equipment..     42.5%    42.4%     44.0%    43.6%    39.8 %
Industrial equipment...........     17.0     18.1      16.7     18.4     18.6
Commercial service equipment...     15.4     14.6      14.5     13.8     15.0
Office equipment...............      9.5      8.7       8.1      8.1      8.0
Transportation equipment.......      7.1      7.2       6.6      6.5      7.4
Medical equipment..............      3.5      3.4       3.8      3.9      4.1
Other..........................      5.1      5.6       6.3      5.8      7.1

                           Annual New Lease Contracts



<TABLE>
<CAPTION>
                                                                   Year ended March 31,
                                            -----------------------------------------------------------------
                                               1997          1998          1999          2000          2001
                                            ---------     ---------     ---------     ---------     ---------
                                                                            (Billions of yen)
<S>                                         <C>           <C>           <C>           <C>           <C>
Total receivables under new lease
 contracts................................. Yen 8,287     Yen 7,930     Yen 7,145     Yen 7,402     Yen 7,946
Annual new lease contracts (cost basis)....     7,224         7,018         6,315         6,586         6,992
Private fixed investment...................    77,413        83,571        77,834        75,086        76,400
Annual new lease contracts as a
 percentage of private fixed
 investment................................      9.33%         8.40%         8.11%         8.77%         9.15%
</TABLE>

Overview of Activities

  Scope of Domestic Operations

     Domestically our group is comprised as of March 31, 2001 of ORIX, 63
subsidiaries, and a number of investments in affiliates. As of that date, we
employ approximately 6,500 staff in Japan excluding our affiliates, and our
domestic operations are serviced by a network of 577 offices throughout Japan.
Approximately 75% of our revenues in fiscal 2001 were generated by our domestic
operations. Activities conducted principally through subsidiaries include our
automobile leasing business conducted by ORIX Auto Leasing and our operating
lease business for high-precision measuring equipment and personal computers
conducted by ORIX Rentec.

     In addition to our core leasing business, we continue to expand into new
areas, such as the life insurance business conducted by ORIX Life Insurance and
real estate management and development conducted by ORIX Real Estate.

  Scope of International Activities

     Since the establishment of our first overseas subsidiary in Hong Kong in
1971, we have competed in selected international markets through subsidiaries
and investments in joint ventures as affiliates. At March 31, 2001, we


                                      12
<PAGE>


operated in 21 countries outside Japan through 92 subsidiaries and affiliates.
Our overseas operations, including our affiliates, employ approximately 4,700
staff, and include a network of 201 offices.

     ORIX USA is our base for operations in the Americas. Stockton Holdings
Limited, an affiliate, conducts reinsurance operations and trades in futures.
In July 1999, we increased our ownership of Bank One Mortgage Capital Markets,
LLC from 45% to 100% and renamed the operations as ORIX Real Estate Capital
Markets, LLC, which securitizes and services commercial mortgage loans.

     In the Asia and Oceania region, ORIX Asia, a Hong Kong operating
subsidiary, is engaged in leasing and installment sales operations and makes
housing loans. Singapore has also become an important center for our business
in the region.

     We also engage in leasing activities in other countries. Some of our
domestic subsidiaries, such as ORIX Rentec and ORIX Auto Leasing, have also
established overseas operations.

Profile of Businesses

     Domestic operations are conducted by ORIX and a number of subsidiaries and
affiliates.

     In general, our domestic sales staff sells the full range of our products.
However, some staff, such as the real estate staff, have specialized functions.
Domestic subsidiaries, such as ORIX Auto Leasing, ORIX Rentec and ORIX Life
Insurance, offer opportunities for cross-selling and other coordinated
activities with our companies. Other subsidiaries serve more specialized
functions. Products and services of these subsidiaries are handled by their
dedicated sales staff, whose specialized training and experience are required
in the markets they serve.

     Our main customer base is comprised of small and medium-sized businesses.
However, we have expanded our client base to large corporations in some
business segments, such as leasing of high-precision measuring equipment. We
have also targeted individual customers as a growth area in various business
segments, such as the card loan, auto leasing and life insurance businesses.

     Through our various product lines and distribution channels, we provide a
variety of financing solutions responsive to the varying financing needs of our
customers. We offer a variety of financing alternatives that accommodate
specific maintenance, asset risk, cash flow, accounting, tax and other
requirements of our customers. In many of our financing operations, we are able
to offer a variety of financing alternatives for the same asset, including
direct financing leases, operating leases or installment loans. We offer
options such as fixed or variable interest rates, principal installments and
varying prepayment or cancellation options.

     The extensive experience of our staff in leasing and secured financing
allows them to effectively evaluate residual value risk and to manage equipment
and residual value risks by locating alternative users or purchasers. See
"--Management of Residual Assets".

  Direct Financing Leases

     Direct financing leases are one of our core business activities. The table
below provides a geographical breakdown of our investment in direct financing
leases as of March 31, 2001.

                                        As of March 31, 2001
                                  -------------------------------------
                                                      Percent of direct
                                  Millions of yen     financing leases
                                  ---------------     -----------------
Direct financing leases in:
  Japan......................       Yen 1,193,332            72.0%
  Overseas...................             464,377            28.0%
                                    -------------           ------
Total........................       Yen 1,657,709           100.0%
                                    =============           ======


                                      13
<PAGE>


     As of March 31, 2001, the total balance of our investment in direct
financing leases represented 33.0% of our total operating assets.

     The table below provides a geographical breakdown of revenues from our
direct financing leases for the year ended March 31, 2001.

                                           Year ended March 31, 2001
                                  --------------------------------------
                                                       Percent of direct
                                  Millions of yen       financing leases
                                  ---------------      -----------------
Direct financing leases in:
 Japan.......................       Yen   77,365             63.4%
 Overseas....................             44,638             36.6%
                                    -------------           ------
Total........................       Yen  122,003            100.0%
                                    =============           ======

     Our revenues from direct financing leases represented 20.8% of our total
revenues in fiscal 2001.

     The typical direct financing lease is for one specific user, with
financial terms designed to recoup most, if not all, of the initial cost of the
equipment during the initial contractual lease term. Payments are usually made
monthly in a fixed amount. A direct financing lease is generally noncancellable
during the term of the lease. The term of a typical direct financing lease in
Japan is approximately five years. We engage in direct financing lease
operations in Japan and in most countries in which we have operations. Our
direct financing lease operations cover most types of equipment, broadly
categorized into information-related and office equipment, industrial
equipment, commercial services equipment, transportation equipment, and other
equipment.

     The following table shows the balance of direct financing lease assets by
category of equipment.

<TABLE>
                                                                     As of March 31,
                                    ---------------------------------------------------------------------------------
                                         1997              1998            1999             2000             2001
                                    -------------    -------------    -------------    -------------    -------------
                                                                      (Millions of yen)
<S>                                 <C>               <C>               <C>               <C>               <C>
Information-related and office
 equipment........................  Yen   557,439    Yen   623,203    Yen   493,298    Yen   373,281    Yen   334,174
                                    -------------    -------------    -------------    -------------    -------------
Industrial equipment..............        436,813          473,140          444,261          394,581          372,542
Commercial services equipment.....        226,118          273,730          224,080          194,809          193,624
Transportation equipment..........        458,572          443,486          414,093          398,521          415,246
Other.............................        388,674          372,463          377,110          383,761          342,123
                                    -------------    -------------    -------------    -------------    -------------
 Total............................  Yen 2,067,616    Yen 2,186,022    Yen 1,952,842    Yen 1,744,953    Yen 1,657,709
                                    =============    =============    =============    =============    =============
</TABLE>

     The decrease in the balance of investment in direct financing leases is
due to the securitization of lease assets and a decline in the level of new
contracts compared with the previous fiscal year.

     The sluggish private-sector capital investment in Japan, our highly
selective approach to new leasing contracts and our emphasis on profitability
over asset growth caused the overall balance of the leasing contracts to
decline.

     The above table does not include securitized lease assets. If securitized
assets were included the total balance of direct financing lease assets would
be Yen2,098,897 million as of March 31, 2000, and Yen1,968,872 million ($15,891
million) as of March 31, 2001.

     At March 31, 2001, no single lessee represented more than 1% of our total
portfolio of direct finance leases. As of March 31, 2001, approximately 72.0%
of our direct financing leases were to lessees located in Japan, and
approximately 20.0% of our direct financing leases were to lessees located in
the United States.

     The following table shows a breakdown of the components of investment in
direct financing leases.


                                      14
<PAGE>

<TABLE>
                                                                    As of March 31,
                                    ---------------------------------------------------------------------------------
                                         1997             1998             1999             2000             2001
                                    -------------    -------------    -------------    -------------    -------------
                                                                         (Millions of yen)
<S>                                 <C>              <C>              <C>              <C>               <C>
Minimum lease payments receivable.. Yen 2,229,528    Yen 2,353,294    Yen 2,107,393    Yen 1,889,224    Yen 1,779,295
Estimated residual value...........        76,578           59,119           52,368           49,965           48,896
Initial direct costs...............        23,886           28,294           29,374           26,042           24,616
Unearned lease income..............      (262,376)        (254,685)        (236,293)        (220,278)        (195,098)
                                    -------------    -------------    -------------    -------------    -------------
      Total........................ Yen 2,067,616    Yen 2,186,022    Yen 1,952,842    Yen 1,744,953    Yen 1,657,709
                                    =============    =============    =============    =============    =============
</TABLE>

     Information-related and Office Equipment

     Information-related and office equipment includes computers and related
equipment, as well as communication-related equipment. Japanese companies have
significantly increased investment in information systems, and outsourcing by
Japanese firms has increased the importance of lease financing. This category
represents a major portion of our direct financing lease portfolio, reflecting
our strategy to focus on profitable small-ticket leasing. Profitability was
emphasized and contracted lease balances were stringently monitored. In
addition due to the small-lot nature of this type of agreement, lease assets in
this market were often securitized, causing a decline in balance. If
securitized assets were included, this category would make up the largest
single portion of our direct financing lease portfolio. We have also employed
vendor programs in this sector to improve the efficiency of our origination
activities, and we have systematized the contract process and automated credit
evaluation. In the small-ticket lease sector we compete mainly with captive and
non-captive credit companies rather than traditional leasing firms. We compete
with these firms by maintaining a nationwide network of sales offices. We have
been successful in penetrating the market. In particular we have developed a
new customer base through our relationships with dealers and distributors. We
also provide a range of complementary products and services.

     Industrial Equipment

     Industrial equipment primarily consists of construction and heavy
equipment, and pulp and paper milling equipment. The balance of investment in
industrial machinery has decreased in line with the lower level of new
contracts compared to previous year due to depressed domestic demand and the
slowdown of the US economy.

     Commercial Services Equipment

     Commercial services equipment includes gaming machines, cash registers,
showcases and point-of-sales systems. Despite an overall decline in Japanese
personal consumption, the balance of investment in commercial services
equipment has declined only slightly.

     Transportation Equipment

     Transportation equipment within the direct financing lease portfolio
consists almost entirely of automobile fleet leasing to corporate clients. ORIX
Auto Leasing is our main company handling domestic operations. We also have
automobile leasing companies in several countries in Asia and Oceania. This
segment has become important in the direct financing lease portfolio as the
demand for auto leasing services has increased both in Japan and in our
overseas markets. Domestic demand for automobile leasing services has increased
due to the general trends towards outsourcing and greater acceptance of fleet
leasing by corporate customers. In addition, there is an increasing trend for
Japanese companies not to own their own vehicle fleets, particularly when
dealer negotiation, maintenance and the payment of taxes, insurance and other
costs can be handled by one vendor, such as us.

     We maintain a nationwide service network of approximately 8,000 agents and
repair shops with which we have entered into arrangements to provide services
for our leased automobiles. To further upgrade automobile maintenance
capabilities, we supply ORIX-brand low-cost, high-quality automobile
replacement parts to cooperating auto repair facilities. In addition, in a
joint arrangement with three oil refining and distribution companies in 1998 we
began to issue an Auto Management Service Card that can be used anywhere in
Japan to allow customers to monitor fuel costs on a centralized basis and
obtain other data services. Moreover, to deal with legal, labor-related,
accident,


                                      15
<PAGE>


and other types of risks, we provide comprehensive risk management services and
assist customers, from a variety of perspectives, in effectively managing and
controlling costs related to automobile usage.

     We are coordinating marketing activities of our various business lines and
subsidiaries to promote automobile leasing. In recent periods we have increased
the scope of our corporate fleet leasing operations. As of March 31, 2001, we
had a total of approximately 285,000 vehicles under lease. Based on fiscal 2000
data, we had a market share of approximately 11% of the domestic automobile
leasing industry, which we believe made us the largest independent automobile
lessor in Japan. We believe that our value-added services relating to vehicle
maintenance and post-accident procedures enable us to provide quick and
efficient comprehensive maintenance services. In order to diversify our access
to secondary markets, and increase the returns on the eventual sale of vehicles
from our fleet on which leases have expired, we have established five
specialist automobile auction sites in Japan. These sites handled the sale of
approximately 38,000 vehicles in fiscal 2001.

     Other Equipment

     Other equipment that we lease to Japanese clients includes a wide range of
medical machinery.

     Quality of Our Assets

     The following table provides information about our past due receivables
and provisions for direct financing leases. Average balances are calculated on
the basis of fiscal quarter-end balances.

<TABLE>
                                                                    As of March 31,
                                                     --------------------------------------------
                                                        1999             2000             2001
                                                     ----------       ----------       ----------
                                                       (Millions of yen, except percentage data)
<S>                                                  <C>              <C>              <C>
90+ days past due direct financing leases........... Yen 54,051       Yen 53,743       Yen 53,515
90+ days past due direct financing leases as a
 percentage of the balance of investment in direct
 financing leases...................................        2.8%             3.1%             3.2%
Provisions as a percentage of average balance of
 investment in direct financing leases..............        0.8%             1.1%             1.3%
Allowance for direct financing leases............... Yen 23,867       Yen 35,783       Yen 40,885
Allowance for direct financing leases as a
 percentage of the balance of 90+ days past due
 direct financing leases............................       44.2%            66.6%            76.4%
Allowance for direct financing leases as a
 percentage of the balance of investment in direct
 financing leases...................................       1.22%            2.05%            2.47%
</TABLE>

     The allowance for direct financing leases increased at March 31, 2001
mainly due to the deterioration in the quality of US lease receivables.

     We believe that the ratio of allowance for doubtful receivables as a
percentage of the balance of investment in direct financing leases was adequate
as of March 31, 2001, because:

     o    lease receivables are generally diversified and the amount of the
          realized loss on each contract is likely to be relatively small;

     o    all the lease contracts are collateralized by the underlying leased
          equipment and we can expect to recover at least a portion of the
          outstanding lease receivables by selling the underlying equipment;
          and

     o    the allowance for doubtful receivables on direct financing leases as
          a percentage of the balance of 90+ days past due direct financing
          leases was 76.4% as of March 31, 2001.

     The ratio of charge-offs as a percentage of the balance of the investment
in direct financing leases averaged 0.66% for fiscal 1999 through fiscal 2001.
We recognize that, due to our charge-off policy, historical ratios of
charge-offs as a percentage of the balance of our investment in direct
financing leases may be lower than if we had


                                      16
<PAGE>


taken charge-offs on a more timely basis. Accordingly, in evaluating whether
the ratio of allowance for doubtful receivables as a percentage of the balance
of our investment in direct financing leases is adequate, we do not give as
much weight to historical charge-off ratios as we do to the other factors
discussed above.

  Operating Leases

     Operating leases constitute another of our principal business activities.
The table below provides a geographical breakdown of our operating lease assets
as of March 31, 2001.

                                           As of March 31, 2001
                                  --------------------------------------
                                                       Percent of direct
                                                       financing leases
                                                             from
                                  Millions of yen      operating leases
                                  ---------------      -----------------
Operating leases in:
 Japan..................            Yen  320,638             71.1%
 Overseas...............                 130,533             28.9%
                                    ------------            ------
Total...................            Yen  451,171            100.0%
                                    ============            ======

     As of March 31, 2001, our total operating lease assets represented 9.0% of
our total operating assets.

     The table below provides a geographical breakdown of revenues from our
operating leases for the year ended March 31, 2001.

                                      Year ended March 31, 2001
                                  ---------------------------------------
                                                      Percentage of total
                                                           revenue
                                                        from operating
                                  Millions of yen            leases
                                  ---------------     -------------------

Operating leases in:
 Japan..................            Yen   83,612              73.7%
 Overseas...............                  29,866              26.3%
                                    ------------             ------
Total...................            Yen  113,478             100.0%
                                    ============             ======

     In fiscal 2001, our revenues from operating leases represented 19.4% of
our total revenues.

     Operating leases differ from direct financing leases in that they are
generally cancellable by the lessee. The lessor does not substantially recoup
the initial cost of the item through lease payments during the initial lease
term. Therefore, the lessor usually leases out the same item sequentially to
more than one customer (or to the same customer under successive lease
contracts) during its useful life. In the Japanese marketplace, operating
leases are often referred to as rentals. The lessor in an operating lease bears
the inventory risk. This means that the lessor must always maintain strong
links to secondary markets for the purchase and sale of used equipment. The
principal participants in these informal, unregulated markets are brokers and
dealers who specialize in the purchase and sale of used equipment.

     Our operating lease operations cover most types of equipment. These are
broadly classified into three principal market segments: transportation
equipment, measuring equipment and personal computers, and real estate and
other.

               The following table shows the balance of operating lease assets
by segment.

<TABLE>
                                                                     As of March 31,
                                    ---------------------------------------------------------------------------------
                                         1997             1998             1999             2000             2001
                                    -------------    -------------    -------------    -------------    -------------
                                                                         (Millions of yen)
<S>                                 <C>              <C>              <C>              <C>              <C>
Transportation equipment.........   Yen   205,277    Yen   195,392    Yen   181,886    Yen   159,548    Yen   165,218
Measuring equipment and personal
  computers......................          53,740           59,989           58,552           58,431           77,808
Real estate and other............         206,720          179,685          170,718          179,597          208,145
                                    -------------    -------------    -------------    -------------    -------------
      Total......................   Yen   465,737    Yen   435,066    Yen   411,156    Yen   397,576    Yen   451,171
                                    =============    =============    =============    =============    =============
</TABLE>


                                      17
<PAGE>


     The balance of our total investment in operating leases increased by
13.5%, or Yen53,595 million, from March 31, 2000 to March 31, 2001.

     Transportation Equipment

     Transportation equipment that we lease out under operating leases consists
mainly of aircraft, automobiles and oceangoing vessels. Our fleet of aircraft
currently stands at 22 owned and 31 managed aircraft. These are leased
principally to European and North American carriers. We own 21 Airbus 320s and
one Boeing 737. We have limited our investment to these types of aircraft due
to their relative liquidity in the leasing market. Our aircraft lease
operations are managed by ORIX Aviation Systems. The weighted average useful
life of our transportation equipment is 12 years.

     Our two principal markets for automobile operating leases are Japan and
Australia, although we also maintain automobile operating lease operations in
several Asian countries.

     Measuring Equipment and Personal Computers

     We have developed a strong position in the domestic measuring equipment
and personal computer rental sector. We believe we are the industry leader in
the domestic market for measuring equipment. Our customers include major
domestic and overseas electronics companies. We rent measuring equipment and
personal computers primarily through a specialist subsidiary, ORIX Rentec. We
believe that our inventory of more than 380,000 pieces of measuring and
diagnostic equipment is the largest of its kind in Japan.

     Our measuring and diagnostic equipment is used mainly in manufacturing
facilities and research and development centers. This includes:

     o    equipment for testing emissions from cellular phones and personal
          handyphones;

     o    equipment for testing noise emissions;

     o    equipment for testing compliance of electrical circuitry with
          prescribed standards;

     o    laboratory and field use meteorological and environmental testing
          equipment (pollution monitoring equipment); and

     o    equipment for monitoring, testing and evaluating the electromagnetic
          performance of printed circuit boards and the efficiency of
          microprocessors.

     ORIX Rentec maintains a website for the auction of used personal computers
and measuring equipment. The weighted average useful life for our measuring
equipment and personal computers is three years.

     Real Estate and Other

     We maintain a portfolio of 60 rental dormitories, which we rent to major
domestic corporations for use by their staff. We also own for rental and
operate office buildings, approximately 2,200 apartment units, and a number of
other real estate properties, located mainly in or near Tokyo and Osaka. This
includes a multi-purpose development in Yokohama, the Minato Mirai complex,
which has hotel, retail and commercial office space, and which was completed in
September 2000. The weighted average useful life for our real estate and other
is 40 years.


                                      18
<PAGE>


  Installment Loans and Investment Securities

     In fiscal 2001, our revenues from interest on loans and investment
securities were Yen109,448 million ($883 million), representing 18.7% of our
total revenues. As of March 31, 2001, the balance of installment loans was
Yen1,846,511 million ($14,903 million) and the balance of investment in
securities was Yen942,158 million ($7,604 million).

     Installment Loans

     The table below provides a geographical breakdown of installment loans as
of March 31, 2001.

                                           As of March 31, 2001
                                  ---------------------------------------
                                                         Percentage of
                                                      total installment
                                  Millions of yen            loans
                                  ---------------     -------------------

Investment in installment loans
 Domestic.......................   Yen  1,489,065             80.6%
 Foreign........................          357,446
                                   --------------            ------
Total...........................   Yen  1,846,511            100.0%

     For a breakdown of investment securities by business segments, see "Item
5. Operating and Financial Review and Prospects--General--Presentation of
Income from Investments".

     The following table shows the balance of installment loans by domicile and
type of borrowers.

<TABLE>
                                                                     As of March 31,
                                    ---------------------------------------------------------------------------------
                                         1997             1998             1999             2000             2001
                                    -------------    -------------    -------------    -------------    -------------


<S>                                 <C>              <C>              <C>              <C>              <C>
                                                                     (Millions of yen)
Domestic Consumer
 Housing loans..................... Yen   435,388    Yen   426,559    Yen   411,215    Yen   396,748    Yen   392,896
 Card loans........................        78,438           98,187          118,347          121,272          181,215
 Other.............................        67,902           55,811           43,663           56,461           43,959
                                    -------------    -------------    -------------    -------------    -------------
 Subtotal..........................       581,728          580,557          573,225          574,481          618,070
Domestic Commercial
 Real estate related companies.....       193,578          213,911          188,085          203,537          222,818
 Commercial and industrial
   companies.......................       558,232          607,952          614,988          657,355          627,252
                                    -------------    -------------    -------------    -------------    -------------
 Subtotal..........................       751,810          821,863          803,073          860,892          850,070
                                    -------------    -------------    -------------    -------------    -------------
                                        1,333,538        1,402,420        1,376,298        1,435,373        1,468,140
Foreign commercial, industrial
 and other borrowers...............       351,053          377,761          368,661          337,754          357,446
Direct loan origination costs, net.        16,106           14,644           16,928           18,312           20,925
                                    -------------    -------------    -------------    -------------    -------------
Total.............................. Yen 1,700,697    Yen 1,794,825    Yen 1,761,887    Yen 1,791,439    Yen 1,846,511
                                    =============    =============    =============    =============    =============
</TABLE>

     As of March 31, 2001, we had no concentration of loans to borrowers in a
single industry, other than loans to real estate related companies. At March
31, 2001, we had loans outstanding of Yen255,863 million ($2,065 million) to
real estate related companies and construction companies. Of that amount, a
valuation allowance was required for loans with an outstanding balance of
Yen29,714 million ($240 million). The remaining outstanding balance represents
performing loans or the portion of loans secured by collateral.


                                      19
<PAGE>


     As of March 31, 2001, approximately 81% of loans were to borrowers in
Japan and approximately 10% were to borrowers in the United States.

     Loans to Domestic Consumer Borrowers

     We have three distinct categories of domestic consumer lending: housing
loans, card loans and other lending. We select the type of borrower, undertake
systematic credit and risk analysis, and tailor products to meet specific
customer needs. Our lending experience in the real estate development sector
has enabled us to form strong relationships with developers which provide us
with attractive housing loan opportunities.

     Substantially all of our card loans and small-lot consumer loans are
unsecured. Despite the relatively small size of these loans, we have emphasized
the selection of borrower type, and have developed products that differentiate
us from our competitors. For example, we provide card loans that offer higher
credit-quality individuals lower interest rates than those offered by consumer
finance companies. We also undertake rigorous credit evaluation procedures.

     We distribute our housing loans principally through contacts with real
estate developers and brokers while we distribute other consumer loan products
through retail outlets and direct mail.

     In fiscal 2000, we transferred our housing loan business from ORIX's Real
Estate Finance Headquarters to ORIX Trust and Banking in order to respond
effectively to diverse demands for housing loans from owners-occupiers as well
as investors.

     Loans to Domestic Commercial Borrowers

     Loans to domestic commercial borrowers include loans to real estate
related companies, as well as general corporate lending. Historically, a
substantial portion of our loans were to real estate related companies.
However, in recent years, we have made few new loans to real estate related
companies. Reflecting changing industry trends, we receive financing proposals
more for short-term bridge finance for homes and other real estate than for
long-term project finance. We expect steady demand to continue for this type of
lending in the short-to-medium term. Commercial lending covers the spectrum of
Japanese corporate lending, including loans to the leisure industry, loans to
consumer finance companies, and loans to the Japanese retail sector. Despite
sluggish economic conditions in Japan, we have been able to achieve moderate
growth in this segment by offering financing products that meet our customers'
diverse needs.

     Loans to Foreign Borrowers

     Loans to foreign borrowers include our overseas ship finance operations
and general corporate lending. These borrowers are primarily in the United
States and Hong Kong. Substantially all of our overseas installment loans are
to corporate customers, such as multinational shipping companies and North
American real estate investors and developers, except for housing loans to
individuals and consumer finance loans in Hong Kong.

     Quality of Our Assets

     We classify past due installment loans into two categories: installment
loans considered impaired under the definitions contained in FASB Statement 114
and 90+ days past due loans excluding amounts attributable to treatment under
FASB Statement 114. See "Item 5. Operating and Financial Review and
Prospects--Policies relating to Non-performing Assets and Charge-Offs" and note
1(f) of the notes to the consolidated financial statements.

     The following table provides information about our recorded investment in
loans considered impaired under the definition contained in FASB Statement 114.
The valuation allowance for each period is the required valuation allowance
less the value of the collateral from impaired loans, calculated under FASB
Statement 114.


                                      20
<PAGE>



<TABLE>
<CAPTION>
                                                                   As of March 31,
                                                     -----------------------------------------------
                                                         1999             2000             2001
                                                     -------------    -------------    -------------
                                                              (Millions of yen)
<S>                                                 <C>             <C>             <C>
Impaired loans..................................     Yen   130,226    Yen   125,921    Yen   120,090
Impaired loans requiring a valuation allowance..           114,525           83,408           73,636
                                                     -------------    -------------    -------------
Valuation allowance.............................            62,109           51,791           47,037
                                                     =============    =============    =============
</TABLE>

     The allowance for impaired loans accounted for under FASB Statement 114
relates mainly to non-performing assets resulting from the collapse of the
Japanese real estate market in and following 1992. Following the adoption of
FASB Statement 114 in fiscal 1996, we increased the allowance for the category,
principally as a result of a decline in the value of real estate collateral
supporting these loans, despite the absence of significant change in the level
of total outstanding value of these loans. In fiscal 2001, a charge-off of
impaired loans amounting to Yen11,185 million ($90 million) resulted in a
decrease in the outstanding balances of impaired loans as of March 31, 2001
compared to March 31, 2000.

     The following table provides the outstanding balances of impaired loans by
region and type of borrowers. Domestic consumer loans in the "Others" category
primarily consist of loans secured by stock and golf club memberships.

<TABLE>
                                                                         As of March 31,
                                                     -------------    -------------    -------------
                                                         1999             2000             2001
                                                     -------------    -------------    -------------
<S>                                                      <C>              <C>              <C>
                                                                        (Millions of yen)
Domestic Consumers
 Housing loans....................................... Yen        -    Yen         -    Yen         -
 Card loans..........................................            -                -                -
 Others..............................................          740              646              625
                                                      ------------    -------------    -------------
   Subtotal..........................................          740              646              625
Domestic Commercial
 Real estate related companies.......................       64,536           49,432           48,527
 Commercial and industrial companies.................       57,135           64,131           59,288
                                                      ------------    -------------    -------------
   Subtotal..........................................      121,671          113,563          107,815
Foreign, commercial, industrial and other borrowers..        7,815           11,712           11,650
                                                      ------------    -------------    -------------
Total................................................ Yen  130,226    Yen   125,921    Yen   120,090
                                                      ============    =============    =============
</TABLE>

     The following table provides information as to past due loans and
allowance for installment loans, excluding amounts attributable to treatment
under FASB Statement 114. Average balances are calculated on the basis of
fiscal quarter-end balances.

<TABLE>
                                                                     As of March 31,
                                                     -----------------------------------------------
                                                          1999            2000              2001
                                                     -------------    -------------    -------------
                                                        (Millions of yen, except percentage data)
<S>                                                   <C>             <C>              <C>
90+days past due loans not attributable to
  treatment under FASB  Statement 114 loans......    Yen    98,100    Yen    91,513    Yen    84,827
90+ days past due loans not attributable to
 treatment under FASB  Statement 114 as a
 percentage of the balance of installment loans
 excluding FASB Statement 114 loans..............              6.0%             5.4%             4.9%
Provisions as a percentage of average balance of
 installment loans...............................              1.7%             1.1%             1.0%
Allowance for possible loan losses not
 attributable to treatment under FASB
 Statement 114...................................    Yen    46,630    Yen    49,365    Yen    53,155
Allowance for loans not attributable to treatment
 under FASB Statement  114 as a percentage of the
 balance of 90+ days past due loans not
 attributable to treatment under FASB
 Statement 114...................................             47.5%            53.9%           62.7%
</TABLE>


                                      21
<PAGE>

<TABLE>
                                                                     As of March 31,
                                                     -----------------------------------------------
                                                          1999            2000              2001
                                                     -------------    -------------    -------------
                                                        (Millions of yen, except percentage data)
<S>                                                  <C>              <C>              <C>

Allowance for loans not attributable to treatment
 under FASB Statement 114 as a percentage of the
 balance of installment loans excluding
 FASB statement 114 loans........................             2.86%            2.96%            3.08%
</TABLE>

     At March 31, 2001, the allowance for loans not attributable to treatment
under FASB Statement 114 as a percentage of 90+ days past due loans not
attributable to treatment under FASB Statement 114 loans increased, reflecting
a decline in value of collateral underlying assets and overall economic
conditions in Japan with remained stagnant.

     The following table shows the balance of 90+ days past due loans not
attributable to treatment under FASB Statement 114 by domicile and type of
borrowers.

<TABLE>

                                                                     As of March 31,
                                                     -----------------------------------------------
                                                          1999            2000              2001
                                                     -------------    -------------    -------------
                                                                    (Millions of yen)
<S>                                                   <C>             <C>              <C>
Domestic consumer
 Housing loans...................................    Yen    71,157    Yen    67,066    Yen    60,316
 Card loans and other............................           20,021           16,825           14,832
Domestic commercial
 Real estate related companies...................               --              191              808
 Commercial and industrial companies.............              675            2,103            2,050
Foreign..........................................            6,247            5,328            6,821
                                                     -------------    -------------    -------------
Total............................................    Yen    98,100    Yen    91,513    Yen    84,827
                                                     =============    =============    =============
</TABLE>

     The majority of these past-due loans were domestic housing loans to
consumers secured by collateral (mostly first mortgages) where we received
partial payments. A significant majority of these housing loans are to
consumers who purchased condominiums for investment purposes. We make
provisions against losses in this portfolio by way of general reserves for
installment loans included in allowance for doubtful receivables. We make
allowance for domestic housing loans after careful evaluation of the value of
collateral underlying the loans, past loss experience and any economic
conditions that may affect the default rate. These conditions include corporate
and personal bankruptcies and increased unemployment rates.

     We determine the allowance for card loans on the basis of past loss
experience, general economic conditions and the current portfolio composition.
In addition, we determine the amounts of necessary charge-offs and these
amounts are added to provision against losses.

     We believe that the level of the allowance as of March 31, 2001 was
adequate because

     o    we expect to recover a portion of the outstanding balance for 90+
          days past due loans (excluding FASB Statement 114 loans) primarily
          because most 90+ days past due loans are domestic housing loans,
          which are generally made to individuals and generally secured by
          first mortgages, and

     o    the allowance for possible loan losses not attributable to treatment
          under FASB Statement 114 as a percentage of the balance of 90+ days
          past due loans not attributable to treatment under FASB Statement 114
          was 62.7% as of March 31, 2001.

     The ratio of charge-offs as a percentage of the balance of installment
loans averaged 0.82% for fiscal 1999 through fiscal 2001. We recognize that,
due to our charge-off policies, historical ratios of charge-offs as a
percentage of the balance of our investment in installment loans may be lower
than if we had taken charge-offs on a more timely basis. Accordingly, in
evaluating whether the ratio of allowance for possible loan losses as a
percentage of the balance of installment loans is adequate, we do not give as
much weight to historical charge-off ratios as we do to the other factors
discussed above.


                                      22
<PAGE>

     Investment Securities

     We maintain a sizable investment in various securities. The largest
segment of this portfolio is the investment of the reserves in our life
insurance operations. This is approximately 57.0% of our total investment in
securities as of March 31, 2001. These reserves are generally invested in
corporate debt. For a breakdown of investment securities by business segments,
see "Item 5. Operating and Financial Review and Prospects-General-Presentation
of Income from Investments". Overseas, we also have substantial holdings in
corporate debt in the United States as well as emerging markets in Latin
America, Eastern Europe and Southeast Asia. The following table shows our
investment in securities by category of investment.

<TABLE>
                                                                           As of March 31,
                                    -----------------------------------------------------------------------------------------------
                                                 1999                              2000                              2001
                                    ------------------------------    ------------------------------    ---------------------------
                                                                            (Millions of yen)
<S>                                 <C>              <C>              <C>              <C>              <C>              <C>
Trading securities..............    Yen       414          0.1%       Yen       390         0.1%        Yen       581         0.1%
Available-for-sale securities...          507,510         88.1              689,638        90.9               841,409        89.3
Held-to-maturity securities.....           16,542          2.8               11,404         1.5                13,005         1.4
Other securities................
                                           51,740          9.0               56,949         7.5                87,163         9.2
                                    -------------        ------       -------------       ------        -------------       ------
     Total......................    Yen   576,206        100.0%       Yen   758,381       100.0%        Yen   942,158       100.0%
                                    =============        ======       =============       ======        =============       ======
</TABLE>

     Corporate debt securities consist of general obligation and fixed interest
rate instruments. Our portfolio included investments by ORIX USA in high yield
debt securities with a balance of Yen59,073 million ($477 million) as of March
31, 2001. In June 1998 we reduced the balance of investments in high yield debt
securities by Yen50,611 million by means of a securitization in which ORIX USA
sold notes collateralized by a portion of its high yield securities portfolio.
ORIX USA retained a subordinated interest in this portfolio. Trading securities
include securities held in the trading portfolio of ORIX Securities and ORIX
Commodities.

     The following table provides the fair value of available-for-sale and
held-to-maturity securities in each major security type.

<TABLE>
                                                                     As of March 31,
                                                      ----------------------------------------------
                                                          1999             2000             2001
                                                      ------------     ------------     ------------
<S>                                                    <C>             <C>             <C>
                                                                    (Millions of yen)
Available-for-sale securities:
   Japanese and foreign government bond securities... Yen   20,601     Yen   12,895     Yen   25,431
   Japanese prefectural and foreign municipal bond
      securities.....................................       20,468           33,021           39,692
   Corporate debt securities.........................      398,753          482,417          604,145
   Mortgage-backed and other asset-backed
     securities......................................        6,795           54,475           94,236
   Funds in trust....................................        6,128            2,479            5,508
   Equity securities.................................       54,765          104,351           72,397
                                                      ------------     ------------     ------------
                                                      Yen  507,510     Yen  689,638     Yen  841,409
                                                      ============     ============     ============
Held-to-maturity securities:
   Japanese and foreign government bond securities... Yen       --     Yen       --     Yen      142
   Corporate debt securities.........................       16,515           11,404           12,864
                                                      ------------     ------------     ------------
                                                      Yen   16,515     Yen   11,404     Yen   13,006
                                                      ============     ============     ============
</TABLE>

     At March 31, 2001, marketable equity securities amounted to approximately
7.7% of ORIX's total investment in securities. We make these equity investments
mainly to strengthen business relationships with customers.


                                      23
<PAGE>


     Life Insurance

     Our life insurance business includes insurance underwriting and agency
sales. Our life insurance underwriting business is conducted by our subsidiary
ORIX Life Insurance. Our life insurance agency sales business is conducted by
ORIX. Revenues from life insurance premiums and related investment income for
fiscal 2001 were Yen158,314 million ($1,278 million), or 27.0% of our total
revenues.

     ORIX Life Insurance

     ORIX Life Insurance is a full-line life insurance underwriter, with total
value of insurance contracts in force at March 31, 2001 amounting to Yen3,026
billion ($24.4 billion). ORIX Life Insurance traditionally distributed its
products through agents, including ORIX as well as independent agents. In
September 1997 ORIX Life Insurance initiated ORIX Direct.

     ORIX Direct is Japan's first range of whole life, endowment, and term life
insurance products offered through direct channels. Since this insurance is
sold via newspaper advertisements, the Internet, and other direct channels,
administration expenses such as agent fees and marketing office expenses are
lower than for agency-based businesses. As a consequence, we are able to offer
this insurance at a lower cost than competitors. Also, by setting an upper
limit Yen30 million on insurable amounts and Yen15 million on single payment
endowment insurance, we have been able to simplify analysis and approval
procedures. ORIX Direct is part of our overall initiative to increase our
presence in the retail financial services sector.

     The following table shows a breakdown of the balance of investments by
ORIX Life Insurance as of March 31, 2001.

<TABLE>
                                              As of March 31, 2001
                                    ----------------------------------------
                                    Millions of yen      Millions of dollars
                                    ---------------      --------------------
<S>                                  <C>                 <C>
Investment in securities
 Fixed income securities.........    Yen   519,995            $  4,197
 Marketable equity securities....            7,167                  58
 Other securities................            9,975                  80
                                     -------------            --------
Total investment in securities...    Yen   537,137            $  4,335
Other investments................           29,744                 240
                                     -------------            --------
Total............................    Yen   566,881            $  4,575
                                     =============            ========
</TABLE>

     Investments by ORIX Life Insurance other than securities consisted
principally of real estate for rental and loans.

  Other Operations

     Our other operations include the sale and structuring of commodities
funds, securities brokerage, the sale of life and non-life insurance products
offered by insurance companies other than ORIX Life Insurance, real estate
development and management, and several other businesses. As of March 31, 2001,
these operations had assets of Yen132,006 million ($1,065 million),
representing 2.6% of our total operating assets. In fiscal 2001, we had
revenues from other operations of Yen68,331 million ($552 million),
representing 11.7% of our total revenues.

     Real Estate Development and Management

     In addition to our real estate lending operations, we are involved in a
range of property development and property management services. We own, operate
and provide management services, including tenant and rental income management,
for a number of commercial and other properties in Japan, including a corporate
training facility, golf courses and hotels.


                                      24
<PAGE>


     We actively engage in real estate development. In particular, we have
earned substantial profit from the planning and development of condominium
buildings in Japan. In fiscal 2001, operating revenues from the condominium
business accounted for approximately 54.4% of other operating revenues. In the
United States, ORIX Real Estate Equities engages in real estate development,
focusing on "build-to-suit" real estate development. This type of development
enables it to secure the profitability of new projects through the prior
arrangement of long-term leases and sales contracts.

     Our real estate development activities cover both the residential and
commercial property markets in Japan. We completed the subdivision and sale of
approximately 1,000 residential apartment units in fiscal 2000 and
approximately 1,900 units in fiscal 2001. We are also participating in a
consortium, led by Japan's largest property developer, Mitsubishi Estate Co.,
Ltd., that is building a large residential apartment complex in Tokyo. We are
also involved in commercial real estate development. The expertise that we have
accumulated in more than 16 years in the Japanese real estate market, coupled
with our financing capabilities, allow us to create one-stop development
packages.

     Since the adoption of the Law Concerning Securitization of Specified
Assets by Special Purpose Companies in September 1998, we have actively engaged
in the securitization of real estate assets. In this areas, we are drawing on
our experience from U.S. operations and other expertise in handling leases,
loans to corporations, and real estate business as we actively work to expand
our securitization of real estate and other types of assets as well as develop
our service operations.

     Securities Brokerage

     ORIX Securities Corporation is engaged primarily in equity and other
securities brokerage activities. We attach significant strategic importance to
this company. As financial sector deregulation proceeds in Japan, we expect
that there will be significant opportunities to offer products and services
that capitalize on synergies with our other affiliated companies. ORIX
Securities has seats on the Tokyo Stock Exchange and the Osaka Securities
Exchange.

     Taking advantage of the deregulation of brokerage commissions in October
1999, ORIX Securities is offering discount brokerage services to individual
investors. As part of this move to further develop its activities, ORIX
Securities in May 1999 began to offer On-Line Trade, an equity trading service
available via telephone and the Internet.

     Venture Capital

     In 1983 we established ORIX Capital to provide venture capital and related
consultancy services for companies that are potential candidates for initial
public offerings in Japan. As of March 31, 2001, assets under ORIX Capital's
management were approximately Yen16,978 million ($137 million), consisting
entirely of equity securities.

     Insurance Agency Sales

     We engage in life insurance agency sales through our network of
approximately 1,900 registered sales agents. ORIX serves as a sales agent for
ORIX Life Insurance. ORIX Life Insurance also contracts with independent
specialized insurance sales agents to market its products. ORIX Life
Insurance's sales agents market through customer visits.

     In September 1999, we formed a joint venture with the American
International Group (AIG) to operate in the Japanese nonlife insurance sector.
The company, ORIX Insurance Planning Corporation, is a domestic nonlife
insurance agency that provides various types of nonlife insurance products such
as fire and casualty insurance and other products including new types of
liability insurance. ORIX Insurance Planning is developing new nonlife
insurance products tailored to customers' requirements in cooperation with AIG
and organizing distinctive marketing programs for those products.

                                      25
<PAGE>

     Personal Financial Services

     In 1997, we established our PFS Department to examine the potential for us
to enter the Japanese personal financial services sector. This market sector
has been highly regulated with little product differentiation, and,
consequently, offered few opportunities for us. However, with the advent of
financial deregulation in Japan, we expect that there will be many
opportunities for us to enter the market, and capitalize on the brand
recognition we have built to date. We provide financial consulting and
financial products tailored to meet the needs of Japan's consumers.

     The PFS Department began to offer Life Insurance Diagnostic Services in
July 1997. These services provide detailed advice to customers regarding the
type of insurance most suited to their individual lifetime financial plans. In
addition, based on the data gathered while providing these services, the PFS
Department makes proposals for insurance products tailored to individual
customers.

     General and Trust Banking

     ORIX Trust and Banking provides us with a general banking license and a
trust business license. We engage in direct marketing of deposit products. As
of March 31, 2001, the balance of these deposits was approximately Yen178
billion ($1.4 billion).

     Waste Management

     We established ORIX Eco Services Corporation in 1998 to help leasing
service clients deal with their waste management problems. Its activities
include organizing a network of waste disposal companies and introducing as
well as acting as intermediary between our customers and these waste disposal
companies.

     Servicing

     Through our subsidiary, ORIX Real Estate Capital Markets, we engaged in
servicing of commercial mortgage loans collateralized primarily by real estate.
As of March 31, 2001, ORIX Real Estate Capital Markets serviced commercial loan
portfolios on behalf of itself and outside investors with unpaid principal
balances of approximately Yen4,882 billion ($39.4 billion).

     Other Financial Services

     We maintain a network of leasing affiliates throughout Japan that have
been established in cooperation with leading regional banks and other financial
institutions.

     Other Activities

     We own the ORIX Baseball Club, a professional baseball team named ORIX
BlueWave which we acquired in 1988, as part of an overall initiative to promote
our corporate image.

Management of Residual Assets

     Our personnel have extensive experience in managing equipment over its
full life cycle. We have the expertise to provide or arrange for required
maintenance and repairs, to obtain required regulatory permits and to repossess
equipment or real estate from defaulting credits. Although the estimated
residual value of equipment under direct financing leases is on average less
than 3% of total receivables, this figure is greater for operating leases which
carry inherently higher obsolescence and resale risks.

     We have established relationships with service, repair and resale
facilities throughout Japan, which reduce these risks. For example, ORIX Auto
Leasing maintains alliances with approximately 8,000 servicing and repair
facilities throughout Japan.

                                      26
<PAGE>

     ORIX Rentec maintains two fully automated facilities that offer repair,
servicing and recalibration services on personal computers and measuring
equipment, as well as its own internet auction site for used personal computers
and measuring equipment. We also maintain a relationship with a major personal
computer manufacturer for personal computer servicing. We also coordinate the
disposal of items that are of no further commercial use.

     Environmental services provided by ORIX Eco Services include those which
systematize the ultimate disposal of used leasing equipment.

International Operations

     Since the establishment of our first overseas subsidiary in Hong Kong in
1971, we have competed in selected international markets through our
subsidiaries and investments in international joint ventures. Our approach to
international expansion has been to focus first on direct financing leases. We
either establish wholly owned operations or set up joint ventures with a strong
local partner. In the cases of ORIX Financial Services in the United States and
ORIX Polska S.A. in Poland, we have expanded through acquisitions. In addition
to direct financing leases, in our international operations in various
jurisdictions we offer automobile maintenance leases, operating leases for
measuring equipment, personal financial services and aircraft leases. In the
United States, we have undertaken a diverse range of financial and real
estate-related business including corporate finance as well as real estate
financing and development operations.

     Our international operations have become a substantial part of our
operations, generating approximately 25% of our total revenues in fiscal 2001.
Of these overseas revenues, approximately 55.4% are from the Americas, 34.0%
from the Asia and Oceania region, and the remaining 10.6% from Europe.
Approximately 24.4% of our total assets are overseas operating assets,
excluding assets attributable to the corporate segment and assets which belong
to affiliate operations. Approximately 58.9% of overseas assets as of March 31,
2001 relate to the Americas, 29.5% to Asia and Oceania, and the remaining 11.6%
to Europe.

     The Americas

     After opening a representative office in 1974, we commenced formal
operations in the United States in 1981 when we established a wholly-owned
subsidiary, ORIX USA. Since then, we have significantly expanded our activities
in the United States. ORIX USA, headquartered in New York and with offices in
several major cities in the Unites States, offers a range of financial products
and services, including corporate finance, real estate finance, equipment
leasing, and investment and financing in the mortgage capital market. ORIX USA
owns 100% of the equity of ORIX Real Estate Equities, ORIX Financial Services
and ORIX Real Estate Capital Market, LLC.

     ORIX Real Estate Equities is a real estate development and management
company, which we acquired in 1987. ORIX Real Estate Equities is headquartered
in Chicago with offices in several major cities in the Unites States, and
properties in ten states in the U.S. and Toronto, Canada. The current
operations of ORIX Real Estate Equities are focused on three main activities:

     o    build-to-suit development of retail, industrial and office projects;

     o    the acquisition of office and industrial properties that offer
          value-enhancement opportunities; and

     o    asset and property management.

     These activities cover properties in our own portfolio as well as third
party properties.

     ORIX Financial Services, which was acquired in 1989, specialized in
leasing heavy equipment. ORIX Financial Services has engaged in vendor programs
that targets dealers and distributors to promote sales and marketing. The
largest segments of its leasing portfolio are transportation, construction and
other heavy equipment.

     In fiscal 2001, weakening conditions in the U.S. economy adversely
affected the leasing business related to transportation, construction and other
heavy equipment, resulting in an increase in doubtful receivables on direct


                                      27
<PAGE>


financial leases. We are proactively responding to this development. ORIX
Financial Services has focused on assets- based loans secured by receivables
and inventory as well as fixed assets, or other financing and leasing business.

     In 1989 we became involved in the field of commodities trading and
management, primarily through our investment in Stockton Holdings, a company
that trades in futures and provide reinsurance. As of March 31, 2001 we owned
29.7% of the equity of Stockton Holdings, without taking into account
outstanding options.

     ORIX increased its ownership of Banc One Mortgage Capital Markets, LLC.,
from 45% to 100% in July 1999 and subsequently changed the name of the company
to ORIX Real Estate Capital Markets, LLC. (ORIX Real Estate Capital Markets).
ORIX Real Estate Capital Markets combines origination, commercial
mortgage-backed securities investment, and servicing functions into a single
entity focused on commercial mortgage capital markets. ORIX Real Estate Capital
Markets is a leading servicer of performing mortgage loans and the largest
special servicer in the United States providing loan workout and liquidation
expertise on securitized and privately held portfolios.

     Asia, Oceania and Middle East

     In 1971 we established our first overseas office in Hong Kong, and we had
57 subsidiaries and affiliates at March 31, 2001. These companies do business
in 16 countries in the Asia, Oceania and Middle East regions. During about 30
years that we have maintained a presence in Asia, ORIX Asia, based in Hong
Kong, has been the base for our expansion and operations in the region. ORIX
Asia provides a wide range of financial services. Singapore has been another
center for our activity in the region. We now have five ORIX subsidiaries and
affiliates in Singapore undertaking leasing, rental, ship financing, securities
investment and venture capital operations.

     Although we provide a broad range of financial products and services
throughout the Asia and Oceania region, our primary focus has been on the
leasing operations. We introduced lease financing to, and are the leading
lessor in, most of the countries in this region. In this region, as in other
regions, we have employed two strategies in managing our operations. First, we
have focused on local business demand rather than on expatriate business
demand. This strategy has resulted in our Asia and Oceania portfolios being
composed of a large volume of small transactions which has had the effect of
dispersing risk. Second, we have sought to procure funds and transact business
in the relevant local currency and thus minimize currency fluctuation risk.

     Our domestic subsidiaries have also been expanding into the region. For
example, we have established specialized auto leasing operations in Singapore,
Taiwan and Malaysia, and ORIX Rentec established personal computer and
measuring equipment rental operations in Singapore in 1995 and in Malaysia in
1996.

     We have also expanded our activities into throughout Asia and Oceania
including Middle East and North Africa through our overseas subsidiaries and
affiliates such as ORIX Australia, ORIX New Zealand Limited, ORIX Leasing
Pakistan Limited, ORIX Investment Bank Pakistan Limited and Infrastructure
Leasing & Financial Services, Ltd in India.

     Europe

     We initiated our activities in Europe in 1974, when we established a
liaison office in London. We conduct our current European operations
principally through ORIX Europe, ORIX Ireland, established in 1988 as a finance
vehicle for ORIX's European operations, ORIX Aviation Systems in Dublin which
has marketing, technical, legal and administrative teams to develop our
international aircraft operating lease business, and ORIX Polska S.A., an
equipment leasing company in Warsaw. Multinational transportation operators are
the principal customers of our European operations.

     Established in 1982, ORIX Europe has grown to now provide leasing, general
and corporate lending and other financial services throughout Europe. These
include international ship financing, real estate financing and investment in
and trading of international securities.


                                      28
<PAGE>


Property, Plants and Equipment

     Because our main business is to provide diverse financial services to our
clients, we do not own any factories or facilities which manufacture products.
There are no factories currently under construction, and we have no plans to
build any factories in the future.

     Our most important facility that we own is our headquarters building. Our
headquarters is in Shiba, Minato-ku, Tokyo and covers a floor space of 19,662
square meters. We have no plans to expand our headquarters or to build
additional material offices. See also "- Description of Property".

Regulation

     ORIX Corporation is incorporated under the Commercial Code of Japan, and
its corporate activities are governed by the Commercial Code.

     There is no specific regulatory regime in Japan which governs the conduct
of our direct financing lease and operating lease businesses. Our installment
loan business is regulated by two principal laws which also regulate the
activities of credit card providers: the Acceptance of Contributions, Money and
Interest Law and the Regulation of Moneylending Business Law.

     The Moneylending Business Law requires all companies engaged in the money
lending business, whether they are installment finance companies, leasing
companies, credit card companies or specialized consumer loan finance
companies, to register with the relevant authorities. As registered
moneylenders, our registered companies are regulated by the Financial Services
Agency, which has the right to review registered moneylenders' operations and
inspect their records to monitor compliance with the provisions of the
Moneylending Business Law. The Financial Services Agency has the authority, and
is obliged, to cancel a registration upon substantial noncompliance with law,
failure to comply with some administrative orders and under other
circumstances.

     The insurance industry in Japan is regulated by the Insurance Business
Law. Insurance business may not be carried out without a license from the
Financial Services Agency. There are two kinds of licenses related to insurance
businesses: one for life insurance businesses and another for non-life
insurance businesses. The same entity cannot obtain both of these licenses. In
general, ORIX Life Insurance, as an insurance company, is prohibited from
engaging in any other activity. Insurance solicitation which is conducted by
ORIX is also governed by the Insurance Business Law. ORIX is registered as a
sales agent with the Ministry of Finance, the government authority formerly in
charge of supervising the insurance business at the time of ORIX's application
for the registration.

     We operate our securities business through ORIX Securities. The Securities
and Exchange Law and related laws and regulations apply to the securities
industry in Japan. The Securities and Exchange Law regulates both the business
activities of securities companies and the conduct of securities transactions.
ORIX Securities is subject to these and other laws and regulations. Violation
of these provisions could result in sanctions against ORIX Securities or its
officers and employees.

     General banking and trust businesses, which are operated by our banking
subsidiary, ORIX Trust and Banking, are also regulated. In general, the Banking
Law governs the general banking business and the Trust Law and the Trust
Business Law govern the trust business. These banking businesses may not be
carried out without a license from the Financial Services Agency and are
supervised by the Financial Services Agency.

     Outside of Japan, some of our businesses are also subject to regulation
and supervision in the jurisdictions in which we operate.

Competition

     Our markets are highly competitive and are characterized by competitive
factors that vary by product and geographic region. Our competitors include
independent and captive leasing and finance companies and commercial banks.
Some of our competitors have substantial market positions. Many of our
competitors are large companies that

                                      29
<PAGE>

have substantial capital and marketing resources, and some of these competitors
are larger than us and may have access to capital at a lower cost than we do.
Competition in Japan and a number of other geographical markets has increased
in recent years because of deregulation and increased liquidity. The markets
for most of our products are characterized by a large number of competitors.
However, in some of our markets, such as automobile leasing and small-ticket
leasing, competition is relatively more concentrated.

     Japan's leasing industry has a small number of independent leasing
companies. Many leasing firms are affiliated with banks, trading houses,
manufacturers and financial organizations. Furthermore, many of these
specialize in specific products, product ranges, or geographical regions. We
have established a nationwide network and distribute a full range of lease
products. Similarly, our array of other financial products and services, and
the seamless way in which they are presented, make us unique in the Japanese
marketplace. This ability to provide comprehensive financial solutions through
a single sales staff is one of our competitive advantages, and sets us apart
from our domestic competitors. Credit tightening has led to a general reduction
in aggressive marketing from most domestic competitors. We believe that this
factor, coupled with our ability to access funds directly from the capital
markets, will allow us to expand our domestic leasing operations as
consolidation proceeds within the industry.

     Recently, a number of non-Japanese finance companies have established
bases in Japan, or are in the process of increasing sales and marketing
initiatives. Many of these companies compete with us in specific fields.
However, in general we maintain the same competitive advantage that we enjoy
over many domestic competitors in that we offer a range of products and
services that offer customers more than a simple leasing product. Furthermore,
our established network of sales offices and experience in the Japanese
marketplace provides us with advantages over foreign leasing and asset finance
firms entering the Japanese marketplace.

     In small-ticket leasing we compete more with credit companies than with
traditional leasing firms. These companies, like us, have significant
experience and expertise in handling a large volume of small-ticket
transactions. We use our nationwide coverage and ability to offer a broad range
of financial products and services to compete with these firms.

     Recent consolidation and alliances among life insurance companies in Japan
have increased competition within the insurance industry. While Japanese
commercial banks are not currently permitted to sell insurance products
directly, scheduled deregulation of the insurance industry is expected to
permit them to sell life insurance products through subsidiary or affiliate
insurance companies at the bank branch offices. In the event that such
deregulation is implemented, the commercial banks could pose a competitive
challenge to our life insurance operations. If existing Japanese life insurers
are acquired by foreign insurers such foreign insurers would gain access to
established networks of sales agents.

Description of Property

     Our operations are generally conducted in leased office space in numerous
cities throughout Japan and the other countries in which we operate. Our leased
office space is suitable and adequate for our needs. We utilize, or plan to
utilize in the foreseeable future, substantially all of our leased office
space.

     We own office buildings, including one used as ORIX's principal executive
offices, apartment buildings and recreational facilities for our employees with
an aggregate value as of March 31, 2001 of Yen74,406 million ($601 million).

Legal Proceedings

     We are a defendant in various lawsuits arising in the ordinary course of
our business. In the second half of the fiscal year ended March 31, 2001, ORIX
reached on out-of-court settlement mediated by the Tokyo High Court with
Sumisei Leasing Co. Ltd. ("Sumisei") regarding all the outstanding claims by
Sumisei against us in connection with the repayment of loans. Under the terms
of this settlement, an accrued expense of Yen4.9 billion that was recorded in
our interim financial statements for the six-month period ended September 30,
2000, pursuant to the Tokyo District Court's judgment rendered on August 31,
2000, was reversed. This settlement did not have any material impact on our
results of operations for the year ended March 31, 2001.

                                      30
<PAGE>

     We aggressively manage our pending litigation and assess appropriate
responses to lawsuits in light of a number of factors, including potential
impact of the actions on the conduct of our operations. In the opinion of our
management, none of the pending matters is expected to have a material adverse
effect on our financial condition or results of operations. However, there can
be no assurance that an adverse decision in one or more of these lawsuits will
not have a material adverse effect.

Item 5.  Operating and Financial Review and Prospects

General

     The following discussion and analysis provides information that management
believes to be relevant to understanding ORIX's consolidated financial
condition and results of operations. This discussion should be read in
conjunction with the Consolidated Financial Statements of ORIX, including the
notes thereto, included in this Annual Report.

Overview

     We are engaged principally in financial service businesses. These include
leasing and commercial and consumer finance businesses in Japan and in overseas
markets. We earn our revenues mainly from direct financing leases, operating
leases and life insurance premiums, as well as interest on loans and investment
securities. Our expenses include mainly interest expense; depreciation on
operating leases; life insurance costs; selling, general and administrative
expenses; and provision for doubtful receivables on direct financing leases and
possible loan losses. We require funds mainly to purchase equipment for lease,
extend loans and invest in securities.

     We earn most of our revenues from our operations in Japan. Revenues from
overseas operations have also contributed significantly to our operating
results in recent periods. Overseas operations generated 24.4% of our total
revenues in fiscal 2001.

  Presentation of Income from Investments

     We present income from investments in separate lines of our consolidated
statements of income, depending upon the type of security and whether the
security is held in connection with our life insurance operations. The balances
of our investments in securities are shown by type of security and operation as
of the end of each of the last three fiscal years in the tables below.

                                           As of March 31, 1999
                                -----------------------------------------------
                                    Life            Other
                                  insurance       operations         Total
                                -------------    -------------    -------------
                                                 (Millions of yen)
Fixed income securities......   Yen   284,281    Yen   178,878    Yen   463,159
Marketable equity securities.           8,783           45,982           54,765
Other securities.............          38,101           20,181           58,282
                                -------------    -------------    -------------
     Total...................   Yen   331,165    Yen   245,041    Yen   576,206
                                =============    =============    =============

                                             As of March 31, 2000
                                -----------------------------------------------
                                    Life            Other
                                  insurance       operations         Total
                                -------------    -------------    -------------
                                                 (Millions of yen)
Fixed income securities......   Yen   390,523    Yen   203,689    Yen    594,212
Marketable equity securities.          13,243           91,108           104,351
Other securities.............          13,379           46,439            59,818
                                -------------    -------------    --------------
     Total...................   Yen   417,145    Yen   341,236    Yen    758,381
                                =============    =============    ==============


                                      31
<PAGE>

                                               As of March 31, 2001
                                -----------------------------------------------
                                    Life            Other
                                  insurance       operations         Total
                                -------------    -------------    -------------
                                              (Millions of yen)
Fixed income securities......   Yen   519,995    Yen   256,514    Yen    776,509
Marketable equity securities.           7,167           65,230            72,397
Other securities.............           9,975           83,277            93,252
                                -------------    -------------    --------------
     Total...................   Yen   537,137    Yen   405,021    Yen    942,158
                                =============    =============    ==============

     Interest we earn on fixed income securities and on interest-earning
securities classified in other securities held in connection with operations
other than life insurance are reflected in our consolidated statements of
income as interest on loans and investment securities. All other income and
losses (other than foreign currency transaction gain or loss and write-downs of
securities) we recognize on securities held in connection with operations other
than life insurance are reflected in our consolidated statements of income as
brokerage commissions and gains on investment securities. All income and losses
(other than foreign currency transaction gain or loss and write-downs of
securities) we recognize on securities held in connection with life insurance
operations are reflected in our consolidated statements of income as life
insurance premiums and related investment income.

  Policies relating to Non-performing Assets and Charge-Offs

     We review delinquencies or other transactions which are not in compliance
with our internal policies as frequently as every two weeks in the case of
domestic transactions. Transactions with payments three months or more overdue
are reported to the corporate executive officer responsible for the Credit
Department. We stop accruing revenues on direct financing leases and
installment loans when principal or interest is past due 180 days or more. We
also stop accruing revenues when our management determines that it is doubtful
that we can collect on direct financing leases and installment loans. The
decision is based on factors such as the general economic environment,
individual clients' creditworthiness and historical loss experience,
delinquencies and accruals. After we have set aside provisions for a
non-performing asset, we carefully monitor the quality of any underlying
collateral, the status of management of the obligor and other important
factors. When we determine that there is little likelihood of continued
repayment by the borrower or lessee, we sell the leased equipment or loan
collateral, and we record a charge-off for the portion of the lease or loan
that remains outstanding.

     Our charge-off policy is greatly affected by the Japanese tax law, which
limits the amount of tax deductible charge-offs. Japanese tax law allows
companies to charge off doubtful receivables on a tax deductible basis only
when specified conditions are met. Japanese tax law does not allow a partial
charge-off against the total outstanding receivables to an obligor. Japanese
regulations do not specify a maximum time period after which charge-offs must
occur.

     It is common in the United States for companies to charge-off loans after
they are past due for a specific arbitrary period, for example, six months or
one year. However, we are required to keep our primary records in accordance
with Japanese tax law. Japanese tax law does not allow Japanese companies to
adopt a policy similar to that in the U.S. If we had prepared our accounting
records as if each charge-off had occurred at an arbitrary date, the
differences in our financial statements would be a reduction in gross
receivables, an identical reduction in the allowance for doubtful receivables
and a change in the timing of charge-offs. We believe that the most significant
of these differences, when comparing us to other non-Japanese companies
(particularly U.S. companies), may be the delay in when we record a charge-off.
In a period of worsening economic conditions and increasing delinquencies, we
may reflect a lower charge-off ratio than we would if we applied the charge-off
policies used by some non-Japanese companies.

     FASB statement 121 requires that long-lived assets and certain
identifiable intangibles held and used by ORIX and its subsidiaries be reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. We conduct this review for
impairment by using undiscounted future cash flows expected to be generated by
the assets. During fiscal 1999, 2000 and 2001, ORIX and certain subsidiaries
wrote down certain real estate development projects included in "investment in
operating leases", "other operating assets", and "advances" in the consolidated
balance sheets to their fair values. An impairment loss was

                                      32
<PAGE>

recognized for each fiscal year in the amount by which the carrying amount of
the assets exceeded fair value determined by external appraisals.

Risk Management

     Our business activities contain elements of risk. We consider the
principal types of risk to be credit risk, asset/liability risk, and, to a
lesser extent, operational and legal risk.

     We consider the management of risk essential to conducting our businesses
and to maintaining profitability. Accordingly, our risk management systems and
procedures are designed to identify and analyze our risks, to set appropriate
policies and limits and to continually monitor these risks and limits by means
of reliable administrative and information systems and other policies and
programs.

  Credit Risk Management

     We have established an organizational structure specifically designed to
allow the management of credit risk in each business segment. We employ a risk
management system under which both the relevant marketing department and ORIX's
independent Credit Department make thorough evaluations of customer-,
industry-, and country-related risks. The Credit Department consists of
approximately 70 specialized staff. In addition, some of our domestic
subsidiaries, such as ORIX Auto Leasing and ORIX Credit, have their own
independent credit departments. Another independent specialized Real Estate
Appraisal Department, consisting of approximately 40 specialized staff, focuses
on the appraisal of real estate collateral. Based on internal standards, we
methodically evaluate individual financing proposals and determine whether or
not they should be approved. Financing and leasing assets are evaluated for
credit and collateral risk both during the credit granting process and
periodically after the advancement of funds.

     We maintain a unified set of credit evaluation practices with regard to
all of our operations. Our credit evaluation consists of three basic steps: (i)
initial evaluation to determine whether we will enter into each individual
transaction; (ii) monitoring of contracts for potential defaults or problems;
and (iii) corrective action for the management of defaults and other problem
transactions.

     Initial Evaluation--Domestic

     Staff members in our sales and marketing business units are authorized to
approve credit within limits that correspond to the seniority of the staff
member making the credit evaluation. If proposed transactions exceed these
credit limits within the marketing departments, the transaction is referred to
our Credit Department. In addition, a composite, on-line record of all
transactions able to be approved within the sales and marketing business units
is available to almost all ORIX employees, including the Credit Department. If
the transaction exceeds the limits which the Credit Department is authorized to
approve, the matter is referred to our Investment and Credit Committee for
ultimate determination. The Investment and Credit Committee, which consists of
at least five corporate executive officers, including the heads of the
departments originating relevant transactions, meets twice or three times per
month in order to review and approve large domestic and overseas transactions.

     In the initial evaluation process, the salesperson will first obtain
financial statements and other relevant financial information from the customer
covering at least the three years prior to the application. We do the
evaluation of credit on a cumulative basis so that an existing customer seeking
new credit will be re-evaluated if the new application, when coupled with
existing, outstanding credit, exceeds the limit granted by the last evaluation.
The salesperson will then interview senior management from the customer seeking
credit. If further investigation is necessary, we may retain independent credit
agencies.

     The credit evaluation process is provided in a series of manuals that we
have developed to ensure that the credit evaluation process is adhered to and
executed in a methodical manner. These manuals provide management risk
acceptance criteria for:

     o    acceptable maximum credit lines;

                                      33
<PAGE>

     o    selected target markets and products;

     o    the creditworthiness of borrowers, including credit history,
          financial condition, adequacy of cash flow and quality of management;
          and

     o    type and value of underlying collateral and guarantees.

These manuals are reviewed by management and staff and amended or improved as
required.

     Initial Evaluation--International

     We operate a number of subsidiaries and affiliates outside Japan. All of
these companies maintain systems and procedure manuals that are similar to
those we maintain within Japan, with modifications incorporated to take into
account local business practices and economic conditions and the varying
natures of the transactions being undertaken. Some of these companies,
particularly subsidiaries at which ORIX's secondees are stationed, use systems
and procedure manuals that are substantially similar to those used by ORIX,
while others, particularly affiliates, use their own credit evaluation
procedures. Substantially all subsidiaries refer transactions exceeding fixed
limits to the Credit Department, or to the Investment and Credit Committee, for
ultimate determination. For some of these companies, we carry out periodic
country and region evaluations to minimize exposure to potentially high risk
markets.

     Monitoring

     We maintain monitoring systems that allow us to evaluate the
creditworthiness of customers and identify potential problem transactions. In
particular, management reviews the financial position of lessees and borrowers
by monitoring the collection of receivables from these lessees and borrowers.
Coupled with the initial evaluation systems, this kind of monitoring enables us
to manage our exposure to particular industries, countries or regions and
products within our portfolio. For each industry segment we carry out periodic,
typically quarterly, industry sector evaluations to minimize exposure to
potentially high risk market segments.

     We review delinquencies or other transactions which are not in compliance
with our accepted practices as frequently as every two weeks in the case of
domestic transactions. Our management reviews accounts that are three months or
more overdue. We classify accounts six months overdue as non-accrual. However,
some exceptions to these time limits apply when imposing more stringent
requirements is necessary due to the nature of the transaction, such as
transactions for big ticket aircraft, real property or ship leasing and
financing transactions. Under current procedures, we are not aware of any
potential problem accounts which are likely to impact future operations.

     Under internally established rules, the management of each overseas
subsidiary and affiliate prepares reports on delinquent transactions on a
monthly basis, which are forwarded to ORIX's International Credit Department.
The International Credit Department then compiles these into a report that is
sent to ORIX's management.

     Remedial Measures

     As part of the credit management process, we maintain systems that
establish procedures for the handling of problem transactions, from consulting
measures that help customers rehabilitate their activities, to repossession,
legal adjudication, and obtaining further guarantees or collateral as required.
Repossession is also integrated, to the extent that it may be, with our
secondary market operations.

  Credit Evaluation by Industry Segment

     Direct Financing Leases and Operating Leases

     We carry out lease financing credit procedures in accordance with the
credit evaluation process. However, in lease transactions, generally the only
collateral is the leased item itself, and we generally assume that there is
little or

                                      34
<PAGE>

no residual value in the case of default. Therefore, we place particular
emphasis on the creditworthiness of the customer and the soundness of all
aspects of the customer's business to minimize any risk of default.

     Installment Loans

     In installment loan operations, managing credit risk and controlling loan
charge-offs depend on the evaluation of each corporate borrower's
creditworthiness and the underlying collateral.

     Except for a program for an experimental range of low-limit personal card
loans begun in 1998, all of our consumer lending is done only after
interviewing the applicant and receiving all relevant financial data. In order
to minimize default and other risks, we only target some borrower profiles, and
we always obtain third party credit reports. Our domestic installment loans are
mostly secured by real estate collateral, except for card loans which are
mostly unsecured because the maximum amount of each loan transaction is
relatively small. We use a collateral evaluation manual, issued by ORIX's
Credit Department, to determine the value of each item of collateral and
ascertain the appropriate loan amount for the relevant transaction by
considering a loan to value ratio. The value of collateral is derived after
considering factors such as the type of collateral and risk factors inherent in
each type. In domestic residential home loans, we generally obtain a registered
first mortgage, and use the specialized staff from the Real Estate Appraisal
Department to assess collateral and other risks. If collateral is a traded
security, the value of collateral is determined by referring to its current
market value. Separate manuals set out lending principles for loan staff to use
in making credit determinations.

     Most overseas loans are also secured by various forms of collateral. Our
overseas subsidiaries which conduct installment loan operations have similar
systems and procedures in place to evaluate and monitor the adequacy of
collateral in support of a loan. For example, in the case of overseas
commercial and home mortgage lending, our subsidiaries employ independent
property valuation professionals to assess collateral and other risks.

     The assessed value of collateral is reviewed periodically, at least once a
year, and we generally request the borrower to provide additional
collateral where the value is no longer sufficient to support the loan.

     Other Operations

     In addition to Credit Department staff, the specialized Real Estate
Appraisal Department has approximately 40 staff that are experienced in the
valuation of real property collateral and development proposals.

     Separate manuals set out more stringent procedures for transactions where
the size or nature of the transaction require greater care, such as
transactions for ship leasing and financing, aircraft leasing, investment in
securities and transactions involving complex financial products such as
commodities funds. The evaluation of credit and collateral is handled by
specially trained staff with experience in evaluating the property-, client-,
country- and other related risks inherent in these transactions. Our staff
promptly report delinquencies and other issues and take any necessary remedial
action.

  Loan Loss Reserves and Credit Losses

     We maintain a consolidated reserve for credit losses on finance
receivables at an amount which we believe is sufficient to provide adequate
protection against potential credit losses in our portfolios. We determine the
level of the allowance for doubtful receivables on direct financing leases and
possible loan losses in the manner described in Note 1(f) of the notes to the
consolidated financial statements.

     We review commercial and consumer finance receivables to determine the
probability of loss. We take provisions after considering various factors. If
an unrecovered balance remains due, we take a final charge-off from provisions
at the time we decide collection efforts are no longer useful.

                                      35
<PAGE>

   Asset/Liability Management and Interest Rate Risks

     We annually prepare a performance target report on a consolidated basis.
This report is based on the analysis of previous performance and information of
each business segment. It projects the value of new business volumes, interest
rate trends, and various other factors that may affect performance. The
performance target report includes new financial asset marketing targets, a
profit projection, balance sheet projections, and medium-term and fiscal-
year-based funding plans. The report is reviewed and approved by the Board of
Directors, which is responsible for decisions on the execution of operational
measures. Twice a year, a semi-annual funding plan, which sets out a planned
funding mix as well as required funding volumes and proposed sources, is
prepared with the goal of matching floating-rate assets to floating-rate
liabilities. The Board of Directors also reviews and approves these funding
plans.

     After the approval of these plans, each division operates on a basis
consistent with the performance target report. Asset-liability management has
become an important element of managing the execution of these operations.
Under our asset-liability management system, the relationship between actual
performance and the performance target report is compared and analyzed, and
asset-liability management charts, gap reports and cash-flow maps are prepared
and used to analyze mismatches between existing assets and liabilities. These
charts show the contractual maturity, interest rates, and balances of
fixed-rate assets and liabilities and also project future trends in these
balances. In addition, through profit-loss simulations and asset maturity
ladder analysis, we try to ascertain the influence of future market movements
on our performance and, based on interest rate forecasts, determine marketing
divisions' internal costs and treasury departments' procurement policies. This
allows us to maximize our spreads and return on assets and engage in efficient
funding activities.

     In addition, from April 1, 1999, we began using a new asset-liability
management system that enables prompt access to quantitative indicators of
interest rate risks.

     Aiming to further increase the sophistication of our interest rate risk
management, we are currently implementing a project that will, when completed,
establish a system for rapidly obtaining a greater volume of quantitative data
on interest rate risks.

     Changes in market interest rates or in the relationships between
short-term and long-term market interest rates or between different interest
rate indices (i.e., basis risk) can affect the interest rates charged on
interest-earning assets differently than the interest rates paid on
interest-bearing liabilities, which can result in an increase in interest
expense relative to finance income.

     The Treasury Department manages interest rate risk by changing the
proportions of fixed- and floating-rate debt and by utilizing primarily
interest rate swaps and, to a lesser extent, other derivative instruments to
modify the repricing characteristics of existing interest-bearing liabilities.
For example, a fixed-rate, fixed-term loan transaction may initially be funded
by short-term floating rate liabilities, resulting in interest rate risk;
however, this may later be hedged by way of an interest rate swap, thus
eliminating the risk initially created.

     Interest rate risks are managed as part of asset-liability management
activities.

     We seek to limit the impact on profitability of interest rate trends that
are contrary to our projections. For example, our typical financing lease
contracts call for both principal and interest to be paid in equal lease
payments over periods averaging only five years. Thus, even when these leases
are financed with short-term funds, we do not require much time to change our
asset-liability and interest rate structures through strategic changes in new
funding operations, the use of derivatives, and other methods. In addition to
the Board of Directors, our management organization includes a committee
composed of the Chief Executive Officer and other top managers as well as
departmental managers that is capable of rapid decision making with regard to
interest rate risks.

     Most overseas subsidiaries also adhere to a basic policy of matching
future cash flows due with assets and liabilities, periodically producing
asset-liability management charts and working to minimize any mismatching.

                                      36
<PAGE>

  Life Insurance

     Our life insurance operations are subject to a number of risks and
uncertainties that may be broadly categorized as follows:

     o    insurance risk: the risk that a greater number of policy claims than
          anticipated will arise resulting in greater levels of expense and
          reduced earnings, or in some cases, losses;

     o    portfolio management risk: the risk that the return on assets managed
          will substantially fall short of the rates of return guaranteed to
          policy holders and the risk that the actual value of assets that
          policy liability reserves have been invested in will fall, in each
          case leading to additional provisioning that would negatively impact
          our earnings; and

     o    overall managerial risk: as with any business, the risk that
          strategies adopted with regard to new products, marketing or other
          initiatives will not accurately respond to market needs.

     In order to cope with these risks we have adopted the following policies:

     o    we employ an in-house actuary to closely monitor micro- and
          macro-economic and social trends and adopt standards that reduce the
          chance of unforeseen numbers of policy claims;

     o    while diversifying policy liability reserves in order to avoid a
          disproportionate exposure to one asset segment, we invest in stable
          instruments that tend not to be affected by short-term market
          movements, such as fixed-return corporate debt instruments; and

     o    we monitor the returns we achieve on assets under management and
          lower guaranteed policy returns (if required) in order to reduce the
          risk of a shortfall in return on assets under management.

  Operational and Legal Risks

     Like all large financial institutions, we are exposed to many types of
operational risk, including the potential for loss caused by a breakdown in
information, communication or transaction processing systems or by fraud by
employees or outsiders or unauthorized transactions by employees. We attempt to
mitigate operational risks by maintaining a system of internal controls
designed to keep operational risk at appropriate levels. In so doing, we take
into account our consolidated financial position, the characteristics of the
businesses and markets in which we operate, competitive circumstances and
regulatory considerations. We cannot assure you that we will not incur material
losses from operational risks in the future.

     Legal risk arises from the uncertainty of enforceability, through legal or
judicial process, of obligations of our customers and counterparties. It also
arises from the possibility that changes in law or regulation could adversely
affect our businesses. We seek to minimize legal risk through consultation with
internal and external legal counsel.

     In order to enhance our compliance function, in June 1999 ORIX established
the Legal Affairs Department by combining the compliance functions previously
performed by the Credit Department and Office of Corporate Auditors. This new
department is in charge of checking the legality of contracts and business
activities of our operations and evaluating legal risk relating to new
financial products. We are currently in the process of developing a compliance
manual to guide our employees.

  Results of Operations

  Year Ended March 31, 2001 Compared to Year Ended March 31, 2000

                                      37
<PAGE>

  Overview

     Despite a decrease in direct financing leases, our consolidated operating
assets surpassed the Yen5 trillion mark for the first time, growing 5.6%, or
Yen264.7 billion, from the previous year to Yen5,029.6 billion ($40.6 billion).
This reflected a sizeable increase in investment securities, as well as
increases in installment loans, operating leases and other operating assets.

     Revenues reflected increases in operating lease revenues, interest on
loans and investment securities, and other operating revenues, including the
condominium development business. However, a substantial decline in life
insurance premiums and related investment income, together with a decrease in
direct financing lease revenue, caused our total revenues to decrease by 4.9%,
or Yen30,364 million, to Yen586,149 million ($4,731 million).

     Corresponding to the change in revenue, operating lease depreciation
expense and other operating expenses grew, but life insurance costs declined in
line with lower revenue. An increase in the number of consolidated companies
produced an increase in selling, general and administrative expenses. However,
interest expense decreased, due mainly to declines in domestic interest rates.
Thus total expenses decreased by 6.1%, or Yen34,626 million, to Yen529,001
million ($4,270 million).

     As a result, income before income taxes increased by 13.8% to Yen59,236
million ($478 million). Net income increased for the sixth consecutive fiscal
year, rising 11.5% to a historical high of Yen34,157 million ($276 million).

     The tables below contain some financial data for fiscal 2000 and 2001, as
well as the amounts and percentages of the changes from fiscal 2000 to fiscal
2001.

                             Income Statement Data


<TABLE>
                                                                    Year ended March 31,                    Change
                                                              ------------------------------    ----------------------------
                                                                  2000             2001             Amount         Percent
                                                              -------------    -------------    -------------    -----------
                                                                                     (Millions of yen)
<S>                                                           <C>              <C>              <C>              <C>
Total revenues............................................... Yen   616,513    Yen   586,149    Yen   (30,364)         (4.9)
 Direct financing leases.....................................       130,798          122,003           (8,795)         (6.7)
 Operating leases............................................       100,503          113,478           12,975          12.9
 Interest on loans and investment securities.................        97,390          109,448           12,058          12.4
 Brokerage commissions and gains on investment
   securities................................................        19,700           12,055           (7,645)        (38.8)
 Life insurance premiums and related investment income.......       205,829          158,314          (47,515)        (23.1)
 Interest income on deposits.................................         3,884            2,520           (1,364)        (35.1)
 Other operating revenues....................................        58,409           68,331            9,922          17.0
Total expenses...............................................       563,627          529,001          (34,626)         (6.1)
                                                              -------------    -------------    -------------
Operating income.............................................        52,886           57,148            4,262           8.1
Equity in net income (loss) of and gain (loss) on sales of
 affiliates..................................................          (838)           2,088            2,926            --
                                                              -------------    -------------    -------------
Income before income taxes...................................        52,048           59,236            7,188          13.8
Net income..................................................         30,642           34,157            3,515          11.5
</TABLE>

                              Balance Sheet Data



<TABLE>
                                                                    Year ended March 31,                    Change
                                                              ------------------------------    ----------------------------
                                                                  2000             2001             Amount         Percent
                                                              -------------    -------------    -------------    -----------
                                                                                     (Millions of yen)
<S>                                                           <C>              <C>              <C>              <C>
Investment in direct financing leases....................     Yen 1,744,953    Yen 1,657,709    Yen   (87,244)         (5.0)
Investment in operating leases...........................           397,576          451,171           53,595          13.5
Installment loans........................................         1,791,439        1,846,511           55,072           3.1
Investment in securities.................................           758,381          942,158          183,777          24.2
</TABLE>

                                      38
<PAGE>

<TABLE>
                                                                    Year ended March 31,                    Change
                                                              ------------------------------    ----------------------------
                                                                  2000             2001             Amount         Percent
                                                              -------------    -------------    -------------    -----------
                                                                                     (Millions of yen)
<S>                                                           <C>              <C>              <C>              <C>
Other operating assets...................................            72,472          132,006           59,534          82.1
                                                              -------------    -------------    -------------
Operating assets.........................................         4,764,821        5,029,555          264,734           5.6
Allowance for doubtful receivables on direct financing
 leases and possible loan losses.........................          (136,939)        (141,077)          (4,138)           --
Other assets.............................................           713,660          702,833          (10,827)         (1.5)
                                                              -------------    -------------    -------------
Total assets.............................................     Yen 5,341,542    Yen 5,591,311    Yen   249,769           4.7
                                                              =============    =============    =============
</TABLE>



     The table below shows the volume of new transactions for fiscal 2000 and
2001, as well as the amounts and percentages of change in these data from
fiscal 2000 to fiscal 2001. Figures for new equipment acquisitions for direct
financing leases and operating leases are based on purchase cost of the
equipment.


                             Volume of New Assets


<TABLE>

                                                                    Year ended March 31,                    Change
                                                              ------------------------------    ----------------------------
                                                                  2000             2001             Amount         Percent
                                                              -------------    -------------    -------------    -----------
                                                                                     (Millions of yen)
<S>                                                           <C>              <C>              <C>              <C>
Direct financing leases: New equipment acquisitions .....     Yen   905,898    Yen   723,330    Yen  (182,568)      (20.2)
Operating leases: New equipment acquisitions.............           101,020          143,158           42,138        41.7
Installment loans: New loans added.......................           807,477          740,639          (66,838)       (8.3)
Investment in securities: New securities added...........           333,249          397,218           63,969        19.2
Other operating assets: New assets added.................            70,443          128,984           58,541        83.1
</TABLE>

     Total Revenues

     Our total revenues decreased by 4.9%, or Yen30,364 million, to Yen586,149
million in fiscal 2001 compared to Yen616,513 million in fiscal 2000,
reflecting principally a decline of Yen47,515 million or 23.1%, in life
insurance premiums and related investment income and an Yen8,795 million
decline in revenue from direct financing leases. These declines were partially
offset by increases of Yen12,975 million in operating leases, Yen12,058 million
in interest on loans and investment securities, and Yen9,922 million in other
operating revenues.

     Direct Financing Leases

     Revenue from direct financing leases decreased 6.7%, to Yen122,003 million
($985 million). This decrease was due to a decline in the balance of investment
in direct financing leases, which resulted from the securitization of lease
assets and from a decline in the level of new contract issuance compared with
the previous fiscal year. The balance of investment in direct financing leases
as of March 31, 2001 decreased 5.0%, to Yen1,657,709 million ($13,379 million).

     The average interest rates on domestic direct financing leases, calculated
on the basis of quarterly balances, slightly decreased to 5.77% in fiscal 2001
from 5.79% in fiscal 2000. The average interest rates on overseas direct
financing leases, calculated on the basis of quarterly balances, increased to
9.92% in fiscal 2001 from 9.67% in fiscal 2000, reflecting an increase in the
amount of high-yield contracts.

     Securitization of direct financing leases during fiscal 2001 affected
revenues from direct financing leases both because we recognized gains from
securitizations and because securitization decreased interest income from
securitized assets. Revenues from direct financing leases in fiscal 2001
included Yen3,722 million ($30 million) of gains from securitization of direct
financing leases.

                                      39
<PAGE>


               The table below shows the balances as of the dates indicated of
investment in direct financing leases by category of equipment, together with
the amounts and percentages of the changes between period-ends.

                     Investment in Direct Financing Leases


<TABLE>
                                                         As of March 31,                     Change
                                                 -----------------------------    ---------------------------
                                                      2000            2001            Amount        Percent
                                                 -------------   -------------    -------------   -----------
                                                                         (Millions of yen)
<S>                                              <C>             <C>              <C>             <C>
Information-related and office equipment......   Yen   373,281   Yen   334,174    Yen   (39,107)     (10.5)
Industrial equipment..........................         394,581         372,542          (22,039)      (5.6)
Commercial services equipment.................         194,809         193,624           (1,185)      (0.6)
Transportation equipment......................         398,521         415,246           16,725        4.2
Other.........................................         383,761         342,123          (41,638)     (10.8)
                                                 -------------   -------------    -------------
 Total........................................   Yen 1,744,953   Yen 1,657,709    Yen   (87,244)      (5.0)
                                                 =============   =============    =============
</TABLE>

     Investment in direct financing leases decreased by 5.0% from March 31,
2000 to March 31, 2001. New investment in leased equipment in fiscal 2001
amounted to Yen723,330 million ($5,838 million), a decrease of 20.2% from
fiscal 2000. Robust growth in the automobile leasing business in Japan led to
an increase in the balance of transportation equipment leases. However, weak
private-sector capital investment and our selective approach to new domestic
leasing contracts with emphasis on profitability over asset growth caused the
overall balance of domestic leasing contracts to decline. The balance of
overseas leasing contracts also decreased owing to the deceleration of economic
growth in the United States.

     During fiscal 2001, we securitized Yen167,802 million of domestic and
Yen17,064 million of overseas leasing assets. The securitization of these
assets, accounted for as off balance sheet assets, contributed to the reduction
in the balance of direct financing leases. The balance of direct financing
lease assets which were treated as off balance sheet assets amounted to
Yen311,163 million ($2,511 million) as of March 31, 2001. The unpaid principal
balance outstanding of securitized receivables is excluded from our
consolidated balance sheets. See note 9 of the notes to the consolidated
financial statements. In addition, we entered into other lease receivable
securitization programs that are not accounted for as sale, or not treated as
off balance sheet assets. Under these securitization programs, we had long-term
debt payables of Yen72,210 million ($583 million) under securitized lease
assets as of March 31, 2001.

     Operating Leases

     Revenues from operating leases increased by 12.9%, or Yen12,975 million,
to Yen113,478 million ($916 million) from fiscal 2000 to fiscal 2001. The
continued strength of IT-related investment in Japan supported strong growth in
the rental of measuring and information related equipment. In our office
building and commercial real estate leasing business, proactive investments in
new properties contributed to overall growth in related leasing revenues.
Consequently, revenue from operating leases increased by 12.9%, to Yen113,478
million ($916 million). The balance of investment in operating leases increased
13.5%, to Yen451,171 million ($3,641 million). Gains from the disposition of
operating lease assets included in revenues from operating leases were Yen7,883
million ($64 million) in fiscal 2001, compared to Yen4,144 million in fiscal
2000.

     The table below shows the balances as of the dates indicated of our
investment in operating leases by category of equipment under lease, together
with the amounts and percentages of the changes between period-ends.

<TABLE>
                                                         As of March 31,                     Change
                                                 -----------------------------    ---------------------------
                                                      2000            2001           Amount         Percent
                                                 -------------   -------------    -------------   -----------
                                                                         (Millions of yen)
<S>                                              <C>             <C>              <C>             <C>
Transportation equipment......................   Yen   159,548   Yen   165,218    Yen     5,670       3.6
Measuring equipment and personal computers....          58,431          77,808           19,377      33.2
Real estate and other.........................         179,597         208,145           28,548      15.9
                                                 -------------   -------------    -------------
 Total........................................   Yen   397,576   Yen   451,171    Yen    53,595      13.5
                                                 -------------   -------------    -------------
</TABLE>

                                      40
<PAGE>

     The balance of our total investment in operating leases increased by
13.5%, or Yen53,595 million, from March 31, 2000 to March 31, 2001. The balance
of new contracts increased due to the steady performance of the measuring
equipment and OA equipment rental businesses. Regarding our real estate leasing
business, we also progressively acquired office building and commercial use
real estate, such as the Minato Mirai Complex in Yokohama. Although the
outstanding balance of transportation equipment, which includes aircraft,
declined on a local currency basis due to asset sales and depreciation, the
balance increased on a yen basis due to the depreciation of the yen.

     Interest on Loans and Investment Securities

     Interest we earn on installment loans and interest-earning securities held
in connection with operations other than life insurance is reflected in our
consolidated statements of income as interest on loans and investment
securities. Revenues from interest on loans and investment securities increased
by 12.4%, or Yen12,058 million, from fiscal 2000 to fiscal 2001, due to an
increase in the balance of high-yield card loans. An increase in investment US
corporate bonds also contributed to the increase. The average interest rate
earned on domestic loans, calculated on the basis of quarterly balances,
increased to 4.19% in fiscal 2001 from 3.97% in fiscal 2000, primarily due to
an increase in the balance of high-yield card loans. The average interest rate
earned on domestic investment securities, calculated on the basis of quarterly
balances, decreased to 2.68% in fiscal 2001 from 2.86% in fiscal 2000,
reflecting a decline in domestic market interest rates. The average interest
rate earned on overseas loans, calculated on the basis of quarterly balances,
decreased to 9.29% in fiscal 2001 from 9.35% in fiscal 2000, primarily due to a
reduction in high-yield loans. The average interest rate earned on overseas
investment securities, calculated on the basis of quarterly balances, increased
to 10.03% in fiscal 2001 from 8.84% in fiscal 2000, primarily reflecting
increased investment in high-yielding CMBS and corporate debt securities in the
US.

     The table below shows the balances as of the dates indicated of our
installment loans to domestic and foreign borrowers, categorized in the case of
domestic borrowers by type of consumer or commercial loan, together with the
amounts and percentages of the changes between period-ends. A small portion of
these installment loans is held in connection with our life insurance
operations, and income from these loans is reflected in our consolidated
statements of income as life insurance premiums and related investment income.

                               Installment Loans

<TABLE>
                                                         As of March 31,                     Change
                                                 -----------------------------    ---------------------------
                                                      2000            2001            Amount        Percent
                                                 -------------   -------------    -------------   -----------
                                                                         (Millions of yen)
<S>                                              <C>             <C>              <C>             <C>
Domestic Consumer
 Housing loans...............................    Yen   396,748   Yen   392,896    Yen    (3,852)      (1.0)
 Card loans..................................          121,272         181,215           59,943       49.4
 Other.......................................           56,461          43,959          (12,502)     (22.1)
                                                 -------------   -------------    -------------
   Subtotal..................................          574,481         618,070           43,589        7.6
Domestic Commercial
 Real estate related companies...............          203,537         222,818           19,281        9.5
 Commercial and industrial companies.........          657,355         627,252          (30,103)      (4.6)
                                                 -------------   -------------    -------------
   Subtotal..................................          860,892         850,070          (10,822)      (1.3)
                                                 -------------   -------------    -------------
Foreign commercial, industrial and other
  borrowers..................................          337,754         357,446           19,692        5.8
Direct loan origination costs, net...........           18,312          20,925            2,613       14.3
                                                 -------------   -------------    -------------
   Total.....................................    Yen 1,791,439   Yen 1,846,511    Yen    55,072        3.1
                                                 =============   =============    =============
</TABLE>

     The total balance of installment loans increased by 3.1%, to Yen1,846,511
million ($14,903 million), from March 31, 2000 to March 31, 2001. In the
domestic retail market, loan balance increased as a result of expansion of our
card loan business.

                                      41
<PAGE>

     The balance of our investments in securities other than in connection with
our life insurance operations increased from Yen341,236 million at March 31,
2000 to Yen405,021 million ($3,269 million) at March 31, 2001. Fixed income
securities increased by Yen52,825 million, principally reflecting increased
investment in CMBS in the US.

     Brokerage Commissions and Gains on Investment Securities

     All non-interest income and losses (other than foreign currency
transaction gain or loss) which we recognize on securities held in connection
with operations other than life insurance are reflected in our consolidated
statements of income as brokerage commissions and gains on investment
securities. Brokerage commissions and gains on investment securities decreased
by Yen7,645 million, or 38.8%, in fiscal 2001 to Yen12,055 million ($97
million). ORIX Securities Corporation generates all of the brokerage
commissions accounted for in this segment. Although the online trading business
of ORIX Securities Corporation grew, the weakness of the Japanese stock market
inhibited growth in the overall level of brokerage commissions. Revenues from
gains on investment securities decreased in fiscal 2001, reflecting reduced
sales of equity securities in Japan and overseas.

     At March 31, 2001, gross unrealized gains on available-for-sale
securities, including those held in connection with our life insurance
operations, were Yen68,037 million ($549 million). Gross unrealized gains on
equity securities decreased by Yen36,932 million from fiscal 2000 to fiscal
2001. Due to the weakness of the domestic equities market, unrealized gains on
IT-related equity securities at March 31, 2000 declined.

     At March 31, 2001, gross unrealized losses on available-for-sale
securities, including those held in connection with our life insurance
operations, were Yen11,018 million ($89 million).

     Life Insurance Premiums and Related Investment Income

     Life insurance premiums and related investment income decreased Yen47,515
million, or 23.1%, to Yen158,314 million ($1,278 million) and life insurance
costs fell approximately Yen50.0 billion in fiscal 2001. These declines were
due to our policy of emphasizing profitability as we devoted considerable
energy to the marketing of such products as term and whole life insurance that
produce lower revenues but higher margins.

     Interest Income on Deposits

     Interest income on deposits not included in other categories of revenues
includes principally interest on bank deposits. Interest income on deposits in
fiscal 2001 decreased by Yen1,364 million, or 35.1%, from fiscal 2000,
principally as a result of a lower average balance of bank deposits.

     Other Operating Revenues

     Other operating revenues are generated from various businesses, such as
the development and sales of residential apartments, sales of commodities funds
and servicing of receivables. Other operating revenues increased by Yen9,922
million ($80 million), or 17.0%, from fiscal 2000 to fiscal 2001, principally
as a result of growth in our condominium development business and growth in
commission income from our servicer business and other businesses.

     Total Expenses

     Total expenses decreased by 6.1%, to Yen529,001 million ($4,270 million),
from fiscal 2000 to fiscal 2001. Interest expense decreased in fiscal 2001
mainly due to a decline in domestic market interest rates. Life insurance costs
decreased 25.8%, corresponding to the decrease in life insurance premium
revenue. Other operating expenses increased 13.8% from fiscal 2000 to fiscal
2001, corresponding to the increase in revenue from the condominium development
business. We recognized a write-down of securities in the amount of Yen10,848
million ($88 million) in fiscal 2001.

                                      42
<PAGE>

     Interest Expense

     Interest expense was Yen109,289 million ($882 million) in fiscal 2001, a
decrease of 5.0% from fiscal 2000. The decrease in interest expense principally
reflects the decline in domestic interest rates. In addition, as a result of
effective control of market risks, such as interest rate and liquidity risks by
using our asset-liability management system, we were able to respond quickly to
changing market environments.

     The ratio of our funding directly from capital markets, interest expense
related to which was significantly lower than traditional bank borrowing, were
56.8% and 56.7% at March 31, 2000 and 2001, respectively. See "--Funding and
Liquidity-Diversification of Funding Sources." Notes issued under medium-term
notes program increased by Yen21,157 million from Yen328,221 million at March
31, 2000 to Yen349,378 million ($2,820 million) at March 31, 2001, Commercial
paper decreased from Yen977,436 million at March 31, 2000 to Yen914,611 million
($7,382 million) at March 31, 2001 reflecting the decrease of commercial paper
issued overseas, and long-term asset backed securities increased from Yen56,034
million at March 31, 2000 to Yen72,210 million ($583 million) at March 31,
2001. The average interest rates on our domestic short-term and long-term debt,
calculated on the basis of quarterly balances, decreased from 1.81% in fiscal
2000 to 1.64% in fiscal 2001. The average interest rates on our short-term and
long-term overseas debt, calculated on the basis of quarterly balances,
increased from 6.39% in fiscal 2000 to 6.81% in fiscal 2001.

     Depreciation on Operating Leases

     Depreciation on operating leases increased to Yen68,316 million ($551
million) in fiscal 2001, an increase of 12.5% from the level in fiscal 2000.
This increase was principally due to assets aquisitions.

     Life Insurance Costs

     In line with a decrease in life insurance premiums, life insurance costs
decreased by Yen49,955 million, or 25.8%, to Yen143,709 million ($1,160
million) from fiscal 2000 to fiscal 2001.

     We use the net level premium method to evaluate our future life insurance
policy liabilities. This method requires the preliminary calculation of fund
management yields, contract withdrawal/discontinuance rates, mortality rates,
and other calculations at the time an insurance contract is signed. The
projected yield figures used in this calculation were 3.3% in fiscal 2000 and
3.0% in fiscal 2001.

     Other Operating Expenses

     Other operating expenses principally comprise the cost of sales for
condominium marketing operations. Other operating expenses increased 13.8%, to
Yen5,278 million ($43 million), in fiscal 2001, reflecting increased
condominium sales.

     Selling, General and Administrative Expenses

     Approximately half of our selling, general and administrative expenses
consist of wages and other labor-related costs, while the remaining half
consists principally of general overhead expenses, such as rent for office
spaces, communication expenses and travel expenses. Selling, general and
administrative expenses in fiscal 2001 were Yen101,156 million ($816 million),
an increase of 11.2% from fiscal 2000. This increase in expenses primarily
reflects advertising and other expenses increased as a result of the expansion
of the retail card loan business. In addition, as the number of consolidated
companies increased in the preceding year, these companies recognized expenses
on a full-year basis.

     Provision for Doubtful Receivables and Possible Loan Losses

     We make provisions for doubtful receivables and possible loan losses for
direct financing leases and installment loans. Provision for doubtful
receivables and possible loan losses in fiscal 2001 was Yen44,584 million ($360
million), a decrease of 2.2% from the corresponding amount in fiscal 2000.

                                      43
<PAGE>

     The table below shows the calculation of the provision for doubtful
receivables and possible loan losses for fiscal 2000 and fiscal 2001. The
"Other" category includes foreign currency translation adjustments and the
effect of an acquisition.

                                       Year ended March 31,
                                  ----------------------------
                                      2000            2001
                                  ------------   -------------
                                       (Millions of yen)

Beginning balance..............   Yen  132,606   Yen   136,939
 Provisions charged to income..         45,573          44,584
 Charge-offs (net):
   Gross charge-offs...........        (37,697)        (46,845)
   Recoveries..................            354             539
                                  ------------   -------------
   Charge-offs (net)...........        (37,343)        (46,306)
   Other.......................         (3,897)          5,860
                                  ------------   -------------
Ending balance.................   Yen  136,939   Yen   141,077
                                  ------------   -------------

     A breakdown of the allowance for doubtful receivables and possible loan
losses as of March 31, 2001 is shown below. The "Other" category includes
foreign currency translation adjustments and the effect of an acquisition.

   Allowance for Doubtful Receivables on Direct Financing Leases and Possible
                                  Loan Losses

<TABLE>
                                                    Year ended March 31, 2001
                                 --------------------------------------------------------------
                                                     Installment Loans
                                                 -----------------------------
                                     Direct                           FASB
                                   Financing                       Statement
                                     Leases         General         No. 114           Total
                                 -------------   -------------   -------------    -------------
                                                        (Millions of yen)
<S>                              <C>             <C>             <C>              <C>
Beginning balance..............  Yen    35,783   Yen    49,365   Yen    51,791    Yen   136,939
 Provisions charged to income..         22,619          16,417           5,548           44,584
 Charge-offs (net).............        (20,679)        (14,442)        (11,185)         (46,306)
 Other.........................          3,162           1,815             883            5,860
                                 -------------   -------------   -------------    -------------
Ending balance.................  Yen    40,885   Yen    53,155   Yen    47,037    Yen   141,077
                                 =============   =============   =============    =============
</TABLE>

     For a discussion of past due receivables and allowances for direct
financing leases as of March 31, 2000 and March 31, 2001, see "Item 4.
Information on the Company--Profile of Businesses--Direct Financing Leases".

     In fiscal 2001, provisions charged to income were Yen44,584 million ($360
million) and direct financing leases and loans totaling Yen46,306 million ($374
million) were written off. As of March 31, 2001, the allowance was Yen141,077
million ($1,139 million). The ratio of this figure to the balance of investment
in direct financing leases and installment loans was 4.0% as of March 31, 2001,
compared to 3.9% as of March 31, 2000.

     The recorded investment in loans considered impaired under the definition
contained in FASB Statement 114 was Yen125,921 million as of March 31, 2000 and
Yen120,090 million ($969 million) as of March 31, 2001. The principal reason
for the decline was a charge-off of impaired loans in the amount of Yen11,185
million ($90 million). We determined that a valuation allowance was required
for impaired loans which had outstanding balances of Yen83,408 million as of
March 31, 2000 and Yen73,636 million ($594 million) as of March 31, 2001. We
recorded a valuation allowance, which is the required valuation allowance less
the value of the collateral from impaired loans, calculated under FASB
Statement 114, in the amount of Yen51,791 million as of March 31, 2000 and
Yen47,037 million ($380 million) as of March 31, 2001. FASB Statement 114
requires that impaired loans be measured based on the present value of expected
future cash flows discounted at the loan's original effective interest rate. As
a practical expedient, impairment may be measured based on the loan's
observable market price or the fair value of the collateral if the loan is
collateral dependent. When the measure of the impaired loan is less than the
recorded

                                      44
<PAGE>

investment in the loan, the impairment is recorded through a valuation
allowance. Some loans, such as large groups of smaller-balance homogeneous
loans (e.g., individual housing loans), and lease receivables are exempt from
the provisions of FASB Statement 114. However, provisions for these loans and
lease receivables are reflected in the general provisions under installment
loans and investment in direct financing leases.

     The average recorded investments in impaired loans were Yen128,658 million
for fiscal 2000 and Yen123,715 million ($999 million) for fiscal 2001. We
recognized interest income on impaired loans of Yen1,429 million for fiscal
2000 and Yen1,414 million ($11 million) for fiscal 2001. For a discussion of
delinquencies on installment loans, see "Item 4. Information on the
Company--Profile of Businesses--Installment Loans and Investments Securities".

     Write-downs of long-lived assets

     During fiscal 2001, in accordance with FASB Statement 121, we wrote down
Yen4,090 million ($33 million) for some real estate development projects
included in "investment in operating leases", "other operating assets" and
"advances" in the consolidated balance sheets. See "--Policies relating to
Non-performing Assets and Charge-offs".

     Write-downs of Securities

     Our current policy for determining whether declines in the market value of
available-for-sale securities are other than temporary places more emphasis on
the length of time that the market value has been below the carrying value and
less emphasis on the business reasons for owning the securities.

     Our policy primarily reflects the continued poor performance of Japanese
equity markets and decreasing cross-shareholdings by Japanese companies in
general. Predictions in prior years that market conditions would improve have
proved to be inaccurate and market prices of some of our stocks continued to be
below their acquisition costs for the twelve months ended March 31, 2001. We
view this as a strong indication that the declines in the market value of these
available-for-sale securities are other than temporary. Although we have not
abandoned our practice of holding securities for business relationship
purposes, Japanese companies in general are increasingly willing to sell
securities previously held for business relationship purposes.

     Under our current policy, we would, in principle, charge against income
losses related to securities if

     o    the market price for a security has for more than one year been below
          its acquisition cost, or below current carrying value if the price of
          the security has been adjusted in the past, or

     o    there has been an issuer default or similar event.

     However, if we have a significant long-term business relationship with a
company, we would also consider the probability of the market value recovering
within the following twelve months. As part of this review, we would consider:

     o    the company's operating results,

     o    the company's net asset value,

     o    the company's future performance forecast, and

     o    general market conditions.

     If we believe, based on this review, that the market value of a security
may realistically be expected to recover, the loss for that security will
continue to be classified as temporary. Temporary declines in market value are
recorded in other comprehensive income (loss), net of applicable income taxes.
If after an additional twelve months, the market value for that security is
still significantly below the acquisition cost, we would classify the loss for
that security as other than temporary and charge the decline in market value
against income.

                                      45
<PAGE>


     Following this policy, in fiscal 2001, we charged Yen10,848 million ($88
million) to income for declines in market value classified as other than
temporary. In fiscal 2000, we charged Yen12,297 million to income for declines
in market value classified as other than temporary.

     Foreign Currency Transaction Loss (Gain), Net

     We recognized a foreign currency transaction loss in the amount of
Yen3,429 million ($28 million) in fiscal 2001, compared to a gain of Yen839
million in fiscal 2000. This loss principally resulted from the depreciation of
the Indonesia Rupiah against the US dollar, as a subsidiary procured a portion
of its funding through dollar-denominated loans.

     Equity in Net Income (Loss) of and Gain (Loss) on Sales of Affiliates

     Equity in net income (loss) of and gain (loss) on sales of affiliates in
fiscal 2001 was a profit of Yen2,088 million ($17 million) compared to a loss
of Yen838 million in fiscal 2000. The gain in fiscal 2001 was improved from the
loss in fiscal 2000, because loss from the sale of unprofitable affiliates was
recognized in the previous year. The income in fiscal 2001 also reflects
favorable financial performance of most domestic and foreign affiliates.

     Provision for Income Taxes

     Provision for income taxes in fiscal 2001 was Yen25,079 million
($202 million), compared to the provision of Yen21,406 million in fiscal 2000.
The increase of Yen3,673 million was primarily due to an increase in income
before income taxes.

     Net Income

     Operating income was Yen57,148 million ($461 million), compared
to the operating income of Yen52,886 million in fiscal 2000. Income before
income taxes increased by 13.8% to Yen59,236 million. Net income increased
11.5%, to Yen34,157 million ($276 million) from fiscal 2000 to fiscal 2001.
Basic and diluted earnings per share in fiscal 2001 were Yen418 and Yen401
respectively, compared to Yen385 and Yen377 in fiscal 2000.

     Cash Flows

     Net cash provided by operating activities decreased by Yen81,509 million,
or 25.6%, from fiscal 2000 to fiscal 2001, to a total of Yen237,122 million
($1,914 million). This decrease was substantially due to our life insurance
operations where most of the premiums are received in cash, while the largest
related expense, policy benefit payments, requires cash outlays that are spread
over a number of years.

     Net cash used in investing activities was Yen285,652 million ($2,306
million) in fiscal 2001, approximately the same level as in the previous fiscal
year. While the rise in investment in lease equipment assets was less than in
the previous fiscal year, greater funds were required for insurance
business-related securities investments as well as for REIT related and other
real estate acquisitions.

     Net cash used in financing activities was Yen64,620 million ($522 million)
in fiscal 2001, compared to net cash used in financing activities of Yen6,053
million in fiscal 2000.

     Cash and cash equivalents decreased 41.6% from March 31, 2000 to March 31,
2001.

Business Segments

     The following discussion presents segment financial information on the
basis that is regularly used by management for evaluating performance of
business segments and deciding how to allocate resources to them. The reporting
segments are identified based on the nature of services for domestic operations
and on geographic areas for foreign operations.


                                      46
<PAGE>


     The table below shows the amount of our revenues by business segment for
fiscal 2000 and 2001, as well as the amounts and percentages of the changes
from fiscal 2000 to fiscal 2001.

<TABLE>
                                     Year ended March 31,                  Change
                                 -----------------------------   ------------------------------
                                     2000            2001            Amount         Percent
                                 -------------   -------------   -------------    -------------
                                                      (Millions of yen)
<S>                              <C>             <C>             <C>              <C>
Domestic Business Segments
 Corporate finance.............  Yen   121,415   Yen   113,113   Yen    (8,302)        (6.8)
 Equipment operating leases....         53,000          61,677           8,677         16.4
 Real estate-related finance...         17,294          24,262           6,968         40.3
 Real estate...................         44,873          48,438           3,565          7.9
 Life insurance................        204,746         157,636         (47,110)       (23.0)
 Other.........................         30,882          36,215           5,333         17.3
                                 -------------   -------------   -------------
   Subtotal....................        472,210         441,341         (30,869)        (6.5)
                                 -------------   -------------   -------------
Overseas Business Segments
 The Americas..................         74,525          79,397           4,872          6.5
 Asia and Oceania..............         49,739          48,735          (1,004)        (2.0)
 Europe........................         18,260          15,151          (3,109)       (17.0)
                                 -------------   -------------   -------------
   Subtotal....................        142,524         143,283             759          0.5
                                 -------------   -------------   -------------
   Total.......................        614,734         584,624         (30,110)        (4.9)
Adjustments....................          1,779           1,525            (254)       (14.3)
                                 -------------   -------------   -------------
   Total consolidated revenues.  Yen   616,513   Yen   586,149   Yen   (30,364)        (4.9)
                                 =============   =============   =============
</TABLE>

     The table below shows the amount of our profits by business segment for
fiscal 2000 and 2001, as well as the amounts and percentages of the changes
from fiscal 2000 to fiscal 2001.

<TABLE>
                                     Year ended March 31,                  Change
                                 -----------------------------   ------------------------------
                                     2000            2001            Amount          Percent
                                 -------------   -------------   -------------    -------------
                                                      (Millions of yen)
<S>                              <C>             <C>             <C>              <C>
Domestic Business Segments
 Corporate finance............   Yen    40,918          44,427   Yen     3,509           8.6
 Equipment operating leases...           7,823          11,165           3,342          42.7
 Real estate-related finance..          (3,415)          1,944           5,359            --
 Real estate..................          (8,241)         (4,604)          3,637            --
 Life insurance...............           5,455           5,982             527           9.7
 Other........................          (1,036)          1,035           2,071            --
                                 -------------   -------------   -------------
   Subtotal...................          41,504          59,949          18,445          44.4
                                 -------------   -------------   -------------
Overseas Business Segments
 The Americas.................          18,775           8,896          (9,879)        (52.6)
 Asia and Oceania.............           3,371           1,203          (2,168)        (64.3)
 Europe.......................             278             716             438         157.6
                                 -------------   -------------   -------------
   Subtotal...................          22,424          10,815         (11,609)        (51.8)
                                 -------------   -------------   -------------
   Total......................          63,928          70,764           6,836          10.7
                                 -------------   -------------   -------------
Adjustments...................         (11,880)        (11,528)            352            --
                                 -------------   -------------   -------------
   Total consolidated income
     before income taxes......   Yen    52,048   Yen    59,236   Yen     7,188          13.8
                                 =============   =============   =============
</TABLE>

     The table below shows the amount of our assets by business segment for
fiscal 2000 and 2001, as well as the amounts and percentages of the changes
from fiscal 2000 to fiscal 2001.

                                      47
<PAGE>


<TABLE>
                                        As of March 31,                     Change
                                 -----------------------------   ------------------------------
                                     2000            2001            Amount          Percent
                                 -------------   -------------   -------------    -------------
                                                      (Millions of yen)
<S>                              <C>             <C>             <C>              <C>

Domestic Business Segments
 Corporate finance.............  Yen 1,968,590   Yen 1,889,538   Yen   (79,052)         (4.0)
 Equipment operating leases....        113,389         134,270          20,881          18.4
 Real estate-related finance...        597,274         606,801           9,527           1.6
 Real estate...................        276,494         310,340          33,846          12.2
 Life insurance................        425,335         543,886         118,551          27.9
 Other.........................        242,280         284,835          42,555          17.6
                                 -------------   -------------   -------------
   Subtotal....................      3,623,362       3,769,670         146,308           4.0
                                 -------------   -------------   -------------
Overseas Business Segments
 The Americas..................        691,403         804,118         112,715          16.3
 Asia and Oceania..............        369,540         402,707          33,167           9.0
 Europe........................        159,608         158,646            (962)         (0.6)
                                 -------------   -------------   -------------
   Subtotal....................      1,220,551       1,365,471         144,920          11.9
                                 -------------   -------------   -------------
   Total.......................      4,843,913       5,135,141         291,228           6.0
                                 -------------   -------------   -------------
Adjustments....................        (79,092)       (105,586)        (26,494)           --
                                 -------------   -------------   -------------
   Total consolidated operating
     assets....................  Yen 4,764,821   Yen 5,029,555   Yen   264,734           5.6
                                 =============   =============   =============
</TABLE>

Domestic Business Segments

     Corporate Finance

     Our domestic corporate finance segment includes principally direct
financing leases of equipment, including information-related and office
equipment, industrial equipment, commercial services equipment, transportation
equipment (other than those extended by ORIX Rentec Corporation), and
installment loans to commercial and industrial companies (other than for real
estate finance). Our domestic corporate finance segment also includes
investment securities (other than those held by ORIX Life Insurance
Corporation). The activities of this segment are conducted by ORIX, ORIX Auto
Leasing Corporation, ORIX Alpha Corporation and a few other domestic
subsidiaries. In this business segment, segment profit increased 8.6%, or
Yen3,509 million, from fiscal 2000 to Yen44,427 million ($359 million) in
fiscal 2001. The balance of segment assets declined 4.0%, or Yen79,052 million,
from March 31, 2000 to Yen1,889.5 billion ($15.3 billion), as of March 31,
2001.

     The increase in segment profits principally reflects a rise in automobile
leasing revenue and a decline in interest expense and provision for doubtful
receivables and possible loan losses.

     The balance of domestic direct financing leases declined, reflecting the
securitization of Yen267,510 million ($2,159 million) in direct finance lease
assets and a decline in the level of new contracts.

     The balance of domestic loans included in our corporate finance segment
decreased, due to the impact of the recession in Japan. The Company has
introduced more stringent screening and is more selective in new loan
transactions.

     Equipment Operating Leases

     Our domestic equipment operating lease segment includes primarily
operating leases of equipment, including measuring equipment, personal
computers and transportation equipment. The activities of this segment are
conducted mainly by ORIX Rentec (including direct financing leases extended by
ORIX Rentec) and ORIX Rent-A-Car Corporation. In fiscal 2001, we recorded
Yen11,165 million ($90 million) of profit in this segment. This represents an
increase of 42.7% from segment profit of Yen7,823 million in fiscal 2000. The
balance of segment assets increased by 18.4%, or Yen20,881 million, from March
31, 2000 to Yen134,270 million ($1,084 million) as of March 31, 2001.

                                      48
<PAGE>


Continued strength in IT-related investment in Japan supported strong growth in
demand for measuring instrument leasing and information-related equipment and
higher utilization rates. Our rent-a-car business also continued its steady
growth.

     Real Estate-Related Finance

     Our domestic real estate-related finance business includes principally
construction and other real estate development loans to construction companies
and real estate developers conducted by the Real Estate Finance Division of
ORIX, as well as housing loans to individuals conducted by ORIX Trust and
Banking Corporation. Loans to most corporate customers not in the real estate
business are included in the corporate finance segment, even where these loans
are secured by real estate.

     In fiscal 2001, segment profit amounted to Yen1,944 million ($16 million),
compared to a loss of Yen3,415 million in fiscal 2000. Real estate-related
finance assets increased 1.6%, or Yen9,527 million, from March 31, 2000 to
Yen606,801 million ($4,898 million) as of March 31, 2001. Steady growth in
investment in and resale of real estate-related distressed assets and the
development of new corporate sector business such as nonrecourse loans led to a
significant increase in earnings. ORIX Trust and Banking recorded strong
performance providing individuals with housing loans.

     Real Estate

     Our domestic real estate business consists principally of condominium
development and office rental as well as management of hotels, employee
dormitories, and training and other facilities. The activities of this segment
are currently conducted by ORIX Real Estate Corporation. In fiscal 2001,
segment loss was Yen4,604 million ($37 million) compared to a loss of Yen8,241
million in fiscal 2000. Because of the continuing decline in land prices in
Japan, the Company proceeded with sales of old properties and consequently
recorded losses on such sales as well as recorded valuation losses on
long-lived assets. However, such losses were offset by steady growth of the
condominium development business related to "Sanctus" series and other
developments. For a discussion of write-downs of long lived real estate, see
"--Write-downs of long lived assets". Owing to the Company's active acquisition
of profitable rental properties, the balance of real estate assets increased
12.2%, or Yen33,846 million, from March 31, 2000 to Yen310,340 million ($2,505
million) as of March 31, 2001.

     Life Insurance Business

     Our life insurance business includes direct and agency life insurance
sales and related activities. This segment also includes investment in
securities in connection with our life insurance operations. The activities in
this segment are conducted by ORIX Life Insurance, a wholly-owned subsidiary of
ORIX.

     Segment profits in the domestic life insurance business increased 9.7%, or
Yen527 million, from fiscal 2000 to Yen5,982 million ($48 million) in fiscal
2001. Due to our shift in strategy from emphasizing volume to profitability,
the weight of term, life-long insurance and other relatively profitable
products has increased. The outstanding balance of segment assets increased
27.9%, or Yen118,551 million, from March 31, 2000 to Yen543,886 million ($4,390
million) as of March 31, 2001. The growth in segment assets reflected strong
demand for our "ORIX Direct" policies.

     Marketable equity securities held in connection with our life insurance
business decreased from Yen13,243 million as of March 31, 2000 to Yen7,167
million ($58 million) as of March 31, 2001.

     Other Domestic Business Segments

     Our other domestic business segments include:

     o    consumer loans by ORIX Credit Corporation and ORIX Club Corporation;

     o    security brokerage by ORIX Securities Corporation;


                                      49
<PAGE>


     o    commodities trading by ORIX Commodities Corporation; and

     o    venture capital operations conducted by ORIX Capital Corporation.

     This segment's results improved from segment loss of Yen1,036 million in
fiscal 2000 to gain of Yen1,035 million ($8 million) in fiscal 2001. Other
domestic business segments have increased due to the entry into new businesses
such as the card loan business and futures investments. The outstanding balance
of segment assets increased 17.6%, or Yen42,555 million, from March 31, 2000 to
Yen284,835 million ($2,299 million) as of March 31, 2001.

Overseas Business Segments

     The Americas

     Our activities in the Americas include:

     o    direct financing leases of transportation equipment and construction
          machinery;

     o    operating leases of real estate;

     o    installment loans to customers in the industrial and real estate
          sectors;

     o    investment securities; and

     o    commercial mortgage servicing.

     We conduct our activities in the Americas mainly through ORIX USA
Corporation, ORIX Financial Services, Inc. ORIX Real Estate Equities, Inc, and
ORIX Real Estate Capital Markets LLC, our wholly-owned subsidiaries in the
United States.

     Segment profit in the Americas decreased 52.6%, or Yen9,879 million, from
fiscal 2000 to Yen8,896 million ($72 million) in fiscal 2001. Commercial
mortgage-backed loan securitization operations continued to make a major
contribution to performances in the Americas. However, the economic slowdown in
the United States adversely affected demand for finance leasing of
transportation construction and other equipment, and also gave rise to a large
increase in provisions for doubtful receivables. In addition, a decline in
market prices for certain debt securities in the United States resulted in a
loss on the revaluation of such securities. The segment assets amounted to
Yen804,118 million ($6,490 million) as of March 31, 2001, an increase of 16.3%
or Yen112,715 million, from March 31, 2000 reflecting the influence of the
depreciation of the yen.

     Asia and Oceania

     Our activities in Asia and Oceania include:

     o    direct financing leases of information-related, industrial,
          commercial service and other equipment;

     o    operating leases of measuring and transportation equipment;

     o    housing and card loans to customers;

     o    installment loans to real estate and industrial customers; and

     o    investment securities.

     These activities are conducted in Asia and Oceania mainly through ORIX
Asia Limited, ORIX Australia Corporation Limited, ORIX Leasing Malaysia and PT.
ORIX Indonesia Finance.

                                      50
<PAGE>

     In Asia and Oceania, we recorded a Yen1,203 million ($10 million) segment
profit during fiscal 2001, compared with a Yen3,371 million profit in fiscal
2000. Segment assets amounted to Yen402,707 million ($3,250 million) as of
March 31, 2001, an increase of 9.0%, or Yen33,167 million, from March 31, 2000.
The foreign exchange loss incurred as a result of the sharp depreciation of the
Indonesian Rupiah contributed to a decline in segment earnings.

     Of segment assets, Yen325,364 million ($2,626 million) as of March 31,
2001 was invested in Asia. These assets included Yen171,484 ($1,384 million) of
shipping loans secured by first mortgages. Substantially all non-shipping
assets in Asia are denominated in local currencies.

     Europe

     Our activities in Europe include operating leases of transportation
equipment, installment loans to industrial customers and investment securities.
These activities are conducted in Europe mainly through ORIX Ireland Limited,
ORIX Europe Limited and ORIX Aviation Systems Limited. Segment profit amounted
to Yen716 million ($6 million) in fiscal 2001, an increase of Yen438 million,
or 157.6%, from fiscal 2000. Earnings grew as a result of strong performance of
investment in securities. Segment assets amounted to Yen158,646 million ($1,280
million) at March 31, 2001, a decrease of Yen962 million, or 0.6%, from March
31, 2000. Fewer new contracts caused a decline in outstanding balance.

  Year Ended March 31, 2000 Compared to Year Ended March 31, 1999

     Overview

     In fiscal 2000 net income improved despite a decrease in assets. As a
result of primarily our securitization of lease assets mostly in Japan and the
strength of the yen relative to the U.S. dollar operating assets decreased 0.2%
from March 31, 1999, to Yen4,765 billion at March 31, 2000. Investment in
direct financing leases, operating leases and other operating assets all
decreased, while installment loans and investment in securities increased.
Despite a decline in revenues from direct financing leases and investment in
securities, our total revenues grew 3.8% from fiscal 1999 to fiscal 2000, to
Yen616,513 million. The increase in revenues reflects principally strong growth
in life insurance premiums and related investment income and income from our
real estate development business and other operations included in other
operating revenues as well as an increase in revenues from operating leases.

     Operating expenses increased slightly, as increases particularly in life
insurance costs and other operating expenses were offset by reduction in some
other categories. Interest expense decreased substantially in fiscal 2000,
reflecting a reduction in the amount of our interest bearing liabilities and a
reduction of borrowing rates as a result of expanding direct funding from the
capital markets. Life insurance costs increased due primarily to the growth in
policies in force. Provision for doubtful receivables and possible loan losses
declined compared to fiscal 1999. Other operating expenses increased 21.5% from
fiscal 1999 to fiscal 2000, as a result of construction expenses related to
condominium sales. We recognized a write-down of securities in the amount of
Yen12,297 million in fiscal 2000, reflecting our judgment that declines in
prices for securities at the end of the period were other than temporary. Total
expenses increased by 0.1%, to Yen563,627 million, from fiscal 1999 to fiscal
2000. While income before income taxes increased 90.5%, to Yen52,048 million,
net income increased 19.6%, to Yen30,642 million, reflecting a substantial
increase in the provision for deferred income taxes. The provision was
unusually low for deferred income taxes in fiscal 1999 due to a drop in the
corporate income tax rate in Japan effected in that fiscal year.

     The tables below contain some financial data for fiscal 1999 and 2000, as
well as the amounts and percentages of the changes from fiscal 1999 to fiscal
2000.

                             Income Statement Data

<TABLE>
                                      Year ended March 31,                   Change
                                 -----------------------------   ------------------------------
                                     1999            2000            Amount          Percent
                                 -------------   -------------   -------------    -------------
                                                       (Millions of yen)
<S>                              <C>             <C>             <C>              <C>
Total revenues.................  Yen   593,941   Yen   616,513   Yen    22,572           3.8
 Direct financing leases.......        143,170         130,798         (12,372)         (8.6)
</TABLE>

                                      51
<PAGE>

<TABLE>
                                      Year ended March 31,                   Change
                                 -----------------------------   ------------------------------
                                     1999            2000            Amount          Percent
                                 -------------   -------------   -------------    -------------
                                                       (Millions of yen)
<S>                              <C>             <C>             <C>              <C>
 Operating leases..............         92,407         100,503           8,096           8.8
 Interest on loans and
   investment securities.......        100,480          97,390          (3,090)         (3.1)
 Brokerage commissions and
   gains on investment
   securities..................          7,381          19,700          12,319         166.9
 Life insurance premiums and
   related investment income...        196,259         205,829           9,570           4.9
 Interest income on deposits...          6,695           3,884          (2,811)        (42.0)
 Other operating revenues......         47,549          58,409          10,860          22.8
Total expenses.................        562,899         563,627             728           0.1
                                 -------------   -------------   -------------
Operating income...............         31,042          52,886          21,844          70.4
Equity in net income (loss) of
   and gain (loss) on sales of
   affiliates..................         (3,727)           (838)          2,889            --
                                 -------------   -------------   -------------
Income before income taxes.....         27,315          52,048          24,733          90.5
Net income.....................         25,621          30,642           5,021          19.6
</TABLE>

                                                   Balance Sheet Data
<TABLE>
                                      Year ended March 31,                   Change
                                 -----------------------------   ------------------------------
                                     1999            2000            Amount          Percent
                                 -------------   -------------   -------------    -------------
                                                       (Millions of yen)
<S>                              <C>             <C>             <C>              <C>
Investment in direct financing
   leases......................  Yen 1,952,842   Yen 1,744,953   Yen  (207,889)        (10.6)
Investment in operating leases.        411,156         397,576         (13,580)         (3.3)
Installment loans..............      1,761,887       1,791,439          29,552           1.7
Investment in securities.......        576,206         758,381         182,175          31.6
Other operating assets.........         73,345          72,472            (873)         (1.2)
                                 -------------   -------------   -------------
Operating assets...............      4,775,436       4,764,821         (10,615)         (0.2)
Allowance for doubtful
   receivables on direct
   financing leases and
   possible loan losses........       (132,606)       (136,939)         (4,333)           --
Other assets...................        704,806         713,660           8,854           1.3
                                 -------------   -------------   -------------
Total assets...................  Yen 5,347,636   Yen 5,341,542   Yen    (6,094)         (0.1)
                                 =============   =============   =============
</TABLE>

     The table below contains the volume of new transactions for fiscal 1999
and 2000, as well as the amounts and percentages of change in these data from
fiscal 1999 to fiscal 2000. Figures for new equipment acquisitions for direct
financing leases and operating leases are based on purchase costs of the
equipment.

                             Volume of New Assets

<TABLE>
                                      Year ended March 31,                   Change
                                 -----------------------------   ----------------------------
                                     1999            2000            Amount         Percent
                                 -------------   -------------   -------------    -----------
                                                       (Millions of yen)
<S>                              <C>             <C>             <C>              <C>
Direct financing leases:
   New equipment acquisitions..  Yen   913,221   Yen   905,898   Yen    (7,323)       (0.8)
Operating leases:
   New equipment acquisitions..         92,272         101,020           8,748         9.5
Installment loans: New loans
   added.......................        706,758         807,477         100,719        14.3
Investment in securities:
   New securities added........        302,035         333,249          31,214        10.3
</TABLE>

     Total Revenues

     Our total revenues increased by 3.8%, or Yen 22,572 million, to Yen
616,513 million in fiscal 2000 compared to Yen593,941 million in fiscal 1999,
reflecting principally an increase of Yen 12,319 million or 166.9%, in
brokerage

                                      52
<PAGE>

commissions and gains on investment securities, and an increase of Yen 10,860
million, or 22.8%, in other operating revenues.

     Direct Financing Leases

     Revenues from direct financing leases decreased by 8.6%, or Yen 12,372
million, from fiscal 1999 to Yen130,798 million in fiscal 2000.

     Revenues from direct financing leases decreased primarily due to the
appreciation of yen, as well as a decline in the balance of investment in
direct financing leases due to the securitization of leasing assets. The
balance of such securitization of leasing assets as of March 31, 2000 was
Yen353,944 million. This securitization reduced interest income. The average
interest rates on domestic direct financing leases, calculated on the basis of
quarterly balances, increased to 5.79% in fiscal 2000 from 5.56% in fiscal 1999
primarily due to merger and acquisition activities and the acquisition of
operating assets. The average interest rates on overseas direct financing
leases, calculated on the basis of quarterly balances, decreased to 9.67% in
fiscal 2000 from 9.94% in fiscal 1999, reflecting a decrease in the amount of
high-yield assets. While the balance of information-related and office
equipment at March 31, 2000 was lower than the balance at March 31, 1999, the
decrease is primarily attributable to securitizations.

     Securitization of direct financing leases during fiscal 2000 affected
revenues from direct financing leases both because we recognized gains from
securitizations and because securitization decreased interest income from
securitized assets. Revenues from direct financing leases in fiscal 2000
included Yen8,591 million of gains from securitization of direct financing
leases.

     The table below shows the balances as of the dates indicated of investment
in direct financing leases by category of equipment, together with the amounts
and percentages of the changes between period-ends.

                     Investment in Direct Financing Leases


<TABLE>
                                          As of March 31,                    Change
                                 -----------------------------   ------------------------------
                                     1999            2000            Amount          Percent
                                 -------------   -------------   -------------    -------------
                                                       (Millions of yen)
<S>                              <C>             <C>             <C>              <C>
Information-related and office
   equipment...................  Yen   493,298   Yen   373,281   Yen  (120,017)        (24.3)
Industrial equipment...........        444,261         394,581         (49,680)        (11.2)
Commercial services equipment..        224,080         194,809         (29,271)        (13.1)
Transportation equipment.......        414,093         398,521         (15,572)         (3.8)
Other..........................        377,110         383,761           6,651           1.8
                                 -------------   -------------   -------------
 Total.........................  Yen 1,952,842   Yen 1,744,953   Yen  (207,889)        (10.6)
                                 =============   =============   =============
</TABLE>

     Investment in direct financing leases decreased by 10.6% from March 31,
1999 to March 31, 2000. New investment in leased equipment in fiscal 2000
amounted to Yen 905,898 million, a decrease of 0.8% from fiscal 1999. Although
in fiscal 2000 we maintained a high level of origination of small-ticket leases
for products like information-related and office equipment, investment in that
category decreased by 24.3% due primarily to securitization. Investment in
other category increased due to acquisitions of two domestic companies. The
level of new lease contracts for industrial equipment remained strong,
particularly in the United States. However, the depreciation of the local
currency against the Japanese yen depressed the balance of investment expressed
in yen.

     During fiscal 2000, we securitized Yen320,666 million principal balance of
lease receivables, which were treated as off-balance sheet transactions. The
balance of direct financing lease assets which were treated as off-balance
sheet transactions amounted to Yen353,944 million as of March 31, 2000. The
unpaid principal balance outstanding of securitized receivables is excluded
from our consolidated balance sheets. See note 4 of the notes to the
consolidated financial statements. In addition, we entered into other lease
receivable securitization programs that are not accounted for as sales, and not
therefore treated as off balance sheet assets. Under these securitization
programs, we had long-term debt payables of Yen56,034 million under securitized
lease receivables as of March 31, 2000.

                                      53
<PAGE>


     Operating Leases

     Revenues from operating leases increased by 8.8%, or Yen8,096 million, to
Yen100,503 million from fiscal 1999 to fiscal 2000, despite a decrease in the
balance of operating leases. Increased business from companies in information
technology-related industries contributed to growth in the rental of measuring,
analysis, and information-related equipments. In addition, the acquisition of
new businesses increased revenues from operating leases. Although the
investment in measuring equipment and personal computer accounted based on
their book value decreased from 1999 to fiscal 2000 as the table below
indicates, such investment recorded at purchase cost increased. See note 5 of
the notes to consolidated financial statements. Gains from the disposition of
operating lease assets included in revenues from operating leases were Yen4,144
million in fiscal 2000, compared to Yen2,356 million in fiscal 1999.

     The table below shows the balances as of the dates indicated of our
investment in operating leases by category of equipment under lease, together
with the amounts and percentages of the changes between period-ends.

<TABLE>
                                        As of March 31,                      Change
                                 -----------------------------   ------------------------------
                                     1999            2000            Amount          Percent
                                 -------------   -------------   -------------    -------------
                                                       (Millions of yen)
<S>                              <C>             <C>             <C>              <C>
Transportation equipment.......  Yen   181,886   Yen   159,548   Yen   (22,338)        (12.3)
Measuring equipment and
  personal computers...........         58,552          58,431            (121)         (0.2)
Real estate and other..........        170,718         179,597           8,879           5.2
                                 -------------   -------------   -------------
 Total.........................  Yen   411,156   Yen   397,576   Yen   (13,580)         (3.3)
                                 =============   =============   =============
</TABLE>

     The balance of our total investment in operating leases decreased by 3.3%,
or Yen13,580 million, from March 31, 1999 to March 31, 2000. The sale of an
aircraft reduced the balance of transportation equipment assets, bringing the
total fleet size to 23.

     Interest on Loans and Investment Securities

     Interest we earn on installment loans and interest-earning securities held
in connection with operations other than life insurance is reflected in our
consolidated statements of income as interest on loans and investment
securities. Revenues from interest on loans and investment securities decreased
by 3.1%, or Yen3,090 million, from fiscal 1999 to fiscal 2000, reflecting a
decline in domestic interest rates and a decrease in yen-denominated revenues
from overseas operations due to higher average value of yen during the year.
These decreases were partially offset by an increase in the balance of
installment loans in Japan. The average interest rate earned on domestic loans,
calculated on the basis of quarterly balances, decreased to 3.97% in fiscal
2000 from 4.00% in fiscal 1999, primarily due to a decline in market interest
rates offset by improved spreads. The average interest rate earned on domestic
investment securities, calculated on the basis of quarterly balances, decreased
to 2.86% in fiscal 2000 from 3.13% in fiscal 1999, primarily due to a decline
in market rates. The average interest rate earned on overseas loans, calculated
on the basis of quarterly balances, decreased to 9.35% in fiscal 2000 from
9.44% in fiscal 1999, primarily due to the maturity of high-yielding loans. The
average interest rate earned on overseas investment securities, calculated on
the basis of quarterly balances, increased to 8.84% in fiscal 2000 from 8.61%
in fiscal 1999, primarily reflecting the investments in commercial mortgage
securities by ORIX Real Estate Capital Markets, which was accounted for by the
equity method for the previous fiscal year.

     The table below shows the balances as of the dates indicated of our
installment loans to domestic and foreign borrowers, categorized in the case of
domestic borrowers by type of consumer or commercial loan, together with the
amounts and percentages of the changes between period-ends. A small portion of
these installment loans is held in connection with our life insurance
operations, and income from these loans is reflected in our consolidated
statements of income as life insurance premiums and related investment income.

                                      54
<PAGE>

                               Installment Loans

<TABLE>
                                         As of March 31,                     Change
                                 -----------------------------   ------------------------------
                                     1999            2000            Amount          Percent
                                 -------------   -------------   -------------    -------------
                                                       (Millions of yen)
<S>                              <C>             <C>             <C>              <C>
Domestic Consumer
 Housing loans.................  Yen   411,215   Yen   396,748   Yen   (14,467)         (3.5)
 Card loans....................        118,347         121,272           2,925           2.5
 Other.........................         43,663          56,461          12,798          29.3
                                 -------------   -------------   -------------
   Subtotal....................        573,225         574,481           1,256           0.2
Domestic Commercial
 Real estate related companies.        188,085         203,537          15,452           8.2
 Commercial and industrial
   companies...................        614,988         657,355          42,367           6.9
                                 -------------   -------------   -------------
     Subtotal..................        803,073         860,892          57,819           7.2
                                 -------------   -------------   -------------
Foreign commercial, industrial
   and other borrowers.........        368,661         337,754         (30,907)         (8.4)
Direct loan origination costs,
   net.........................         16,928          18,312           1,384           8.2
                                 -------------   -------------   -------------
     Total.....................  Yen 1,761,887   Yen 1,791,439   Yen    29,552           1.7
                                 =============   =============   =============
</TABLE>

     The total balance of installment loans increased by 1.7%, to Yen1,791,439
million, from March 31, 1999 to March 31, 2000. Despite a rise in the balance
of card loans and loans for margin stock trading included in other domestic
consumer loans, the balance of our domestic loans to individuals slightly
increased as the balance of housing loans decreased. Primarily reflecting
factors such as the reluctance of Japanese banks to extend new loans, we
increased new domestic loans to corporate customers. As a result, the net
balance of our loans to corporate customers in Japan increased. The
strengthening of the yen at the end of the fiscal year contributed to a 8.4%
decrease in the balance of overseas installment loan assets.

     The balance of our investments in securities other than in connection with
our life insurance operations increased from Yen245,041 million at March 31,
1999 to Yen341,236 million at March 31, 2000. Fixed income securities increased
by Yen24,811 million, principally as a result of consolidation of ORIX Real
Estate Capital Market's assets.

     Brokerage Commissions and Gains on Investment Securities

     All non-interest income and losses (other than foreign currency
transaction gain or loss) which we recognize on securities held in connection
with operations other than life insurance are reflected in our consolidated
statements of income as brokerage commissions and gains on investment
securities. Brokerage commissions and gains on investment securities increased
by Yen12,319 million, or 166.9%, from fiscal 1999 to fiscal 2000. ORIX
Securities Corporation generates all of the brokerage commissions accounted for
in this segment. Brokerage commissions increased in fiscal 2000 due principally
to the strength of Japanese stock market. Revenues from gains on investment
securities increased in fiscal 2000 due to income on the sale of securities in
Japan and overseas.

     At March 31, 2000, gross unrealized gains of available-for-sale
securities, including those held in connection with our life insurance
operations, were Yen88,934 million. Gross unrealized gains of equity securities
increased by Yen51,624 million from fiscal 1999 to fiscal 2000 due to a rapid
rise in prices of equity securities of information-technology companies in
Japan. However, since March 31, 2000, such unrealized gains have significantly
declined, due principally to a recent drop in prices of equity securities of
Japanese information-technology companies.

     At March 31, 2000, gross unrealized losses on available-for-sale
securities, including those held in connection with our life insurance
operations, were Yen11,744 million.

                                      55
<PAGE>

     Life Insurance Premiums and Related Investment Income

     Reflecting the low level of domestic interest rate, life insurance
premiums and related investment income slightly increased by Yen9,570 million,
or 4.9%, in fiscal 2000 to Yen205,829 million. Life insurance premiums
increased due primarily to continued growth in sales of our directly marketed
insurance products, "ORIX Direct", which include single-premium endowment
insurance. Single-premium endowment insurance requires up-front payment of
premiums, which are included in income when received. Related investment income
increased primarily because of the growth of the life insurance investment
portfolio, with new investment consisting principally of Japanese corporate
bonds.

     Interest Income on Deposits

     Interest income on deposits not included in other categories of revenues
includes principally interest on bank deposits. Interest income on deposits in
fiscal 2000 decreased by Yen2,811 million, or 42.0%, from fiscal 1999,
principally as a result of a lower average balance of bank deposits.

     Other Operating Revenues

     Other operating revenues are generated from various businesses, such as
the development and sales of residential apartments, sales of commodities funds
and servicing of receivables. Other operating revenues increased by Yen10,860
million, or 22.8%, from fiscal 1999 to fiscal 2000, principally as a result of
a large increase in revenues from sales of residential apartments and the
securitization of real estate loans in the United States.

     Total Expenses

     Total expenses increased by 0.1%, to Yen563,627 million, from fiscal 1999
to fiscal 2000. Interest expense decreased in fiscal 2000, reflecting the
reduction in the amount of our short-term and long-term debts. Life insurance
costs increased 3.7% due to the growth in policies in force. Life insurance
costs consist of accrual of policy liabilities and operating expenses. We made
a smaller provision for doubtful receivables and possible loan losses compared
to fiscal 1999 because the deterioration in collateral values in fiscal 2000
was significantly less than in fiscal 1999. Other operating expenses increased
21.5% from fiscal 1999 to fiscal 2000, reflecting an increase in condominium
sales. We recognized a write-down of securities in the amount of Yen12,297
million in fiscal 2000.

     Interest Expense

     Interest expense was Yen115,038 million in fiscal 2000, a decrease of
18.3% from fiscal 1999. The decrease in interest expense principally reflects a
decline in the balance of debt, reflecting a decrease of the balance of
operating assets through such measures as securitization of lease assets.
Another principal factor behind is our proactive policy to diversify our
funding operations and reduce funding costs through the increased use of direct
funding methods, such as the issuance of shares, bonds, commercial paper, and
medium-term notes. This increased the ratio of our funding directly from
capital markets from 48.9% at March 31, 1999 to 56.8% at March 31, 2000. See "-
Funding and Liquidity-Diversification of Funding Sources."  While notes issued
under medium-term notes program increased by Yen 75,642 million from
Yen252,579 million at March 31, 1999 to Yen 328,221 million at March 31, 2000,
commercial paper decreased from Yen1,013,401 million at March 31, 1999 to
Yen977,436 million at March 31, 2000, and long-term asset backed securities
decreased from Yen194,243 million at March 31, 1999 to Yen56,034 million at
March 31, 2000. Our interest expense related to these capital markets fundings
was significantly lower than traditional bank borrowing.  The average interest
rates on our domestic short-term and long-term debt, calculated on the basis of
quarterly balances, decreased from 2.15% in fiscal 1999 to 1.81% in fiscal
2000.  The average interest rates on our short-term and long-term overseas
debt, calculated on the basis of quarterly balances, decreased from 6.89% in
fiscal 1999 to 6.39% in fiscal 2000.

                                      56
<PAGE>

     Depreciation on Operating Leases

     Depreciation on operating leases increased to Yen60,750 million in fiscal
2000, an increase of 5.8% from the level in fiscal 1999. This increase
principally reflects an increase in new investment in operating leases.

     Life Insurance Costs

     Life insurance costs increased by Yen6,889 million, or 3.7 %, to
Yen193,664 million from fiscal 1999 to fiscal 2000. The growth in life
insurance costs reflected primarily the growth in policies in force.

     We use the net level premium method to evaluate our future life insurance
policy liabilities. This method requires the preliminary calculation of fund
management yields, contract withdrawal/discontinuance rates, mortality rates,
and other calculations at the time an insurance contract is signed. The
projected yield figures used in this calculation were 3.7% in fiscal 1999 and
3.3% in fiscal 2000.

     Other Operating Expenses

     Other operating expenses principally comprise the cost of sales for
condominium marketing operations. Reflecting an increase in condominium sales,
other operating expenses increased 21.5%, to Yen38,302 million, in fiscal 2000.

     Selling, General and Administrative Expenses

     Approximately half of our selling, general and administrative expenses
consist of wages and other labor-related costs, while the remaining half
consists principally of general overhead expenses, such as rent for office
spaces, communication expenses and travel expenses. Selling, general and
administrative expenses in fiscal 2000 were Yen90,961 million, an increase of
10.4% from fiscal 1999. This increase in expenses primarily reflects expenses
relating to an increase in the number of consolidated companies, and an
increase in the number of our employees.

     Provision for Doubtful Receivables and Possible Loan Losses

     We make provisions for doubtful receivables and possible loan losses for
direct financing leases and installment loans. Provision for doubtful
receivables and possible loan losses in fiscal 2000 was Yen45,573 million, a
decrease of 12.1% from the corresponding amount in fiscal 1999.

     The table below shows the calculation of the provision for doubtful
receivables and possible loan losses for fiscal 1999 and fiscal 2000. The
"Other" category includes foreign currency translation adjustments and the
effect of an acquisition.

<TABLE>
                                      Year ended March 31,
                                 -----------------------------
                                     1999             2000
                                 -------------   -------------
                                       (Millions of yen)
<S>                              <C>              <C>
Beginning balance..............  Yen   145,741   Yen   132,606
 Provisions charged to income..         51,845          45,573
 Charge-offs (net):
   Gross charge-offs...........        (70,705)        (37,697)
   Recoveries..................            399             354
                                 -------------   -------------
   Charge-offs (net)...........        (70,306)        (37,343)
   Other.......................          5,326          (3,897)
                                 -------------   -------------
Ending balance.................  Yen   132,606   Yen   136,939
                                 =============   =============
</TABLE>

                                      57
<PAGE>

     A breakdown of the allowance for doubtful receivables and possible loan
losses as of March 31, 2000 is shown below. The "Other" category includes
foreign currency translation adjustments and the effect of an acquisition.

   Allowance for Doubtful Receivables on Direct Financing Leases and Possible
                                  Loan Losses

<TABLE>
                                                  Year ended March 31, 2000
                                 --------------------------------------------------------------
                                                     Installment Loans
                                                 -----------------------------
                                    Direct                           FASB
                                   Financing                       Statement
                                     Leases         General         No. 114           Total
                                 -------------   -------------   -------------    -------------
                                                      (Millions of yen)
<S>                              <C>             <C>             <C>             <C>
Beginning balance..............  Yen    23,867   Yen    46,630   Yen    62,109    Yen   132,606
                                 -------------   -------------   -------------    -------------
 Provisions charged to income..         20,646          18,314           6,613           45,573
 Charge-offs (net).............         (7,108)        (13,907)        (16,328)         (37,343)
 Other.........................         (1,622)         (1,672)           (603)          (3,897)
                                 -------------   -------------   -------------    -------------
Ending balance.................  Yen    35,783   Yen    49,365   Yen    51,791    Yen   136,939
                                 =============   =============   =============    =============
</TABLE>

     In fiscal 2000, provisions charged to income were Yen45,573 million and
direct financing leases and loans totaling Yen37,343 million were written off.
As of March 31, 2000, the allowance was Yen136,939 million. The ratio of this
figure to the balance of investment in direct financing leases and installment
loans was 3.9% as of March 31, 2000, compared to 3.6% as of March 31, 1999.

     The recorded investment in loans considered impaired under the definition
contained in FASB Statement 114 was Yen130,226 million as of March 31, 1999 and
Yen125,921 million as of March 31, 2000. The principal reason for the decline
was a charge-off of impaired loans in the amount of Yen16,328 million. We
determined that a valuation allowance was required for impaired loans which had
outstanding balances of Yen114,525 million as of March 31, 1999 and Yen83,408
million as of March 31, 2000. We recorded a valuation allowance, which is the
required valuation allowance less the value of the collateral from impaired
loans, calculated under FASB Statement 114, in the amount of Yen62,109 million
as of March 31, 1999 and Yen51,791 million as of March 31, 2000. FASB Statement
114 requires that impaired loans be measured based on the present value of
expected future cash flows discounted at the loan's original effective interest
rate. As a practical expedient, impairment may be measured based on the loan's
observable market price or the fair value of the collateral if the loan is
collateral dependent. When the measure of the impaired loan is less than the
recorded investment in the loan, the impairment is recorded through a valuation
allowance. Some loans, such as large groups of smaller-balance homogeneous
loans (e.g., individual housing loans), and lease receivables are exempt from
the provisions of FASB Statement 114. However, provisions for these loans and
lease receivables are reflected in the general provisions under installment
loans and investment in direct financing leases.

     The average recorded investments in impaired loans were Yen170,838 million
for fiscal 1999 and Yen128,658 million for fiscal 2000. We recognized interest
income on impaired loans of Yen1,577 million for fiscal 1999 and Yen1,429
million for fiscal 2000.

     Write-downs of long-lived assets

     During fiscal 2000, in accordance with FASB Statement 121, we wrote down
Yen7,881 million for some real estate development projects included in
"investment in operating leases" and "advances" in the consolidated balance
sheets. These write-downs were previously included in provision for doubtful
receivables and possible loan losses in the consolidated statements of income
and subsequently charged-off from allowance for doubtful receivables on direct
financing leases and possible loan losses in the consolidated balance sheets.
However, for fiscal 2000, these write-downs are not included in provision for
doubtful receivables and possible loan losses but in "write-downs of long-lived
assets" in the consolidated statement of income. See "--Policies relating to
Non-performing Assets and Charge-offs".

                                      58
<PAGE>

     Write-downs of Securities

     In fiscal 2000, we charged Yen12,297 million to income for declines in
market value classified as other than temporary. Most of this charge relates to
debt securities. In fiscal 1999, we charged Yen11,077 million to income for
declines in market value classified as other than temporary.

     Foreign Currency Transaction Loss (Gain), Net

     We recognized a foreign currency transaction gain in the amount of Yen839
million in fiscal 2000, compared to a loss of Yen390 million in fiscal 1999.
This gain principally resulted from the fluctuation of the Indonesian rupiah
against the U.S. dollar, as one of our subsidiaries procured a portion of its
funding through dollar-denominated loans. The rupiah appreciated to a
comparable degree in fiscal 1999.

     Equity in Net Income (Loss) of and Gain (Loss) on Sales of Affiliates

     Equity in net income (loss) of and gain (loss) on sales of affiliates in
fiscal 2000 was a loss of Yen838 million compared to a loss of Yen3,727 million
in fiscal 1999. The loss in fiscal 2000 was significantly lower than the loss
in fiscal 1999 because we completely wrote down our investment in Korea
Development Leasing Corporation in fiscal 1999. See note 9 of the notes to the
consolidated financial statements. The loss in fiscal 2000 principally reflect:

     o    the conversion of Banc One Mortgage Capital Markets, LLC, which
          engages in the securitization of loans secured by commercial
          property, into a subsidiary, the name of which was subsequently
          changed to ORIX Real Estate Capital Markets, LLC;

     o    a significant decline in the net income of Stockton Holdings Limited,
          which engages primarily in reinsurance activities and trades
          commodities and financial futures; and

     o    losses on the sale of certain domestic companies.

     At March 31, 2000, the investment in affiliates accounted for by the
equity method located in Asia (other than Japan and Oceania) decreased to Yen
11,201 million compared to Yen11,576 million as of March 31, 1999.

     Provision for Income Taxes

     Provision for income taxes in fiscal 2000 was Yen21,406 million,
substantially above the provision of Yen1,694 million in fiscal 1999. The
increase of Yen19,712 million was primarily due to the remeasurement of
deferred tax liabilities in fiscal 1999, as a result of the reduction of normal
Japanese tax rates from approximately 48% to 42%, effective from April 1, 1999.

     Net Income

     Operating income was Yen52,886 million, substantially above the operating
income of Yen31,042 in fiscal 1999. Income before income taxes increased by
90.5% to Yen52,048 million. Net income increased 19.6%, to Yen30,642 million,
from fiscal 1999 to fiscal 2000. Basic and diluted income per share in fiscal
2000 were Yen385 and Yen377 respectively, compared to Yen330 and Yen330 in
fiscal 1999.

     Cash Flows

     Net cash provided by operating activities increased by Yen31,877 million,
or 11.1%, from fiscal 1999 to fiscal 2000, to a total of Yen318,631 million.
This increase is substantially due to our life insurance operations where most
of the premiums are received in cash, while the largest related expense, policy
benefit payments, requires cash outlays that are spread over a number of years.
These increased cash inflows were partially offset by a decrease in revenues
from direct financing.

                                      59
<PAGE>


     Net cash used in investing activities was Yen292,858 million in fiscal
2000, compared to Yen26,046 million in fiscal 1999. The principal reasons for
the change in fiscal 2000 include a significant decline in the amount of
principal payments received under direct financing leases and a sizable
increase in installment loans to customers in fiscal 2000.

     Net cash used in financing activities was Yen6,053 million in fiscal 2000,
compared to net cash used in financing activities of Yen269,472 million in
fiscal 1999. In October 1999, ORIX issued Yen41,346 million shares of common
stock and Yen40 billion in yen denominated convertible notes.

     To diversify our funding sources, we have increased our securitization of
lease assets and issuance of domestic commercial paper, bonds, and overseas
medium term notes. This increased the share of our funding procured directly
from capital markets and from our securitization of lease assets to 60.8%.

     Cash and cash equivalents increased 5.4% from March 31, 1999 to March 31,
2000.

Business Segments

     The following discussion presents segment financial information on the
basis that is regularly used by management for evaluating performance of
business segments and deciding how to allocate resources to them. The reporting
segments are identified based on the nature of services for domestic operations
and on geographic areas for foreign operations.

     The table below shows the amount of our revenues by business segment for
fiscal 1999 and 2000, as well as the amounts and percentages of the changes
from fiscal 1999 to 2000.

<TABLE>
                                              Year ended March 31,                    Change
                                 -----------------------------   ------------------------------
                                      1999            2000           Amount          Percent
                                 -------------   -------------   -------------    -------------
                                                      (Millions of yen)
<S>                              <C>             <C>             <C>              <C>
Domestic Business Segments
 Corporate finance.............  Yen   122,629   Yen   121,415   Yen    (1,214)         (1.0)
 Equipment operating leases....         51,000          53,000           2,000           3.9
 Real estate-related finance...         17,731          17,294            (437)         (2.5)
 Real estate...................         39,088          44,873           5,785          14.8
 Life insurance................        195,484         204,746           9,262           4.7
 Other.........................         22,684          30,882           8,198          36.1
                                 -------------   -------------   -------------
   Subtotal....................        448,616         472,210          23,594           5.3
                                 -------------   -------------   -------------
Overseas Business Segments
 The Americas..................         68,821          74,525           5,704           8.3
 Asia and Oceania..............         51,220          49,739          (1,481)         (2.9)
 Europe........................         23,811          18,260          (5,551)        (23.3)
                                 -------------   -------------   -------------
   Subtotal....................        143,852         142,524          (1,328)         (0.9)
                                 -------------   -------------   -------------
   Total.......................        592,468         614,734          22,266           3.8
Adjustments....................          1,473           1,779             306          20.8
                                 -------------   -------------   -------------
   Total consolidated revenues.  Yen   593,941   Yen   616,513   Yen    22,572           3.8
                                 =============   =============   =============
</TABLE>


                                      60
<PAGE>

     The table below shows the amount of our profits by business segment for
fiscal 1999 and 2000, as well as the amounts and percentages of the changes
from fiscal 1999 to fiscal 2000.

<TABLE>
<CAPTION>
                                          Year ended March 31,               Change
                                 -----------------------------   ------------------------------
                                    1999              2000           Amount          Percent
                                 -------------   -------------   -------------    -------------
                                                       (Millions of yen)

<S>                              <C>             <C>             <C>              <C>
Domestic Business Segments
 Corporate finance.............  Yen    35,240   Yen    40,918   Yen     5,678          16.1
 Equipment operating leases....          6,923           7,823             900          13.0
 Real estate-related finance...        (11,013)         (3,415)          7,598            --
 Real estate...................         (2,236)         (8,241)         (6,005)           --
 Life insurance................          3,813           5,455           1,642          43.1
 Other.........................         (4,266)         (1,036)          3,230            --
                                 -------------   -------------   -------------
   Subtotal....................         28,461          41,504          13,043          45.8
                                 -------------   -------------   -------------
Overseas Business Segments
 The Americas..................         20,590          18,775          (1,815)         (8.8)
 Asia and Oceania..............        (11,729)          3,371          15,100            --
 Europe........................            264             278              14           5.3
                                 -------------   -------------   -------------
   Subtotal....................          9,125          22,424          13,299         145.7
                                 -------------   -------------   -------------
   Total.......................         37,586          63,928          26,342          70.1
                                 -------------   -------------   -------------
Adjustments....................        (10,271)        (11,880)         (1,609)           --
                                 -------------   -------------   -------------
   Total consolidated income
     before income taxes.......  Yen    27,315   Yen    52,048   Yen    24,733          90.5
                                 =============   =============   =============
</TABLE>

     The table below shows the amount of our assets by business segment for
fiscal 1999 and 2000, as well as the amounts and percentages of the changes
from fiscal 1999 to fiscal 2000.

<TABLE>
                                         As of March 31,                     Change
                                 -----------------------------   ------------------------------
                                     1999             2000           Amount          Percent
                                 -------------   -------------   -------------    -------------
                                                                        (Millions of yen)
<S>                              <C>             <C>             <C>              <C>
Domestic Business Segments
 Corporate finance.............  Yen 2,046,516   Yen 1,968,590   Yen   (77,926)        (3.8)
 Equipment operating leases....        109,772         113,389           3,617          3.3
 Real estate-related finance...        573,767         597,274          23,507          4.1
 Real estate...................        273,504         276,494           2,990          1.1
 Life insurance................        334,836         425,335          90,499         27.0
 Other.........................        248,872         242,280          (6,592)        (2.6)
                                 -------------   -------------   -------------
   Subtotal....................      3,587,267       3,623,362          36,095          1.0
                                 -------------   -------------   -------------
Overseas Business Segments
 The Americas..................        634,101         691,403          57,302          9.0
 Asia and Oceania..............        440,872         369,540         (71,332)       (16.2)
 Europe........................        178,559         159,608         (18,951)       (10.6)
                                 -------------   -------------   -------------
   Subtotal....................      1,253,532       1,220,551         (32,981)        (2.6)
                                 -------------   -------------   -------------
   Total.......................      4,840,799       4,843,913           3,114          0.1
                                 -------------   -------------   -------------
Adjustments....................        (65,363)        (79,092)        (13,729)          --
                                 -------------   -------------   -------------
   Total consolidated
     operating assets..........  Yen 4,775,436   Yen 4,764,821   Yen   (10,615)        (0.2)
                                 =============   =============   =============
</TABLE>

                                      61
<PAGE>

Domestic Business Segments

     Corporate Finance

     In this business segment, segment profit increased 16.1%, or Yen5,678
million, from fiscal 1999 to Yen40,918 million in fiscal 2000. The balance of
segment assets declined 3.8%, or Yen77,926 million, from March 31, 1999 to
Yen1,968.6 billion, as of March 31, 2000.

     The increase in segment profits principally reflect decreases in the
provision for doubtful receivables and possible loan losses in this segment and
in interest expense.

     The balance of domestic direct financing leases declined, reflecting the
securitization of Yen263,523 million in direct finance lease assets. The
decline in the balance of domestic direct financing leases also reflects a
lower level of new contract execution. In most areas of direct financing leases
we restrained asset growth in light of adverse economic conditions. However, we
substantially increased the number of automobiles under lease in Japan by
20,000.

     The balance of domestic loans included in our corporate finance segment
increased. While Japanese banks were constrained from extending new loans due
to capital adequacy considerations, we increased lending to commercial and
industrial companies.

     Equipment Operating Leases

     In fiscal 2000, we recorded Yen7,823 million of profit in this segment.
This represents an increase of 13.0% from segment profit of Yen6,923 million in
fiscal 1999. The balance of segment assets increased by 3.3%, or Yen3,617
million, from March 31, 1999 to Yen113,389 million as of March 31, 2000. In
measuring equipment, office automation equipment and personal computer rental
operations, we broadened and diversified the range of products we handle and
increased technical support. Due to the strength of domestic investment in the
information technology industry, segment profitability improved.

     Real Estate-Related Finance

     In fiscal 2000, segment loss amounted to Yen3,415 million, compared to a
loss of Yen11,013 million in fiscal 1999. Real estate-related finance assets
increased 4.1%, or Yen23,507 million, from March 31, 1999 to Yen597,274 million
as of March 31, 2000. During both fiscal years, we made a provision for
possible loan losses on a large amount of non-performing loans to corporate
customers created during Japan's bubble economy period. However, the provision
for fiscal 2000 was significantly lower than the amount for fiscal 1999 because
the deterioration in collateral values in fiscal 2000 was significantly less
than in fiscal 1999.

     Real Estate

     In fiscal 2000, segment loss was Yen8,241million, compared to a loss of
Yen2,236 million in fiscal 1999. This was principally due to write-downs of
long lived real estate assets in accordance with SFAS 121, which offset the
increased sales of a series of condominiums, named "Sanctus". For write-downs
of long lived real estate, see "--Write-downs of long lived assets". The
balance of real estate assets increased 1.1%, or Yen2,990 million, from March
31, 1999 to Yen276,494 million as of March 31, 2000.

     Life Insurance Business

     Segment profits in the domestic life insurance business increased 43.1%,
or Yen1,642 million, from fiscal 1999 to Yen5,455 million in fiscal 2000. While
"ORIX Direct" life insurance policies for individuals grew significantly in
fiscal 2000, pricing advantageous to our customers constrained our margins on
these policies. In addition, in common with other Japanese insurance companies,
older policies issued by ORIX Life Insurance realized lower investment income
than committed rates of return on the policies. Finally, net gain on sale of
securities increased in fiscal 2000 as losses on sale of equity securities
offset part of the gain on bond sales by ORIX Life Insurance. The

                                      62
<PAGE>

outstanding balance of segment assets increased 27.0%, or Yen90,499 million,
from March 31, 1999 to Yen425,335 million as of March 31, 2000. The growth in
segment assets reflected strong demand for our "ORIX Direct" policies.

     Marketable equity securities held in connection with our life insurance
business increased from Yen8,783 million as of March 31, 1999 to Yen13,243
million as of March 31, 2000.

     Other Domestic Business Segments

     The strength of the Japanese stock market supported growth in brokerage
commissions of ORIX Securities as well as the gains of ORIX Capital Corporation
on its sales of securities. Reflecting these factors as well as gains on the
sale of affiliates recognized in fiscal 1999, the segment's results improved
from segment loss of Yen4,266 million in fiscal 1999 to loss of Yen1,036
million in fiscal 2000. The outstanding balance of segment assets decreased
2.6%, or Yen6,592 million from March 31, 1999 to Yen242,280 million as of March
31, 2000.

Overseas Business Segments

     The Americas

     Segment profit in the Americas declined 8.8%, or Yen1,815 million, from
fiscal 1999 to Yen18,775 million in fiscal 2000. ORIX Real Estate Capital
Markets contributed significantly to segment profit, which was offset by
reduced profits at ORIX Commercial Alliance and a decrease in gains on the sale
of equity securities in affiliates. In addition reflecting the effects of the
appreciation of the yen, segment profit was slightly lower than in fiscal 1999.
The segment assets amounted to Yen691,403 million as of March 31, 2000, up 9.0%
or Yen57,302 million from March 31, 1999.

     Asia and Oceania.

     In Asia and Oceania, we recorded a Yen3,371 million segment profit during
fiscal 2000, compared with Yen11,729 million loss in fiscal 1999. Segment
assets amounted to Yen369,540 million as of March 31, 2000, down 16.2% or
Yen71,332 million from March 31, 1999. Economic conditions in Asia and Oceania
are recovering from the stagnation of recent years. Under these circumstances,
we focused on preventing an expansion of losses and made a highly selective
approach to new investment.

     Of segment assets, Yen271,673 million as of March 31, 2000 was invested in
Asia. These assets included Yen151,996 million of shipping loans secured by
first mortgages. Substantially all non-shipping assets in Asia are denominated
in local currencies.

     Europe

     Reflecting considerable improvement in the profitability of our aircraft
operating lease business, segment profit in Europe rose to Yen278 million.
Mainly due to the sale of one aircraft, segment assets amounted to Yen159,608
million at March 31, 2000, down 10.6% from March 31, 1999.

Funding and Liquidity

     We continually require funds for working capital and to grow our business.
We manage our funding and liquidity by monitoring the relative maturities of
assets and liabilities and by borrowing funds, primarily in the Japanese
financial and capital markets but also in significant amounts overseas. Funds
raised are used to fund asset growth and to meet debt obligations and other
commitments, on a timely and cost-effective basis. We place a priority on the
ready and rapid access to funding in order to be able to respond rapidly to
client and transactional requirements. By monitoring cash flow requirements
from sales and marketing activities, and the funding supply and demand balance,
we seek to ensure timely and ample access to funding. Our primary sources of
funding are borrowings from commercial banks and other institutional lenders,
commercial paper, medium term notes, straight bonds, asset-backed
securitizations and other term debt.

                                      63
<PAGE>

     Diversification of Funding Sources

     We are improving our funding costs and diversifying our funding sources by
taking advantage of the opportunities afforded by financial deregulation and
the development of new financial markets in Japan. We have increased the share
of our direct funding from the capital markets through debt offerings and
reduced our reliance on borrowings from banks in recent periods. The balance of
capital market instruments as a percentage of our total debt has increased from
48.9% at March 31, 1999 to 56.8% at March 31, 2000 and maintained the high
level of 56.7% at March 31, 2001.

     Japanese finance companies were allowed for the first time to issue
commercial paper in the domestic market in June 1993. In the following month,
ORIX became the first finance company to issue domestic commercial paper. From
April 1, 1998, ORIX has been able to issue commercial paper directly to
investors without the use of dealers. While the proceeds from the issuance of
commercial paper and bonds previously were not permitted to be used for any
loan operations, in May 1999 new legislation eliminated this restriction for
some qualifying lenders. Because ORIX is a qualifying lender, it is able to
issue commercial paper and bonds and use the proceeds without restriction.

     Prior to the establishment of the current regulatory regime for
asset-backed securities, we issued Japan's first asset-backed securities of
leasing assets in January 1992. Then, in June 1992, Japan took a significant
deregulatory step in enacting the so-called Business Asset Securitization Law,
which came into effect in June 1993 and facilitated the securitization of
leasing and installment sale assets. Since the Act was revised to allow asset
backed commercial paper to be issued in the domestic market in 1996 we have
issued asset-backed commercial paper, backed by lease receivables.

     As of March 31, 2001, our outstanding balance of unsecured bonds was
Yen795,500 million ($6,421 million).

     We have also sought to diversify our funding sources by developing overall
financial relationships with a number of banks overseas and through securities
issuances overseas, principally to fund overseas operations. Since 1992, we
have established several euro medium term note programs for various ORIX
entities. These programs have been integrated into one multi-issuer program
which includes as issuers ORIX and a number of its overseas subsidiaries. This
multi-issuer program has a limit of US$3 billion, and allows these ORIX
entities direct access to capital markets. The issuance of notes is determined
by the funding requirements of the overseas subsidiaries and is controlled by
ORIX's Treasury Department. ORIX Financial Services has also issued medium term
notes under a separate program within the United States and Canada. As of March
31, 2001, the balance of notes issued under these medium term note programs
stood at Yen349,378 million ($2,820 million).

     Short-Term Debt

     In order to promote stability in borrowings, the Company shifted its debt
from short term to long term. The balance of our short-term debt at March 31,
2001 was Yen1,562,072 million ($12,608 million), representing 40.1% of total
debt at March 31, 2001, compared to the level of 49.6% at March 31, 2000. The
balance of short-term debt decreased by Yen350,689 million or 18.3%, from March
31, 2000 to March 31, 2001. Commercial paper decreased by Yen62,825 million, or
6.4%, reflecting the decrease of commercial paper issued overseas. Other
short-term debt, consisted principally of borrowings from commercial banks,
decreased by Yen287,864 million or 30.8%, from March 31, 2000 to March 31,
2001.

     Long-Term Debt

     Long-term debt at March 31, 2001 was Yen2,330,159 million ($18,807
million), representing 59.9% of total debt, compared to the level of 50.4% at
March 31, 2000. The balance of long-term debt increased by Yen387,375 million,
or 19.9%, from March 31, 2000 to March 31, 2001. Most of this long-term debt
consisted of borrowings from Japanese banks as well as insurance companies and
other institutional lenders in Japan. Long-term debt also included borrowings
from foreign institutional lenders, unsecured bonds of Yen795,500 million
($6,421 million) and medium-term notes of Yen349,378 million ($2,820 million).
The balance of asset-backed securities was Yen72,210 million ($583 million) at
March 31, 2001.

                                      64
<PAGE>

     The maturity profile of long-term borrowings at March 31, 2001 is
described in Item 11.

     Some bank loan agreements provide that we are required to obtain consent
of the lenders before effecting any merger or any increase or decrease of our
capital, issuing any bonds or selling or transferring any part of our business.
As is typical in the Japanese market, loan agreements relating to short-term
and long-term debt from Japanese banks and some insurance companies provide
that we may be required to pledge our assets as collateral against these
borrowings upon request by our lenders if it is reasonably necessary for them
to secure their claims. To date, we have not received any requests of this kind
from the lenders. In addition, our debt agreements with some banks provide that
these banks have the right to offset cash deposited against any short-term or
long-term debt that becomes due, and in case of default and some other
specified events, against all other debt payable to the bank. Whether these
provisions can be enforced will depend upon the factual circumstances. As of
March 31, 2001, we paid interest at fixed rates on approximately 61.6% of our
long-term debt. The rest of our long-term debt incurred interest at floating
rates, principally based on LIBOR.

     We have entered into various types of interest rate contracts in managing
our interest rate risk. Under interest rate swap agreements, we agree with
other parties to exchange, at specified intervals, the difference between
fixed-rate and floating-rate interest amounts calculated by reference to an
agreed notional amount. Interest rate swaps with notional principal amounts of
Yen626,380 million ($5,056 million) at March 31, 2001 were designated as hedges
against outstanding debt and were principally used to effectively convert the
interest rate on variable rate debt to a fixed rate. This sets our fixed rate
term debt borrowing cost over the life of the swap and reduces our exposure to
rising interest rates but reduces our benefits from lower interest rates.

     We have also entered into foreign exchange forward contracts and foreign
currency swap agreements in managing foreign exchange risk. Foreign exchange
forward contracts and foreign currency swap agreements are agreements between
two parties to purchase and sell a foreign currency for a price specified at
the contract date, with delivery and settlement in the future. At March 31,
2001, we use foreign exchange forward contracts and foreign currency swap
agreements with notional principal amounts of Yen497,434 million ($4,015
million) which were principally used to hedge the risk of change in foreign
currency exchange rates associated with long-term debt denominated in foreign
currencies other than functional currencies.

     Credit Facilities

     In common with most other Japanese corporations, we did not maintain a
substantial amount of committed bank credit lines in the past, because Japan's
Interest Rate Restriction Law, which imposes interest rate ceilings ranging
from 15% to 20% per annum, effectively limited our ability to obtain these
facilities. Under the Interest Rate Restriction Law, commitment fees payable to
banks in connection with committed credit facilities constituted "interest". If
there was no, or only a small, balance drawn under committed credit facilities,
this "interest" could not exceed the amount permitted under the Interest Rate
Restriction Law. This made it difficult for banks to provide committed credit
facilities. In March 1999, new legislation eliminated these restrictions
imposed by the Interest Rate Restriction Law. In fiscal 2000, we obtained
short-term committed credit lines of Yen294,500 million in Japan to enhance
liquidity. During fiscal 2001, we established a Yen74,560 million ($602
million) multicurrency global line of credit for ORIX and our principal
overseas subsidiaries. Total committed lines for ORIX and its subsidiaries were
Yen549,525 million and Yen795,489 million ($6,420 million) at March 31, 2000
and 2001, respectively, and of these lines, Yen509,379 million and Yen726,888
million ($5,867 million) were available at March 31, 2000 and 2001,
respectively. These committed facilities are subject to financial and other
covenants and conditions to drawdown.

     We and other Japanese companies traditionally relied for liquidity upon
relationships with institutional lenders, particularly Japanese commercial
banks. In order to reduce funding costs and improve diversification of funding
sources, we have been cultivating borrowing relationships with a variety of
institutional lenders in Japan and with a number of banks overseas, and
increasing our capital markets funding both domestically and overseas. Our new
capital raising operations overseas are used principally to fund our overseas
operations. As a result of our efforts, the balance of capital market
instruments as a percentage of our total debt and deposits has increased from
48.9% at March 31, 1999 to 56.8% at March 31, 2000 and maintained the high
level of 56.7% at March 31, 2001.

                                      65
<PAGE>

     Commitments for Capital Expenditures

     As mentioned above, we have a commitment line of Yen726,888 million
($5,867 million) that we may use as of March 30, 2001. This amount, however, is
only to be used specifically to complement liquidity, and not to be used for
the purchase of any assets or specific corporate entities.

Research and Development

     The amount we spent during each of the last three fiscal years on research
and development activities is not material.

Recent Developments

     Economic Conditions

     Deregulation in Japan has resulted in a much more dynamic market
environment that is expected to bring on an era of major changes in our
principal businesses. We are in an age of accelerating structural economic
change due to, in particular, deregulation and the revolution in information
technology. While striving to create new value in order to contribute to
society in this environment, we are pursuing high profits and growth as we
continuously aim to raise shareholder value by enhancing the ORIX brand,
improving management efficiency and strengthening our financial position. We
also continue to endeavor at raising our business profitability in order to
sustain our superior position in the financial services industry.

     While economic conditions in Japan are expected to remain sluggish in the
first half of the fiscal year ending March 31, 2002, in the second half
corporate profits are expected to recover moderately as the effect of easier
monetary policy makes its way through the economy and as external demand
recovers. The United States' economy is also expected to continue to slowdown
in the first half, but recover in the second half against the background of
lower interest rates and a growth-oriented fiscal policy. We will seek to
respond with speed and flexibility to this changing business environment by
focusing greater attention on the review of its business strategies and reform
of management structures to raise profitability.

     New accounting pronouncement

     On April 1, 2001, we adopted FASB Statement No.133 ("Accounting for
Derivative Instruments and Hedging Activities"), as amended by FASB Statement
No.137 ("Accounting for Certain Derivative Instruments and Certain Hedging
Activities - Deferral of the Effective Date of FASB Statement No.133") and FASB
Statement No.138 ("Accounting for Certain Derivative Instruments and Certain
Hedging Activities - an amendment of FASB Statement No.133") (Collectively "the
Statement"). The Statement changed the accounting treatment of derivative
contracts as well as certain derivative -like instruments embedded in other
contracts. It requires that an entity recognizes all derivatives as either
assets or liabilities in the statement of financial position and measure those
instruments at fair value. If certain conditions are met, a derivative may be
designated as a hedge. The accounting treatment for changes in the fair value
of derivatives depends on the character of the transaction.

     For a fair value hedge, in which derivatives hedge the exposure to changes
in the fair value of fixed rate assets and liabilities, changes in the fair
value of derivatives will be reflected in current earnings along with changes
in the fair value of the related hedged item that is attributed to the hedged
risk.

     For a cash flow hedge, in which derivatives hedge the variability of cash
flows related to floating rate assets, liabilities or forecasted transactions,
the accounting treatment will depend on the effectiveness of the hedge. To the
extent these derivatives are effective in offsetting the variability of the
hedged cash flows, changes in the derivatives' fair value will not be included
in current earnings but will be reported as other comprehensive income. It is
reclassified into earnings in the period when earnings are also affected by the
variability of the hedged cash flows. To the extent these derivatives are not
effective, changes in their fair values will be immediately included in current
earnings.

                                      66
<PAGE>

     Non-trading derivatives that do not qualify as hedge under the new rules
will be carried at fair value with changes in value included in current
earnings.

     In order to adopt the Statement, the initial revaluation of these
derivatives are required to be recorded as cumulative effects of a change in
accounting principle, either in net income if the hedging relationship could
have been considered a faire value type hedge prior to adoption or in other
comprehensive income if the hedging relationship could have been considered a
cash flow type hedge prior to adoption. The cumulative effect of this
accounting change as of April 1, 2001, was approximately Yen9 billion ($73
million) unfavorable to other comprehensive income, and was not significant to
earnings.

     In September 2000, FASB Statement No. 140 ("Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities - a
replacement of FASB Statement No.125") was issued. It revises the standard for
accounting for securitizations and other transfers of financial assets and
collateral and requires certain disclosures, but it carries over most of FASB
Statement No. 125's provisions without reconsideration. We adopted the
disclosure provisions related to the securitization of financial assets on
March 31, 2001. All transactions entered into after March 31, 2001 will be
accounted for in accordance with FASB Statement No.140. Management anticipates
this adoption will not have a significant effect on our operations or financial
position.

Item 6.   Directors, Senior Management and Employees

Board of Directors

     ORIX'S Board of Directors has the ultimate responsibility for the
administration of our affairs. The Articles of Incorporation of ORIX provide
for not less than three Directors. Directors are elected at general meetings of
shareholders. The normal term of office of any Director expires within two
years after his or her assumption of office, at the close of the ordinary
general meeting of shareholders held to release the last settlement of
accounts. The Board of Directors elects from among its members Representative
Directors.

     The Articles of Incorporation of ORIX also provide for not less than three
Corporate Auditors, who are elected at general meetings of shareholders. The
normal term of office of any Corporate Auditor expires within three years after
his or her assumption of office, at the close of the ordinary general meeting
of shareholders held to release the last settlement of accounts. Under the
Commercial Code of Japan and other related laws, the Corporate Auditors (at
least one of whom is required to be independent of ORIX) are not required to
be, and are not, certified public accountants. Corporate Auditors have the
duties of supervising the administration by the Directors of ORIX's affairs and
examining the financial statements and business reports that the Board of
Directors submits to the general meeting of shareholders. Corporate Auditors
are not entitled to vote. They are required to elect from among themselves at
least one Standing Corporate Auditor.

     In addition to Corporate Auditors, ORIX must appoint independent certified
public accountants, who have the statutory duties of examining the financial
statements that the Board of Directors submits to the general meeting of
shareholders and reporting on the financial statements to the Corporate
Auditors and the Directors, and examining the financial statements to be filed
with the Minister of Finance. Presently, ORIX's independent certified public
accountants are Arthur Andersen.

     The Directors and Corporate Auditors of ORIX as of June 28, 2001 are as
follows:

<TABLE>
                                                                                                              Shareholdings
                                                                                              Year First      as of March 31,
         Name                                          Title                                  Appointed            2001
- ----------------------    ----------------------------------------------------------------    ----------      ----------------
                                                                                                                 (Thousands)
<S>                       <C>                                                                <C>             <C>
Yoshihiko Miyauchi....    Chairman and Chief Executive Officer, Representative
                          Director                                                               1970                39
Yasuhiko Fujiki.......    President and Chief Operating Officer, Representative
                          Director                                                               1994                 5
Yoshiaki Ishida.......    Vice Chairman, Representative Director                                 1990                 2
</TABLE>

                                      67
<PAGE>

<TABLE>
                                                                                                              Shareholdings
                                                                                              Year First      as of March 31,
         Name                                          Title                                  Appointed            2001
- ----------------------    ----------------------------------------------------------------    ----------      ----------------
                                                                                                                 (Thousands)
<S>                       <C>                                                                <C>             <C>
Shunsuke Takeda.......    Deputy President, Director                                             1993                 2
Katsuo Kawanaka.......    Director                                                               1992                 6
Takeshi Sato..........    Director                                                               1997                 7
Hiroaki Nishina.......    Director                                                               1993                 2
Tatsuya Tamura........    Director; Representative Director and Chairman, A.T.
                          Kearney K. K.; Director (Non executive), The Suruga Bank,
                          Ltd.                                                                   1999
Akira Miyahara........    Director; Vice Chairman of the Board, Fuji Xerox Co., Ltd.             1999
Hiroshi Nakamura......    Standing Corporate Auditor                                             2000                 1
Masaaki Yamamoto......    Standing Corporate Auditor                                             2001                 1
Hirotaka Takeuchi.....    Corporate Auditor; Dean, Hitotsubashi University, Graduate
                          School of International Corporate Strategy                             2000
Hiroko Ota............    Corporate Auditor; Professor, National Graduate Institute for
                          Policy Studies                                                         2001
</TABLE>

     Mr. Yoshinori Yokoyama, a director of McKinsey & Company, Inc., serves as
an advisor to the Board of Directors. Except for Mr. Tamura and Mr. Miyahara,
all of our directors are engaged in our business on a full-time basis.

Yoshihiko Miyauchi
Representative Director
Chairman and Chief Executive Officer

     Yoshihiko Miyauchi began his career at Nichimen & Co., Ltd. in 1960 and
worked there four years before entering ORIX Corporation (then Orient Leasing
Co., Ltd.) as one of the founding 13 members in 1964. Mr. Miyauchi became a
Director in 1970 and was appointed President and CEO in 1980, a position he
held until he assumed his present role as Chairman and CEO in April 2000. In
his term as CEO, Mr. Miyauchi has overseen the development of ORIX into a
diversified financial services company that has continued to be on the
forefront of innovation.

     Mr. Miyauchi is a strong proponent of deregulation and serves as the
President of the Japanese government's Council for Regulatory Reform. His other
affiliations include: Chairman, Japan Leasing Association; Vice Chairman,
Keizaidoyukai (Japan Association of Corporate Executives); and Councilor,
Keidanren (Japan Federation of Economic Organizations). He also has
directorships on the boards of Fuji Xerox Corporation, AOZORA BANK, Ltd. and
Mercian Corporation.

     Mr. Miyauchi was born in September 1935 and graduated with a BA from the
School of Business Administration of Kwansei Gakuin University in 1958 followed
by an MBA from the University of Washington in the USA in 1960.

Yasuhiko Fujiki
Representative Director
President and Chief Operating Officer

     Yasuhiko Fujiki joined Nikko Securities Co., Ltd. in 1968, before moving
to Mitsubishi Development Co., Ltd. in 1971 then to ORIX in 1976. Following
appointments as General Manager of the Real Estate Sales Department, Credit
Department and General Affairs Department, Mr. Fujiki was appointed Director in
Charge of General Affairs in 1994. In 1997, he became Principal and Director in
Charge of the Office of the Assistant to the President and Director in Charge
of the Personal Financial Services (PFS) Department. In 1999 Mr. Fujiki became
Corporate Senior Vice President and was named Chief Branding Officer in the
same year.

     In his role in the Office of Assistant to the President, Mr. Fujiki was
instrumental in the Company's recent M&A activities and strategic plans to
position ORIX to continue to be a major player in Japanese and international
financial markets. As COO, Mr. Fujiki now oversees the execution of the ORIX
Group's business activities and is leading the next generation of ORIX
management.

                                      68
<PAGE>

     Mr. Fujiki was born in November 1945 and graduated from Waseda
University's School of Commerce in 1968.

Yoshiaki Ishida
Representative Director
Vice Chairman
Responsible for Overseas Activities

     Yoshiaki Ishida joined Nozawa Asbestos & Cement Co., Ltd. (currently
Nozawa Corporation) in 1963, where he worked for five years before entering
ORIX in 1968. After a decade of various appointments in Japan, Mr. Ishida was a
major figure in ORIX's international activities. He was seconded to ORIX Asia
Limited in Hong Kong in 1981 where he was Managing Director. In June 1990, he
was made a Director and the Deputy Head of the International Business
Headquarters and in November of that year became President & CEO of ORIX USA
CORPORATION.

     After his return to Japan in 1993, Mr. Ishida completed assignments that
included the Deputy Head of International Business Headquarters and General
Manager of the Overseas Real Estate Department. He became Managing Director of
ORIX in 1994 and Senior Managing Director in 1996, before assuming the position
of Deputy President and Representative Director in 1998. He has been Vice
Chairman since April 2000, in which role he oversees ORIX's international
activities. Mr. Ishida was born in January 1940 and graduated from the Kobe
City University of Foreign Studies in 1963.

Shunsuke Takeda
Director
Deputy President
Chief Financial Officer

     Shunsuke Takeda entered the Nippon Kangyo Bank, Ltd. (currently the
Dai-Ichi Kangyo Bank, Ltd.) in 1965 before joining ORIX in 1968. After an
assignment to the London Liaison Office and several posts in Japan, Mr. Takeda
was appointed General Manager of the International Treasury Department in 1989,
General Manager of the International Department in 1990 and then General
Manager of the Treasury Department in 1992 before become Director in 1993.

     Mr. Takeda was appointed Managing Director in 1997 and Corporate Executive
Vice President in 1999. He has been Chief Financial Officer since 1997 and has
been instrumental in creating an advanced system for efficient fund procurement
of ORIX and its subsidiaries. He assumed the present position of Deputy
President in April 2000. In addition to his oversight of the Treasury
operations and support of ORIX's President, in August 2000 he was appointed to
oversee the reorganization of ORIX's Investment Banking Headquarters, while he
now serves as the officer responsible for the Office of Assistant to the
President.

     Mr. Takeda was born in September 1941 and graduated from the Law
Department of Tokyo University in 1965.

Katsuo Kawanaka
Director
Corporate Executive Vice President
Tokyo Sales Headquarters

     Katsuo Kawanaka joined Japan Rayon Limited (currently Unichika Co., Ltd.)
in 1965 and moved to ORIX Corporation in 1971. After serving in a range of
marketing positions, he was appointed General Manager of the Tokyo
Communications Equipment Department No. 3 in 1988, General Manager of the
Office Automation Equipment Department in 1989, and General Manager of the
Tokyo Information and Communications Equipment Department in 1991.

     In 1992, he became a Director and Deputy Senior General Manager of the
Tokyo Sales Headquarters. In 1996, he was named Managing Director, and he has
been Head of the Tokyo Sales Headquarters since the same year as well as
Corporate Executive Vice President since 1999.

     Mr. Kawanaka was born in March 1942 in Osaka and graduated from Osaka City
University's School of Commerce in 1965.

                                      69
<PAGE>

Takeshi Sato
Director
Corporate Senior Vice President
Chairman, ORIX USA CORPORATION

     Takeshi Sato began his career at the Saitama Bank, Ltd. (currently The
Asahi Bank, Ltd.) in 1969 before coming to ORIX in 1972. Mr. Sato began
focusing on international activities early at ORIX and was assigned as a
Director of PT. ORIX Indonesia Finance in 1975, President of ORIX METRO Leasing
and Finance Corporation in the Philippines in 1982, and President of ORIX
Australia Corporation Limited in 1987, before returning to Tokyo in 1993 as
General Manager of the International Department. Mr. Sato was appointed to the
Director and Deputy Head of the International Headquarters in 1997, which
included a posting in Singapore to oversee the Asia and Oceania operations. He
has been Corporate Senior Vice President since 1999 and became Chairman of ORIX
USA CORPORATION in April 2001.

     Mr. Sato was born in September 1946. He graduated from Meiji University's
School of Commerce in 1969 and completed a Masters of Commerce Degree from
Meiji University's Postgraduate School of Commerce in 1972.

Hiroaki Nishina
Director
Corporate Senior Vice President
Real Estate Business Headquarters
President, ORIX Real Estate Corporation

     Hiroaki Nishina joined ORIX in 1968. He became a Director and Deputy Head
of the Tokyo Sales Headquarters in 1993 and was appointed President of ORIX
Auto Leasing in 1996. In 1998, Mr. Nishina became a Corporate Executive Officer
and took over responsibility for the Real Estate Business Headquarters before
becoming President of ORIX Real Estate Corporation in 1999. He has been
Corporate Senior Vice President since June 2000.

     Mr. Nisina was born in September 1944 and graduated from Kwansei Gakuin
University's School of Economics in 1968.

Tatsuya Tamura
Director
Representative Director and Chairman, A.T. Kearney K.K.
Diector (Non-executive), The Suruga Bank, Ltd.

     Tatsuya Tamura joined the Bank of Japan in 1961 and occupied a number of
posts before becoming Executive Director in 1992. He became Chairman of A.T.
Kearney (Japan) in 1996 and Representative Director & Chairman A.T. Kearney,
K.K. in 1998. He served as President of EDS Japan from January 1997 to March
1999, and the President and CEO of Japan Investor Solution and Technology Co.,
Ltd. from August 1999 to June 2000. He has been a Director (non-executive) at
The Suruga Bank, Ltd. since June 2000. Mr. Tamura became a member of ORIX's
Advisory Board in 1997 and then a Director in 1999.

     Mr. Tamura is also a member of Keizai Doyukai (Japan Association of
Corporate Executives). He was born in October 1938 and graduated from Tokyo
University's School of Law in 1961.

Akira Miyahara
Director
Vice Chairman of the Board,
Fuji Xerox Co., Ltd.

     Akira Miyahara joined Fuji Photo Film Co. Ltd. in 1962 and then moved to
Fuji Xerox Co., Ltd. in 1971. At Fuji Xerox he occupied a number of posts
before becoming a Director in 1984. After promotions to Managing Director in
1987 and Senior Manager Director in 1988, he was appointed Deputy President in
1990 and President and Chief Operating Officer in 1992, before assuming his
present role as Vice Chairman of the Board in 1998. Mr. Miyahara was invited to
the Advisory Board of ORIX in 1997 and was then appointed as an Independent
Director in June 1999. Mr. Miyahara has brought with him a wealth of experience
to the ORIX Board and is able to provide an important outside perspective on
the company's strategy. Mr. Miyahara was born in June 1939 and graduated from
Kwansei Gakuin University's Commercial Science Department in 1962.

                                      70
<PAGE>

Hiroshi Nakamura
Standing Corporate Auditor

     Hiroshi Nakamura joined ORIX in 1971. After a number of posts in Japan, he
became general manager of the Credit Department No. 1 in 1995 and Corporate
Executive Officer in Charge of Compliance and the Legal Affairs Department in
1999, before assuming his present position in June 2000. In his function as
standing corporate auditor, Mr. Nakamura is able to use his extensive
experience in compliance and legal issues to monitor ORIX's operations.

     Mr. Nakamura was born in May 1948 and graduated from Kwansei Gakuin
University's School of Business Administration in 1971.

Masaaki Yamamoto
Standing Corporate Auditor

     Masaaki Yamamoto joined ORIX in 1972 after working five years at Ube
Industries, Ltd. He became general manager of the Accounting Department in 1996
and was appointed a director of ORIX MIC Corporation in 1999 before assuming
his role as Standing Corporate Auditor in June 2001.

     Mr. Yamamoto was born in November 1943 and graduated from Kobe
University's School of Management in 1967.

Hirotaka Takeuchi
Corporate Auditor
Dean, Hitotsubashi University
Graduate School of International Corporate Strategy

     Hirotaka Takeuchi joined McCann-Erickson Advertising Co., Ltd. in 1969,
before taking a position as Research Assistant at the Graduate School of
Business Administration at the University of California at Berkley in 1972. He
became a Lecturer at the Graduate School of Business Administration at Harvard
University in 1976 and became an Assistant Professor there before returning to
Japan in 1983 as an Assistant Professor at Hitosubashi University's School of
Commerce, where he became Professor there in 1987. He has held his present
position at the Graduate School of International Corporate Strategy since 1998.
Mr. Takeuchi became a Corporate Auditor of ORIX in June 2000.

     Mr. Takeuchi was born in October 1946 and he graduated from International
Christian University in 1969. He then went on to receive an MBA in 1971 from
the Graduate School of Business Administration at the University of California
at Berkley and a Ph.D. in 1977 from the Graduate School of Business
Administration at Harvard University.

Hiroko Ota
Corporate Auditor
Professor
National Graduate Institute for Policy Studies

     Hiroko Ota joined Mikimoto Corporation in 1976 before becoming a research
associate at the Japan Institute of Life Insurance in 1981. Ms. Ota worked at
the institute until 1993, at which time she became a guest lecturer in the
Economics Department of Osaka University. In 1996, Ms. Ota was an associate
professor at the Saitama University's Graduate School of Policy Science and
then moved to National Graduate Institute for Policy Studies in 1997 as
associate professor, before becoming a full professor at the institute in May
2001.

     Ms. Ota was born in February 1954 and graduated from Hitotsubashi
University's Department of Sociology in 1976.


                                      71
<PAGE>





Corporate Executive Officers

     In June 1998, ORIX introduced a corporate executive officer system to help
separate strategic decision-making functions from day-to-day administrative
operations. As a result, the Board of Directors now has responsibility for
strategic management decisions, while corporate executive officers are
responsible for implementing those decisions. In addition, ORIX created a Group
Corporate Executive Officer Committee to promote the sharing of management
information.

     The Corporate Executive Officers of ORIX as of June 28, 2001 are as
follows:

<TABLE>

Name                            Title and Areas of Duties
- ------------------------------  ----------------------------------------------------------------------------
<S>                             <C>                                  <C>
Yoshihiko Miyauchi..........    Chairman and Chief Executive
                                Officer
Yasuhiko Fujiki.............    President and Chief Operating
                                Officer
Yoshiaki Ishida.............    Vice Chairman                        Responsible for overseas activities
Shunsuke Takeda.............    Deputy President                     Chief Financial Officer
Katsuo Kawanaka.............    Corporate Executive Vice
                                President                            Tokyo Sales Headquarters
Takeshi Sato................    Corporate Senior Vice President      Chairman, ORIX USA CORPORATION
Hiroaki Nishina.............    Corporate Senior Vice President      Real Estate Business Headquarters; President,
                                                                     ORIX Real Estate Corporation
Masahiro Matono.............    Corporate Senior Vice President      District Sales Headquarters
Hiroyuki Harada.............    Corporate Senior Vice President      Credit Department
Hiroshi Nakajima............    Corporate Senior Vice President      Kinki (Osaka) Sales Headquarters
Masaru Hattori..............    Corporate Senior Vice President      Head of Compliance; Office of Corporate
                                                                     Planning; Accounting Department; General
                                                                     Affairs Department
Koichiro Muta...............    Corporate Senior Vice President      Investment Banking Headquarters
Yoshio Ono..................    Corporate Executive Officer          International Headquarters
Akira Fukushima.............    Corporate Executive Officer          OQL Headquarters
Nobuyuki Kobayashi..........    Corporate Executive Officer          IT Business Headquarters; PFS Department;
                                                                     President, ORIX Computer Systems Corporation
                                                                     President, ORIX Call Center Corporation
Masaaki Tashiro.............    Corporate Executive Officer          Real Estate Finance Headquarters,
                                                                     President, ORIX Asset Management and Loan
                                                                     Services Corporation
Tamio Umaki.................    Corporate Executive Officer          Tokyo Sales Headquarters
Kozo Endo...................    Corporate Executive Officer          Kinki (Osaka) Sales Headquarters
Shintaro Agata..............    Corporate Executive Officer          Treasury Department
Tetsuo Matsumoto............    Corporate Executive Officer          Real Estate Business Headquarters; Deputy
                                                                     President, ORIX Real Estate Corporation
Shunji Sasaki...............    Corporate Executive Officer          President, ORIX Rentec Corporation
Shinobu Shiraishi...........    Corporate Executive Officer          President, ORIX Life Insurance Corporation
Teruo Isogai................    Corporate Executive Officer          President, ORIX Auto Leasing Corporation
Takafumi Kanda..............    Corporate Executive Officer          President, ORIX Credit Corporation
Yutaka Okazoe...............    Corporate Executive Officer          President, ORIX Baseball Club Co., Ltd.
</TABLE>

Employees

     As of March 31, 2001, we had 9,529 full-time employees, compared to 9,503
as of March 31, 2000 and 9,037 as of March 31, 1999. We employ approximately
6,500 staff in Japan, 2,000 staff in Asia & Oceania, 900 staff in Americas and
100 staff in Europe. We consider our labor relations to be excellent. None of
ORIX's employees are represented by a union while employees of some of ORIX's
subsidiaries and affiliates are represented by unions. The mandatory retirement
age for ORIX's employees is 60, and varies for ORIX's subsidiaries and
affiliates. ORIX announced in June 1999 an early voluntary retirement program
which is available to ORIX employees who are at

                                      72
<PAGE>

least 54 years old. Employees who take advantage of this program receive their
accrued retirement package plus an incentive premium.

     ORIX and some of our subsidiaries have established contributory and
non-contributory funded pension plans covering substantially all of their
employees other than directors and corporate auditors. Under the plans,
employees are entitled to lump-sum payments at the time of termination of their
employment or to pension payments. The amounts of these payments are determined
on the basis of length of service and remuneration at the time of termination.
ORIX's funding policy in respect of these plans is to contribute annually the
amounts actuarially determined to be required. Assets of the plans are invested
primarily in interest-bearing securities and marketable equity securities. In
addition, directors and corporate auditors of ORIX and some subsidiaries
receive lump-sum payments upon termination of their services under unfunded
termination plans. Total provisions (termination or pension plans for both
employees and directors and corporate auditors) charged to income for all
benefit plans (including defined benefit plans) were Yen2,942 million, Yen3,431
million and Yen5,119 million ($41 million) in fiscal 1999, 2000 and 2001,
respectively.

Compensation

     To ensure greater management transparency, we established an Executive
Appointment and Compensation Committee in June 1999. This committee includes
independent directors as well as our internally appointed representative
directors. The independent directors will appoint the chairman of the
committee. The committee recommends to the Board of Directors candidates for
directors, auditors and corporate executive officers. The committee also
recommends to the Board an executive remuneration and evaluation system as well
as the executive remuneration and other compensation scales.

     During fiscal 2001, the executive compensation paid to ORIX's Directors
and Corporate Auditors excluding stock options and warrants amounted to
approximately Yen466 million ($3.8 million) in the aggregate. In accordance
with customary Japanese business practices, a retiring Directors or Corporate
Auditor receives a lump-sum retirement payment, which is subject to the
approval of the general meeting of shareholders. At the Shareholders' Meeting
held on June 28, 2001, the shareholders approved bonuses for the Directors and
Corporate Auditors in the amounts of Yen43 million and Yen3 million,
respectively, and retirement payments for the Directors and Corporate Auditors
in the amounts of Yen274 million were approved for fiscal 2002.

     The following table shows the names of Directors and Corporate Executive
Officers who received stock options, and the number of shares for which they
were granted options, under the 1997, 1998, 1999, 2000 and 2001 stock option
plans. Each of our shares has one vote. We have not issued any preferred
shares.

<TABLE>
                                                                                1997-1999           2000            2001
                                                                              ------------     -------------    ------------
                                                                              stock option      stock option    stock option
        Name                                  Title                               plans             plan            plan
- --------------------    -----------------------------------------------       ------------     -------------    -------------
<S>                     <C>                                                  <C>               <C>              <C>
Yoshihiko Miyauchi      Chairman and Chief Executive Officer                      60,000            30,000          21,000
Yasuhiko Fujiki         President and Chief Operating Officer                     17,000            15,000          13,000
Yoshiaki Ishida         Vice Chairman                                             36,000            17,000          10,000
Shunsuke Takeda         Deputy President and Chief Financial Officer              23,000            13,000           9,000
Katsuo Kawanaka         Director and Corporate Executive Vice President           23,000            11,000           7,000
Takeshi Sato            Director and Corporate Senior Vice President              17,000             9,000           6,000
Hiroaki Nishina         Director and Corporate Senior Vice President              15,000             8,000           6,000
Tatsuya Tamura          Director                                                                     1,000           1,500
Akira Miyahara          Director                                                                     1,000           1,500
Masahiro Matono         Corporate Senior Vice President                           15,000             7,500           5,500
Hiroyuki Harada         Corporate Senior Vice President                           15,000             7,500           5,500
Hiroshi Nakajima        Corporate Senior Vice President                           15,000             7,000           5,500
Masaru Hattori          Corporate Senior Vice President                            9,000             6,000           5,500
Koichiro Muta           Corporate Senior Vice President                                                              5,000
Yoshio Ono              Corporate Executive Officer                               15,000             7,000           4,500
Akira Fukushima         Corporate Executive Officer                               10,000                             4,500
</TABLE>

                                      73
<PAGE>


<TABLE>
                                                                                1997-1999           2000            2001
                                                                              ------------     -------------    ------------
                                                                              stock option      stock option    stock option
        Name                                  Title                               plans             plan            plan
- --------------------    -----------------------------------------------       ------------     -------------    -------------
<S>                     <C>                                                  <C>               <C>              <C>
Nobuyuki Kobayashi      Corporate Executive Officer                                9,000             6,000           4,500
Masaaki Tashiro         Corporate Executive Officer                                8,000             6,000           4,500
Tamio Umaki             Corporate Executive Officer                                4,000             5,000           4,500
Kozo Endo               Corporate Executive Officer                                                  3,500           4,500
Shintaro Agata          Corporate Executive Officer                                                  3,500           4,500
Tetsuo Matsumoto        Corporate Executive Officer                                                                  4,000
</TABLE>

Stock Option and Warrant Plans

     ORIX has adopted various employee incentive plans. The purpose of ORIX's
stock option and warrant plans is to enhance the awareness of the option
holders of the link between management, corporate performance and stock price,
and, in this way, improve the business results of ORIX. These plans are
administered by the General Affairs Department of ORIX.

     Stock Option Plans

     ORIX's shareholders approved Stock Option Plans at the ordinary general
meeting of shareholders in the years from 1997 to 2000 inclusive, under which
shares were purchased from the open market and held by ORIX reserved for
transfer to Directors and Corporate Executive Officers and some employees of
ORIX upon the exercise of their options.

     From 1997 to 1999 Stock Option Plans, the exercise prices of the options
were adjusted on April 1, 2000 to reflect the subdivision of each of common
stock into 1.2 shares which was implemented on May 19, 2000. Options granted
under Stock Option Plans generally expire one year after the termination of the
option holder's service with ORIX.

<TABLE>
                                                   Exercise        Purchase             Option
                                    Options          Price           Price            Expiration
                                    Granted        per Share       per Share             Date
                                 -------------   ------------    -------------    ------------------
<S>                            <C>               <C>             <C>              <C>
2001 Stock Option Plan.....          300,900
2000 Stock Option Plan.....          316,700    Yen    16,272    Yen    16,274    2010  June      29
1999 Stock Option Plan.....          145,000           10,393           10,396    2009  June      29
1998 Stock Option Plan.....          146,000            7,784            7,521    2008  June      26
1997 Stock Option Plan.....          168,000            7,665            7,320    2002  September 30
</TABLE>

     At the ordinary general meeting of shareholders in June 2001, ORIX's
shareholders approved the 2001 Stock Option Plan, under which stock
subscription rights for approximately 300,900 shares shall be granted to
Directors and Corporate Executive Officers and some employees of ORIX.

     Warrant Plans

     The Board of Directors of ORIX approved warrant plans under which warrants
to purchase shares were granted or sold to Corporate Auditors and some
employees of ORIX, excluding employees who are option holders under Stock
Option Plan of same year, and to directors and auditors and some employees of
ORIX's subsidiaries.

     From 1997 to 1999 Warrant Plans, the exercise prices of the options were
adjusted on April 1, 2000 to reflect the subdivision of each of common stock
into 1.2 shares which was implemented on May 19, 2000. Warrants granted under
Warrant Plan generally expire one year after the termination of the warrant
holder's service with ORIX.

                                      74
<PAGE>

<TABLE>
                                                 Exercise Price         Option
                               Options Granted      per Share       Expiration  Date
                               ---------------   --------------   ------------------
<S>                            <C>               <C>             <C>
2001 Warrant Plan.........          123,900
2000 Warrant Plan.........          126,143      Yen    14,090    2004 September   6
1999 Warrant Plan.........          302,484             11,291    2003 November    4
1998 Warrant Plan.........          315,593              6,885    2002 November    5
1997 Warrant Plan.........          311,110              7,939    2001 October    23
</TABLE>

     Subject to the final approval by the Board of Directors of the Company,
the Company intends to introduce the 2001 Warrant Plan. Under the plan,
warrants to purchase approximately 123,900 shares will be granted to corporate
auditors of the Company, directors, corporate auditors and key employees of its
certain subsidiaries by repurchasing warrants attached to bonds with warrants
to be issued by the Company during fiscal 2002.

Item 7. Major Shareholders and Related Party Transactions

Major Shareholders

     The following table shows our major shareholders as of March 31, 2001.
Each of our shares has one vote. We do not issue any preferred shares.

<TABLE>
                                                                                  Percent of Total
                                                                Share Holdings     Shares Issued
                                                                --------------    ----------------
                                                                 (Thousands)
<S>                                                            <C>                <C>
Japan Trustee Services Bank, Ltd. (Trust Account)                    6,933             8.42%
The Mitsubishi Trust and Banking Corporation (Trust Account)         4,892             5.94%
State Street Bank and Trust Company                                  3,996             4.85%
The Sanwa Bank, Limited                                              2,817             3.42%
The Toyo Trust & Banking Co., Ltd.                                   2,537             3.08%
The Chase Manhattan Bank, N.A. London                                2,341             2.84%
The Chase Manhattan Bank, N.A. London SL Omnibus Account             1,814             2.20%
Nippon Life Insurance Corporation                                    1,804             2.19%
Boston Safe Deposit BSDT, Treaty Clients Omnibus                     1,565             1.90%
The Toyo Trust & Banking Co., Ltd. (Trust Account A)                 1,352             1.64%
</TABLE>

     ORIX is not directly or indirectly owned or controlled by any
corporations, natural or legal persons severally or jointly. As of March 31,
2001, the percentage of outstanding shares held by foreign corporations and
individuals was 39.32%.

Related Party Transactions

     As of March 31, 2001, no person was the beneficial owner of more than 10%
of any class of ORIX's shares which might give that individual significant
influence over the Company. There is no material transaction of outstanding
loans, including guarantees of any kind made by or proposed to be made by the
Company with any enterprises and individuals.

Item 8. Financial Information

All relevant financial statements are attached hereto.  See "Item 19.
Financial Statements and Exhibits."

Legal Proceedings

     See Item 4. "Information on the Company -Legal Proceedings"

Dividend Policy and Dividends

     See Item 10. "-Additional Information -Dividend Policy and Dividends"

                                      75
<PAGE>

Significant Changes

   None

Item 9. The Offer and Listing

Tokyo Stock Exchange

     The primary market for the shares is the Tokyo Stock Exchange. The shares
have been traded on the First Section of the Tokyo Stock Exchange since 1973
and are also listed on the First Sections of The Osaka Securities Exchange and
The Nagoya Stock Exchange.

     The Tokyo Stock Exchange is the principal Japanese stock exchange. The
most widely followed price index of stocks on the Tokyo Stock Exchange is the
Nikkei Stock Average, an index of 225 selected stocks traded on the First
Section of the Tokyo Stock Exchange.

     The following table shows the reported high and low sales prices of the
shares on the Tokyo Stock Exchange, excluding off-floor transactions. High and
low sales price quotations from the Tokyo Stock Exchange have been translated
in each case into dollars per ADS at the Federal Reserve Bank of New York's
noon buying rate on the relevant date or the noon buying rate on the next
business day if the relevant date is not a business day.

<TABLE>
<CAPTION>
                      Tokyo Stock Exchange Price Share
                                                            Translated
                                                               into
                                  Price Per Share          US$ per ADS
                                 -----------------      ------ ---------
     Calendar period               High       Low        High       Low
- ------------------------------   -------    ------      ------    ------
<S>                              <C>        <C>         <C>       <C>
1996......................         5,000     3,950         22        19
1997......................         9,950     4,560         42        20
1998......................        10,630     7,560         39        31
1999
 First quarter............         9,080     7,200         38        33
 Second quarter...........        11,860     8,250         49        34
 Third quarter............        13,930    10,540         65        48
 Fourth quarter...........        24,150    12,050        118        57
2000
 First quarter............        24,100    16,030        117        76
 Second quarter...........        16,980    13,750         81        66
 Third quarter............        16,850    12,000         79        56
 Fourth quarter...........        13,400    10,280         62        46
2001
 January..................        12,030    10,450         51        44
 February.................        11,650     9,860         51        43
 March....................        11,300     8,600         46        35
 April....................        11,390     9,900         47        39
 May......................        13,330    11,100         56        46
 June (through June 22)...        12,390    11,610         52        48
</TABLE>

     In May 2000, ORIX implemented the subdivision of each of common stock
registered on its register of shareholders as of March 31, 2000 into 1.2
shares. The per-share prices set forth above have not been adjusted to reflect
that subdivision.

New York Stock Exchange

     The ADSs and ADNs are listed on the New York Stock Exchange under the
symbol "IX".

                                      76
<PAGE>

     Two ADSs represent one share. On March 31, 2001, approximately 2,106,120
ADSs were outstanding. This is equivalent to 1,053,060 or approximately 1.3% of
the total number of shares outstanding on that date. On that date, ADSs were
held by 3 record holders, including 2 record holders in the United States
holding 2,105,880 ADSs. The ADS/share ratio and the per ADS prices below were
not adjusted as a result of the share subdivision mentioned above.

     The following table provides the high and low sales prices and the average
daily trading volume of the ADSs on the New York Stock Exchange.

                                      77
<PAGE>


                              NYSE Price Per ADS

<TABLE>
          Calendar Period                         High            Low
- ----------------------------------------------   ------          -----
                                                   ($)            ($)
<S>                                              <C>             <C>
1998 (from September 16)......................    39.25          31.38
1999
 First quarter................................    39.00          30.00
 Second quarter...............................    40.00          29.89
 Third quarter................................    53.39          39.17
 Fourth quarter...............................    95.31          47.50
2000:
 First quarter................................    95.21          52.92
 Second quarter...............................    76.38          65.83
 Third quarter................................    78.50          56.38
 Fourth quarter...............................    61.25          46.75
2001:
 January......................................    51.13          44.50
 February.....................................    50.50          43.00
 March........................................    46.35          37.30
 April........................................    46.20          39.90
 May..........................................    55.00          44.40
 June (through June 21).......................    51.96          48.22
</TABLE>

     On March 31, 2001, 150 ADNs were outstanding. On that date, all of the
ADNs were held by one record holder in the United States.

Item 10. Additional Information

Memorandum and Article of Incorporation

     Purposes

     The purposes of the Company are provided in Article of two of our articles
of incorporation and shall be to engage in the following business. (1) Lease,
purchase and sale (including purchase and sale on an installment basis),
maintenance and management of movable property of all types. (2) Lease,
purchase and sale, ground preparation, development, maintenance and management
of real property. (3) Lending of money, purchase and sale of claims of all
types, payment on behalf of third parties, guarantee and assumption of
obligations and other financial business. (4) Holding, investment in,
management, purchase and sale of securities. (5) Holding, management, purchase
and sale of mortgage certificates. (6) Business of investment in and sale of
commodities, and advisory business in respect of investment in commodities. (7)
Acting as an agent for collection of money and for calculation business of
enterprises. (8) Manufacture, processing, repair and sale of furniture,
interior goods, transport machinery and equipment, etc. (9) Water transport,
road transport of cargo and warehousing. (10) Contracting for construction and
civil engineering, and design and supervision thereof. (11) Planning of,
development of, contracting for, lease of and sale of intangible property
rights such as copyrights, industrial property rights, etc. (12) Information
services, electric communication, advertising and publishing business. (13)
Management of facilities for sports, lodging, medical treatment and social
education, etc. Management of restaurants, and tour business. (14) Conducting
of cultural projects, sports, etc. (15) Business of dispatching workers to
enterprises. (16) Purchase and sale of antiques. (17) Business relating to the
collection, transportation and disposal of ordinary waste products and
industrial waste products. (18) Generation of electric power and supply of
electricity. (19) Brokerage, agency, investigation and consulting of business
relating to any of the preceding items. (20) Non-life insurance agency
business, insurance agency business under the Automobile Accident Compensation
Security Law, and business related to soliciting life insurance. (21)
Investment advisory business relating to real estate, securities and other
financial assets. (22) Conducting trust, banking and Credit Management and
Collection Business operations, as a result of the acquisition of shares in a
company engaged in those activities. (23) Any and all business related to any
of the preceding items.

                                      78
<PAGE>

     Directors and Board of Directors

     There shall be no less than three Directors of the Company (Article 17).
Directors shall be elected at a General Meeting of Shareholders. In the case of
the above election, shareholders representing not less than one third (1/3) of
the total number of shares entitled to vote shall attend such Meeting. In the
case of election of Directors, cumulative voting shall not be used (Article
18). The term of office of Directors shall expire upon conclusion of the
Ordinary General Meeting of Shareholders relating to the last fiscal year
ending within two years from his assumption of office. (Article 19) Resolutions
of the Board of Directors shall be adopted by a majority of the Directors
present at a Meeting that a majority of the Directors shall attend (Article
23). Remuneration of Directors shall be determined by resolution of the General
Meeting of Shareholders (Article 25).

     Shares

     The Company do not issue any preferred stock. Cash dividends shall be paid
to shareholders or registered pledgees last of record on the Register of
Shareholders and the Register of Substantial Shareholders as of the closing of
accounts for each business year. With respect to the first cash dividends on
shares issued upon requests for conversion of convertible bonds, such
conversions shall be deemed to have been made at the beginning of the business
year during which such requests for conversion have been made, and the cash
dividends shall be paid accordingly. Cash dividends shall bear no interest and
if they have not been received within three years from the day of commencement
of payments, they shall belong to the Company. (Article 35) Unless otherwise
provided for by laws and ordinances, resolutions of General Meetings of
Shareholders shall be adopted by a majority of votes of shareholders present at
the Meetings. Unless otherwise provided for by laws and ordinances, each
shareholder shall have one vote for each share (Article 14).

      General Meeting of Shareholders

      The Ordinary General Meeting of Shareholders shall be held in June of
each year and an Extraordinary General Meeting of Shareholders shall be held
whenever necessary.  Notices for calling of an Ordinary General Meeting of
Shareholders and an Extraordinary General Meeting of Shareholders shall be
dispatched at least two weeks prior to the date set for such Meetings (Article
11). A General Meeting of Shareholders shall be called by a Representative
Director pursuant to resolution of the Board of Directors (Article 12).

Material Contracts

     We have no material contracts aside from those entered in our ordinary
course of business.

Foreign Exchange and Other Regulations

     The Foreign Exchange and Foreign Trade Law of Japan, as amended, and the
cabinet orders and ministerial ordinances issued thereunder govern some matters
relating to the acquisition and holding of shares by "non-residents of Japan"
and "foreign investors".

     "Non-residents of Japan" are defined as individuals who are not residents
of Japan and corporations whose principal offices are located outside Japan.
Generally, branches and other offices located within Japan of non-resident
corporations are regarded as residents of Japan, and branches and other offices
of Japanese corporations located outside Japan are regarded an non-residents of
Japan.

     "Foreign investors" are defined in the foreign exchange control laws as:

     o    individuals not resident in Japan,

     o    corporations organized under the laws of foreign countries or whose
          principal offices are located outside Japan, and

                                      79
<PAGE>


     o    corporations organized in Japan not less than 50% of the shares of
          which are held, directly or indirectly, by individuals or
          corporations falling within either of the two categories above or a
          majority of the directors or other officers (or directors or other
          officers having the power of representation) of which are
          non-resident individuals.

  Acquisition of Shares

     In general, a non-resident of Japan can acquire shares of a Japanese
company listed on a Japanese stock exchange or traded on an over-the-counter
market in Japan ("listed shares") from a resident of Japan. A resident of Japan
must file a report of a transfer with the Minister of Finance within 20 days
from and including the date of the transfer. However, if a foreign investor
intends to acquire listed shares and as a result of any acquisition the foreign
investor would, directly or indirectly, hold 10% or more of the total
outstanding shares of the relevant company, the foreign investor must file a
report of the acquisition. The report must be filed with the Minister of
Finance and any other competent Minister within 15 days from and including the
date of the acquisition. In some limited circumstances a prior notification of
the acquisition must be filed with the Minister of Finance and any other
competent Minister, which may modify or prohibit the proposed acquisition.

  Dividends and Proceeds of Sale

     Under the Foreign Exchange and Foreign Trade Law, dividends paid on, and
the proceeds of sales in Japan of, shares held by non-residents of Japan may in
general be converted into any foreign currency and repatriated abroad. The
acquisition of shares by non-resident shareholders by way of stock split is not
subject to any notification or reporting requirements.

  Exercise or Transfer of Subscription Rights Granted to Shareholders

     An acquisition by a non-resident holder of shares upon exercise of
subscription rights granted to shareholders is subject to the same conditions
as are referred to under "--Acquisition of Shares" above. If certificates
representing these subscription rights are made available by ORIX, a
non-resident shareholder can acquire a certificate subject to the same
conditions as are referred to under "--Acquisition of Shares" above.
Non-resident (or any non-resident transferee of a certificate) may acquire
shares upon exercise of the subscription rights represented by a certificate
subject only to the restrictions referred to under the same heading.

  Other Regulations

     The Securities and Exchange Law generally requires any person who has
become a beneficial holder, including joint holders, of more than five percent
of the total issued share capital of a company listed on any Japanese stock
exchange or traded on the over-the-counter markets in Japan to file a report
concerning its share holdings. This report must be filed with the Minister of
Finance within five business days. A similar report must also be made (with
some exceptions) if the percentage of this holding subsequently changes by one
percent or more. Copies of any report must also be furnished to the issuer of
these shares and to all Japanese stock exchanges on which the shares are listed
or the Japan Securities Dealers Association in the case of over-the-counter
shares. For this purpose, shares issuable on conversion of convertible
securities or exercise of warrants are taken into account in determining both
the number of shares held by a holder and the issuer's total issued share
capital.

Dividend Policy and Dividends

     ORIX has paid cash dividends on the shares on an annual basis in each year
since 1967. The Board of Directors recommends the annual dividends. The
shareholders approve the annual dividend at the ordinary general meeting of
shareholders customarily held in June of each year. Immediately following this
approval at the meeting, dividends are paid to holders of record as of the
preceding March 31.

     The following table shows the amount of dividends paid by ORIX in each of
the fiscal years indicated, which amounts are translated into US dollars per
ADS at the noon buying rate on each of the dates of the ordinary general
meetings of shareholders. Since the share division was implemented in May 2000
after the record date for annual

                                      80
<PAGE>

dividends, the amount of dividends for the
fiscal year ending March 31, 2000 was not adjusted to reflect the share
division.

<TABLE>
                                             Dividend      Translated into
          Year ending                        per Share     dollar per ADS
          ------------------------------   -------------   ---------------
<S>                              <C>             <C>
          March 31, 1997.........          Yen     15.00      $  0.06
          March 31, 1998.........                  15.00         0.06
          March 31, 1999.........                  15.00         0.07
          March 31, 2000.........                  15.00         0.07
          March 31, 2001.........                  15.00         0.06
</TABLE>

     We currently intend to continue to pay annual cash dividends on the
shares. In the future, however, we may decide not to pay dividends for any of
the following reasons:

     o    in response to a decline in our earnings or financial condition;

     o    to permit us to increase our assets;

     o    to maintain our debt-to-equity ratios at a desired level; or

     o    if any of our lenders with the right to review our dividend plan and
          approve our payment of dividends objects to a planned dividend.

     Dividends paid to U.S. holders of shares or ADSs are generally reduced by
a Japanese withholding tax at the maximum rate of 15%.

Taxation

     The following is a summary of the principal Japanese tax consequences to
an owner of Notes, ADNs, Shares or ADSs who is an individual not resident in
Japan or a non-Japanese corporation (a "Non-resident holder"). The statements
regarding Japanese tax laws set forth below are based on the laws in force and
as interpreted by the Japanese taxation authorities as of the date hereof and
are subject to changes in the applicable Japanese laws or double taxation
conventions occurring after that date. This summary is not exhaustive of all
possible tax considerations which may apply to a particular investor and
potential investors are advised to satisfy themselves as to:

     o    the overall tax consequences of owning the Notes, ADNs, Shares or
          ADSs described herein, including specifically the tax consequences
          under Japanese law,

     o    the laws of the jurisdiction in which they are resident, and

     o    any tax treaty between Japan and their country of residence.

Notes

     Payment of interest on the notes outside Japan by our paying agents to
some beneficial owners will not be subject to Japanese withholding tax. The two
groups of beneficial owners that are exempt from the withholding tax are:

     o    an individual who is not a resident of Japan or corporation that is
          not a Japanese corporation for Japanese tax purposes. These
          individuals and corporations are referred to as "non-resident
          holders".

     o    a Japanese financial institution designated in Article 6, Paragraph 8
          of the Special Taxation Measures Law of Japan (Law No. 26 of 1957)
          and in the related cabinet order. Each of these financial
          institutions is referred to as a "DFI".

     Each non-resident holder and DFI must comply with procedures
for establishing its status in accordance with the requirements of Japanese
law.

                                      81
<PAGE>

     Interest on the Notes will continue to be exempt from Japanese withholding
tax until March 31, 2002. You should be aware that the exemption for
non-resident holders and DFI's may be affected if Japan adopts new rules that
apply to interest on outstanding securities and does not provide for
grandfathering. If that happens,

     o    non-resident holders and DFIs generally would be entitled to receive
          additional amounts, and

     o    we would be entitled to redeem the debt securities.

     Under current Japanese practice, we and our paying agents may determine
our withholding obligations in respect of notes held through a qualified
clearing organization in reliance on certifications we receive from the
qualified clearing organization. In these cases, we do not need to obtain
certifications from the ultimate beneficial owners of the notes. As part of the
procedures under which these certifications are given, a beneficial owner may
be required to establish that it is a non-resident holder or DFI to the person
or entity through which is holds the notes. If a non-resident holder or DFI
does not hold its notes through a qualified clearing organization, the
non-resident holder or DFI, as the case may be, will be required to deliver to
our paying agents a claim for exemption from Japanese withholding tax and
documentation concerning its identity and residence in order to receive
interest payments on the notes free of Japanese withholding tax. We and our
paying agents may adopt modified or supplemental certification procedures to
the extent necessary to comply with changes in Japanese law or administrative
practice.

     Holders of Notes other than non-resident holders or DFIs will be subject
to Japanese income tax:

     o    on the full amount of interest to be received, or

     o    in the case of a public entity, financial institution, securities
          company or other corporation designated in Article 3-3, Paragraph 6
          of the Special Taxation Measures Law that receives interest through a
          receiving agent in Japan in accordance with Paragraph 6, on the full
          amount of interest to be received less the amount of interest
          corresponding to the period during which it holds the notes as
          provided in the related cabinet order.

     There are generally no Japanese taxes payable on conversion of Notes which
may be payable if we pay holders cash for shares that we are prohibited from
delivering to them.

     If holders sell our Notes or ADNs outside of Japan, the proceeds will
generally not be subject to Japanese income or corporation taxes.

     If holders acquire our Notes or ADNs as a legatee, heir or donee, holders
may be subject to Japanese inheritance and gift taxes at progressive rates.

     We will pay the Japanese stamp duty tax imposed upon the issuance of
shares of common stock registered in the name of the custodian and the delivery
of the shares to the custodian's agent.

Shares

     Generally, we will be required to withhold amounts from dividends we pay
to non-resident holders. Non-resident holders will not generally be required to
pay Japanese income tax if our stock splits. However, if we transfer retained
earnings or legal reserve to stated capital non-resident holders will be
treated as having received a dividend for Japanese tax purposes and will, in
general, be required to pay Japanese income tax. This is true whether or not we
make the transfer in connection with a stock split or otherwise. In general,
non-resident holders will not be treated as having been paid a dividend in
connection with additional paid-in capital. We would not be required to
transfer retained earnings or legal reserve to stated capital in connection
with a stock split if the total par value of shares in issue after the stock
split does not exceed the stated capital.

     We will be required to withhold 20% from dividends we pay non-resident
holders unless a relevant tax treaty, convention or agreement provides for a
lower rate of withholding. Japan has entered into income tax treaties,
conventions or agreements with a number of countries that reduce the general
20% withholding tax rate to 15%. These countries include, among others,
Australia, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy,
Luxembourg,

                                      82
<PAGE>

The Netherlands, New Zealand, Norway, Singapore, Spain, Sweden, Switzerland,
the United Kingdom and the United States.

     If non-resident holders are entitled to a reduced rate of Japanese
withholding tax on payment of dividends by us, they must submit the
"Application Form for Income Tax Convention regarding Relief from Japanese
Income Tax on Dividends" to the relevant Japanese tax authority through us. A
standing proxy for non-resident holders may provide this application service
for you. A reduced rate is applicable to ADSs if Citibank, N.A., as depositary,
or its agent submits two Application Forms for Income Tax Convention. One form
must be submitted before payment of dividends, and the other form must be
submitted within eight months after our fiscal year-end. Citibank, N.A. has
indicated to us that it shall undertake reasonable efforts to file the
applicable forms to obtain a reduced rate of Japanese withholding taxes. If
non-resident holders hold ADSs and want to claim a reduced rate, they will be
required to file proof of taxpayer status, residence and beneficial ownership,
as applicable. Non-resident holders will also be required to provide any other
information or documents required by the depositary.

     Non-resident holders will not generally be required to pay Japanese income
or corporation tax on any gains they derive from selling our shares or ADSs. If
non-resident holders acquired our shares or ADSs as a distributee, legatee or
donee they may have to pay Japanese inheritance or gift taxes at progressive
rates.

     We have paid or will pay any stamp, registration or similar tax imposed by
Japan in connection with the issue of the shares, other than any tax payable in
connection with the transfer or sale of the shares by non-resident holders.

Documents on Display

     Our annual reports, news releases and interim results are displayed in our
home page (URL: www.orix.co.jp).

Item 11. Quantitative and Qualitative Disclosures About Market Risk

Derivatives and Other Financial Instruments

     We engage in a number of derivative transactions such as interest rate and
currency swaps and, interest rate cap, floor and collar transactions. We engage
in these transactions principally for hedging purposes. ORIX establishes market
risk management regulations determined by the Investment and Credit Committee,
and each subsidiaries that engages in derivatives transactions has established
market risk management parameters. Based on those parameters, the object of the
risks which should be managed and the types of hedging methods are clarified,
while an internal check system has been established to separate the functions
of departments responsible for execution, hedging efficacy evaluation, and
related administration tasks. Departments executing transactions calculate the
fair market values of transactions with individual counterparties and
transactions with counterparties of given credit ratings, and the types of
hedging methods employed. In addition, these departments make other
calculations as part of a management system capable of responding rapidly to
sharp market changes and other unanticipated developments. We perform hedging
efficacy check to ensure that the types of hedging methods employed are
appropriate and, periodically or when necessary, evaluate the efficacy of the
hedging methods. Working in cooperation with banks and other outside entities,
administrative management undertake checks of all transactions. In addition,
each quarter, they prepare reports on each subsidiaries' transactions that
include compilations of such information as the notional principal, fair market
value, hedging method, and hedging efficacy associated with each type of
transaction and each counterparty, and present this report to CFO. Further, the
Inspection Office inspects derivatives-related accounts and performs checks to
ensure that relevant regulations are observed.

  Market Risks

     Our primary market risk exposures are to interest rate fluctuations,
foreign exchange rate movements and changes in market prices for equity
securities. We seek to manage market risk exposures as described under "Item 5.
Operating and Financial Review and Prospects--Risk Management".

     Our interest income is exposed to the risk of decreases in market interest
rates. Decreases in market interest rates reduce interest income from:

                                      83
<PAGE>

     o    floating rate installment loans;

     o    investment securities yielding a floating rate of return;

     o    short-term investments; and

     o    interest rate swaps in which we receive a floating rate of interest.

     Our most significant exposure of this kind is to installment loans bearing
a floating rate of interest, although we also have a significant amount of
short-term investments. Most of our floating-rate installment loans and
short-term investments are denominated in yen and are therefore exposed to the
risk of changes in market rates of interest for financial obligations
denominated in yen.

     Our interest expense is exposed to the risk of increases in market
interest rates. Increases in market interest rates increase interest expense
from:

     o    short-term debt;

     o    floating rate long-term debt; and

     o    interest rate swaps in which we pay a floating rate of interest.

     Our most significant exposure of this kind is to short-term debt; we
customarily finance a significant portion of our operations through the
issuance of commercial paper and short-term borrowings. We also have a
significant amount of floating-rate long-term debt.

     Most of our short-term debt and floating-rate long-term debt is
denominated in yen and is therefore exposed to the risk of changes in market
rates of interest for financial obligations denominated in yen. In principle,
our floating rate assets are funded by floating rate debt such as commercial
paper and by way of derivative instruments.

     We have foreign-currency denominated assets and liabilities, and engage in
foreign-currency denominated transactions. Although we generally seek to match
the currencies in which our assets and liabilities are denominated, our attempt
at matching is not comprehensive. Consequently, our profits from foreign
currency denominated transactions and shareholders' equity are exposed to
foreign exchange rate risks if that foreign currency denominated investments
are not hedged. These risks include:

     o    the effects of changes in payment flows on foreign currency swaps;

     o    changes in the yen equivalent amounts of income or expenses from
          transactions denominated in foreign currencies; and

     o    revaluation of assets and liabilities denominated in foreign
          currencies or reflected in the financial statements of subsidiaries
          whose functional currencies are other than yen.

     We have a portfolio of equity securities, principally Japanese listed
common stocks. Our shareholders' equity and net income are exposed to the risk
of changes in market prices for these securities.

     In addition to the risks described above, we are exposed to market risks
in relation to our direct financing leases and operating leases. Interest rate
sensitivity and exchange rate sensitivity data for these leases are not
required to be presented in the tables below. Substantially all of our direct
financing leases and operating leases do not provide for payments that
fluctuate based on changes in market rates of interest or changes in rates of
currency exchange. However, changes in market rates of interest will affect the
fair values of these payments in the future.

     We are also exposed to market risks in relation to insurance policies
issued by ORIX Life Insurance. Interest rate sensitivity and exchange rate
sensitivity data for these policies are not required to be presented in the
tables below. All

                                      84
<PAGE>

insurance policies issued by ORIX Life Insurance are denominated in yen. Those
policies do not provide for payments that fluctuate based on market rates of
interest. Our obligations under insurance policies include obligations that are
based upon the occurrence of loss events. These also include obligations that
are based upon essentially financial criteria, such as insurance products that
are designed partially or wholly as investment products. Changes in market
rates of interest may affect the fair value of our obligations under other
investment-type insurance products and may affect the present value of our
expected obligations (based on actuarial determinations) under other insurance
products.

     The following quantitative information about the market risk of our
financial instruments does not include information about financial instruments
to which the requirements under FASB Statement 107 do not apply, such as
investment in direct financing leases, investment in operating leases, and
insurance contracts. As a result, the following information does not present
all the risk of our financial instruments. We choose to present in tabular form
our interest risk exposure, and provide sensitivity analysis, which presents
potential losses in future earnings resulting from hypothetical changes in
exchange rates, to show our foreign currency exchange rate exposure. We omitted
the disclosure for trading purpose financial instruments because the amount is
immaterial.

     The table of interest rate sensitivity for non-trading on-balance sheet
financial instruments summarizes installment loans, interest-bearing bonds and
long-and short-term debt. These instruments are further classified as fixed
rate and floating rate. For on-balance sheet items, the principal collection
and repayment schedules and the weighted average interest rates for collected
and repaid portions are disclosed. For interest swaps of off-balance sheet
items, the estimated notional principal amounts for each contractual period and
the weighted average interest swap rates are disclosed. The average interest
rates of financial instruments as of the end of fiscal 2001 are: 5.4% for
installment loans, 4.1% for interest-bearing bonds, 2.3% for long-and
short-term debt and 0.6% for deposits. The average payment rate of interest
rate swaps is 3.8% and the average receipt rate is 2.8%. There is no material
change in the balance and the average interest rate of financial instruments.
The average interest rates of financial instruments as of the end of fiscal
2000 are: 5.7% for installment loans, 3.8% for interest-bearing bonds, 2.6% for
long-and short-term debt and 0.5% for deposits. The average payment rate on
interest rate swaps is 3.1% and the average receipt rate is 2.7%.

     Since we have a foreign currency transaction policy of basically keeping
the same balance of foreign currency denominated assets and liabilities, there
is a small amount of net exposure to foreign currency exchange risk. We are
exposed to exchange risk mainly when our investment is primarily denominated in
the local currency of Indonesia or other Asian countries and the source of our
funding is US dollar debt. When the currencies depreciate against the US
dollar, we incur foreign currency transaction losses. There is no material
change in our exchange risk position from fiscal 2000 to fiscal 2001.

     We identified all positions subject to a change in the value of the
foreign currency and calculated the potential loss in future earnings resulting
from several hypothetical scenarios of 10% changes in related currencies. For
the Indonesian Rupiah, we used a 60% change, taking into consideration the
recent fluctuation in the value of the currency. The largest loss results from
the scenario that both the US dollar and Japanese yen appreciate against other
currencies. Based on this scenario, the exchange losses in future earnings are
Yen2,905 million at the end of fiscal 2000 and Yen3,962 million ($32 million)
at the end of fiscal 2001.

     The following tables contain quantitative information concerning the
interest rate risk of ORIX's financial instruments.

                          Interest Rate Sensitivity

              Non-Trading On-Balance Sheet Financial Instruments

<TABLE>
                                                        Expected maturity date                                        March 31, 2001
                    --------------------------------------------------------------------------------                  estimated fair
                         2002          2003         2004         2005          2006      Thereafter       Total            value
                    -------------  -----------  -----------  -----------   -----------   -----------   -------------  --------------
                                                                     (Yen amounts in millions)
<S>                      <C>       <C>          <C>          <C>           <C>           <C>           <C>            <C>
Assets
 Installment loans
  (fixed rate)..... Yen   248,716  Yen  79,115  Yen  83,668  Yen  74,393   Yen  41,829   Yen  97,396   Yen   625,117   Yen   645,680
  Average interest
    rate...........           5.6%         7.9%         7.6%         7.8%          9.7%          8.3%            7.1%
</TABLE>

                                      85
<PAGE>

<TABLE>
                                                        Expected maturity date                                        March 31, 2001
                    --------------------------------------------------------------------------------                  estimated fair
                         2002          2003         2004         2005          2006      Thereafter       Total            value
                    -------------  -----------  -----------  -----------   -----------   -----------   -------------  --------------
                                                             (Yen amounts in millions)
<S>                      <C>       <C>          <C>          <C>           <C>           <C>           <C>            <C>
 Installment loans
  (floating rate).. Yen   297,564  Yen 173,044  Yen 142,316  Yen 118,575   Yen 137,463   Yen 352,432   Yen 1,221,394   Yen 1,221,394
  Average interest
  rate.............           4.4%         3.8%         4.4%         4.9%          5.0%          5.1%            4.6%
 Investment in
  securities (fixed
  rate)............ Yen    39,213  Yen  65,692  Yen 108,010  Yen 128,951   Yen  89,134   Yen 264,696   Yen   695,696   Yen   717,075
  Average interest
    rate...........           2.7%         2.4%         2.1%         2.3%          1.8%          8.1%            4.2%
 Investment in
  securities
  (floating
  rate)............ Yen     5,974  Yen  12,613  Yen   6,158  Yen   1,187   Yen   1,407   Yen  29,280   Yen    56,619   Yen    59,435
  Average interest
    rate...........           7.7%        12.4%        15.3%         4.7%          7.2%          3.6%            7.4%
Liabilities
 Short-term debt... Yen 1,562,072           --           --           --            --            --   Yen 1,562,072   Yen 1,562,072
  Average interest
    rate...........           1.8%          --           --           --            --            --             1.8%
 Deposits.......... Yen   145,283  Yen   9,134  Yen  14,361           --   Yen   9,536            --   Yen   178,314   Yen   179,376
  Average interest
    rate...........           0.6%         0.9%         1.0%          --           1.4%           --            0.6%
 Long-term debt
  (fixed rate)..... Yen   328,314  Yen 314,536  Yen 307,651  Yen 282,184   Yen 126,826   Yen  75,750   Yen 1,435,261   Yen 1,466,903
  Average interest
    rate...........           2.9%         2.4%         2.1%         1.9%          1.9%          3.2%            2.3%
 Long-term debt
  (floating rate).. Yen   296,524  Yen 159,967  Yen 172,282  Yen 110,508   Yen  92,504   Yen  63,113   Yen   894,898   Yen   894,898
  Average interest
    rate...........           4.6%         3.8%         2.3%         1.6%          2.0%          2.8%            3.2%
</TABLE>

<TABLE>
                                         Non-Trading Off-Balance Sheet Financial Instruments

                                                        Expected maturity date                                        March 31, 2001
                    --------------------------------------------------------------------------------                  estimated fair
                         2002          2003         2004         2005          2006      Thereafter       Total            value
                    -------------  -----------  -----------  -----------   -----------   -----------   -------------  --------------
                                                             (Yen amounts in millions)
<S>                 <C>            <C>          <C>          <C>           <C>           <C>           <C>             <C>
Interest rate swaps
  Notional amount
   (Floating to
    fixed)......... Yen   168,298  Yen  50,849  Yen  82,613  Yen  44,969   Yen 120,654   Yen  37,651   Yen   505,034   Yen  (14,796)
   Average pay
    rate...........           3.7%         4.4%         3.4%         3.0%          4.7%          5.5%            4.0%
   Average receive
    rate...........           1.6%         3.2%         2.4%         1.8%          2.5%          4.1%            2.3%
  Notional amount
   (Fixed to
    floating)...... Yen    25,760  Yen  19,289  Yen  15,071  Yen  29,478   Yen   8,830   Yen  22,919   Yen   121,347   Yen    4,624
    Average pay
     rate..........           4.2%         1.0%         1.8%         1.2%          1.2%          5.4%            2.7%
    Average receive
     rate..........           6.1%         2.8%         4.6%         4.4%          2.8%          6.2%            4.8%
</TABLE>

<TABLE>

                                                                                          Weighted     March 31,2001
                                                                             Notional      average       estimated
                                                                              amount     strike rate     fair value
                                                                           -----------   -----------   -------------
                                                                                            (Yen
                                                                                         amounts in
                                                                                          millions)
<S>                                                                        <C>           <C>           <C>
Caps, floors and collars-held...........................................   Yen  96,153        6.3%     Yen       (46)
</TABLE>

                                      86
<PAGE>


Item 12. Other than Equity Securities

     Not applicable.






                                      87
<PAGE>


                                    PART II

Item 13. Defaults, Dividend Arrearages and Delinquencies

     None.

Item 14. Material Modifications to the Rights of Security Holders and Use of
         Proceeds

     In May 2000, ORIX implemented the subdivision of each share of common
stock registered on its register of shareholders as of March 31, 2000 into 1.2
shares.

Item 15. [Reserved]




Item 16. [Reserved]











                                      88
<PAGE>


                                   PART III

Item 17. Financial Statements

     ORIX has elected to provide financial statements and related information
pursuant to Item 18.

Item 18. Financial Statements

     The consolidated financial statements of ORIX and the report thereon by
its independent auditors listed below are attached hereto as follows:

     (a)  Report of Independent Accountants (page F-2)
     (b)  Consolidated Balance Sheets as of March 31, 2000 and 2001 (page F-3)
     (c)  Consolidated Statements of Income for the years ended March 31, 1999,
          2000, and 2001 (page F-4)
     (d)  Consolidated Statements of Shareholders' Equity for the years ended
          March 31, 1999, 2000 and 2001 (page F-5)
     (e)  Consolidated Statements of Cash Flows for the years ended March 31,
          1999, 200 and 2001 (page F-6)
     (f)  Notes to Consolidated Financial Statements (pages F-7 to F-42)

Item 19. Financial Statements and Exhibits


Financial Statements

     The following financial statements are attached hereto.

     (a)  Consolidated Balance Sheets as of March 31, 2000 and 2001 (page F-3)
     (b)  Consolidated Statements of Income for the years ended March 31, 1999,
          2000 and 2001 (page F-4)
     (c)  Consolidated Statements of Shareholders' Equity for the years ended
          March 31, 1999, 2000 and 2001 (pages F-5)
     (d)  Consolidated Statements of Cash Flows for the years ended March 31,
          1999, 2000 and 2001 (pages F-6)
     (e)  Notes to Consolidated Financial Statements (pages F-7 to F-42)

Exhibits

     None.





                                      89
<PAGE>


                                   SIGNATURES

     The registrant hereby certifies that it meets all of the requirements for
filing on Form 20-F and that it has duly caused and authorized the undersigned
to sign this annual report on its behalf.


                                                  ORIX CORPORATION


                                                  By: /s/ Masaru Hattori
                                                     --------------------------
                                                     Title: Attorney-in-Fact


                                                     Date: June 29, 2001

<PAGE>


                                ---------------
                  INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                                ---------------

                                                                         Page
                                                                         ----

Report of Independent Public Accountants...............................  F-2
Consolidated Balance Sheets as of March 31, 2000 and 2001..............  F-3
Consolidated Statements of Income For the Years Ended
  March 31, 1999, 2000 and 2001........................................  F-4
Consolidated Statements of Shareholders' Equity For the Years Ended
   March 31, 1999, 2000 and 2001.......................................  F-5
Consolidated Statements of Cash Flows For the Years Ended
  March 31, 1999, 2000 and 2001........................................  F-6
Notes to Consolidated Financial Statements.............................  F-7


                                      F-1
<PAGE>


                   REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

      To the Shareholders and the Board of Directors of ORIX Corporation:

      We have audited the accompanying consolidated balance sheets of ORIX
Corporation (a Japanese corporation) and its subsidiaries as of March 31, 2000
and 2001, and the related consolidated statements of income, shareholders'
equity and cash flows for each of the three years in the period ended March
31, 2001, expressed in Japanese yen. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

      We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

      In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of ORIX Corporation
and its subsidiaries as of March 31, 2000 and 2001, and the results of their
operations and their cash flows for each of the three years in the period
ended March 31, 2001, in conformity with accounting principles generally
accepted in the United States of America.

      Also, in our opinion, the translated amounts in the accompanying
consolidated financial statements translated into U.S. dollars have been
computed on the basis set forth in Note 1 (w).


Arthur Andersen
Tokyo Japan
April 27, 2001


                                      F-2
<PAGE>


CONSOLIDATED BALANCE SHEETS

ORIX Corporation and Subsidiaries   March 31, 2000 and 2001

<TABLE>
                                                                                                  Millions of
                                                                    Millions of yen               U.S. dollars
                                                            --------------------------------      ------------
ASSETS                                                            2000              2001              2001
- ---------------------------------------------------------   -------------      -------------      ------------
<S>                                                         <C>                <C>                <C>
Cash and Cash Equivalents................................   Yen   265,956      Yen   155,411        $  1,254
Restricted Cash and Cash Equivalents.....................          13,666             17,072             138
Time Deposits............................................           7,698              8,673              70
Investment in Direct Financing Leases....................       1,744,953          1,657,709          13,379
Installment Loans........................................       1,791,439          1,846,511          14,903
Allowance for Doubtful Receivables on Direct Financing
  Leases and Possible Loan Losses........................        (136,939)          (141,077)         (1,139)
Investment in Operating Leases...........................         397,576            451,171           3,641
Investment in Securities.................................         758,381            942,158           7,604
Other Operating Assets...................................          72,472            132,006           1,066
Investment in Affiliates.................................          63,312             63,155             510
Other Receivables........................................          70,345            112,677             910
Advances.................................................          89,676            141,148           1,139
Prepaid Expenses.........................................          24,813             27,740             224
Office Facilities........................................          74,770             74,406             601
Other Assets.............................................         103,424            102,551             828
                                                            -------------      -------------        --------
                                                            Yen 5,341,542      Yen 5,591,311        $ 45,128
                                                            =============      =============        ========
</TABLE>


<TABLE>
                                                                                                  Millions of
                                                                    Millions of yen               U.S. dollars
                                                            --------------------------------      ------------
LIABILITIES AND SHAREHOLDERS' EQUITY                              2000              2001              2001
- ---------------------------------------------------------   -------------      -------------      ------------
<S>                                                         <C>                <C>                  <C>
Short-Term Debt..........................................   Yen 1,912,761      Yen 1,562,072        $ 12,608
Deposits.................................................         154,923            178,314           1,439
Trade Notes and Accounts Payable.........................         151,477            211,280           1,705
Accrued Expenses.........................................          72,733             81,334             657
Policy Liabilities.......................................         494,443            561,887           4,535
Income Taxes:
      Current............................................           5,688             10,173              82
      Deferred...........................................         135,218            135,430           1,093
Deposits from Lessees....................................          45,844             59,339             479
Long-Term Debt...........................................       1,942,784          2,330,159          18,807
                                                            -------------      -------------        --------
      Total liabilities..................................       4,915,871          5,129,988          41,405
                                                            -------------      -------------        --------

Commitments and Contingent Liabilities

Shareholders' Equity:
  Common stock, par value Yen 50 per share:
    authorized 259,000,000 shares
    issued     68,630,294 shares in 2000 and
               82,388,025 shares in 2001.................          41,688             41,820             338
  Additional paid-in capital.............................          59,285             59,885             483
  Legal reserve..........................................           1,970              2,090              16
  Retained earnings......................................         328,248            361,262           2,916
  Accumulated other comprehensive income (loss)..........          (1,417)             4,552              37
  Treasury stock, at cost:
    402,223 shares in 2000 and 681,745 shares in 2001....          (4,103)            (8,286)            (67)
                                                            -------------      -------------        --------
                                                                  425,671            461,323           3,723
                                                            -------------      -------------        --------
                                                            Yen 5,341,542      Yen 5,591,311        $ 45,128
                                                            =============      =============        ========
</TABLE>


  The accompanying notes to consolidated financial statements are an integral
                         part of these balance sheets.

                                      F-3
<PAGE>


CONSOLIDATED STATEMENTS OF INCOME

ORIX Corporation and Subsidiaries
For the Years Ended March 31, 1999, 2000 and 2001

<TABLE>
                                                                                                              Millions of
                                                                         Millions of yen                      U.S. dollars
                                                        -----------------------------------------------       ------------
                                                            1999              2000              2001              2001
                                                        -----------       -----------       -----------       ------------
<S>                                                     <C>               <C>               <C>                 <C>
Revenues:
      Direct financing leases.......................    Yen 143,170       Yen 130,798       Yen 122,003          $   985
      Operating leases..............................         92,407           100,503           113,478              916
      Interest on loans and investment securities...        100,480            97,390           109,448              883
 Brokerage commissions and gains on
   investment securities............................          7,381            19,700            12,055               97
 Life insurance premiums and related investment
   income...........................................        196,259           205,829           158,314            1,278
      Interest income on deposits...................          6,695             3,884             2,520               20
      Other operating revenues......................         47,549            58,409            68,331              552
                                                        -----------       -----------       -----------          -------
        Total revenues..............................        593,941           616,513           586,149            4,731
                                                        -----------       -----------       -----------          -------
Expenses:
      Interest expense..............................        140,846           115,038           109,289              882
      Depreciation-operating leases.................         57,405            60,750            68,316              551
      Life insurance costs..........................        186,775           193,664           143,709            1,160
      Other operating expenses......................         31,522            38,302            43,580              352
      Selling, general and administrative expenses..         82,395            90,961           101,156              816
      Provision for doubtful receivables and
        possible loan losses........................         51,845            45,573            44,584              360
      Write-downs of long-lived assets..............            644             7,881             4,090               33
      Write-downs of securities.....................         11,077            12,297            10,848               88
      Foreign currency transaction loss (gain), net.            390              (839)            3,429               28
                                                        -----------       -----------       -----------          -------
        Total expenses..............................        562,899           563,627           529,001            4,270
                                                        -----------       -----------       -----------          -------
Operating Income....................................         31,042            52,886            57,148              461
Equity in Net Income (Loss) of and Gain (Loss) on
 Sales of Affiliates (Yen 3,978 million gain in 1999,
 Yen 1,503 million loss in 2000 and Yen 2,059 million
 ($17 million) gain in 2001)........................         (3,727)             (838)            2,088               17
                                                        -----------       -----------       -----------          -------
Income before Income Taxes..........................         27,315            52,048            59,236              478
Provision for Income Taxes..........................          1,694            21,406            25,079              202
                                                        -----------       -----------       -----------          -------
Net Income..........................................    Yen  25,621       Yen  30,642       Yen  34,157          $   276
                                                        ===========       ===========       ===========          =======

                                                                               Yen                              U.S. dollars
                                                        -----------------------------------------------         ------------
Amounts per Share of Common Stock:
      Net income Basic (Notes 1 (y) and 17).........    Yen  330.43       Yen  385.27       Yen  417.77          $  3.37
                 Diluted (Notes 1 (y) and 17).......         330.43            377.02            400.99             3.24
      Cash dividends................................          15.00             15.00             15.00             0.12
</TABLE>


  The accompanying notes to consolidated financial statements are an integral
                           part of these statements.

                                      F-4
<PAGE>


CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

ORIX Corporation and Subsidiaries
For the Years Ended March 31, 1999, 2000 and 2001

<TABLE>
                                                                                                              Millions of
                                                                         Millions of yen                      U.S. dollars
                                                        -----------------------------------------------       ------------
                                                            1999              2000              2001              2001
                                                        -----------       -----------       -----------       ------------
<S>                                                     <C>               <C>               <C>                 <C>
Common Stock:
 Beginning balance..................................... Yen  20,180       Yen  20,180       Yen  41,688         $   337
 Common stock issued in public offering................           -            19,856                 -               -
 Exercise of warrants..................................           -             1,647               132               1
 Common stock issued for acquisitions of minority
  interests of subsidiaries............................           -                 5                 -               -
                                                        -----------       -----------       -----------         -------
 Ending balance........................................ Yen  20,180       Yen  41,688       Yen  41,820         $   338
                                                        -----------       -----------       -----------         -------
Additional Paid-in Capital:
 Beginning balance..................................... Yen  37,303       Yen  37,464       Yen  59,285         $   479
 Value ascribed to warrants attached to 1.925%
  bonds issued.........................................         161                 -                 -               -
 Value ascribed to warrants attached to 1.22% bonds
  issued...............................................           -               333                 -               -
 Value ascribed to warrants attached to 1.59% bonds
  issued...............................................           -                 -               178               1
 Common stock issued in public offering................           -            18,954                 -               -
 Exercise of warrants and stock options................           -             1,504               130               1
 Common stock issued for acquisitions of minority
  interests of subsidiaries............................           -             1,030                 -               -
 Gains on sales of treasury stock......................           -                 -               297               2
 Forfeit of stock options..............................           -                 -                (5)             (0)
                                                        -----------       -----------       -----------         -------
 Ending balance........................................ Yen  37,464       Yen  59,285       Yen  59,885         $   483
                                                        -----------       -----------       -----------         -------
Legal Reserve:
 Beginning balance..................................... Yen   1,750       Yen   1,860       Yen   1,970         $    15
 Transfer from retained earnings.......................         110               110               120               1
                                                        -----------       -----------       -----------         -------
 Ending balance........................................ Yen   1,860       Yen   1,970       Yen   2,090         $    16
                                                        -----------       -----------       -----------         -------
Retained Earnings:
 Beginning balance..................................... Yen 274,144       Yen 298,684       Yen 328,248         $ 2,649
 Cash dividends........................................        (971)             (968)           (1,023)             (8)
 Transfer to legal reserve.............................        (110)             (110)             (120)             (1)
 Net income............................................      25,621            30,642            34,157             276
                                                        -----------       -----------       -----------         -------
 Ending balance........................................ Yen 298,684       Yen 328,248       Yen 361,262         $ 2,916
                                                        -----------       -----------       -----------         -------
Accumulated Other Comprehensive Income (Loss):
 Beginning balance..................................... Yen (18,079)      Yen (27,550)      Yen  (1,417)        $   (11)
 Net increase (decrease) in net unrealized gains
  on investment in securities..........................       1,442            41,551           (11,360)            (92)
 Net increase in minimum pension liability
  adjustments..........................................           -            (3,485)           (1,199)            (10)
 Net increase (decrease) in cumulative translation
  adjustments..........................................     (10,913)          (11,933)           18,528             150
                                                        -----------       -----------       -----------         -------
 Ending balance........................................ Yen (27,550)      Yen  (1,417)      Yen   4,552         $    37
                                                        -----------       -----------       -----------         -------
Treasury Stock:
 Beginning balance..................................... Yen  (1,477)      Yen  (2,795)      Yen  (4,103)        $   (33)
 Purchases of treasury stock...........................      (1,318)           (1,811)           (5,155)            (42)
 Exercise of stock options.............................           -               503               265               2
 Resales of treasury stock issued in stock split.......           -                 -               683               6
 Resales accompanied by forfeit of stock options.......           -                 -                24               0
                                                        -----------       -----------       -----------         -------
 Ending balance........................................ Yen  (2,795)      Yen  (4,103)      Yen  (8,286)        $   (67)
                                                        -----------       -----------       -----------         -------
Total Shareholders' Equity:
 Beginning balance..................................... Yen 313,821       Yen 327,843       Yen 425,671         $ 3,435
 Increase, net.........................................      14,022            97,828            35,652             288
                                                        -----------       -----------       -----------         -------
 Ending balance........................................ Yen 327,843       Yen 425,671       Yen 461,323         $ 3,723
                                                        ===========       ===========       ===========         =======
Summary of Comprehensive Income:
 Net income............................................ Yen  25,621       Yen  30,642       Yen  34,157         $   276
 Other comprehensive income (loss).....................      (9,471)           26,133             5,969              48
                                                        -----------       -----------       -----------         -------
 Comprehensive income.................................. Yen  16,150       Yen  56,775       Yen  40,126         $   324
                                                        ===========       ===========       ===========         =======
</TABLE>


  The accompanying notes to consolidated financial statements are an integral
                           part of these statements.

                                      F-5
<PAGE>


CONSOLIDATED STATEMENTS OF CASH FLOWS

ORIX Corporation and Subsidiaries
For the Years Ended March 31, 1999, 2000 and 2001

<TABLE>
                                                                                                              Millions of
                                                                         Millions of yen                      U.S. dollars
                                                        -----------------------------------------------       ------------
                                                            1999              2000              2001              2001
                                                        -----------       -----------       -----------       ------------
<S>                                                     <C>               <C>               <C>                 <C>
Cash Flows from Operating Activities:
 Net Income............................................ Yen  25,621       Yen  30,642       Yen  34,157         $   276
 Adjustments to reconcile net income to net cash
  provided by operating activities:
   Depreciation and amortization.......................      88,914            93,203           103,673             837
   Provision for doubtful receivables and possible
     loan losses.......................................      51,845            45,573            44,584             360
   Increase in policy liabilities......................     135,086           137,902            67,444             544
   Deferred tax provision (benefit)....................     (10,346)            6,464             8,111              65
   Equity in net (income) loss of and (gain) loss
     on sales of affiliates............................       3,727               838            (2,088)            (17)
   Gains on sales of available-for-sale securities.....      (5,276)          (13,893)           (7,698)            (62)
   Write-downs of long-lived assets....................         644             7,881             4,090              33
   Write-downs of securities...........................      11,077            12,297            10,848              88
   Increase in restricted cash and cash equivalents....      (2,250)          (11,702)           (2,831)            (23)
   (Increase) decrease in other operating assets held
     for sales, including advance payments.............         667            (8,572)          (28,285)           (228)
   Increase in prepaid expenses........................      (3,523)             (423)           (4,514)            (37)
   Increase (decrease) in accrued expenses.............        (898)           11,886             4,116              33
   Increase (decrease) in deposits from lessee.........      (4,477)            1,828            13,629             110
   Other, net..........................................      (4,057)            4,707            (8,114)            (65)
                                                        -----------       -----------       -----------         -------
     Net cash provided by operating activities.........     286,754           318,631           237,122           1,914
                                                        -----------       -----------       -----------         -------
Cash Flows from Investing Activities:
 Purchases of lease equipment, including advance
   payments............................................  (1,034,091)       (1,022,279)         (883,061)         (7,127)
 Principal payments received under direct financing
   leases..............................................     894,692           710,485           640,680           5,171
 Net proceeds from securitization of lease and loan
   receivables.........................................     224,960           185,530           215,494           1,739
 Installment loans made to customers...................    (706,758)         (801,959)         (740,639)         (5,978)
 Principal collected on installment loans..............     635,022           681,908           660,652           5,332
 Proceeds from sales of operating lease assets.........      45,150            37,013            38,727             313
 Investment in and dividends received from affiliates,
   net.................................................      (1,592)           (8,945)            1,242              10
 Proceeds from sales of affiliates.....................      10,877             2,881             6,277              51
 Purchases of available-for-sale securities............    (301,575)         (263,679)         (359,945)         (2,905)
 Proceeds from sales of available-for-sale securities..     182,338           177,157           152,022           1,227
 Maturities of available-for-sale securities...........      38,345            18,403            64,105             517
 Maturities of held-to-maturity securities.............           -             3,089                 -               -
 Purchases of other securities.........................     (54,902)          (14,382)          (37,153)           (300)
 Proceeds from sales of other securities...............      46,242             3,759             9,763              79
 Purchases of other operating assets...................        (758)           (5,389)          (40,049)           (323)
 Net increase in call loans............................           -                 -            (9,500)            (77)
 Other, net............................................      (3,186)            3,550            (4,267)            (34)
                                                        -----------       -----------       -----------         -------
   Net cash used in investing activities...............     (26,046)         (292,858)         (285,652)         (2,305)
                                                        -----------       -----------       -----------         -------
Cash Flows from Financing Activities:
 Repayment of short-term debt, net.....................    (278,186)         (248,386)         (324,438)         (2,619)
 Repayment of commercial paper, net....................     (76,143)          (16,426)          (68,759)           (555)
 Proceeds from long-term debt..........................     567,166           722,069           794,823           6,415
 Repayment of long-term debt...........................    (525,534)         (604,360)         (485,371)         (3,917)
 Net increase in deposits due to customers.............      45,353           101,654            23,391             189
 Issuance of common stock..............................           -            41,346               249               2
 Purchases of treasury stock...........................      (1,318)           (1,811)           (5,155)            (42)
 Dividends paid........................................        (971)             (968)           (1,023)             (8)
 Other, net............................................         161               829             1,663              13
                                                        -----------       -----------       -----------         -------
   Net cash used in financing activities...............    (269,472)           (6,053)          (64,620)           (522)
                                                        -----------       -----------       -----------         -------
Effect of Exchange Rate Changes on Cash and Cash
  Equivalents..........................................      (7,161)           (6,054)            2,605              21
                                                        -----------       -----------       -----------         -------
Net Increase (Decrease) in Cash and Cash Equivalents...     (15,925)           13,666          (110,545)           (892)
Cash and Cash Equivalents at Beginning of Year.........     268,215           252,290           265,956           2,146
                                                        -----------       -----------       -----------         -------
Cash and Cash Equivalents at End of Year............... Yen 252,290       Yen 265,956       Yen 155,411         $ 1,254
                                                        ===========       ===========       ===========         =======
</TABLE>


  The accompanying notes to consolidated financial statements are an integral
                           part of these statements.

                                      F-6
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENT

ORIX Corporation and Subsidiaries

1.   Significant Accounting and Reporting Policies

     In preparing the accompanying consolidated financial statements, ORIX
Corporation (the Company) and its subsidiaries have complied with accounting
principles generally accepted in the United States of America, modified for the
accounting for stock splits (see (m)). Significant accounting and reporting
policies are summarized as follows:

     (a) Basis of presenting financial statements

     The Company and its domestic subsidiaries maintain their books in
conformity with Japanese income tax laws and accounting practices, which differ
in certain respects from accounting principles generally accepted in the United
States of America.

     The accompanying consolidated financial statements have been prepared in
conformity with accounting principles generally accepted in the United States
of America and reflect certain adjustments. The principal adjustments relate to
accounting for direct financing leases (see (e)), impairment of long-lived
assets and long-lived assets to be disposed of, adoption of the straight-line
method of depreciation for operating lease equipment, deferral of life
insurance policy acquisition cost and calculation of policy liabilities, and a
reflection of the income tax effect on such adjustments.

     (b) Principles of consolidation

     The consolidated financial statements include the accounts of the Company
and all of its subsidiaries. Investments in 20%-50% owned affiliates are
accounted for by using the equity method.

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

     The excess of cost over the underlying equity at acquisition dates of
investments in subsidiaries and affiliates is being amortized over periods
ranging from 5 to 25 years.

     (c) Use of estimates

     The preparation of the 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.

     (d) Foreign currencies translation

     The Company and its subsidiaries maintain their accounting records in
their functional currency.

     Transactions in foreign currencies are recorded in the entity's functional
currency based on the prevailing exchange rates on the transaction date.

     The financial statements of foreign 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 foreign subsidiaries and
affiliates are conducted are regarded as the functional currencies of these
companies. Cumulative translation adjustments reflected in accumulated other
comprehensive income (loss) in shareholders' equity are from translation of
foreign currency financial statements into Japanese yen.

     (e) Recognition of revenues


                                      F-7
<PAGE>


     Direct financing leases--Direct financing leases consist of full-payout
leases of various equipment, including office equipment, industrial machinery
and transportation equipment (aircraft, vessels and automobiles). The excess of
aggregate lease rentals plus the estimated residual value over the cost of the
leased equipment constitutes the unearned lease income to be taken into income
over the lease term. The estimated residual values represent estimated proceeds
from the disposition of equipment at the time the lease is terminated. Certain
direct lease origination costs ("initial direct costs") are being deferred and
amortized over the lease term as a yield adjustment. The unamortized balance of
initial direct costs is reflected as a component of investment in direct
financing leases. Amortization of unearned lease income and direct finance
lease origination cost is computed using the interest method.

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

     Interest payments received on impaired loans 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 (see Note 7).

     Non-accrual policy--Revenues on direct financing leases and installment
loans are no longer accrued at the time when principal or interest is past due
180 days or more, or earlier, if management believes their collectibility is
doubtful.

     Operating leases--Operating lease assets are recorded at cost and are
depreciated over their estimated useful lives mainly on a straight-line basis.
Gains or losses arising from dispositions of operating lease assets are
included in operating lease revenues.

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

     Life insurance--Life insurance premiums are reported as earned when due
from policyholders.

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

     The allowance for doubtful receivables on direct financing leases and
possible loan losses is maintained at a level which, in the judgment of
management, is adequate to provide for potential losses on lease and loan
portfolios that can be reasonably anticipated. The allowance is increased by
provisions charged to income and is decreased by charge-offs, net of
recoveries. In evaluating the adequacy of the allowance, management considers
various factors, including current economic conditions, credit concentrations
or deterioration in pledged collateral, historical loss experience,
delinquencies and non-accruals. Receivables are charged off when, in the
opinion of management, the likelihood of any future collection is believed to
be minimal.

     Under FASB Statement No. 114 ("Accounting by Creditors for Impairment of a
Loan"), impaired loans shall be measured based on the present value of expected
future cash flows discounted at the loan's original effective interest rate. As
a practical expedient, impairment is measured based on the loan's observable
market price or the fair value of the collateral if the loan is collateral
dependent. Certain loans, such as large groups of smaller-balance homogeneous
loans (these include individual housing loans and card loans) and lease
receivables, are exempt from this measuring. When the measure of the impaired
loan is less than the recorded investment in the loan, the impairment is
recorded through a valuation allowance.

     (g) Investment in securities

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

     Available-for-sale securities are reported at fair value, and unrealized
gains or losses are recorded through other comprehensive income (loss), net of
applicable income taxes. In principle, the Company and its subsidiaries
recognize losses related to securities for which the market price has been
below the acquisition cost (or current carrying value if an adjustment has been
made in the past) for more than one year or if there has been a significant


                                      F-8
<PAGE>


deterioration in a bond issuer's credit rating, an issuer's default or similar
event. However, if the Company and its subsidiaries have a significant
long-term business relationship with the investee, management considers the
probability of the market value recovering within the following 12 months. As
part of this review, the investee's operating results, net asset value and
future performance forecasts as well as general market conditions are taken
into consideration. If management believes, based on this review, that the
market value of an equity security may realistically be expected to recover,
the loss will continue to be classified as temporary. Temporary declines in
market value are recorded through other comprehensive income (loss), net of
applicable income taxes. If after an additional 12 months the market value is
still significantly below the acquisition cost, the loss will be considered
other than temporary and the decline in market value charged to income.

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

     (h) Securitized assets

     The Company and its subsidiaries have securitized and sold to investors
certain lease receivables, loan receivables and investment in securities. In
the securitization process, assets for securitization (the assets) are sold to
Special-Purpose Entities which issue asset-backed securities to the investors.
When the Company and its subsidiaries sell the assets in a securitization
transaction, the carrying value of the assets is allocated to the portion
retained and the portion sold, based on relative fair values. The Company and
its subsidiaries recognize a gain or loss for the difference between the net
proceeds received and the allocated carrying value of the assets sold. Any gain
or loss from a securitization transaction is recorded as revenue of direct
financing leases, interest on loans and investment securities, or brokerage
commissions and gains on investment securities.

     Retained interests include subordinated interests, servicing assets,
excess spread assets and cash collateral. Retained interests are initially
recorded at allocated carrying value of the assets based on their fair value
and are periodically reviewed for impairment.

     Fair values are estimated based on estimated future cash flows, factoring
in expected credit loss, and discounted at a market rate of interest.

     (i) Derivative financial instruments

     Hedge criteria include demonstrating how the hedge will reduce risk,
identifying the asset or liability being hedged and citing the time horizon
being hedged.

     Trading instruments--The Company and its subsidiaries use futures, forward
and option contracts and other similar types of contracts based on interest
rates, foreign exchange rates, equity indices and other. Trading instruments
used for trading purposes are recorded in the consolidated balance sheets at
fair value at the reporting date. Gains, losses and unrealized changes in fair
values from trading instruments are recognized in brokerage commissions and
gains on investment securities in the fiscal year in which they occur.

     Risk management instruments--The Company and its subsidiaries primarily
utilize foreign currency swaps and forward exchange contracts to hedge the
exposure to foreign currency fluctuations associated with certain foreign
currency assets and liabilities. Gains and losses in the forward exchange
contracts and foreign currency swaps designated as hedges are recognized based
on changes in the value of the related hedged asset or liability. Realized or
unrealized gains or losses in instruments that hedge net capital exposures are
recorded in shareholders' equity as foreign currency translation adjustments,
which is a part of accumulated other comprehensive income (loss). All other
foreign exchange contracts are marked to market and gains or losses are charged
to earnings. The Company and its subsidiaries also enter into principally
interest rate swap agreements and purchase interest rate option contracts
(caps, floors and collars) to reduce interest rate risks and to modify the
interest rate characteristics of financing transactions. For these hedging
instruments, the accrual method of accounting is used where interest income or
expense on the hedging instruments is accrued and recorded as an adjustment to
the interest income or expense related to the hedged item. Premiums paid for
interest rate options are deferred as other assets and amortized to interest
income over the term of the options.


                                      F-9
<PAGE>


     If a hedging derivative contract is terminated early, any resulting gain
or loss is charged to earnings. And if the assets or liabilities hedged are
sold or otherwise disposed of, the related gains and losses on the terminated
derivative contracts are recognized as a component of the gain or loss on
disposition of the related assets or liabilities.

     Notional amounts and credit exposures of derivatives--The notional amounts
of derivatives do not represent amounts exchanged by the parties and, thus, are
not a measure of the exposure. The amounts exchanged are calculated on the
basis of the notional amounts and the other terms of the derivatives contracts.
The Company and its subsidiaries are exposed to credit-related losses in the
event of non-performance by counterparties.

     (j) Income taxes

     Deferred tax assets or liabilities are computed based on the difference
between the financial statement and income tax bases of assets and liabilities
using the enacted marginal tax rate. Deferred income tax expenses or credits
are based on the changes in the asset or liability from period to period.
Deferred income tax assets have been recognized on the net operating loss
carryforwards of certain subsidiaries.

     (k) Policy liabilities

     Policy liabilities of the life insurance operations for future policy
benefits are computed by the net level premium method, based upon estimated
future investment yields, withdrawals, mortality and other assumptions
appropriate at the time the policies were issued. The average rates of assumed
investment yields are 3.7%, 3.3% and 3.0% for fiscal 1999, 2000 and 2001,
respectively.

     (l) Capitalization of interest costs

     The Company and its subsidiaries capitalized interest costs of Yen 966
million, Yen 2,132 million and Yen 4,730 million ($38 million) in fiscal 1999,
2000 and 2001, respectively, related to specific long-term development
projects.

     (m) Stock splits

     Stock splits have been accounted for by transferring an amount equivalent
to the par value of the shares from additional paid-in capital to common stock
as required by the Japanese Commercial Code. No accounting recognition is made
for stock splits when common stock already includes a portion of the proceeds
from shares issued at a price in excess of par value. This method of accounting
is in conformity with accounting principles generally accepted in Japan.

     In the United States, stock splits in comparable circumstances are
considered to be stock dividends and are accounted for by transferring from
retained earnings amounts equal to the fair market value of the shares issued
and by increasing additional paid-in capital by the excess of the market value
over par value of the shares issued. Had such stock splits in prior years been
accounted for in this manner, additional paid-in capital as of March 31, 2001
would have increased by approximately Yen 24,674 million, with a corresponding
decrease in retained earnings; total shareholders' equity would have remained
unchanged. A stock split implemented on May 19, 2000 was excluded from the
above pro forma information because the stock split is not considered to be
stock dividends under generally accepted accounting principles in the United
States of America.

     (n) Cash and cash equivalents

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

     (o) Restricted cash and cash equivalents

     Restricted cash and cash equivalents consist of cash and securities trusts
for the segregation of assets under an investor protection fund and deposits
related to servicing agreements.

     (p) Other operating assets


                                     F-10
<PAGE>


     Other operating assets consist primarily of business assets, including
golf courses, hotels, training facilities and inventories.

     (q) Other receivables

     Other receivables consist primarily of payments made on behalf of lessees
for property tax, maintenance fees and insurance premiums in relation to direct
financing lease contracts and receivables from the sale of lease assets.

     (r) Advances

     Advances include advance payments made in relation to purchases of assets
to be leased, advance and/or progress payments for acquisition of real estate
for sale.

     (s) 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 is Yen
17,666 million and Yen 18,849 million ($152 million) as of March 31, 2000 and
2001, respectively.

     (t) Other assets

     Other assets consist primarily of the unamortized excess of purchase
prices over the net assets acquired in acquisitions of Yen 14,388 million and
Yen 17,069 million ($138 million) as of March 31, 2000 and 2001, respectively,
deferred insurance acquisition costs, which are amortized over the contract
periods, and leasehold deposits.

     (u) Impairment of long-lived assets

     Long-lived assets and certain identifiable intangibles to be held and used
by the Company and its subsidiaries are reviewed for impairment, whenever
events or changes in circumstances indicate that the carrying amount of the
assets may not be recoverable. When the sum of undiscounted future cash flows
expected to be generated by the assets is less than the carrying amount of the
assets, impairment losses are recognized based on the fair value of the assets.
During fiscal 1999, 2000 and 2001, the Company and its subsidiaries wrote down
certain real estate development projects included in investment in operating
leases, other operating assets and advances in the consolidated balance sheets
to their fair values. And an impairment loss is recognized by using the amount
by which the carrying amount of the asset exceeds the fair value of assets
determined by external appraisal.

     (v) Advertising

     The costs of advertising are expensed as incurred. The total amounts
charged to advertising expense in fiscal 1999, 2000 and 2001 are Yen 4,860
million, Yen 6,916 million and Yen 7,268 million ($59 million), respectively.

     (w) Financial statements presentation in U.S. dollars

     The translations of the Japanese yen amounts into U.S. dollars are
included solely for the convenience of the readers, using the prevailing
exchange rate at March 31, 2001, which was Yen 123.90 to $1.00. The convenience
translations should not be construed as representations that the Japanese yen
amounts have been, could have been, or could in the future be, converted into
U.S. dollars at this or any other rate of exchange.

     (x) New accounting pronouncement

     On April 1, 2001, the Company and its subsidiaries adopted FASB Statement
No. 133 ("Accounting for Derivative Instruments and Hedging Activities"), as
amended by FASB Statement No. 137 ("Accounting for Derivative Instruments and
Hedging Activities--Deferral of the Effective Date of FASB Statement No. 133")
and FASB Statement No. 138 ("Accounting for Certain Derivative Instruments and
Certain Hedging Activities--an amendment of FASB Statement No. 133"). It
requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those
instruments at fair value. If certain conditions are


                                     F-11
<PAGE>


met, a derivative may be designated as a hedge. The accounting treatment for
changes in the fair value of derivatives depends on the character of the
transaction. The cumulative effect of this accounting change as of April 1,
2001, was approximately Yen 9 billion ($73 million) unfavorable to accumulated
other comprehensive income (loss), and was not significant to earnings.

     In September 2000, FASB Statement No. 140 ("Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities--a replacement
of FASB Statement No. 125") was issued. It revises the standard for accounting
for securitizations and other transfers of financial assets and collateral and
requires certain disclosures, but it carries over most of FASB Statement No.
125's provisions without reconsideration. The Company and its subsidiaries
adopted the disclosure provisions related to the securitization of financial
assets on March 31, 2001. All transactions entered into after March 31, 2001
will be accounted for in accordance with FASB Statement No. 140. Management
anticipates this adoption will not have a significant effect on the Company and
its subsidiaries' operations or financial position.

     (y) Earnings per share

     Basic earnings per share (EPS) is computed by dividing net income by the
weighted average number of shares of common stock outstanding in each period
and diluted EPS reflects the potential dilution that could occur if securities
or other contracts to issue common stock were exercised or converted into
common stock.

     EPS is adjusted for any stock split and stock dividend retroactively.

     (z) Reclassifications

     Certain amounts in the 1999 and 2000 consolidated financial statements
have been reclassified to conform with the 2001 presentation.

2.   Acquisitions

     On March 31, 1998, the Company agreed in principle to acquire all the
shares of common stock of Yamaichi Trust & Bank, Ltd., the name of which was
subsequently changed to ORIX Trust and Banking Corporation, from Yamaichi
Securities Co., Ltd. on the closing date of April 28, 1998. On April 28, 1998,
as scheduled, the Company completed the share acquisition of Yamaichi Trust &
Bank, Ltd., which had approximately Yen 68 billion in assets. This acquisition
was accounted for under the purchase method, and net assets acquired were Yen
13.5 billion. The balance sheet of Yamaichi Trust & Bank, Ltd. as of March 31,
1998 was included in the consolidated financial statements, as the acquisition
was substantially completed by that date. The excess of the net assets acquired
over the purchase price was approximately Yen 4.4 billion, which is being
amortized over five years on a straight-line basis.

3.   Cash Flow Information

     Cash payments for interest and income taxes during fiscal 1999, 2000 and
2001 are as follows:

                                                               Millions of
                               Millions of yen                 U.S. dollars
                  -----------------------------------------    ------------
                     1999           2000           2001            2001
                  -----------    -----------    -----------    ------------
Interest......    Yen 146,073    Yen 119,285    Yen 115,058        $ 929
Income taxes..          6,904         17,785         12,778          103


4.   Investment in Direct Financing Leases

     Investment in direct financing leases at March 31, 2000 and 2001 consists
of the following:


                                     F-12
<PAGE>


<TABLE>
                                                                                         Millions of
                                                          Millions of yen               U.S. dollars
                                                  --------------------------------      ------------
                                                      2000               2001                2001
                                                  -------------      -------------      ------------
<S>                                               <C>                <C>                    <C>
Minimum lease payments receivable............     Yen 1,889,224      Yen 1,779,295         $ 14,361
Estimated residual value.....................            49,965             48,896              394
Initial direct costs.........................            26,042             24,616              199
Unearned lease income........................          (220,278)          (195,098)          (1,575)
                                                  -------------      -------------         --------
                                                  Yen 1,744,953      Yen 1,657,709         $ 13,379
                                                  =============      =============         ========
</TABLE>


     Minimum lease payments receivable (including guaranteed residual values)
are due in periodic installments through 2022. At March 31, 2001, the amounts
due in each of the next five years and thereafter are as follows:

                                                      Millions of
Year ending March 31             Millions of yen      U.S. dollars
- ----------------------------     ---------------      ------------
2002........................       Yen   676,196        $  5,457
2003........................             445,888           3,599
2004........................             307,248           2,480
2005........................             168,770           1,362
2006........................              74,664             603
Thereafter..................             106,529             860
                                   -------------        --------
 Total......................       Yen 1,779,295        $ 14,361
                                   =============        ========

     Gains and losses from the disposition of direct financing lease assets are
not significant for fiscal 1999, 2000 and 2001.

5.   Investment in Operating Leases

     Investment in operating leases at March 31, 2000 and 2001 consists of the
following:

<TABLE>
                                                     Weighted
                                                      average                                           Millions of
                                                    useful life              Millions of yen           U.S. dollars
                                                    -----------        ----------------------------    ------------
                                                       Years               2000             2001            2001
                                                    -----------        -----------      -----------    ------------
<S>                                                     <C>            <C>              <C>                <C>
Transportation equipment.......................         12             Yen 234,831      Yen 251,650        $2,031
Measuring equipment and personal computers.....          3                 109,533          138,088         1,115
Real estate and other..........................         40                 204,503          236,708         1,910
                                                                       -----------      -----------        ------
                                                                           548,867          626,446         5,056
Accumulated depreciation.......................                           (165,018)        (190,732)       (1,539)
                                                                       -----------      -----------        ------
 Net...........................................                            383,849          435,714         3,517
Rental receivables.............................                             13,727           15,457           124
                                                                       -----------      -----------        ------
                                                                       Yen 397,576      Yen 451,171        $3,641
                                                                       ===========      ===========        ======
</TABLE>


     For fiscal 1999, 2000 and 2001, gains from the disposition of operating
lease assets are Yen 2,356 million, Yen 4,144 million and Yen 7,883 million
($64 million), respectively, and are included in operating lease revenues in
the consolidated statements of income.

     The operating lease contracts include non-cancelable lease terms ranging
from one month to 20 years. The minimum future rentals on non-cancelable
operating leases are as follows:


                                     F-13
<PAGE>


                                                      Millions of
Year Ending March 31             Millions of yen      U.S. dollars
- --------------------             ---------------      ------------
2002........................        Yen  42,601           $ 344
2003........................             29,640             239
2004........................             19,318             156
2005........................             12,998             105
2006........................              7,422              60
Thereafter..................             11,595              93
                                    -----------           -----
 Total......................        Yen 123,574           $ 997
                                    ===========           =====


6.   Installment Loans

     The composition of installment loans by domicile and type of borrowers at
March 31, 2000 and 2001 is as follows:

<TABLE>
                                                                                   Millions of
                                                        Millions of yen            U.S. dollars
                                               -------------------------------     ------------
                                                    2000              2001             2001
                                               -------------     -------------     -----------
<S>                                            <C>               <C>                  <C>
Domestic borrowers:
 Consumers--
   Housing loans.............................  Yen   396,748     Yen   392,896         $ 3,171
   Card loans................................        121,272           181,215           1,462
   Other.....................................         56,461            43,959             355
                                               -------------     -------------         -------
                                                     574,481           618,070           4,988
                                               -------------     -------------         -------
 Commercial--
   Real estate related companies.............        203,537           222,818           1,798
   Commercial and industrial companies.......        657,355           627,252           5,063
                                               -------------     -------------         -------
                                                     860,892           850,070           6,861
                                               -------------     -------------         -------
                                                   1,435,373         1,468,140          11,849

Foreign commercial, industrial and other
  borrowers..................................        337,754           357,446           2,885
Loan origination costs, net..................         18,312            20,925             169
                                               -------------     -------------         -------
                                               Yen 1,791,439     Yen 1,846,511         $14,903
                                               =============     =============         =======
</TABLE>


     In principle, all domestic installment loans, except card loans, are made
under agreements which require the borrower to provide collateral or
guarantors.

     At March 31, 2001, the contractual maturities of installment loans for
each of the next five years and thereafter are as follows:

                                                      Millions of
Year ending March 31             Millions of yen      U.S. dollars
- --------------------             ---------------      ------------
2002........................      Yen   540,411         $ 4,362
2003........................            247,878           2,000
2004........................            222,729           1,798
2005........................            190,682           1,539
2006........................            177,851           1,435
Thereafter..................            446,035           3,600
                                  -------------         -------
 Total......................      Yen 1,825,586         $14,734
                                  =============         =======


                                     F-14
<PAGE>


     Included in interest on loans and investment securities in the
consolidated statements of income is interest income on loans of Yen 88,003
million, Yen 83,321 million and Yen 85,441 million ($690 million) for fiscal
1999, 2000 and 2001, respectively.

7.   Allowance for Doubtful Receivables on Direct Financing Leases and Possible
     Loan Losses

     Changes in the allowance for doubtful receivables on direct financing
leases and possible loan losses for fiscal 1999, 2000 and 2001 are as follows:

<TABLE>
                                                                                             Millions of
                                                         Millions of yen                     U.S. dollars
                                          ---------------------------------------------      ------------
                                             1999             2000             2001              2001
                                          -----------      -----------      -----------      ------------
<S>                                       <C>              <C>              <C>                 <C>
Beginning balance....................     Yen 145,741      Yen 132,606      Yen 136,939         $1,105
Provisions charged to income.........          51,845           45,573           44,584            360
Charge-offs..........................         (70,705)         (37,697)         (46,845)          (378)
Recoveries...........................             399              354              539              5
Other*...............................           5,326           (3,897)           5,860             47
                                          -----------      -----------      -----------         ------
Ending balance.......................     Yen 132,606      Yen 136,939      Yen 141,077         $1,139
                                          ===========      ===========      ===========         ======
</TABLE>

*Other includes foreign currency translation adjustments and the effect of
acquisitions.

     The balance of the allowance broken down into direct financing leases and
installment loans at March 31, 2000 and 2001 are as follows:

                                                                Millions of
                                         Millions of yen        U.S. dollars
                                    -------------------------   ------------
                                       2000          2001           2001
                                    -----------   -----------   ------------
Balance of allowance related to:
 Direct financing leases........    Yen  35,783   Yen  40,885       $  330
 Installment loans..............        101,156       100,192          809
                                    -----------   -----------       ------
   Total........................    Yen 136,939   Yen 141,077       $1,139
                                    ===========   ===========       ======


     The recorded investments in loans considered impaired are Yen 125,921
million and Yen 120,090 million ($969 million) as of March 31, 2000 and 2001,
respectively. Of these amounts, it was determined that a valuation allowance
was required with respect to loans which had outstanding balances of Yen 83,408
million and Yen 73,636 million ($594 million) as of March 31, 2000 and 2001,
respectively. The Company and its subsidiaries recorded a valuation allowance
of Yen 51,791 million and Yen 47,037 million ($380 million) as of March 31,
2000 and 2001, respectively. This valuation allowance is included in the
allowance for doubtful receivables on direct financing leases and possible loan
losses in the accompanying consolidated balance sheets.

     The average recorded investments in impaired loans for fiscal 1999, 2000
and 2001 were Yen 170,838 million, Yen 128,658 million and Yen 123,715 million
($999 million), respectively.

     The Company and its subsidiaries recognized interest income on impaired
loans of Yen 1,577 million, Yen 1,429 million and Yen 1,414 million ($11
million), and collected in cash interest on impaired loans of Yen 1,297
million, Yen 1,061 million and Yen 1,052 million ($8 million) in fiscal 1999,
2000 and 2001, respectively.

     As of March 31, 2000 and 2001, the Company and its subsidiaries suspended
income recognition pursuant to its non-accrual policy on investment in direct
financing leases of Yen 43,047 million and Yen 39,303 million ($317 million),
and on installment loans other than impaired loans of Yen 84,550 million and
Yen 77,544 million ($626 million), respectively.


                                     F-15
<PAGE>


8.   Investment in Securities

     Investment in securities at March 31, 2000 and 2001 consists of the
following:

                                                                Millions of
                                         Millions of yen        U.S. dollars
                                    -------------------------   ------------
                                       2000          2001           2001
                                    -----------   -----------   ------------
Trading securities............      Yen     390   Yen     581       $    5
Available-for-sale securities.          689,638       841,409        6,791
Held-to-maturity securities...           11,404        13,005          105
Other securities..............           56,949        87,163          703
                                    -----------   -----------       ------
                                    Yen 758,381   Yen 942,158       $7,604
                                    ===========   ===========       ======


     Gains and losses realized from the sale of trading securities and net
unrealized holding gains or losses on trading securities are included in gains
on investment securities (see Note 18). For fiscal 1999, 2000 and 2001, net
unrealized holding losses on trading securities are Yen 1 million, Yen 3
million and Yen 24 million ($0 million), respectively.

     During fiscal 1999 and 2000, the Company and its subsidiaries sold
available-for-sale securities for aggregate proceeds of Yen 182,338 million and
Yen 177,157 million, resulting in gross realized gains of Yen 6,801 million and
Yen 17,726 million and gross realized losses of Yen 1,525 million and Yen 3,833
million, respectively. During fiscal 2001, the Company and its subsidiaries
sold available-for-sale securities for aggregate proceeds of Yen 152,022
million ($1,227 million), resulting in gross realized gains of Yen 9,773
million ($79 million) and gross realized losses of Yen 2,075 million ($17
million). The cost of the securities sold was based on the average cost of each
such security held at the time of the sale.

     During fiscal 1999, 2000 and 2001, the Company and its subsidiaries
charged losses on securities of Yen 11,077 million, Yen 12,297 million and Yen
10,848 million ($88 million), respectively, to income for declines in market
value of available-for-sale securities where the decline was classified as
other than temporary.

     Other securities consist mainly of non-marketable equity securities
carried at cost and investment funds accounted for under the equity method.

     The amortized cost basis amounts, gross unrealized holding gains, gross
unrealized holding losses and fair values of available-for-sale and
held-to-maturity securities in each major security type at March 31, 2000 and
2001 are as follows:

<TABLE>
March 31, 2000
- --------------                                                                     Millions of yen
                                                               --------------------------------------------------------
                                                                                 Gross         Gross
                                                                Amortized      unrealized    unrealized
                                                                   cost          gains         losses       Fair value
                                                               -----------    -----------   ------------    -----------
<S>                                                            <C>            <C>           <C>             <C>
Available-for-sale:
 Japanese and foreign government bond securities............   Yen  12,970    Yen     87    Yen    (162)    Yen  12,895
 Japanese prefectural and foreign municipal bond securities.        32,304           781            (64)         33,021
 Corporate debt securities..................................       474,559        12,410         (4,552)        482,417
 Mortgage-backed and other asset-backed securities..........        54,271         1,643         (1,439)         54,475
 Funds in trust.............................................         2,000           479             --           2,479
 Equity securities..........................................        36,344        73,534         (5,527)        104,351
                                                               -----------    ----------    -----------     -----------
                                                               Yen 612,448    Yen 88,934    Yen (11,744)    Yen 689,638
                                                               ===========    ==========    ===========     ===========
Held-to-maturity:
 Corporate debt securities..................................   Yen  11,404    Yen     --    Yen      --     Yen  11,404
                                                               -----------    ----------    -----------     -----------
                                                               Yen  11,404    Yen     --    Yen      --     Yen  11,404
                                                               ===========    ==========    ===========     ===========
</TABLE>


                                     F-16
<PAGE>


<TABLE>
March 31, 2001
- --------------                                                                     Millions of yen
                                                               --------------------------------------------------------
                                                                                 Gross         Gross
                                                                Amortized      unrealized    unrealized
                                                                   cost          gains         losses       Fair value
                                                               -----------    -----------   ------------    -----------
<S>                                                            <C>            <C>           <C>             <C>
Available-for-sale:
 Japanese and foreign government bond securities....           Yen  24,926    Yen     560   Yen     (55)    Yen  25,431
 Japanese prefectural and foreign municipal bond
   securities.......................................                38,030          1,665            (3)         39,692
 Corporate debt securities..........................               587,442         22,489        (5,786)        604,145
 Mortgage-backed and other asset-backed securities..                88,912          6,721        (1,397)         94,236
 Funds in trust.....................................                 5,995             --          (487)          5,508
 Equity securities..................................                39,085         36,602        (3,290)         72,397
                                                               -----------    -----------   -----------     -----------
                                                               Yen 784,390    Yen  68,037   Yen (11,018)    Yen 841,409
                                                               ===========    ===========   ===========     ===========
Held-to-maturity:
 Japanese and foreign government bond securities....           Yen     141    Yen       1   Yen      --     Yen     142
 Corporate debt securities..........................                12,864             --            --          12,864
                                                               -----------    -----------   -----------     -----------
                                                               Yen  13,005    Yen       1   Yen      --     Yen  13,006
                                                               ===========    ===========   ===========     ===========
<CAPTION>
                                                                                 Millions of U.S. dollars
                                                               --------------------------------------------------------
                                                                                 Gross         Gross
                                                                Amortized      unrealized    unrealized
                                                                   cost          gains         losses       Fair value
                                                               -----------    -----------   ------------    -----------
<S>                                                            <C>            <C>           <C>             <C>
Available-for-sale:
 Japanese and foreign government bond securities.....          $       201    $         5   $        (0)    $       206
 Japanese prefectural and foreign municipal bond
   securities........................................                  307             13            (0)            320
 Corporate debt securities...........................                4,741            182           (47)          4,876
 Mortgage-backed and other asset-backed securities...                  718             54           (11)            761
 Funds in trust......................................                   48             --            (4)             44
 Equity securities...................................                  316            295           (27)            584
                                                               -----------    -----------   -----------     -----------
                                                               $     6,331    $       549   $       (89)    $     6,791
                                                               ===========    ===========   ===========     ===========
Held-to-maturity:
 Japanese and foreign government bond securities.....          $         1    $         0   $        --     $         1
 Corporate debt securities...........................                  104             --            --             104
                                                               -----------    -----------   -----------     -----------
                                                               $       105    $         0   $        --     $       105
                                                               ===========    ===========   ===========     ===========
</TABLE>


     The following is a summary of the contractual maturities of debt
securities classified as available-for-sale and held-to-maturity securities
held at March 31, 2001:

<TABLE>
                                                 Millions of Yen                 Millions of U.S. dollars
                                         ------------------------------      -------------------------------
                                         Amortized cost      Fair value      Amortized cost       Fair value
                                         --------------      ----------      --------------       ----------
<S>                                        <C>                 <C>               <C>                <C>
Available-for-sale:
 Due within one year................       Yen  45,079      Yen  45,932          $  364            $   371
 Due after one to five years........           413,119          424,498           3,334              3,426
 Due after five to ten years........           181,519          187,407           1,465              1,513
 Due after ten years................            99,593          105,667             804                853
                                           -----------      -----------          ------            -------
                                           Yen 739,310      Yen 763,504          $5,967            $ 6,163
                                           ===========      ===========          ======            =======
Held-to-maturity:
 Due within one year................       Yen     108      Yen     108          $    1            $     1
 Due after one to five years........                33               34               0                  0
 Due after ten years................            12,864           12,864             104                104
                                           -----------      -----------          ------            -------
                                           Yen  13,005      Yen  13,006          $  105            $   105
                                           ===========      ===========          ======            =======
</TABLE>


                                     F-17
<PAGE>


     Securities not due at a single maturity date, such as mortgage-backed
securities, are included in the above table based on their final maturities.

     Certain borrowers may have the right to call or prepay obligations. This
right may cause actual maturities to differ from the contractual maturities
summarized above.

     Included in interest on loans and investment securities in the
consolidated statements of income is interest income on investment securities
of Yen 12,477 million, Yen 14,069 million and Yen 24,007 million ($194 million)
for fiscal 1999, 2000 and 2001, respectively.

9.   Securitization

     During fiscal 2001, the Company and its subsidiaries sold direct financing
lease receivables and installment loans with pretax a gain of Yen 4,728 million
($38 million) through securitization transactions. The Company and its
subsidiaries retained subordinated interests and cash collateral. Servicing
assets or liabilities related to securitization transactions initiated during
fiscal 2001 were not recorded, because the servicing fees adequately compensate
the Company and its subsidiaries. The Company and its subsidiaries' retained
interest are subordinate to the investor's interests. Their value is subject to
credit, interest rate risk on the sold financial assets. The investors and
Special-Purpose Entities have no recourse to our other assets for failure of
debtors to pay.

     At March 31, 2001, a subsidiary held servicing assets amounted to Yen 99
million ($1 million) derived from previous years' securitization transactions,
and amortized Yen 126 million ($1 million) during fiscal 2001.

     Economic assumptions used in measuring the retained interests related to
securitization transactions completed during fiscal 2001 are as follows:

                                Direct financing        Installment
                                     leases                loans
                                ----------------        -----------
Expected credit loss.......        0.03%-0.35%             0.75%
Discount rate..............        3.20%-3.48%             2.69%


     Retained interests from securitization transactions that occurred in
previous years and in fiscal 2001 are recorded in the consolidated balance
sheet at March 31, 2001. The impacts of 10% and 20% adverse changes to the key
economic assumptions on the fair value of retained interests as of March 31,
2001 are as follows:

<TABLE>
                                              Millions of yen                             Millions of U.S. dollars
                               --------------------------------------------     -------------------------------------------
                                 Direct                                          Direct
                                financing     Installment     Investment in     financing     Installment     Investment in
                                 leases          loans         securities        leases          loans         securities
                               -----------    ------------    -------------     ---------     -----------     -------------
<S>                            <C>             <C>              <C>              <C>             <C>              <C>
Carrying value of retained
interests..................    Yen 145,723     Yen  5,926       Yen  8,181       $ 1,176         $48              $66
Expected credit loss:
 +10%......................            193              5              211             2           0                2
 +20%......................            384             10              436             3           0                4
Discount rate:
 +10%......................          1,499             35              323            12           0                3
 +20%......................          2,968             68              625            24           1                5
</TABLE>


     These sensitivities are hypothetical and should be used with caution. As
the amounts indicate, changes in fair value based on a 10 percent variation in
assumptions generally cannot be extrapolated because the relationship of the
change in assumption to the change in fair value may not be linear. Also, in
the above table, the effect of a variation in a particular assumption on the
fair value of the retained interest is calculated without changing any other
assumption; in reality, changes in one factor may result in changes in another,
which might magnify or counteract the sensitivities.

     The summarized certain cash flows received from/(paid to) Special-Purpose
Entities for all securitization activity that occurred in fiscal 2001 are as
follows:


                                     F-18
<PAGE>


                                                 Millions of     Millions of
                                                      yen        U.S. dollars
                                                 -----------     ------------
Proceeds from new securitization...............  Yen 215,494        $1,739
Servicing fees received........................           62             1
Repurchases of delinquent or ineligible assets.      (27,399)         (221)


     Quantitative information about delinquencies, net credit losses, and
components of securitized financial assets and other assets managed together in
fiscal 2001 and as of March 31, 2001 are as follows:

<TABLE>
                                                                  Millions of yen
                                                -----------------------------------------------
                                                                    Principal
                                                                    amount of
                                                Total principal   receivables 90
                                                   amount of       days or more      Net credit
                                                  receivables        past due          losses
                                                ---------------   --------------     ----------
<S>                                             <C>               <C>               <C>
Type of assets:
 Direct financing leases....................    Yen 1,968,872     Yen  53,515       Yen  20,679
 Installment loans..........................        1,887,596          84,827            25,627
                                                -------------     -----------       -----------
Total assets managed or securitized.........        3,856,468     Yen 138,342       Yen  46,306
                                                =============     ===========       ===========
 Less: assets securitized...................         (352,248)
                                                -------------
Assets held in portfolio....................    Yen 3,504,220
                                                =============
</TABLE>


<TABLE>
                                                            Millions of U.S. dollars
                                                -----------------------------------------------
                                                                    Principal
                                                                    amount of
                                                Total principal   receivables 90
                                                   amount of       days or more      Net credit
                                                  receivables        past due          losses
                                                ---------------   --------------     ----------
<S>                                                <C>                <C>               <C>
Type of assets:
 Direct financing leases......................     $ 15,891           $   432           $167
 Installment loans............................       15,234               685            206
                                                   --------           -------           ----
Total assets managed or securitized...........       31,125           $ 1,117           $373
                                                   ========           =======           ====
 Less: assets securitized.....................       (2,843)
                                                   --------
Assets held in portfolio......................     $ 28,282
                                                   ========
</TABLE>


     The portion accounted for as off-balance-sheet assets by securitizing
investment in securities is Yen 49,361 million ($398 million) as of March 31,
2001 which are not included in above table.

     In fiscal 1999, 2000 and 2001, subsidiaries entered into other lease
receivable securitization programs that are not accounted for as a sale. The
payables under these securitization programs of Yen 72,210 million ($583
million) are included in long-term debt, the minimum lease payments receivable
of Yen 71,886 million ($580 million) and cash collateral of Yen 6,022 million
($49 million) are included in investment in direct financing leases and other
assets in the consolidated balance sheets as of March 31, 2001, respectively.

10.  Investments in Affiliates

     Investment in affiliates at March 31, 2000 and 2001 consists of the
following:

                                                             Millions of
                                     Millions of yen         U.S.dollars
                                 ------------------------    -----------
                                    2000         2001            2001
                                 ----------    ----------    -----------
Common stock, at equity value.   Yen 51,869    Yen 51,203       $ 413
Loans.........................       11,443        11,952          97
                                 ----------    ----------       -----
                                 Yen 63,312    Yen 63,155       $ 510
                                 ==========    ==========       =====


                                     F-19
<PAGE>


     Certain Asia and Oceania affiliates are listed on stock exchanges. The
aggregate investment in and quoted market value of those affiliates amounted to
Yen 1,040 million and Yen 644 million as of March 31, 2000, respectively, and
Yen 1,172 million ($9 million) and Yen 892 million ($7 million) as of March 31,
2001, respectively.

     In fiscal 1999, 2000 and 2001, the Company and its subsidiaries received
dividends from affiliates of Yen 825 million, Yen 1,091 million and Yen 421
million ($3 million), respectively.

     During fiscal 1999, the Company wrote down its investment in Korea
Development Leasing Corporation (KDLC) to zero, and unrealized loss of
cumulative translation adjustments of Yen 5,205 million was charged to income
as KDLC had negative equity and the Company was not in a position to exert
influence over KDLC's operations.

     During fiscal 2000, the Company reduced its shareholding in KDLC from 26%
to 1% and increased its shareholding in Banc One Mortgage Capital Markets, LLC
from 45% to 100%, the name of which was subsequently changed to ORIX Real
Estate Capital Markets, LLC (ORECM).

     During fiscal 2001, the Company sold its share of Bradesco Leasing S.A.
Arrendamento Mercantil (BL 25% owned).

     Consequently, the major affiliates accounted for by the equity method
which are contained in the following combined and condensed financial
information are ORECM (in fiscal 1999), BL (in fiscal 1999 and 2000) and
Stockton Holdings Limited (30% owned) (in fiscal 1999 and 2000). In fiscal
2001, there is no significant affiliate, either individually or in combined
basis, to be disclosed.

                                              Millions of yen
                                        --------------------------
                                            1999           2000
                                        -----------    -----------
Operations:
 Total revenues.....................    Yen  50,453    Yen  54,563
 Income before income taxes.........         13,235          2,293
 Net income.........................         12,177          1,532
Financial position:
 Total assets.......................        393,589        356,742
 Total liabilities..................        296,210        276,799
 Shareholders' equity...............         97,379         79,943


     The Company had no significant transactions with these companies.

11.  Short-Term and Long-Term Debt

     Short-term debt consists of notes payable to banks, bank overdrafts and
commercial paper.

     The composition of short-term debt and the weighted average interest rate
on short-term debt at March 31, 2000 and 2001 are as follows:

<TABLE>
                                                                   March 31, 2000
                                                          --------------------------------
                                                                                Weighted
                                                          Millions of yen     average rate
                                                          ---------------     ------------
<S>                                                        <C>                    <C>
Short-term debt in Japan, mainly from banks............    Yen   674,708          1.5%
Short-term debt outside Japan, mainly from banks.......          260,617          6.1%
Commercial paper in Japan..............................          851,223          0.2%
Commercial paper outside Japan.........................          126,213          6.7%
                                                           -------------
                                                           Yen 1,912,761          1.9%
                                                           =============
</TABLE>


<TABLE>
                                                                                March 31, 2001
                                                            -----------------------------------------------------
                                                                                 Millions of          Weighted
                                                            Millions of yen      U.S. dollars       averaged rate
                                                            ---------------      ------------       -------------
<S>                                                          <C>                    <C>                   <C>
Short-term debt in Japan, mainly from banks............      Yen   331,963          $  2,679              2.5%
Short-term debt outside Japan, mainly from banks.......            315,498             2,547              5.2%
Commercial paper in Japan..............................            910,751             7,351              0.4%


                                     F-20
<PAGE>

<CAPTION>
                                                                                March 31, 2001
                                                            -----------------------------------------------------
                                                                                 Millions of          Weighted
                                                            Millions of yen      U.S. dollars       averaged rate
                                                            ---------------      ------------       -------------
<S>                                                          <C>                    <C>                   <C>
Commercial paper outside Japan.........................              3,860                31              5.8%
                                                             -------------          --------
                                                             Yen 1,562,072          $ 12,608              1.8%
                                                             =============          ========
</TABLE>


     In fiscal 2000, the Company obtained short-term committed credit lines of
Yen 294,500 million in Japan to enhance liquidity as stipulated in the
Commitment Line Law that came into effect in March 1999.

     In fiscal 2001, the Company arranged a Yen 74,560 million ($602 million)
multicurrency global commitment line for the Company and certain overseas
subsidiaries.

     Total committed lines for the Company and its subsidiaries were Yen
549,525 million and Yen 795,489 million ($6,420 million) at March 31, 2000 and
2001, respectively, and of these lines, Yen 509,379 million and Yen 726,888
million ($5,867 million) were available at March 31, 2000 and 2001,
respectively. Of the available committed lines Yen 61,302 million and Yen
37,762 million ($305 million) were long-term committed credit lines at March
31, 2000 and 2001, respectively.

     While Yen 436,505 million and Yen 521,695 million ($4,211 million) of the
total committed lines at March 31, 2000 and 2001 were for commercial paper
backup purposes, no borrowings have been made under these lines.

     Long-term debt at March 31, 2000 and 2001 consists of the following:

<TABLE>
                                                                                March 31, 2000
                                                                       -------------------------------
                                                                          Due          Millions of yen
                                                                       ---------       ---------------
<S>                                                                    <C>              <C>
Banks:
 Fixed rate: 1.6% to 9.9%............................................  2001-2007        Yen   151,821
 Floating rate: principally based on LIBOR plus 0.0% to 0.6%.........  2001-2009              147,788
Insurance companies and others:
 Fixed rate: 0.8% to 9.4%............................................  2001-2009              330,219
 Floating rate: principally based on LIBOR plus 0.0% to 0.5%.........  2001-2008              167,448
Unsecured 1.1% to 8.5% bonds.........................................  2001-2013              712,553
Unsecured 0.4% convertible notes.....................................  2005                    40,000
Unsecured 0.1% to 1.9% bonds with warrants...........................  2002-2004                8,700
Unsecured 0.0% to 8.2% notes under medium-term note program..........  2001-2010              328,221
0.7% to 7.8% payables under securitized lease receivables............  2001-2004               56,034
                                                                                        -------------
                                                                                        Yen 1,942,784
                                                                                        =============
</TABLE>


                                     F-21
<PAGE>


<TABLE>
                                                                                         March 31, 2001
                                                                        ------------------------------------------------
                                                                                                            Millions of
                                                                          Due          Millions of yen      U.S. dollars
                                                                        ---------      ---------------      ------------
<S>                                                                     <C>             <C>                  <C>
Banks:
 Fixed rate: 1.5% to 9.3%.........................................      2002-2012       Yen   211,746         $  1,709
 Floating rate: principally based on LIBOR plus 0.0% to 0.8%......      2002-2009             323,473            2,611
Insurance companies and others:
 Fixed rate: 0.8% to 9.0%.........................................      2002-2009             361,900            2,920
 Floating rate: principally based on LIBOR plus 0.0% to 0.7%......      2002-2008             215,952            1,743
Unsecured 0.5% to 3.1% bonds......................................      2002-2013             745,000            6,013
Unsecured 0.4% convertible notes..................................      2005                   40,000              323
Unsecured 0.1% to 1.9% bonds with warrants........................      2002-2005              10,500               85
Unsecured 0.0% to 8.2% notes under medium-term note program.......      2002-2011             349,378            2,820
1.0% to 7.8% payables under securitized lease receivables.........      2002-2009              72,210              583
                                                                                        -------------         --------
                                                                                        Yen 2,330,159         $ 18,807
                                                                                        =============         ========
</TABLE>


     The repayment schedule for the next five years and thereafter for
long-term debt at March 31, 2001 is as follows:

<TABLE>
                                                   Millions of U.S.
Year ending March 31           Millions of yen         dollars
- --------------------------     ---------------     ----------------
<S>                             <C>                    <C>
2002......................      Yen   624,838          $  5,043
2003......................            474,503             3,830
2004......................            479,933             3,874
2005......................            392,692             3,169
2006......................            219,330             1,770
Thereafter................            138,863             1,121
                                -------------          --------
 Total....................      Yen 2,330,159          $ 18,807
                                =============          ========
</TABLE>


     The agreements related to debt payable to banks provide that the banks
under certain circumstances may request additional security for loans and have
the rights to offset cash deposited against any short-term or long-term debt
that becomes due, and in case of default and certain other specified events,
against all other debt payable to the banks. Whether such provisions can be
enforced will depend upon the factual circumstances.

     In addition to the minimum lease payments receivable related to the
payables under securitized lease receivables described in Note 9, the
short-term and long-term debt payable to financial institutions are secured by
the following assets as of March 31, 2001:

<TABLE>
                                                                               Millions of
                                                          Millions of yen      U.S. dollars
                                                          ---------------      ------------
<S>                                                         <C>                   <C>
Time deposits............................................   Yen   7,895           $  64
Minimum lease payments, loans and future rentals.........        25,726             207
Investment in securities.................................        53,435             431
Other operating assets and office facilities, net........        17,555             142
                                                            -----------           -----
                                                            Yen 104,611           $ 844
                                                            ===========           =====
</TABLE>


     In addition, under agreements with customers on brokerage business,
customers' securities of Yen 3,023 million ($24 million) at market value are
pledged as collateral for the short-term debt as of March 31, 2001.

     Loan agreements relating to short-term and long-term debt from commercial
banks and certain insurance companies provide that minimum lease payments and
installment loans are subject to pledges as collateral against these debts at
any time if requested by the lenders. To date, the Company has not received any
such requests from the lenders.


                                     F-22
<PAGE>


     Long-term debt of Yen 1,539 million ($12 million) is guaranteed by
commercial banks and an insurance company as of March 31, 2001.

12.  Deposits

     Deposits at March 31, 2000 and 2001, consist of the following:

                                                        Millions of
                             Millions of yen            U.S. dollars
                        ---------------------------     ------------
                           2000            2001             2001
                        -----------     -----------     ------------
Time deposits......     Yen 148,162     Yen 152,321        $1,229
Other deposits.....           6,761          25,993           210
                        -----------     -----------        ------
 Total.............     Yen 154,923     Yen 178,314        $1,439
                        ===========     ===========        ======


     The balances of time deposits, including CDs, issued in amounts of Yen 10
million ($81 thousand) or more were Yen 127,911 million and Yen 126,781 million
($1,023 million) at March 31, 2000 and 2001, respectively.

     The maturity schedule of time deposits at March 31, 2001 is as follows:

                                                      Millions of
Year ending March 31             Millions of yen      U.S. dollars
- ----------------------------     ---------------      ------------
2002........................        Yen 119,290           $   963
2003........................              9,134                73
2004........................             14,361               116
2005........................                 --                --
2006........................              9,536                77
                                    -----------           -------
 Total......................        Yen 152,321           $ 1,229
                                    ===========           =======


                                     F-23
<PAGE>


13.  Income Taxes

     Income before income taxes and the provision for income taxes in fiscal
1999, 2000 and 2001 are as follows:

<TABLE>
                                                                                         Millions of
                                                      Millions of yen                   U.S. dollars
                                        ------------------------------------------      ------------
                                           1999            2000             2001             2001
                                        ----------      ----------      ----------      ------------
<S>                                     <C>             <C>             <C>                 <C>
Income before income taxes:
   Domestic........................     Yen 15,728      Yen 33,245      Yen 56,076          $  452
   Foreign.........................         11,587          18,803           3,160              26
                                        ----------      ----------      ----------          ------
                                        Yen 27,315      Yen 52,048      Yen 59,236          $  478
                                        ==========      ==========      ==========          ======
Provision for income taxes:
 Current--
   Domestic........................     Yen  5,633      Yen  6,803      Yen 12,648          $  102
   Foreign.........................          6,407           8,139           4,320              35
                                        ----------      ----------      ----------          ------
                                            12,040          14,942          16,968             137
                                        ----------      ----------      ----------          ------
 Deferred--
   Domestic........................        (14,153)          7,913          13,080             105
   Foreign.........................          3,807          (1,449)         (4,969)            (40)
                                        ----------      ----------      ----------          ------
                                           (10,346)          6,464           8,111              65
                                        ----------      ----------      ----------          ------
Provision for income taxes........      Yen  1,694      Yen 21,406      Yen 25,079          $  202
                                        ==========      ==========      ==========          ======
</TABLE>


     The normal income tax rate in Japan was approximately 48%, 42% and 42% in
fiscal 1999, 2000 and 2001, respectively. The effective income tax rate is
different from the normal income tax rate primarily because of certain
permanent non-deductible expenses and inclusion in income of equity in net
income of affiliates.

     Under the provisions of FASB Statement No. 109 ("Accounting for Income
Taxes"), the effect of a change in tax laws or rates is included in income in
the period the change is enacted and includes a cumulative recalculation of
deferred tax balances based on the new tax laws or rates. The 1998 tax reform,
enacted on March 31, 1998 (effective from April 1, 1998), decreased the normal
income tax rate to approximately 48%. And the 1999 tax reform, enacted on March
31, 1999 (effective from April 1, 1999), decreased the normal income tax rate
to approximately 42%.

     Reconciliations of the differences between tax provision computed at the
normal rate and consolidated provisions for income taxes in fiscal 1999, 2000
and 2001 are as follows:

<TABLE>
                                                                                         Millions of
                                                      Millions of yen                   U.S. dollars
                                        ------------------------------------------      ------------
                                           1999            2000             2001             2001
                                        ----------      ----------      ----------      ------------
<S>                                     <C>             <C>             <C>                 <C>
Income before income taxes............. Yen 27,315      Yen 52,048      Yen 59,236          $ 478
                                        ==========      ==========      ==========          =====
Tax provision computed at normal rate.. Yen 13,029      Yen 21,860      Yen 24,879          $ 201
Increases (reductions) in taxes due to:
 Application of the equity method......      2,846             150            (383)            (3)
 Permanent non-deductible expenses.....        858             677             575              4
 Effect of a change in tax rates.......    (14,582)             --              --             --
 Amortization of goodwill..............       (459)           (115)            147              1
 Effect of lower tax rate than normal
   in a domestic subsidiary............       (267)           (373)           (407)            (3)
 Other, net............................        269            (793)            268              2
                                        ----------      ----------      ----------          -----
Provision for income taxes............. Yen  1,694      Yen 21,406      Yen 25,079          $ 202
                                        ==========      ==========      ==========          =====
</TABLE>

     Total income taxes recognized in fiscal 1999, 2000 and 2001 are as
follows:


                                     F-24
<PAGE>


<TABLE>
                                                                                         Millions of
                                                      Millions of yen                   U.S. dollars
                                        ------------------------------------------      ------------
                                           1999            2000             2001             2001
                                        ----------      ----------      ----------      ------------
<S>                                     <C>             <C>             <C>                 <C>
Provision for income taxes............  Yen 1,694       Yen 21,406      Yen 25,079          $ 202
Income tax on other comprehensive
 income (loss):
 Net unrealized gains (losses) on
   investment in securities...........      1,414           28,435          (8,809)           (71)
 Minimum pension liability adjustment.         --           (2,515)           (859)            (7)
 Cumulative translation adjustments...       (528)            (958)          1,556             13
                                        ---------       ----------      ----------          -----
Total income taxes....................  Yen 2,580       Yen 46,368      Yen 16,967          $ 137
                                        =========       ==========      ==========          =====
</TABLE>


     The tax effects of temporary differences giving rise to the deferred tax
assets and liabilities at March 31, 2000 and 2001 are as follows:

<TABLE>
                                                                                        Millions of
                                                             Millions of yen            U.S. dollars
                                                        --------------------------      ------------
                                                           2000             2001             2001
                                                        ----------      ----------      ------------
<S>                                                     <C>             <C>                 <C>
Assets:
 Net operating loss carryforwards....................   Yen  14,184     Yen  13,219         $   107
 Allowance for doubtful receivables on direct
   financing leases and possible loan losses.........        30,181          30,904             249
 Installment loans...................................         3,360           2,863              23
 Policy liabilities..................................           704             799               6
 Accrued expenses....................................         4,381          11,247              91
 Other...............................................         2,218           2,866              23
                                                        -----------     -----------         -------
                                                        Yen  55,028     Yen  61,898         $   499
                                                        -----------     -----------         -------
Liabilities:
 Investment in direct financing leases...............   Yen 122,591     Yen 121,903         $   984
 Investment in operating leases......................        12,386          17,382             140
 Investment in securities............................        32,616          22,463             181
 Deferred life insurance acquisition costs...........         6,856          10,074              81
 Undistributed earnings..............................        11,623          12,333             100
 Other...............................................         2,950          11,167              90
                                                        -----------     -----------         -------
                                                        Yen 189,022     Yen 195,322         $ 1,576
                                                        -----------     -----------         -------
 Net deferred tax liability..........................   Yen 133,994     Yen 133,424         $ 1,077
                                                        ===========     ===========         =======
</TABLE>


     Certain subsidiaries have recognized deferred tax assets from net
operating loss carryforwards totaling Yen 36,504 million ($295 million) as of
March 31, 2001, which expire as follows:

                                                      Millions of
Year ending March 31            Millions of yen       U.S. dollars
- --------------------            ---------------       ------------
2002.......................       Yen  1,036             $   8
2003.......................            3,132                25
2004.......................            4,534                37
2005.......................            5,913                48
2006.......................            1,698                14
Thereafter.................           20,191               163
                                  ----------             -----
      Total................       Yen 36,504             $ 295
                                  ==========             =====


     Undistributed earnings of certain foreign subsidiaries for which deferred
income taxes were not provided amounted to Yen 65,208 million ($526 million) as
of March 31, 2001. Since the management decided that the undistributed earnings
are permanently reinvested, no provision for income taxes has been provided.


                                     F-25
<PAGE>


     Net deferred tax assets and liabilities at March 31, 2000 and 2001 are
reflected in the accompanying consolidated balance sheets under the following
captions:

                                                               Millions of
                                     Millions of yen          U.S. dollars
                                --------------------------    ------------
                                   2000           2001            2001
                                -----------    -----------    ------------
Other assets................    Yen   1,224    Yen   2,006       $    16
Income taxes: Deferred......        135,218        135,430         1,093
                                -----------    -----------       -------
Net deferred tax liability..    Yen 133,994    Yen 133,424       $ 1,077
                                ===========    ===========       =======


14.  Pension Plans

     The Company and certain subsidiaries have trusted contributory and
non-contributory funded pension plans covering substantially all of their
employees other than directors and corporate auditors. Under the plans,
employees are entitled to lump-sum payments at the time of termination of their
employment or to pension payments. The amounts of such payments are determined
on the basis of length of service and remuneration at the time of termination.
The Company and its subsidiaries' funding policy is to contribute annually the
amounts actuarially determined. Assets of the plans are invested primarily in
interest-bearing securities and marketable equity securities.

               The funded status of the defined benefit pension plans, a
substantial portion of which consists of domestic pension plans, as of March
31, 2000 and 2001 is as follows:

<TABLE>
                                                                                              Millions of
                                                                  Millions of yen            U.S. dollars
                                                             --------------------------      ------------
                                                                2000            2001             2001
                                                             ----------      ----------      ------------
<S>                                                          <C>             <C>                 <C>
Change in benefit obligation:
 Benefit obligation at beginning of year................     Yen 30,805      Yen 46,065          $ 372
 Service cost...........................................          2,360           3,329             27
 Interest cost..........................................          1,460           1,496             12
 Plan participants' contributions.......................            458             567              5
 Plan amendments........................................            218            (560)            (5)
 Actuarial loss.........................................         12,145           2,997             24
 Foreign currency exchange rate change..................           (325)            460              4
 Benefits paid..........................................           (986)         (1,201)           (10)
 Plan curtailment.......................................            (70)             --             --
                                                             ----------      ----------          -----
Benefit obligation at end of year.......................     Yen 46,065      Yen 53,153          $ 429
                                                             ==========      ==========          =====

Change in plan assets:
Fair value of plan assets at beginning of year..........     Yen 30,936      Yen 38,823          $ 313
Actual return on plan assets............................          3,716          (2,576)           (21)
Employer contribution...................................          4,844           8,157             66
Plan participants' contributions........................            458             567              4
Benefits paid...........................................           (840)         (1,050)            (8)
Foreign currency exchange rate change...................           (291)            358              3
                                                             ----------      ----------          -----
Fair value of plan assets at end of year................     Yen 38,823      Yen 44,279          $ 357
                                                             ==========      ==========          =====

The funded status of the plans:
 Funded status..........................................     Yen (7,242)     Yen (8,874)         $ (71)
 Unrecognized prior service cost........................            253            (248)            (2)
 Unrecognized net actuarial loss........................         17,232          23,310            188
 Unrecognized net transition obligation.................            472             432              3
                                                             ----------      ----------          -----
   Net amount recognized................................     Yen 10,715      Yen 14,620          $ 118
                                                             ==========      ==========          =====


                                     F-26
<PAGE>

<CAPTION>
                                                                                              Millions of
                                                                  Millions of yen            U.S. dollars
                                                             --------------------------      ------------
                                                                2000            2001             2001
                                                             ----------      ----------      ------------
<S>                                                          <C>             <C>                 <C>
Amount recognized in the consolidated balance sheets
 consists of:
 Prepaid benefit cost...................................     Yen 10,077      Yen 14,601          $ 118
 Accrued benefit liability..............................         (5,564)         (8,226)           (66)
 Intangible asset.......................................            202             187              1
 Accumulated other comprehensive income, gross of tax...          6,000           8,058             65
                                                             ----------      ----------          -----
   Net amount recognized................................     Yen 10,715      Yen 14,620          $ 118
                                                             ==========      ==========          =====
</TABLE>


     The aggregate projected benefit obligations, aggregate accumulated benefit
obligations and aggregate fair values of plan assets for the plans with the
accumulated benefit obligations in excess of plan assets were Yen 19,829
million, Yen 16,230 million and Yen 10,899 million, respectively, at March 31,
2000, and Yen 23,681 million ($191 million), Yen 19,621 million ($158 million)
and Yen 11,522 million ($93 million), respectively, at March 31, 2001.

     Net pension cost of the plans for fiscal 1999, 2000 and 2001 consists of
the following:

<TABLE>
                                                                                        Millions of
                                                      Millions of yen                   U.S. dollars
                                        ------------------------------------------      ------------
                                           1999            2000             2001             2001
                                        ----------      ----------      ----------      ------------
<S>                                      <C>             <C>             <C>                 <C>
Service cost............................ Yen 2,140       Yen 2,360       Yen 3,329           $ 27
Interest cost...........................     1,297           1,460           1,496             12
Expected return on plan assets..........    (1,369)         (1,565)         (1,323)           (11)
Amortization of unrecognized transition
  obligation............................        45              35              29              0
Amortization of unrecognized net
  actuarial loss........................       175             237             818              7
Amortization of unrecognized prior
  service cost..........................         2              10             (26)            (0)
Plan curtailment........................        --             (43)             --             --
                                         ---------       ---------       ---------           ----
 Net periodic pension cost.............. Yen 2,290       Yen 2,494       Yen 4,323           $ 35
                                         =========       =========       =========           ====
</TABLE>


     Significant assumptions of domestic and foreign pension plans used to
determine these amounts for fiscal 1999, 2000 and 2001 are as follows:

Domestic                                               1999      2000      2001
- --------                                               ----      ----      ----
Discount rate....................................      4.4%      3.0%      3.0%
Rate of increase in compensation levels..........      2.6%      2.6%      2.1%
Expected long-term rate of return on plan assets.      4.4%      3.0%      3.0%

Foreign                                                1999      2000      2001
- -------                                                ----      ----      ----
Discount rate....................................      6.8%      7.8%      7.3%
Rate of increase in compensation levels..........      4.0%      5.0%      4.5%
Expected long-term rate of return on plan assets.      9.3%      9.3%      9.3%


     In addition, directors and corporate auditors of the Company and certain
subsidiaries, and executive officers of the Company, receive lump-sum payments
upon termination of their services under unfunded termination plans. The
payments to directors and corporate auditors are subject to shareholders'
approval. The amount required based on length of services and remuneration to
date under these plans is fully accrued.

     Total provisions charged to income for all the plans including the defined
benefit plans are Yen 2,942 million, Yen 3,431 million and Yen 5,119 million
($41 million) in fiscal 1999, 2000 and 2001, respectively.


                                     F-27
<PAGE>


15.  Stock-Based Compensation

     The Company has introduced stock option plans for directors, executive
officers and key employees. Under the plans, the right is granted to purchase
the treasury shares of the Company at a certain purchase price. The exercise
price was determined based on a formula linked to a stock price of the shares
on the Tokyo Stock Exchange. Under the stock option plans in fiscal 1999 and
2000, the options vest 100% on the grant date. Under the stock option plan in
fiscal 2001, the option vest 100% over three years' service periods starting
July 2000. Exercisable periods are 9.75 years, 9.7 years and 10 years from the
grant date in 1999, 2000 and 2001, respectively. The Company acquired 146,000,
145,000 and 316,700 shares of its common stock for the plan during fiscal 1999,
2000 and 2001, respectively. The Board of Directors intends to obtain approval
from the shareholders, at the next general meeting, to be held on June 28,
2001, for an additional grant of stock options for 300,900 shares during fiscal
2002.

     FASB Statement No.123 ("Accounting for Stock-Based Compensation") defines
a fair value based method of accounting for a stock option. This statement
gives entities a choice of recognizing related compensation expense by adopting
the new fair value method or to continue to measure compensation using the
intrinsic value approach under APB Opinion No. 25 ("Accounting for Stock Issued
to Employees"), the former standard. The Company chose to use the measurement
prescribed by APB Opinion No. 25 and recognized no compensation expense in
fiscal 1999, 2000 and 2001. Had compensation cost for the Company's stock
option plans been determined consistent with FASB Statement No. 123, net income
and earnings per share in fiscal 1999, 2000 and 2001 would have been as
follows:

<TABLE>
                                                          1999           2000           2001          2001
                                                       ----------     ----------     ----------      ------
<S>                                                    <C>            <C>            <C>             <C>
Net income
  (millions of yen and millions of U.S. dollars)..     Yen 25,102     Yen 29,761     Yen 33,694      $  272
Basic earnings per share
  (yen and U.S. dollars)..........................     Yen 323.74     Yen 374.19     Yen 412.11      $ 3.33
Diluted earnings per share
  (yen and U.S. dollars)..........................     Yen 323.74     Yen 365.66     Yen 395.57      $ 3.19
</TABLE>


     The fair value of these stock options was estimated using the
Black-Scholes option pricing model under the following assumptions:

                               1999         2000          2001
                            ---------     ---------     ---------
Grant-date fair value...    Yen 3,552     Yen 6,078     Yen 5,847    ($47.19)
Expected life...........      10Years     8.55Years     9.25Years
Risk-free rate..........        0.81%         1.72%         1.15%
Expected volatility.....       29.74%        35.53%        30.79%
Expected dividend yield.       0.161%        0.149%        0.096%


                                     F-28
<PAGE>


     The following table summarizes information about stock option activity for
fiscal 1999, 2000 and 2001:

<TABLE>
                                                                    Weighted average exercise price
                                                                    --------------------------------
                                             Number of shares           Yen             U.S. dollars
                                             ----------------       ----------          ------------
<S>                                              <C>                <C>                   <C>
Outstanding at March 31, 1998..........          168,000            Yen  7,665
Granted................................          146,000                 7,784
Exercised..............................               --                    --
Forfeited or expired...................               --
                                                                            --

Outstanding at March 31, 1999..........          314,000                 7,720
Granted................................          145,000                10,393
Exercised..............................           57,000                 7,686
Forfeited or expired...................               --                    --

Outstanding at March 31, 2000..........          402,000                 8,689
Granted................................          316,700                16,272            $ 131.33
Exercised..............................           35,900                 7,706               62.20
Forfeited or expired...................            1,300                16,272              131.33

Outstanding at March 31, 2001..........          681,500            Yen 12,250            $  98.87
</TABLE>


     Exercisable options are 314,000, 402,000 and 366,100 at March 31, 1999,
2000 and 2001, respectively. Exercise prices of all the granted options were
adjusted on April 1, 2000 for a 1.2-for-1 stock split implemented on May 19,
2000.

     Summary information about the Company's stock options outstanding and
exercisable at March 31, 2001 is as follows:

<TABLE>
                                              Outstanding                                      Exercisable
                        --------------------------------------------------------    ---------------------------------
 Range of Exercise                       Weighted average      Weighted average                      Weighted average
       Price                              remaining life        exercise price                        exercise price
- -------------------     Number of        ----------------      ----------------     Number of        ----------------
        Yen               shares               Years                 Yen              shares                Yen
- ---------------------------------------------------------------------------------------------------------------------
<S>                      <C>                    <C>              <C>                 <C>               <C>
Yen  7,665-Yen 10,000    221,000                4.60             Yen  7,731          221,100           Yen  7,731
     10,001-   13,000    145,000                8.25                 10,393          145,000               10,393
     13,001-   16,272    315,400                9.25                 16,272               --                   --
- ---------------------------------------------------------------------------------------------------------------------
 Yen 7,665-Yen 16,272    681,500                7.53             Yen 12,250          366,100           Yen  8,786
- ---------------------------------------------------------------------------------------------------------------------
                                              Outstanding                                      Exercisable
                        --------------------------------------------------------    ---------------------------------
 Range of Exercise                       Weighted average      Weighted average                      Weighted average
       Price                              remaining life        exercise price                        exercise price
- -------------------     Number of        ----------------      ----------------     Number of        ----------------
    U.S. dollars          shares               Years            U.S. dollars         shares            U.S. dollars
- ---------------------------------------------------------------------------------------------------------------------
$ 61.86 - $ 80.71        221,000                4.60               $  62.40         221,100              $  62.40
  80.72 -  104.92        145,000                8.25                  83.88         145,000                 83.88
 104.93 -  131.33        315,400                9.25                 131.33              --                    --
- ---------------------------------------------------------------------------------------------------------------------
$ 61.86 - $131.33        681,500                7.53               $  98.87         366,100              $  70.91
</TABLE>


     The Company has also introduced warrant plans to corporate auditors and
key employees (not including employees who were option holders under the stock
option plan) of the Company and directors of its certain subsidiaries since
fiscal 1998. Under the plans, the Company granted warrants to purchase 315,593
shares, 302,484 shares and 126,143 shares by repurchasing warrants attached to
bonds with warrants issued by the Company during fiscal 1999, 2000 and 2001,
respectively. Grant-date fair value was Yen 510, Yen 1,100 and Yen 1,410
($11.38), and exercise price was Yen 6,885, Yen 11,291 and Yen 14,090 ($113.72)
in fiscal 1999, 2000 and 2001, respectively. Exercise price of the warrants
granted in fiscal 1998 has


                                     F-29
<PAGE>


been adjusted since November 14, 1998, by issuance of bonds with warrants in
fiscal 1999 by the Company. Exercise prices of all the granted warrants were
adjusted on April 1, 2000, for a 1.2-for-1 stock split implemented on May 19,
2000.

     Subject to the final approval by the Board of Directors of the Company,
the Company intends to introduce a warrant plan in fiscal 2002. Under the plan,
warrants to purchase approximately 123,900 shares will be granted to corporate
auditors of the Company, directors, corporate auditors and key employees of its
certain subsidiaries by repurchasing warrants attached to bonds with warrants
to be issued by the Company during fiscal 2002. The exercise price of the
warrants will be determined based on a formula linked to a stock price when the
terms for issuing the bonds with warrants are determined.

16.  Accumulated Other Comprehensive Income (Loss)

     Effective April 1, 1998, the Company and its subsidiaries adopted FASB
Statement No. 130 ("Reporting Comprehensive Income"), which established
standards for the reporting and display of comprehensive income and its
components in a full set of general-purpose financial statements. Comprehensive
income (loss) and its components have been reported, net of tax, in the
consolidated statements of shareholders' equity.

     Changes in each component of accumulated other comprehensive income (loss)
in fiscal 1999, 2000 and 2001 are as follows:

<TABLE>
                                                                                     Millions of yen
                                                          ---------------------------------------------------------------------
                                                          Net unrealized          Minimum                          Accumulated
                                                             gains on             pension           Cumulative        other
                                                          investment in          liability         translation    comprehensive
                                                            securities          adjustments        adjustments    income (loss)
                                                          --------------        -----------        -----------    -------------
<S>                                                        <C>                  <C>                <C>             <C>
Balance at March 31, 1998.............................     Yen   2,711          Yen      --        Yen (20,790)    Yen (18,079)
Net unrealized gains (losses) on investment in
 securities, net of tax of Yen 1,317 million...........         (1,096)                                                 (1,096)
Reclassification adjustment for losses included in
 net income, net of tax of Yen (2,731) million.........          2,538                                                   2,538
Foreign currency translation adjustments, net of tax
 of Yen 892 million....................................                                                (16,118)        (16,118)
Reclassification adjustment for losses included in
 net income, net of tax of Yen (364) million ..........                                                  5,205           5,205
                                                           -----------          -----------        -----------     -----------
Current period change.................................     Yen   1,442          Yen      --        Yen (10,913)    Yen  (9,471)
                                                           -----------          -----------        -----------     -----------
Balance at March 31, 1999.............................     Yen   4,153          Yen      --        Yen (31,703)    Yen (27,550)
Net unrealized gains (losses) on investment in
 securities, net of tax of Yen (28,919) million........         42,699                                                  42,699
Reclassification adjustment for losses included in
 net income, net of tax Yen 484 million................         (1,148)                                                 (1,148)
Minimum pension liability adjustments, net of tax of
 Yen 2,515 million.....................................                              (3,485)                            (3,485)
Foreign currency translation adjustments, net of tax
 of Yen 1,219 million..................................                                                (12,184)        (12,184)
Reclassification adjustment for losses included in
 net income, net of tax of Yen (261) million...........                                                    251             251
                                                           -----------          -----------        -----------     -----------
Current period change.................................     Yen  41,551          Yen  (3,485)       Yen (11,933)    Yen  26,133
                                                           -----------          -----------        -----------     -----------
Balance at March 31, 2000.............................     Yen  45,704          Yen  (3,485)       Yen (43,636)    Yen  (1,417)
Net unrealized gains (losses) on investment in
 securities, net of tax of Yen 9,750 million...........        (12,334)                                                (12,334)
Reclassification adjustment for losses included in
 net income, net of tax of Yen (941) million...........            974                                                     974
Minimum pension liability adjustments, net of tax of
 Yen 859 million.......................................                              (1,199)                            (1,199)


                                      F-30
<PAGE>

<CAPTION>
                                                                                     Millions of yen
                                                          ---------------------------------------------------------------------
                                                          Net unrealized          Minimum                          Accumulated
                                                             gains on             pension           Cumulative        other
                                                          investment in          liability         translation    comprehensive
                                                            securities          adjustments        adjustments    income (loss)
                                                          --------------        -----------        -----------    -------------
<S>                                                        <C>                  <C>                <C>             <C>
Foreign currency translation adjustments, net of tax
 of Yen (1,556) million................................                                                 20,532          20,532
Reclassification adjustment for gains included in net
 income, net of tax Yen- million......................                                                  (2,004)         (2,004)
                                                           -----------          -----------        -----------     -----------
Current period change.................................     Yen (11,360)         Yen  (1,199)       Yen  18,528     Yen   5,969
                                                           -----------          -----------        -----------     -----------
Balance at March 31, 2001.............................     Yen  34,344          Yen  (4,684)       Yen (25,108)    Yen   4,552
                                                           ===========          ===========        ===========     ===========
</TABLE>

<TABLE>
                                                                                 Millions of U.S. dollars
                                                          ---------------------------------------------------------------------
                                                          Net unrealized          Minimum                          Accumulated
                                                             gains on             pension           Cumulative        other
                                                          investment in          liability         translation    comprehensive
                                                            securities          adjustments        adjustments    income (loss)
                                                          --------------        -----------        -----------    -------------
<S>                                                        <C>                  <C>                <C>             <C>
Balance at March 31, 2000..............................    $       369          $       (28)       $      (352)    $       (11)
Net unrealized gains (losses) on investment in
 securities, net of tax of $79 million.................           (100)                                                   (100)
Reclassification adjustment to losses included in net
 income, net of tax of $(8) million....................              8                                                       8
Minimum pension liability adjustments, net of tax of
 $7 million............................................                                 (10)                               (10)
Foreign currency translation adjustments, net of tax
 of $(13) million......................................                                                    166             166
Reclassification adjustment for gains included in net
 income, net of tax of $- million......................                                                    (16)            (16)
                                                           -----------          -----------        -----------     -----------
Current period change..................................    $       (92)         $       (10)       $       150     $        48
                                                           -----------          -----------        -----------     -----------
Balance at March 31, 2001..............................    $       277          $       (38)       $      (202)    $        37
                                                           ===========          ===========        ===========     ===========
</TABLE>


17.  Shareholders Equity

     Changes in the number of shares issued and outstanding in fiscal 1999,
2000 and 2001 are as follows:

<TABLE>
                                                                                      Number of shares
                                                                          ------------------------------------------
                                                                             1999            2000            2001
                                                                          ----------      ----------      ----------
<S>                                                                       <C>             <C>             <C>
Beginning balance...................................................      64,870,299      64,870,299      68,630,294
Common stock issued in public offering..............................              --       3,300,000              --
Exercise of warrants................................................              --         357,175          31,673
Common Stock issued for acquisitions of minority interests of
 subsidiaries.......................................................              --         102,820              --
Common stock issued in stock split on May 19, 2000..................              --              --      13,726,058
                                                                          ----------      ----------      ----------
Ending balance......................................................      64,870,299      68,630,294      82,388,025
                                                                          ==========      ==========      ==========
</TABLE>

     The Japanese Commercial Code (the "Code") provides that an amount
equivalent to at least 10% of cash dividends paid and other cash outlays
resulting from appropriation of retained earnings be appropriate to a legal
reserve until such reserve equals 25% of the issued capital. The Code also
provides that both additional paid-in capital and the legal reserve are not
available for cash dividends but may be used to reduce a capital deficit by
resolution of the shareholders or may be capitalized by resolution of the Board
of Directors.

     The Code provides that at least one-half of the issue price of new shares,
with a minimum of the per value thereof, be included in common stock. In
conformity therewith, the Company has divided the principal amount of the bonds
converted into common stock and the proceeds received from the issuance of
common stock, including the exercise of warrants, equally between common stock
and additional paid-in capital by resolution of the Board of Directors.


                                     F-31
<PAGE>


     The Board of Directors intends to recommend to the shareholders, at the
next general meeting, to be held on June 28, 2001, the declaration of a cash
dividend totaling Yen 1,226 million ($10 million), which will be paid in that
month to the shareholders of record as of March 31, 2001, covering fiscal 2001,
and the related appropriation of retained earnings to the legal reserve of Yen
130 million ($1 million).

     The amount of retained earnings available for dividends under the Code is
based on the amount recorded in the Company's nonconsolidated books of account
in accordance with accounting principles generally accepted in Japan, and
amounted to Yen 109,675 million ($885 million) as of March 31, 2001. However,
there are restrictions on the payment of dividends relating to the treasury
stock acquired for the stock option plan, amounting to Yen 8,284 million ($67
million), and net unrealized gains on investment in securities and earning
impact of derivatives under accounting principles generally accepted in Japan,
amounting to Yen 16,686 million ($135 million) as of March 31, 2001.

     Retained earnings at March 31, 2001 includes Yen 23,598 million ($190
million) relating to equity in undistributed earnings of 50% or less owned
companies accounted for by the equity method.

     The Company implemented a 1.2-for-1 stock split on May 19, 2000 and
assigned to all shareholders appearing on the final list of shareholders as of
March 31, 2000.

18.  Brokerage Commissions and Gains on Investments Securities

     Brokerage commissions and gains on investment securities in fiscal 1999,
2000 and 2001 consist of the following:

<TABLE>
                                                                                             Millions of
                                                            Millions of yen                  U.S. dollars
                                                 ---------------------------------------     ------------
                                                   1999          2000           2001             2001
                                                 ---------     ----------     ----------     ------------
<S>                                              <C>           <C>            <C>               <C>
Brokerage commissions.......................     Yen 1,165     Yen  3,089     Yen  3,252         $ 26
Gains on investment securities, net.........         6,216         16,611          8,803           71
                                                 ---------     ----------     ----------         ----
                                                 Yen 7,381     Yen 19,700     Yen 12,055         $ 97
                                                 =========     ==========     ==========         ====
</TABLE>


     Trading activities -- Gains on investment securities, net, include net
trading revenue on trading securities amounting to Yen 679 million, Yen 1,390
million and Yen 552 million ($4 million) for fiscal 1999, 2000 and 2001,
respectively. A gain of Yen 561 million, a loss of Yen 15 million and a gain of
Yen 444 million ($4 million) of derivative trading instruments are also
included in gains on investment securities, net, for fiscal 1999, 2000 and
2001, respectively.

19.  Life Insurance Operations

     Life insurance premiums and related investment income in fiscal 1999, 2000
and 2001 consist of the following

<TABLE>
                                                                                             Millions of
                                                            Millions of yen                  U.S. dollars
                                                 ---------------------------------------     ------------
                                                   1999          2000           2001             2001
                                                 ---------     ----------     ----------     ------------
<S>                                              <C>           <C>            <C>               <C>
Life insurance premiums........................  Yen 186,629   Yen 190,758    Yen 141,528       $ 1,143
Life insurance related investment income.......        9,630        15,071         16,786           135
                                                 -----------   -----------    -----------       -------
                                                 Yen 196,259   Yen 205,829    Yen 158,314       $ 1,278
                                                 ===========   ===========    ===========       =======
</TABLE>


     Benefits and expenses of the life insurance operations, included in life
insurance costs in the consolidated statements of income, are associated with
earned premiums so as to result in recognition of profits over the life of
contracts. This association is accomplished by means of the provision for
future policy benefits and the deferral and subsequent amortization of policy
acquisition costs (principally commissions and certain other expenses relating
to policy issuance and underwriting). These policy acquisition costs are
amortized in proportion to premium revenue recognized. Amortizations charged to
income for fiscal 1999, 2000 and 2001 amounted to Yen 8,428 million, Yen 9,756
and Yen 10,671 million ($86 million), respectively.


                                     F-32
<PAGE>


20.  Other Operations

     Other operations revenues and expenses include revenues and costs from
sales of residential apartments, fee income and costs from servicing of
receivables, commission income and costs from sales of commodities funds and
revenues and expenses from other operations.

21.  Per Share Data

     In Japan, dividends which are payable to shareholders of record at the end
of fiscal year are subsequently approved shareholders, and, accordingly, the
declaration of these dividends is not reflected in the financial statements at
such fiscal year-end. However, dividends per share shown in the consolidated
statements of income have been presented on an accrual basis and include, in
each fiscal year, dividends to be approved by shareholders after such fiscal
year.

     In fiscal 1999, diluted EPS was equal to basic EPS, and a reconciliation
of the differences between basic and diluted EPS in fiscal 2000 and 2001 is as
follows:

<TABLE>
March 31, 2000
- --------------                                             Millions of yen        Thousands            Yen
                                                           ---------------      --------------      ----------
                                                                                  Weighted-
                                                             Net income         average shares         EPS
                                                           ---------------      --------------      ----------
<S>                                                          <C>                     <C>               <C>
Basic EPS:
 Net income available to common stockholders..........       Yen 30,642              79,534        Yen 385.27
 Effect of dilutive securities--
   Warrants...........................................               --                 160
   Convertible notes..................................               43               1,560
   Treasury stock.....................................               --                 133
                                                             ----------              ------        ----------
Diluted EPS:
   Net income for computation.........................       Yen 30,685              81,387        Yen 377.02
                                                             ==========              ======        ==========
</TABLE>

<TABLE>
March 31, 2001
- --------------                                       Millions of yen        Thousands            Yen          U.S. dollars
                                                     ---------------      --------------      ----------      ------------
                                                                            Weighted-
                                                       Net income         average shares         EPS               EPS
                                                     ---------------      --------------      ----------      ------------
<S>                                                    <C>                     <C>            <C>                <C>
Basic EPS:
 Net income available to common stockholders....       Yen 34,157              81,760         Yen 417.77         $ 3.37
 Effect of dilutive securities--
   Warrants.....................................               --                 127
   Convertible notes............................               87               3,381
   Treasury stock...............................               --                 132
                                                       ----------              ------         ----------         ------
Diluted EPS:
   Net income for computation...................       Yen 34,244              85,400         Yen 400.99         $ 3.24
                                                       ==========              ======         ==========         ======
</TABLE>


     EPS has been adjusted for the stock splits retroactively (see notes 1 (y)
and 17).

22.  Derivative Financial Instruments and Risk Management

     The Company and its subsidiaries operate internationally, giving rise to
significant exposures to market risks from changes in interest rates and
foreign exchange rates. Derivative financial instruments are utilized by the
Company and its subsidiaries to reduce those risks, as explained in this note.


                                     F-33
<PAGE>


(a)  Interest rate risk management

     The Company and certain subsidiaries have entered into various types of
interest rate contracts in managing their interest rate risk as of March 31,
2000 and 2001, as indicated in the following table:

<TABLE>
                                                                                            Millions of
                                                             Millions of yen                U.S. dollars
                                                  -----------------------------------      ---------------
                                                        2000                2001                2001
                                                  ---------------     ---------------      ---------------
                                                  Notional amount     Notional amount      Notional amount
                                                  ---------------     ---------------      ---------------
<S>                                                <C>                <C>                     <C>
Interest rate swap agreements................      Yen 957,398        Yen  626,380            $ 5,056
Options, caps, floors and collars held.......           57,447              96,153                776
Futures......................................           14,233              71,754                579
</TABLE>


     Under interest rate swap agreements, the Company and its subsidiaries
agree with other parties to exchange, at specified intervals, the difference
between fixed-rate and floating-rate interest amounts calculated by reference
to an agreed notional amount. Certain agreements are combinations of interest
rate and foreign currency swap transactions. The Company and its subsidiaries
pay the fixed rate and receive the floating rate under the majority of their
swaps which hedge the risk of variability of cash flows originated from
floating rate assets, liabilities, or forecasted transactions. The Company and
its subsidiaries also entered into some swaps in which they pay the floating
rate and receive the fixed rate.

     Interest rate options grant the purchaser, for a premium payment, the
right to either purchase from or sell to the writer a specified financial
instrument under agreed terms. Interest rate caps, floors and collars require
the writer to pay the purchaser at specified future dates the amount, if any,
by which a specified market interest rate exceeds the fixed cap rate or falls
below the fixed floor rate, applied to a notional amount. The option, cap,
floor or collar writer receives a premium for bearing the risk of unfavorable
interest rate changes. The premiums paid for interest rate options, cap, floor
and collar agreements purchased are included in other assets in the
accompanying consolidated balance sheets and are amortized to interest expense
over the terms of the agreements. Amounts receivable under cap, floor and
collar agreements and gains realized on option contracts are recognized as a
reduction of interest expense.

(b)  Loan commitments

     Loan commitments are agreements to make loans as long as the agreed-upon
terms are met. The outstanding amounts of those loan commitments as of March
31, 2000 and 2001 are set out in the following table:

<TABLE>
                                                                          Millions of
                                             Millions of yen              U.S. dollars
                                  -----------------------------------    ---------------
                                        2000               2001               2001
                                  ---------------     ---------------    ---------------
                                    Outstanding         Outstanding        Outstanding
                                  contract amount     contract amount    contract amount
                                  ---------------     ---------------    ---------------
<S>                                  <C>                <C>                    <C>
Loan commitments............         Yen 10,273         Yen 57,786             $ 466
</TABLE>


(c)  Foreign exchange risk management

     The Company and its subsidiaries have entered into foreign exchange
forward contracts and foreign currency swap agreements in managing their
foreign exchange risk as of March 31, 2000 and 2001, as indicated in the
following table:

<TABLE>
                                                                                            Millions of
                                                             Millions of yen                U.S. dollars
                                                  -----------------------------------      ---------------
                                                        2000                2001                2001
                                                  ---------------     ---------------      ---------------
                                                  Notional amount     Notional amount      Notional amount
                                                  ---------------     ---------------      ---------------
<S>                                                <C>                  <C>                     <C>
Foreign exchange forward contracts.......          Yen  36,617          Yen 104,350             $   842
Foreign currency swap agreements.........              330,491              393,084               3,173
</TABLE>


                                     F-34
<PAGE>


     Foreign exchange forward contracts and foreign currency swap agreements
are agreements between two parties to purchase and sell a foreign currency for
a price specified at the contract date, with delivery and settlement in the
future. The Company and its subsidiaries use such contracts to hedge the risk
of change in foreign currency exchange rates associated with certain assets and
obligations denominated in foreign currencies.

(d)  Other derivative instruments

     The Company and its subsidiaries have entered into various types of
contracts for the purpose of trading activities as of March 31, 2000 and 2001,
as indicated in the following table:

<TABLE>
                                                                                            Millions of
                                                             Millions of yen                U.S. dollars
                                                  -----------------------------------      ---------------
                                                        2000                2001                2001
                                                  ---------------     ---------------      ---------------
                                                  Notional amount     Notional amount      Notional amount
                                                  ---------------     ---------------      ---------------
<S>                                                <C>                <C>                     <C>
Futures.......................................     Yen  15,347         Yen  72,160              $ 582
Interest rate swap agreements .................          7,060              43,154                348
Options, caps, floors and collars held.........          9,080              15,380                124
Options, caps, floors and collars written......         12,265              70,474                569
Foreign exchange forward contracts.............            938               1,651                 13
</TABLE>


23.  Significant Concentrations of Credit Risk

     The Company and its subsidiaries have established various policies and
procedures to manage credit exposure, including initial credit approval, credit
limits, collateral and guarantee requirements, rights of offset and continuous
oversight. The Company and its subsidiaries' principal financial instrument
portfolio consists of direct financing leases and installment loans which are
secured by title to the leased assets and assets specifically collateralized in
relation to loan agreements. When deemed necessary, guarantees are also
obtained. The value and adequacy of the collateral are continually monitored.
Consequently, the risk of credit loss from counterparties' failure to perform
in connection with collateralized financing activities is minimal. The Company
and its subsidiaries have access to collateral in case of bankruptcy and other
losses.

     At March 31, 2000 and 2001, no concentration with a single obligor
exceeded 1 % of consolidated total assets. With respect to the Company and its
subsidiaries' credit exposures on a geographic basis, approximately Yen 3,490
billion, or 76%, at March 31, 2000 and approximately Yen 3,609 billion ($29,128
million), or 74%, at March 31, 2001 of the credit risks arising from all
financial instruments are attributable to customers located in Japan. The
largest concentration of credit risks as to foreign countries is exposure
attributable to the United States of America.

     The Company and its subsidiaries make direct financing lease and operating
lease contracts mostly with the lessees in commercial industries for their
office, industry, commercial service, transport and other equipment. At March
31, 2000 and 2001, the Company and its subsidiaries had concentrations in
certain equipment types included in investment in direct financing leases and
operating leases which exceeded 10% of the consolidated total assets. The
percentage of investment in transportation equipment to consolidated total
assets was 10.4% as of March 31, 2000 and 2001.

24.  Estimated Fair Value of Financial Instruments

     The following information is provided to help users gain an understanding
of the relationship between amounts reported in the accompanying consolidated
financial statements and the related market or fair value.

     The disclosures include financial instruments and derivatives financial
instruments, other than investment in direct financing leases, investment in
subsidiaries and affiliates, pension obligations and insurance contracts.


                                     F-35
<PAGE>


<TABLE>
                                                                                     March 31, 2000
                                                                            ------------------------------
                                                                                     Millions of yen
                                                                            ------------------------------
                                                                              Carrying         Estimated
                                                                               amount          fair value
                                                                            -------------    -------------
<S>                                                                         <C>              <C>
Trading instruments
Trading securities .......................................................  Yen       390    Yen       390
Futures:
 Assets...................................................................             53               53
Options and other derivatives:
 Assets...................................................................             90               90
 Liabilities..............................................................             38               38
Non-trading instruments
Assets:
 Cash and cash equivalents................................................        265,956          265,956
 Restricted cash and cash equivalents.....................................         13,666           13,666
 Time deposits............................................................          7,698            7,698
 Installment loans........................................................      1,791,439        1,791,449
 Allowance for doubtful receivables on possible loan losses...............       (101,156)        (101,156)
 Investment in securities:
   Practicable to estimate fair value.....................................        701,042          701,042
   Not practicable to estimate fair value.................................         56,949           56,949
Liabilities:
 Short-term debt..........................................................      1,912,761        1,912,761
 Deposits.................................................................        154,923          155,492
 Long-term debt...........................................................      1,942,784        1,964,017
Foreign exchange forward contracts:
 Assets ..................................................................            463              463
 Liabilities..............................................................             20               20
Foreign currency swap agreements:
 Assets...................................................................              -           23,154
 Liabilities..............................................................              -            3,140
Interest rate swap agreements:
 Assets...................................................................              -           11,680
 Liabilities..............................................................              -           12,815
Options and other derivatives:
 Assets...................................................................             78              (12)
 Liabilities..............................................................              5              101
</TABLE>

<TABLE>
                                                                                        March 31, 2001
                                                              ------------------------------------------------------------------
                                                                       Millions of yen                Millions of U.S. dollars
                                                              -----------------------------         ----------------------------
                                                                 Carrying       Estimated           Carrying          Estimated
                                                                  amount        fair value           amount           fair value
                                                              -------------     -----------         ---------         ----------
<S>                                                           <C>               <C>                 <C>                <C>
Trading instruments
Trading securities........................................... Yen       581     Yen     581          $      5          $      5
Futures:
 Assets......................................................         1,181           1,181                10                10
 Liabilities.................................................           228             228                 2                 2
Options and other derivatives:
 Assets .....................................................           882             882                 7                 7
 Liabilities.................................................            84              84                 1                 1
Non-trading instruments
Assets:
 Cash and cash equivalents...................................       155,411         155,411             1,254             1,254
 Restricted cash and cash equivalents........................        17,072          17,072               138               138


                                     F-36
<PAGE>

<CAPTION>
                                                                                        March 31, 2001
                                                              ------------------------------------------------------------------
                                                                       Millions of yen                Millions of U.S. dollars
                                                              -----------------------------         ----------------------------
                                                                 Carrying       Estimated           Carrying          Estimated
                                                                  amount        fair value           amount           fair value
                                                              -------------     -----------         ---------         ----------
<S>                                                           <C>               <C>                 <C>                <C>
 Time deposits...............................................         8,673           8,673                70                70
 Installment loans...........................................     1,846,511       1,867,074            14,903            15,069
 Allowance for doubtful receivables on possible loan losses..      (100,192)       (100,192)             (809)             (809)
Investment in securities:
 Practicable to estimate fair value..........................       854,414         854,415             6,896             6,896
 Not practicable to estimate fair value......................        87,163          87,163               703               703
Liabilities:
 Short-term debt.............................................     1,562,072       1,562,072            12,608            12,608
 Deposits....................................................       178,314         179,376             1,439             1,448
 Long-term debt..............................................     2,330,159       2,361,801            18,807            19,062
Foreign exchange forward contracts:
 Assets......................................................         2,273           2,273                18                18
 Liabilities.................................................         1,557           1,557                13                13
Foreign currency swap agreements:
 Assets......................................................             -           5,044                 -                41
 Liabilities.................................................             -          32,822                 -               265
Interest rate swap agreements:
 Assets......................................................             -           7,126                 -                58
 Liabilities.................................................             -          17,298                 -               140
Options and other derivatives:
 Assets .....................................................           323             (46)                3                (0)
 Liabilities.................................................             -             657                 -                 5
</TABLE>


     The fair value of a financial instrument is the amount at which the
instrument could be exchanged in a current transaction between willing parties,
other than in a forced or liquidation sale. The estimated fair value amounts
were determined using available market information, discounted cash flow
information utilized by the Company and its subsidiaries in conducting new
business and certain valuation methodologies. If quoted market prices were not
readily available, management estimated a fair value. Accordingly, the
estimates may not be indicative of the amounts at which the financial
instruments could be exchanged in a current or future market transaction. Due
to the uncertainty of expected cash flows resulting from financial instruments,
the use of different assumptions and valuation methodologies may have a
significant effect on the derived estimated fair value amounts.

      Estimation of fair value

     The following methods and significant assumptions were used to estimate
the fair value of each class of financial instrument for which it is
practicable to estimate a value:

     Cash and cash equivalents, restricted cash and cash equivalents, time
deposits and short-term debt- For cash and cash equivalents, restricted cash
and cash equivalents, time deposits and short-term debt, the carrying amounts
recognized in the balance sheets were determined to be reasonable estimates of
their fair values due to relatively short maturity.

     Installment loans- The carrying amounts of floating-rate installment loans
with no significant changes in credit risk and which could be repriced within a
short-term period were determined to be reasonable estimates of their fair
values. For certain homogeneous categories of medium- and long-term fixed-rate
loans, such as housing loans and other loans, the estimated fair values were
calculated by discounting the future cash flows using the current interest
rates charged by the Company and its subsidiaries for new loans made to
borrowers with similar credit ratings and remaining maturities.

     Investment in securities- For trading securities and available-for-sale
securities, the estimated fair values, which are also the carrying amounts
recorded in the balance sheets, were generally based on quoted market prices or
quotations provided by dealers. For held-to-maturity securities, the estimated
fair values were based on quoted market prices, if available. If a quoted
market price was not available, estimated fair values were determined using
quoted market prices


                                     F-37
<PAGE>


for similar securities or the carrying amounts (where carrying amounts were
believed to approximate the estimated fair values).

     For other securities, for which there were no quoted market prices,
reasonable estimates of fair values could not be made without incurring
excessive costs.

     Deposits- The carrying amounts of demand deposits recognized in the
balance sheets were determined to be reasonable estimates of their fair value.
The estimated fair values of time deposits were calculated by discounting the
future cash flows. The current interest rates offered for the deposits with
similar terms and remaining average maturities were used as the discount rates.

     Long-term debt- The carrying amounts of long-term debt with floating rates
which could be repriced within short-term periods were determined to be
reasonable estimates of their fair values. For medium- and long-term fixed-rate
debt, the estimated fair values were calculated by discounting the future cash
flows. The borrowing interest rates which were currently available to the
Company and its subsidiaries offered by financial institutions for debt with
similar terms and remaining average maturities were used as the discount rates.

     Derivatives- The fair value of derivatives generally reflects the
estimated amounts that the Company and its subsidiaries would receive or pay to
terminate the contracts at the reporting date, thereby taking into account the
current unrealized gains or losses of open contracts. Discounted amounts of
future cash flows using the current interest rate are available for most of the
Company's and its subsidiaries' derivatives.

25.  Commitments and Contingent Liabilities

     Commitments, guarantees and contingencies. As of March 31, 2001, the
Company and its subsidiaries had commitments for the purchase of equipment to
be leased, having a cost of approximately Yen 8,272 million ($67 million).

     The minimum future rentals on non-cancelable operating leases are as
follows:

                                                      Millions of
Year ending March 31             Millions of yen      U.S. dollars
- --------------------             ---------------      ------------
2002........................       Yen   632               $ 5
2003........................             506                 4
2004........................             455                 4
2005........................             409                 3
2006........................             376                 3
Thereafter..................           1,037                 9
                                   ---------               ---
 Total......................       Yen 3,415               $28
                                   =========               ===


     The Company and its subsidiaries lease office space under operating lease
agreements, which are primarily cancelable, and made rental payments totaling
Yen 6,996 million, Yen 5,674 million and Yen 5,722 million ($46 million) in
fiscal 1999, 2000 and 2001, respectively.

     As of March 31, 2001, the Company and its subsidiaries were contingently
liable as guarantor for borrowings of Yen 18,950 million ($153 million) by
customers, principally on consumer loans, and by employees.

     Litigation- The Company and its subsidiaries are also involved in legal
proceedings and claims in the ordinary course of their business. In the opinion
of management, none of such proceedings and claims has a material impact on the
Company's financial position or results of operations.

26.  Segment Information

     Effective April 1, 1998, the Company adopted FASB Statement No. 131
("Disclosures about Segments of an Enterprise and Related Information"). The
following table presents segment financial information on the basis that is
regularly used by management for evaluating the segment performance and
deciding how to allocate resources to them.


                                     F-38
<PAGE>


The reportable segments are identified based on the nature of services for
domestic operations and on geographic area for foreign operations. As to the
segments of corporate finance, equipment operating leases and real estate
related finance in domestic operations, the Company and its subsidiaries
aggregate some operating segments that are determined by region and type of
operating assets for management purposes because they are similar in the nature
of the services, the type of customers and the economic environment.

     Corporate finance operations are primarily corporate direct financing
leases and lending operations other than real estate related lending. Equipment
operating lease operations are comprised of operating leases over measuring
equipment, information-related equipment and automobiles. Real estate related
finance operations include corporate real estate financing activities as well
as personal housing loan lending operations. Real estate operations primarily
comprise residential subdivision developments as well as the rental and
management of office buildings, hotels and training facilities. Life insurance
operations include direct and agency life insurance sales and related
activities. The three foreign operating segments, the Americas, Asia and
Oceania, and Europe, include direct financing lease operations, investment in
securities, collateralized real property lending and aircraft and ship
financing operations. Other operations, which are not deemed by management to
be sufficiently material to disclose as separate items and do not fall into the
above segment categories, are reported under domestic other operations. They
primarily include securities transactions, venture capital operations and card
loans.

     Financial information of the segments for fiscal 1999, 2000 and 2001 is as
follows:

<TABLE>
                                                                Year ended March 31, 1999
                                    ---------------------------------------------------------------------------------
                                                                     Millions of yen
                                    ---------------------------------------------------------------------------------
                                                                    Domestic operations
                                    ---------------------------------------------------------------------------------
                                                     Equipment   Real estate
                                        Corporate    operating     related         Real         Life
                                         finance      leases       finance        estate     insurance      Other
                                    ---------------------------------------------------------------------------------
<S>                                 <C>            <C>           <C>           <C>          <C>          <C>
Revenues                            Yen   122,629  Yen  51,000   Yen  17,731  Yen  39,088   Yen 195,484  Yen  22,684
Interest revenue....................       17,926            7        16,601          519             -       16,828
Interest expense....................       41,697        1,538        10,891        4,220             -        4,435
Depreciation and amortization.......       26,427       30,299         2,259        3,994           359          338
Other significant non-cash items:
  Provision for doubtful receivables
    and possible loan losses........       24,420           35        15,857            -             -        3,324
  Write-downs of long-lived assets..            -            -             -            -             -            -
  Increase in policy liabilities....            -            -             -            -       135,086            -
Equity in net income (loss) of and
  gain (loss) on sales of affiliates          (16)           4             -            -             -          (99)
Segment profit(loss)...............        35,240        6,923       (11,013)      (2,236)        3,813       (4,266)
Segment assets......................    2,046,516      109,772       573,767      273,504       334,836      248,872
Long-lived assets..................        33,338       63,433         3,744      245,963             -        5,877
Expenditures for long-lived assets..       10,524       34,399         2,175       27,121             -        1,333
Investment in affiliates............          141           16             -            -             -        9,313


(table continued)

<CAPTION>
                                                 Year ended March 31, 1999
                                      ----------------------------------------------------------
                                                    Millions of yen
                                      ----------------------------------------------------------
                                                  Foreign operations
                                      ------------------------------------------
                                           The        Asia and
                                        Americas      Oceania         Europe        Total
                                      ----------------------------------------------------------
<S>                                   <C>           <C>            <C>           <C>
Revenues                              Yen  68,821   Yen  51,220    Yen  23,811   Yen   592,468
Interest revenue....................       26,048        18,750          9,674         106,353
Interest expense....................       34,049        27,707         13,174         137,711
Depreciation and amortization.......        5,507        12,038          7,693          88,914
Other significant non-cash items:
  Provision for doubtful receivables
    and possible loan losses........        5,217         1,775          1,217          51,845
  Write-downs of long-lived assets..          644             -              -             644
  Increase in policy liabilities....            -             -              -         135,086
Equity in net income (loss) of and
  gain (loss) on sales of affiliates        7,564       (10,979)            11          (3,515)
Segment profit(loss)...............        20,590       (11,729)           264          37,586
Segment assets......................      634,101       440,872        178,559       4,840,799
Long-lived assets..................        32,773        82,204         79,247         546,579
Expenditures for long-lived assets..       20,312        37,109            136         133,109
Investment in affiliates............       38,956         8,997            169          57,592
</TABLE>


                                     F-39
<PAGE>


<TABLE>
                                                                Year ended March 31, 2000
                                     ------------------------------------------------------------------------------
                                                                     Millions of yen
                                     ------------------------------------------------------------------------------
                                                                   Domestic operations
                                     ------------------------------------------------------------------------------
                                                    Equipment   Real estate
                                       Corporate    operating     related         Real         Life
                                        finance      leases       finance        estate     insurance      Other
                                     ------------------------------------------------------------------------------
<S>                                 <C>             <C>          <C>          <C>           <C>           <C>
Revenues............................Yen   121,415  Yen  53,000   Yen  17,294  Yen  44,873   Yen 204,746   Yen  30,882
Interest revenue....................       16,326            3        16,268          741             -        18,385
Interest expense....................       31,322        1,267         7,775        4,271             -         2,624
Depreciation and amortization.......       31,196       31,097         1,499        3,213           550         2,045
Other significant non-cash items:
 Provision for doubtful receivables
   and possible loan losses.........       21,798            6         9,964            5             -         6,173
 Write-downs of long-lived assets ..            -            -           149        7,398             -             -
 Increase in policy liabilities.....            -            -             -            -       137,902             -
Equity in net income (loss) of and
 gain (loss) on sales of affiliates.           37           11            28            -             -        (1,679)
Segment profit (loss)...............       40,918        7,823        (3,415)      (8,241)        5,455        (1,036)
Segment assets......................    1,968,590      113,389       597,274      276,494       425,335       242,280
Long-lived assets...................       39,561       63,122         3,617      252,128         3,258         5,352
Expenditures for long-lived assets..       19,316       35,003         3,617       34,183         3,295            87
Investment in affiliates............          165           22            95            -             -        12,539


(table continued)
<CAPTION>
                                             Year ended March 31, 2000
                                     ----------------------------------------------------
                                                   Millions of yen
                                     ----------------------------------------------------
                                                 Foreign operations
                                     ------------------------------------
                                             The      Asia and
                                          Americas     Oceania     Europe        Total
                                     ----------------------------------------------------
<S>                                     <C>          <C>         <C>          <C>
Revenues............................    Yen  74,525  Yen  49,739  Yen 18,260  Yen   614,734
Interest revenue....................         26,985       14,882       6,730        100,320
Interest expense....................         33,852       22,003       9,584        112,698
Depreciation and amortization.......          4,405       13,354       5,844         93,203
Other significant non-cash items:
 Provision for doubtful receivables
   and possible loan losses.........          4,505        2,627         495         45,573
 Write-downs of long-lived assets ..            334            -           -          7,881
 Increase in policy liabilities.....              -            -           -        137,902
Equity in net income (loss) of and
 gain (loss) on sales of affiliates.             38        1,081          19           (465)
Segment profit (loss)...............         18,775        3,371         278         63,928
Segment assets......................        691,403      369,540     159,608      4,843,913
Long-lived assets...................         55,312       76,674      60,485        559,509
Expenditures for long-lived assets..         41,903       29,510           1        166,915
Investment in affiliates............         29,729        9,156         163         51,869
</TABLE>


                                     F-40
<PAGE>


<TABLE>
                                                             Year ended March 31, 2001
                                     ---------------------------------------------------------------------------
                                                                   Millions of yen
                                     ---------------------------------------------------------------------------
                                                                  Domestic operations
                                     ---------------------------------------------------------------------------
                                                  Equipment   Real estate
                                     Corporate    operating     related        Real       Life
                                     finance        leases      finance       estate    insurance      Other
                                     ---------------------------------------------------------------------------
<S>                                <C>           <C>          <C>          <C>          <C>          <C>
Revenues ..........................Yen  113,113  Yen  61,677  Yen  24,262  Yen  48,438  Yen 157,636  Yen  36,215
Interest revenue...................      17,368            2       17,746          482            -       24,110
Interest expense...................      25,573        1,058        6,341        3,732            -        3,570
Depreciation and amortization......      35,679       35,291          413        5,670          523        1,964
Other significant non-cash items:
  Provision for doubtful
    receivables and possible
    loan losses ...................      14,726          292        8,650           10            -        8,610
  Write-downs of long-lived assets.           -            -            -        4,090            -            -
  Increase in policy liabilities...           -            -            -            -       67,444            -
Equity in net income (loss) of
  and gain (loss) on sales of
  affiliates ......................         122            8            5            -            -          852
Segment profit (loss)..............      44,427       11,165        1,944       (4,604)       5,982        1,035
Segment assets.....................   1,889,538      134,270      606,801      310,340      543,886      284,835
Long-lived assets..................      48,233       85,523          984      242,464        3,208          247
Expenditures for long-lived
  assets ..........................      24,729       59,957          931       29,277            -            -
Investment in affiliates...........          60           27          372            -            -       13,511


(table continued)

<CAPTION>
                                                    Year ended March 31, 2001
                                     ---------------------------------------------------
                                                        Millions of yen
                                     ---------------------------------------------------
                                                   Foreign operations
                                     -----------------------------------
                                           The      Asia and
                                        Americas     Oceania     Europe         Total
                                     ---------------------------------------------------
<S>                                 <C>          <C>          <C>          <C>
Revenues .......................... Yen  79,397  Yen  48,735  Yen  15,151  Yen   584,624
Interest revenue...................      30,563       12,047        6,020        108,338
Interest expense...................      39,235       20,119        7,235        106,863
Depreciation and amortization......       3,894       14,293        5,462        103,189
Other significant non-cash items:
  Provision for doubtful
    receivables and possible
    loan losses ...................      11,170        1,079           47         44,584
  Write-downs of long-lived assets.           -            -            -          4,090
  Increase in policy liabilities...           -            -            -         67,444
Equity in net income (loss) of
  and gain (loss) on sales of
  affiliates ......................         337        1,321            -          2,645
Segment profit (loss)..............       8,896        1,203          716         70,764
Segment assets.....................     804,118      402,707      158,646      5,135,141
Long-lived assets..................      90,621       76,071       61,091        608,442
Expenditures for long-lived
  assets ..........................      33,701       25,969            -        174,564
Investment in affiliates...........      25,835       11,398            -         51,203
</TABLE>


                                     F-40
<PAGE>


<TABLE>
                                                                    Year ended March 31, 2001
                                  --------------------------------------------------------------------------------------------------
                                                                    Millions of U.S. dollars
                                  --------------------------------------------------------------------------------------------------
                                                      Domestic operations                          Foreign operations
                                  ----------------------------------------------------------   ---------------------------
                                                         Real
                                             Equipment  estate
                                  Corporate  operating related    Real      Life                  The    Asia and
                                   finance    leases   finance   estate   insurance    Other    Americas  Oceania   Europe    Total
                                  --------------------------------------------------------------------------------------------------
<S>                               <C>       <C>       <C>       <C>        <C>       <C>       <C>      <C>        <C>       <C>
Revenues .........................$   913   $   498   $   196   $   391    $ 1,272   $   292   $   641   $   394   $   122   $ 4,719
Interest revenue .................    140         0       143         4         --       195       247        97        48       874
Interest expense .................    206         9        51        30         --        29       317       162        58       862
Depreciation and amortization ....    288       285         3        46          4        16        32       115        44       833
Other significant non-cash items:
  Provision for doubtful
    receivables and possible
    loan losses ..................    119         2        70         0         --        70        90         9         0       360
  Write-downs of long-lived
    assets .......................     --        --        --        33         --        --        --        --        --        33
  Increase in policy
    liabilities ..................     --        --        --        --        544        --        --        --        --       544
Equity in net income (loss) of
  and gain (loss) on sales of
  affiliates .....................      1         0         0        --         --         7         3        10        --        21
Segment profit (loss) ............    359        90        15       (37)        48         8        72        10         6       571
Segment assets ................... 15,251     1,084     4,897     2,505      4,390     2,299     6,490     3,250     1,280    41,446
Long-lived assets ................    389       690         8     1,957         26         2       732       614       493     4,911
Expenditures for long-lived
  assets .........................    199       484         8       236         --        --       272       210        --     1,409
Investment in affiliates .........      0         0         3        --         --       109       209        92        --       413
</TABLE>


     Accounting policies of the segments are almost the same as those described
in Note 1 ("Significant Accounting and Reporting Policies") except for the
treatment of income tax expenses. Since the Company and its subsidiaries
evaluate performance for the segments based on profit or loss before income
taxes, tax expenses are not included in segment profit or loss. Equity in net
income of affiliates and minority interest income, which are recognized as net
of tax on a consolidated basis, are adjusted to the profit or loss before income
tax. Gains and losses that management does not consider for evaluating the
performance of the segments, such as write-downs of certain securities and
certain foreign exchange gains or losses, are excluded from the segment profit
or loss.

     Assets attributed to each segment are consolidated operating assets
(investment in direct finance leases, installment loans, investment in operating
leases, investment in securities and other operating assets), advances and
investment in affiliates (not including loans). This has resulted in
depreciation of office facilities and goodwill amortization expenses being
included in each segment's profit or loss while the carrying amounts of
corresponding assets are not allocated to each segment's assets. However, the
effect stemmed from the allocation is immaterial.

     Reconciliation of segment totals to consolidated financial statement
amounts is as follows. Significant items to be reconciled are revenues, segment
profit and segment assets. Other items do not have a material difference between
segment amounts and consolidated amounts.


                                     F-41
<PAGE>


<TABLE>
                                                                                                     Millions of
                                                                    Millions of yen                  U.S. dollars
                                                    ----------------------------------------------   ------------
                                                         1999             2000           2001            2001
                                                    --------------   -------------   -------------   ------------
<S>                                                 <C>              <C>             <C>             <C>
Revenues:
 Total revenues for segments ................        Yen   592,468   Yen   614,734   Yen   584,624    $  4,719
  Revenue related to corporate assets .......                1,473           1,779           1,525          12
                                                     -------------   -------------   -------------    --------
Total consolidated revenues .................        Yen   593,941   Yen   616,513   Yen   586,149    $  4,731
                                                     =============   =============   =============    ========
Segment profit:
 Total profit for segments ..................        Yen    37,586   Yen    63,928   Yen    70,764    $    571
  Unallocated interest expenses, general and
   administrative expenses ..................               (4,189)         (3,374)         (5,228)        (42)
 Adjustment of income tax
  expenses to equity in net income
  and minority income .......................                 (375)           (537)           (676)         (6)
 Unallocated write-downs of securities ......               (8,383)         (9,772)         (5,688)        (46)
 Unallocated other gain or loss .............                2,676           1,803              64           1
                                                     -------------   -------------   -------------    --------
Total consolidated income before income taxes        Yen    27,315   Yen    52,048   Yen    59,236    $    478
                                                     =============   =============   =============    ========
Segment assets:
 Total assets for segments ..................        Yen 4,840,799   Yen 4,843,913   Yen 5,135,141    $ 41,446
  Advances ..................................              (62,079)        (89,676)       (141,148)     (1,139)
  Investment in affiliates
  (not including loans) .....................              (57,592)        (51,869)        (51,203)       (413)
  Corporate assets ..........................               54,308          62,453          86,765         699
                                                     -------------   -------------   -------------    --------
Total consolidated operating assets .........        Yen 4,775,436   Yen 4,764,821   Yen 5,029,555    $ 40,593
                                                     =============   =============   =============    ========
</TABLE>


     FASB Statement No. 131 requires disclosure of information about geographic
areas as enterprise-wide information. Since the segment is identified based on
the nature of services for domestic operations and on geographic area for
foreign operations, the information required as an enterprise-wide one is
incorporated into the table. Japan and the United States of America are the
countries whose revenues from external customers are material. Almost all the
revenues of the Americas segment are derived from the United States of America.
The basis for attributing revenues from external customers to individual
countries is principally the location of the foreign subsidiaries and foreign
affiliates.

     FASB Statement No. 131 requires disclosure of revenues from external
customers for each product and service as enterprise-wide information. The
consolidated statements of income in which the revenues are categorized based on
the nature of business includes the required information. No single customer
accounted for 10% or more of the total revenues for fiscal 1999, 2000 and 2001.

                                      F-42
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
