8. Credit Quality of Financing Receivables and the Allowance for Credit Losses

The Company and its subsidiaries apply ASC 310 (“Receivables”), which requires an entity to provide the following information disaggregated by portfolio segment and class of financing receivable.

Allowance for credit losses—by portfolio segment

Credit quality of financing receivables—by class

•

Impaired loans

•

Credit quality indicators

•

Non-accrual and past-due financing receivables

Information about troubled debt restructurings—by class

A portfolio segment is defined as the level at which an entity develops and documents a systematic methodology to determine its allowance for credit losses. The Company and its subsidiaries classify our portfolio segments by instruments of loans and direct financing leases. Classes of financing receivables are determined based on the initial measurement attribute, risk characteristics of the financing receivables and the method for monitoring and assessing obligors’ credit risk, and are defined as the level of detail necessary for a financial statement user to understand the risks inherent in the financing receivables. Classes of financing receivables generally are a disaggregation of a portfolio segment, and the Company and its subsidiaries disaggregate our portfolio segments into classes by regions, instruments or industries of debtors.

The following table provides information about the allowance for credit losses for fiscal 2012, 2013 and 2014:


	March 31, 2012
	Millions of yen
	Loans
	Consumer			Corporate						Purchased *loans1**			Direct financing leases			Total
	Consumer			Non-recourse loans			Other			Purchased *loans1**			Direct financing leases			Total
Allowance for Credit Losses:
Beginning balance	¥	17,096		¥	27,426		¥	70,972		¥	17,455		¥	21,201		¥	154,150
Provision charged to income		947			6,509			5,974			3,188			2,568			19,186
Charge-offs		(1,943	)		(10,083	)		(18,928	)		(793	)		(6,863	)		(38,610	)
Recoveries		43			16			2,212			0			80			2,351
Other*2		(3	)		(363	)		36			(25	)		(134	)		(489	)

Ending balance	¥	16,140		¥	23,505		¥	60,266		¥	19,825		¥	16,852		¥	136,588

Individually evaluated for impairment		3,002			20,657			49,853			17,895			0			91,407
Not individually evaluated for impairment		13,138			2,848			10,413			1,930			16,852			45,181

Financing receivables:
Ending balance	¥	881,483		¥	775,465		¥	995,246		¥	97,559		¥	900,886		¥	3,650,639

Individually evaluated for impairment		9,021			82,957			166,889			34,907			0			293,774
Not individually evaluated for impairment		872,462			692,508			828,357			62,652			900,886			3,356,865


	March 31, 2013
	Millions of yen
	Loans												Direct financing leases			Total
	Consumer			Corporate						Purchased *loans1**
	Consumer			Non-recourse Loans			Other			Purchased *loans1**
Allowance for Credit Losses:
Beginning balance	¥	16,140		¥	23,505		¥	60,266		¥	19,825		¥	16,852		¥	136,588
Provision charged to income		809			(200	)		2,335			4,649			2,423			10,016
Charge-offs		(3,050	)		(7,384	)		(20,566	)		(9,412	)		(4,409	)		(44,821	)
Recoveries		281			1			988			0			363			1,633
Other*3		346			795			(1,148	)		254			601			848

Ending balance	¥	14,526		¥	16,717		¥	41,875		¥	15,316		¥	15,830		¥	104,264

Individually evaluated for impairment		3,190			14,620			34,206			13,135			0			65,151
Not individually evaluated for impairment		11,336			2,097			7,669			2,181			15,830			39,113

Financing receivables:
Ending balance	¥	1,171,142		¥	568,957		¥	862,332		¥	70,801		¥	989,380		¥	3,662,612

Individually evaluated for impairment		10,861			61,050			111,722			29,107			0			212,740
Not individually evaluated for impairment		1,160,281			507,907			750,610			41,694			989,380			3,449,872


	March 31, 2014
	Millions of yen
	Loans															Total
	Consumer			Corporate						Purchased *loans1**			Direct financing leases
	Consumer			Non-recourse loans			Other			Purchased *loans1**			Direct financing leases
Allowance for Credit Losses:
Beginning balance	¥	14,526		¥	16,717		¥	41,875		¥	15,316		¥	15,830		¥	104,264
Provision charged to income		4,437			2,381			833			2,532			3,651			13,834
Charge-offs		(5,786	)		(3,590	)		(11,803	)		(3,921	)		(4,421	)		(29,521	)
Recoveries		290			140			798			111			70			1,409
Other*4		6			(6,601	)		1,041			110			254			(5,190	)

Ending balance	¥	13,473		¥	9,047		¥	32,744		¥	14,148		¥	15,384		¥	84,796

Individually evaluated for impairment		3,279			8,534			25,054			12,288			0			49,155
Not individually evaluated for impairment		10,194			513			7,690			1,860			15,384			35,641

Financing receivables:
Ending balance	¥	1,236,414		¥	174,204		¥	837,329		¥	53,341		¥	1,094,073		¥	3,395,361

Individually evaluated for impairment		11,796			24,902			76,051			23,075			0			135,824
Not individually evaluated for impairment		1,224,618			149,302			761,278			30,266			1,094,073			3,259,537

Purchased loans represent loans with evidence of deterioration of credit quality since origination and for which it is probable at acquisition that collection of all contractually required payments from the debtors is unlikely in accordance with ASC 310-30 (“Receivables—Loans and Debt Securities Acquired with Deteriorated Credit Quality”).

*2	Other mainly includes foreign currency translation adjustments, amounts reclassified to discontinued operations and decrease in allowance related to sales of a subsidiary.

*3	Other mainly includes foreign currency translation adjustments and decrease in allowance related to newly consolidated subsidiaries and sales of a subsidiary.

Other mainly includes foreign currency translation adjustments and decrease in allowance related to newly consolidated subsidiaries. Additionally, Other in Non-recourse loans includes a decrease of ¥6,562 million due to the sale of controlling class interests of a certain VIE, which was formerly consolidated, to a third party and resulting in deconsolidation of that VIE.

In developing the allowance for credit losses, the Company and its subsidiaries consider, among other things, the following factors:

•

business characteristics and financial conditions of obligors;

•

current economic conditions and trends;

•

prior charge-off experience;

•

current delinquencies and delinquency trends; and

•

value of underlying collateral and guarantees.

The Company and its subsidiaries individually develop the allowance for credit losses for impaired loans. For non-impaired loans, including loans that are not individually evaluated for impairment, and direct financing leases, the Company and its subsidiaries evaluate prior charge-off experience as segmented by debtor’s industry and the purpose of the loans and develop the allowance for credit losses based on such prior charge-off experience as well as current economic conditions.

In common with all portfolio segments, a deterioration of debtors’ condition may increase the risk of delay in payments of principal and interest. For loans to consumer borrowers, the amount of the allowance for credit losses is changed by the variation of individual debtors’ creditworthiness and value of underlying collateral and guarantees, and the prior charge-off experience. For loans to corporate other borrowers and direct financing leases, the amount of the allowance for credit losses is changed by current economic conditions and trends, the value of underlying collateral and guarantees, and the prior charge-off experience in addition to the debtors’ creditworthiness.

The decline of the value of underlying collateral and guarantees may increase the risk of inability to collect from the loans and direct financing leases. Particularly for non-recourse loans for which cash flow from real estate is the source of repayment, their collection depends on the real estate collateral value, which may decline as a result of decrease in liquidity of the real estate market, rise in vacancy rate of rental properties, fall in rents and other factors. These risks may change the amount of the allowance for credit losses. For purchased loans, their collection may decrease due to a decline in the real estate collateral value and debtors’ creditworthiness. Thus, these risks may change the amount of the allowance for credit losses.

In common with all portfolio segments, the Company and its subsidiaries charge off doubtful receivables when the likelihood of any future collection is believed to be minimal, mainly based upon an evaluation of the relevant debtors’ creditworthiness and the liquidation status of collateral.

The following table provides information about the impaired loans as of March 31, 2013 and 2014:


	March 31, 2013
		Millions of Yen
Portfolio segment	Class	Loans Individually Evaluated for Impairment		Unpaid Principal Balance		Related Allowance
*With no related allowance recorded1:**		¥	52,798	¥	52,768	¥	0
Consumer borrowers			1,003		989		0
	Housing loans		1,003		989		0
	Card loans		0		0		0
	Other		0		0		0
Corporate borrowers			51,795		51,779		0
Non-recourse loans	Japan		21,409		21,407		0
	U.S.		5,825		5,825		0
Other	Real estate companies		7,063		7,060		0
	Entertainment companies		6,148		6,147		0
	Other		11,350		11,340		0
Purchased loans			0		0		0
*With an allowance recorded2:**			159,942		158,798		65,151
Consumer borrowers			9,858		9,828		3,190
	Housing loans		7,496		7,471		2,565
	Card loans		1,858		1,854		547
	Other		504		503		78
Corporate borrowers			120,977		119,863		48,826
Non-recourse loans	Japan		2,006		2,004		1,021
	U.S.		31,810		31,706		13,599
Other	Real estate companies		40,063		39,896		15,862
	Entertainment companies		5,889		5,843		2,118
	Other		41,209		40,414		16,226
Purchased loans			29,107		29,107		13,135

Total:		¥	212,740	¥	211,566	¥	65,151

Consumer borrowers			10,861		10,817		3,190

	Housing loans		8,499		8,460		2,565

	Card loans		1,858		1,854		547

	Other		504		503		78

Corporate borrowers			172,772		171,642		48,826

Non-recourse loans	Japan		23,415		23,411		1,021

	U.S.		37,635		37,531		13,599

Other	Real estate companies		47,126		46,956		15,862

	Entertainment companies		12,037		11,990		2,118

	Other		52,559		51,754		16,226

Purchased loans			29,107		29,107		13,135


	March 31, 2014
		Millions of Yen
Portfolio segment	Class	Loans Individually Evaluated for Impairment		Unpaid Principal Balance		Related Allowance
*With no related allowance recorded1:**		¥	25,049	¥	25,025	¥	0
Consumer borrowers			725		711		0
	Housing loans		725		711		0
	Card loans		0		0		0
	Other		0		0		0
Corporate borrowers			24,324		24,314		0
Non-recourse loans	Japan		6,505		6,505		0
	U.S.		2,259		2,259		0
Other	Real estate companies		3,770		3,767		0
	Entertainment companies		2,614		2,613		0
	Other		9,176		9,170		0
Purchased loans			0		0		0
*With an allowance recorded2:**			110,775		110,064		49,155
Consumer borrowers			11,071		11,010		3,279
	Housing loans		6,592		6,543		2,432
	Card loans		2,950		2,942		629
	Other		1,529		1,525		218
Corporate borrowers			76,629		75,979		33,588
Non-recourse loans	Japan		1,363		1,299		1,020
	U.S.		14,775		14,746		7,514
Other	Real estate companies		25,099		25,046		8,911
	Entertainment companies		5,213		5,172		1,801
	Other		30,179		29,716		14,342
Purchased loans			23,075		23,075		12,288

Total:		¥	135,824	¥	135,089	¥	49,155

Consumer borrowers			11,796		11,721		3,279

	Housing loans		7,317		7,254		2,432

	Card loans		2,950		2,942		629

	Other		1,529		1,525		218

Corporate borrowers			100,953		100,293		33,588

Non-recourse loans	Japan		7,868		7,804		1,020

	U.S.		17,034		17,005		7,514

Other	Real estate companies		28,869		28,813		8,911

	Entertainment companies		7,827		7,785		1,801

	Other		39,355		38,886		14,342

Purchased loans			23,075		23,075		12,288

*1	“With no related allowance recorded” represents impaired loans with no allowance for credit losses as all amounts are considered to be collectible.

*2	“With an allowance recorded” represents impaired loans with the allowance for credit losses as all or a part of the amounts are not considered to be collectible.

The Company and its subsidiaries recognize installment loans other than purchased loans and loans to consumer borrowers as impaired loans when principal or interest is past-due 90 days or more, or it is probable that the Company and its subsidiaries will be unable to collect all amounts due according to the contractual terms of the loan agreements due to various debtor conditions, including insolvency filings, suspension of bank transactions, dishonored bills and deterioration of businesses. For non-recourse loans, in addition to these conditions, the Company and its subsidiaries perform an impairment review using financial covenants, acceleration clauses, loan-to-value ratios, and other relevant available information.

For purchased loans, the Company and its subsidiaries recognize them as impaired loans when it is probable that the Company and its subsidiaries will be unable to collect book values of the remaining investment due to factors such as a decline in the real estate collateral value and debtors’ creditworthiness since the acquisition of these loans.

The Company and its subsidiaries consider that loans to consumer borrowers, including housing loans, card loans and other, are impaired when terms of these loans are modified as troubled debt restructurings.

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

In common with all classes, impaired loans are individually evaluated for a valuation allowance based on the present value of expected future cash flows, the loan’s observable market price or the fair value of the collateral securing the loans if the loans are collateral-dependent. For non-recourse loans, in principle, the estimated collectible amount is determined based on the fair value of the collateral securing the loans as they are collateral-dependent. Further for certain non-recourse loans, the estimated collectible amount is determined based on the present value of expected future cash flows. The fair value of the real estate collateral securing the loans is determined using appraisals prepared by independent third-party appraisers or our own staff of qualified appraisers based on recent transactions involving sales of similar assets or other valuation techniques such as discounted cash flows methodologies using future cash flows estimated to be generated from operation of the existing assets or completion of development projects, as appropriate. We generally obtain a new appraisal once a fiscal year. In addition, we periodically monitor circumstances of the real estate collateral and then obtain a new appraisal in situations involving a significant change in economic and/or physical conditions which may materially affect its fair value. For impaired purchased loans, the Company and its subsidiaries develop the allowance for credit losses based on the difference between the book value and the estimated collectible amount of such loans.

The following table provides information about the average recorded investments in impaired loans and interest income on impaired loans for fiscal 2012, 2013 and 2014:


	March 31, 2012
		Millions of yen
Portfolio segment	Class	Average Recorded Investments in *Impaired Loans1**		Interest Income on Impaired Loans		Interest on Impaired Loans Collected in Cash
Consumer borrowers		¥	8,933	¥	226	¥	204
	Housing loans		8,933		226		204
	Other		0		0		0
Corporate borrowers			252,683		4,506		3,976
Non-recourse loans	Japan		30,021		367		311
	U.S.		41,399		794		695
Other	Real estate companies		84,121		1,243		1,102
	Entertainment companies		25,796		724		711
	Other		71,346		1,378		1,157
Purchased loans			34,063		0		0

Total		¥	295,679	¥	4,732	¥	4,180


	March 31, 2013
		Millions of yen
Portfolio segment	Class	Average Recorded Investments in *Impaired Loans1**		Interest Income on Impaired Loans		Interest on Impaired Loans Collected in Cash
Consumer borrowers		¥	9,586	¥	209	¥	168
	Housing loans		8,635		188		152
	Card loans		771		16		12
	Other		180		5		4
Corporate borrowers			221,136		4,259		3,968
Non-recourse loans	Japan		37,282		216		211
	U.S.		41,903		1,726		1,726
Other	Real estate companies		62,265		889		804
	Entertainment companies		16,443		364		322
	Other		63,243		1,064		905
Purchased loans			29,217		0		0

Total		¥	259,939	¥	4,468	¥	4,136


	March 31, 2014
		Millions of yen
Portfolio segment	Class	Average Recorded Investments in *Impaired Loans1**		Interest Income on Impaired Loans		Interest on Impaired Loans Collected in Cash
Consumer borrowers		¥	11,445	¥	295	¥	230
	Housing loans		8,004		231		178
	Card loans		2,453		38		31
	Other		988		26		21
Corporate borrowers			134,927		4,146		3,449
Non-recourse loans	Japan		15,897		234		219
	U.S.		23,119		667		667
Other	Real estate companies		38,733		1,154		990
	Entertainment companies		10,277		509		343
	Other		46,901		1,582		1,230
Purchased loans			25,588		0		0

Total		¥	171,960	¥	4,441	¥	3,679

*1	Average balances are calculated on the basis of fiscal beginning and quarter-end balances.

The following table provides information about the credit quality indicators as of March 31, 2013 and 2014:


	March 31, 2013
		Millions of yen
				Non-performing
Portfolio segment	Class	Performing		Loans individually evaluated for impairment		90+ days past-due loans not individually evaluated for impairment		Subtotal		Total
Consumer borrowers		¥	1,152,536	¥	10,861	¥	7,745	¥	18,606	¥	1,171,142
	Housing loans		901,895		8,499		6,397		14,896		916,791
	Card loans		223,130		1,858		719		2,577		225,707
	Other		27,511		504		629		1,133		28,644
Corporate borrowers			1,258,517		172,772		0		172,772		1,431,289
Non-recourse loans	Japan		111,025		23,415		0		23,415		134,440
	U.S.		396,882		37,635		0		37,635		434,517
Other	Real estate companies		229,555		47,126		0		47,126		276,681
	Entertainment companies		109,222		12,037		0		12,037		121,259
	Other		411,833		52,559		0		52,559		464,392
Purchased loans			41,694		29,107		0		29,107		70,801
Direct financing leases			973,574		0		15,806		15,806		989,380
	Japan		680,351		0		12,234		12,234		692,585
	Overseas		293,223		0		3,572		3,572		296,795

Total		¥	3,426,321	¥	212,740	¥	23,551	¥	236,291	¥	3,662,612


	March 31, 2014
		Millions of yen
				Non-performing
Portfolio segment	Class	Performing		Loans individually evaluated for impairment		90+ days past-due loans not individually evaluated for impairment		Subtotal		Total
Consumer borrowers		¥	1,218,469	¥	11,796	¥	6,149	¥	17,945	¥	1,236,414
	Housing loans		968,269		7,317		4,211		11,528		979,797
	Card loans		225,198		2,950		720		3,670		228,868
	Other		25,002		1,529		1,218		2,747		27,749
Corporate borrowers			910,580		100,953		0		100,953		1,011,533
Non-recourse loans	Japan		64,757		7,868		0		7,868		72,625
	U.S.		84,545		17,034		0		17,034		101,579
Other	Real estate companies		217,096		28,869		0		28,869		245,965
	Entertainment companies		99,057		7,827		0		7,827		106,884
	Other		445,125		39,355		0		39,355		484,480
Purchased loans			30,266		23,075		0		23,075		53,341
Direct financing leases			1,080,186		0		13,887		13,887		1,094,073
	Japan		751,877		0		9,560		9,560		761,437
	Overseas		328,309		0		4,327		4,327		332,636

Total		¥	3,239,501	¥	135,824	¥	20,036	¥	155,860	¥	3,395,361

Note:

Loans held for sale are not included in the table above.

In common with all classes, the Company and its subsidiaries monitor the credit quality indicators as performing and non-performing assets. The category of non-performing assets includes financing receivables for debtors who have filed for insolvency proceedings, whose bank transactions are suspended, whose bills are dishonored, whose repayment is past-due 90 days or more, financing receivables modified as troubled debt restructurings, and performing assets include all other financing receivables. Regarding purchased loans, they are classified as non-performing assets when considered impaired, while all the other loans are included in the category of performing assets.

Out of non-performing assets, the Company and its subsidiaries consider smaller balance homogeneous loans, including housing loans and card loans which are not restructured and direct financing leases, as 90 days or more past-due financing receivables not individually evaluated for impairment, and consider the others as loans individually evaluated for impairment. After the Company and its subsidiaries have set aside provision for those non-performing assets, the Company and its subsidiaries continue to monitor at least on a quarterly basis the quality of any underlying collateral, the status of management of the debtors and other important factors in order to report to management and develop additional provision as necessary.

The following table provides information about the non-accrual and past-due financing receivables as of March 31, 2013 and 2014:


	March 31, 2013
		Millions of yen
		Past-Due Financing Receivables
Portfolio segment	Class	30-89 Days Past-Due		90 Days or More Past-Due		Total Past-Due		Total Financing Receivables		Non-Accrual
Consumer borrowers		¥	4,699	¥	12,170	¥	16,869	¥	1,171,142	¥	12,170
	Housing loans		3,650		10,422		14,072		916,791		10,422
	Card loans		738		1,078		1,816		225,707		1,078
	Other		311		670		981		28,644		670
Corporate borrowers			64,539		73,876		138,415		1,431,289		73,876
Non-recourse loans	Japan		0		15,211		15,211		134,440		15,211
	U.S.		59,532		7,516		67,048		434,517		7,516
Other	Real estate companies		1,324		23,921		25,245		276,681		23,921
	Entertainment companies		437		1,542		1,979		121,259		1,542
	Other		3,246		25,686		28,932		464,392		25,686
Direct financing leases			5,480		15,806		21,286		989,380		15,806
	Japan		1,467		12,234		13,701		692,585		12,234
	Overseas		4,013		3,572		7,585		296,795		3,572

Total		¥	74,718	¥	101,852	¥	176,570	¥	3,591,811	¥	101,852


	March 31, 2014
		Millions of yen
		Past-Due Financing Receivables
Portfolio segment	Class	30- 89 Days Past-Due		90 Days or More Past-Due		Total Past-Due		Total Financing Receivables		Non-Accrual
Consumer borrowers		¥	4,477	¥	10,542	¥	15,019	¥	1,236,414	¥	10,542
	Housing loans		3,157		8,009		11,166		979,797		8,009
	Card loans		731		1,204		1,935		228,868		1,204
	Other		589		1,329		1,918		27,749		1,329
Corporate borrowers			20,977		45,372		66,349		1,011,533		58,298
Non-recourse loans	Japan		1,364		5,418		6,782		72,625		5,418
	U.S.		17,470		3,687		21,157		101,579		14,432
Other	Real estate companies		149		13,005		13,154		245,965		13,005
	Entertainment companies		1,195		1,297		2,492		106,884		1,297
	Other		799		21,965		22,764		484,480		24,146
Direct financing leases			6,365		13,887		20,252		1,094,073		13,887
	Japan		1,563		9,560		11,123		761,437		9,560
	Overseas		4,802		4,327		9,129		332,636		4,327

Total		¥	31,819	¥	69,801	¥	101,620	¥	3,342,020	¥	82,727

Note:

Loans held for sale and purchases loans are not included in the table above.

In common with all classes, the Company and its subsidiaries consider financing receivables as past-due financing receivables when principal or interest is past-due 30 days or more. Loans whose terms have been modified are not classified as past-due financing receivables if the principals and interests are not past-due 30 days or more in accordance with the modified terms.

The Company and its subsidiaries suspend accruing revenues on past-due installment loans and direct financing leases when principal or interest is past-due 90 days or more, or earlier, if management determines that their collections are doubtful based on factors such as the individual debtor’s creditworthiness, historical loss experience, current delinquencies and delinquency trends. Cash repayments received on non-accrual loans are applied first against past due interest and then any surpluses are applied to principal in view of the conditions of the contract and obligors. The Company and its subsidiaries return to accrual status non-accrual loans and lease receivables when it becomes probable that the Company and its subsidiaries will be able to collect all amounts due according to the contractual terms of these loans and lease receivables, as evidenced by continual payments from the debtors. The period of such continual payments before returning to accrual status varies depending on factors that we consider are relevant in assessing the debtor’s creditworthiness, such as the debtor’s business characteristics and financial conditions as well as relevant economic conditions and trends.

The following table provides information about troubled debt restructurings of financing receivables that occurred during fiscal 2012, 2013 and 2014:


	March 31, 2012
		Millions of yen
Portfolio segment	Class	Pre-modification Outstanding Recorded Investment		Post-modification Outstanding Recorded Investment
Consumer borrowers		¥	1,867	¥	1,690
	Housing loans		1,867		1,690
Corporate borrowers			27,471		26,112
Non-recourse loans	Japan		943		943
	U.S.		7,783		7,518
Other	Real estate companies		6,436		5,636
	Other		12,309		12,015

Total		¥	29,338	¥	27,802


	March 31, 2013
		Millions of yen
Portfolio segment	Class	Pre-modification Outstanding Recorded Investment		Post-modification Outstanding Recorded Investment
Consumer borrowers		¥	3,580	¥	2,396
	Housing loans		1,290		894
	Card loans		1,649		1,081
	Other		641		421
Corporate borrowers			17,970		17,544
Non-recourse loans	Japan		5,180		5,180
	U.S.		10,036		10,036
Other	Real estate companies		967		861
	Other		1,787		1,467

Total		¥	21,550	¥	19,940


	March 31, 2014
		Millions of yen
Portfolio segment	Class	Pre-modification Outstanding Recorded Investment		Post-modification Outstanding Recorded Investment
Consumer borrowers		¥	3,899	¥	2,586
	Housing loans		724		334
	Card loans		1,898		1,391
	Other		1,277		861
Corporate borrowers			14,135		11,097
Non-recourse loans	Japan		4,745		2,608
	U.S.		4,809		4,723
Other	Real estate companies		328		276
	Entertainment companies		779		509
	Other		3,474		2,981

Total		¥	18,034	¥	13,683

A troubled debt restructuring is defined as a restructuring of a financing receivable in which the creditor grants a concession to the debtor for economic or other reasons related to the debtor’s financial difficulties.

The Company and its subsidiaries offer various types of concessions to our debtors to protect as much of our investment as possible in troubled debt restructurings. For the debtors of non-recourse loans, the Company and its subsidiaries offer concessions including an extension of the maturity date at an interest rate lower than the current market rate for a debt with similar risk characteristics. For the debtors of all financing receivables other than non-recourse loans, the Company and its subsidiaries offer concessions such as a reduction of the loan principal, a temporary reduction in the interest payments, or an extension of the maturity date at an interest rate lower than the current market rate for a debt with similar risk characteristics. In addition, the Company and its subsidiaries may acquire collateral assets from the debtors in troubled debt restructurings to satisfy fully or partially the loan principal or past due interest.

In common with all portfolio segments, financing receivables modified as troubled debt restructurings are recognized as impaired and are individually evaluated for a valuation allowance. In most cases, these financing receivables have already been considered impaired and individually evaluated for allowance for credit losses prior to the restructurings. However, as a result of the restructuring, the Company and its subsidiaries may recognize additional provision for the restructured receivables.

The following table provides information about financing receivables modified as troubled debt restructurings within the previous 12 months from March 31, 2012 and for which there was a payment default during fiscal 2012:


	March 31, 2012
		Millions of yen
Portfolio segment	Class	Recorded Investment
Consumer borrowers		¥	392
	Housing loans		392
Corporate borrowers			2,331
Non-recourse loans	U.S.		409
Other	Other		1,922

Total		¥	2,723

The following table provides information about financing receivables modified as troubled debt restructurings within the previous 12 months from March 31, 2013 and for which there was a payment default during fiscal 2013:


	March 31, 2013
		Millions of yen
Portfolio segment	Class	Recorded Investment
Consumer borrowers		¥	383
	Housing loans		369
	Card loans		12
	Other		2
Corporate borrowers			92
Other	Other		92

Total		¥	475

The following table provides information about financing receivables modified as troubled debt restructurings within the previous 12 months from March 31, 2014 and for which there was a payment default during fiscal 2014:


	March 31, 2014
		Millions of yen
Portfolio segment	Class	Recorded Investment
Consumer borrowers		¥	57
	Housing loans		18
	Card loans		31
	Other		8
Corporate borrowers			565
Non-recourse loans	U.S.		497
Other	Real estate companies		42
	Other		26

Total		¥	622

The Company and its subsidiaries consider financing receivables whose terms have been modified in a restructuring as defaulted receivables when principal or interest is past-due 90 days or more in accordance with the modified terms.

In common with all portfolio segments, the Company and its subsidiaries suspend accruing revenues and may recognize additional provision as necessary for the defaulted financing receivables.