34. Segment Information

Financial information about the operating segments reported below is that which is available by segment and evaluated regularly by the management in deciding how to allocate resources and in assessing performance.

From July 1, 2013, in conjunction with the acquisition of Robeco, goodwill and other intangible assets have been allocated to the relevant segments. In addition, from November 1, 2013, ORIX’s Information and Communication Technology Department which was previously included in the Maintenance Leasing Segment, is disclosed as part of the Corporate Financial Services Segment due to reorganization of operation management.

Due to these changes, the reclassified figures are shown for the years ended March 31, 2012 and 2013.

An overview of operations for each of the six segments follows below.


Corporate Financial Services	:	Lending, leasing and fee business

Maintenance Leasing	:	Automobile leasing and rentals, car sharing, and precision measuring and IT-related equipment rentals and leasing

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

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

Retail	:	Life insurance, banking and card loan business

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

Financial information of the segments for the years ended March 31, 2012, 2013 and 2014 is as follows:


Year ended March 31, 2012	Millions of yen
Year ended March 31, 2012	Corporate Financial Services		Maintenance Leasing			Real Estate		Investment and Operation			Retail			Overseas Business		Total
Revenues	¥	76,393	¥	228,007		¥	222,631	¥	73,293		¥	160,071		¥	187,240	¥	947,635
Interest revenue		20,242		2			10,729		21,716			29,041			32,210		113,940
Interest expense		10,336		3,609			15,213		5,759			7,195			19,216		61,328
Depreciation and amortization		3,738		98,495			17,574		1,742			8,916			28,194		158,659
Other significant non-cash items:
Provision for doubtful receivables and probable loan losses		2,461		(173	)		2,988		7,427			1,128			3,811		17,642
Write-downs of long-lived assets		793		0			11,311		713			0			798		13,615
Increase in policy liabilities		0		0			0		0			6,421			0		6,421
Equity in net income (loss) of affiliates and gains (losses) on sales of subsidiaries and affiliates and liquidation losses, net		687		146			1,321		7,033			(9,996	)		6,299		5,490
Discontinued operations		475		0			1,608		(3,309	)		1,749			661		1,184
Segment profits		22,989		33,253			1,349		15,983			19,352			49,768		142,694
Segment assets		946,468		490,869			1,390,518		471,923			1,742,906			1,081,190		6,123,874
Long-lived assets		27,132		327,386			977,102		33,964			44,986			195,207		1,605,777
Expenditures for long-lived assets		909		126,779			22,945		507			14			63,506		214,660
Investment in affiliates		16,842		880			84,697		61,469			79,255			88,564		331,707


	Millions of yen
Year ended March 31, 2013	Corporate Financial Services		Maintenance Leasing			Real Estate			Investment and Operation			Retail		Overseas Business		Total
Revenues	¥	76,128	¥	234,651		¥	215,212		¥	121,933		¥	188,695	¥	202,516	¥	1,039,135
Interest revenue		17,946		15			9,062			22,573			45,854		35,830		131,280
Interest expense		10,181		3,624			12,083			4,469			6,674		18,249		55,280
Depreciation and amortization		2,610		106,254			18,369			2,110			10,631		31,695		171,669
Other significant non-cash items:
Provision for doubtful receivables and probable loan losses		331		(77	)		(449	)		5,532			2,611		2,438		10,386
Write-downs of long-lived assets		0		0			12,075			1,723			0		328		14,126
Increase in policy liabilities		0		0			0			0			20,990		0		20,990
Equity in net income (loss) of affiliates and gains (losses) on sales of subsidiaries and affiliates and liquidation losses, net		1,145		176			(631	)		7,251			4,680		9,521		22,142
Discontinued operations		0		0			3,662			(841	)		632		575		4,028
Segment profits		25,932		34,913			5,582			34,937			43,209		52,756		197,329
Segment assets		943,295		549,300			1,133,170			444,315			1,994,140		1,318,434		6,382,654
Long-lived assets		27,485		381,746			864,754			49,441			92,817		280,218		1,696,461
Expenditures for long-lived assets		1,943		160,420			22,276			1,200			206		109,426		295,471
Investment in affiliates		18,020		1,459			73,141			65,713			25,205		143,019		326,557


	Millions of yen
Year ended March 31, 2014	Corporate Financial Services			Maintenance Leasing		Real Estate		Investment and Operation		Retail		Overseas Business			Total
Revenues	¥	76,877		¥	251,366	¥	198,450	¥	178,532	¥	211,468	¥	416,226		¥	1,332,919
Interest revenue		15,250			12		3,789		17,258		50,381		34,760			121,450
Interest expense		8,594			3,687		8,812		3,939		5,592		28,042			58,666
Depreciation and amortization		3,170			117,357		19,200		2,760		12,644		41,551			196,682
Other significant non-cash items:
Provision for doubtful receivables and probable loan losses		(974	)		363		2,079		2,615		3,485		5,673			13,241
Write-downs of long-lived assets		0			1,292		16,958		15		0		1,046			19,311
Increase in policy liabilities		0			0		0		0		28,429		0			28,429
Equity in net income (loss) of affiliates and gains (losses) on sales of subsidiaries and affiliates and liquidation losses, net		792			152		4,709		68,216		3,920		6,793			84,582
Discontinued operations		0			0		8,832		383		238		(279	)		9,174
Segment profits		24,874			37,062		17,956		94,111		49,871		69,688			293,562
Segment assets		992,078			622,009		962,404		565,740		2,166,986		1,972,138			7,281,355
Long-lived assets		26,665			433,342		773,146		71,403		76,491		396,948			1,777,995
Expenditures for long-lived assets		3,505			176,952		32,056		22,428		195		117,419			352,555
Investment in affiliates		18,909			1,718		62,504		76,734		10,971		143,454			314,290

Segment figures reported in these tables include operations classified as discontinued operations in the accompanying consolidated statements of income.

The 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, net income attributable to the noncontrolling interests, net income attributable to the redeemable noncontrolling interests, income from discontinued operations and the consolidation of certain variable interest entities (VIEs). Income taxes are not included in segment profits or losses because the management evaluates segments’ performance on a pre-tax basis. Also, net income attributable to noncontrolling interests and redeemable noncontrolling interests are not included in segment profits or losses because the management evaluates segments’ performance based on profits or losses (per-tax) attributable to ORIX Corporation Shareholders. On the other hand, income from discontinued operations is included in segment profits or losses because the management considers such disposal activities as part of the ordinary course of business. Net income attributable to the noncontrolling interests, net income attributable to the redeemable noncontrolling interests and income from discontinued operations, which are recognized net of tax in the accompanying consolidated statements of income, are adjusted to profit or loss before income taxes, when calculating segment profits or losses. Most of selling, general and administrative expenses, including compensation costs that are directly related to the revenue generating activities of each segment, have been accumulated by and charged to each segment. Gains and losses that management does not consider for evaluating the performance of the segments, such as write-downs of certain securities, write-downs of certain long-lived assets and certain foreign exchange gains or losses are excluded from the segment profits or losses, and are regarded as corporate items.

Assets attributed to each segment are investment in direct financing leases, installment loans, investment in operating leases, investment in securities, other operating assets, investment in affiliates, inventories, advances for investment in operating leases (included in other assets), advances for investment in other operating assets (included in other assets) and goodwill and other intangible assets recognized as a result of business combination (included in other assets). This has resulted in the depreciation of office facilities 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 resulting from this allocation is not significant.

For those VIEs that are used for securitization and are consolidated in accordance with ASC 810 (“Consolidations”), for which the VIE’s assets can be used only to settle related obligations of those VIEs and the creditors (or beneficial interest holders) do not have recourse to other assets of the Company or its subsidiaries, segment assets are measured based on the amount of the Company and its subsidiaries’ net investments in the VIEs, which is different from the amount of total assets of the VIEs, and accordingly, segment revenues are also measured at a net amount representing the revenues earned on the net investments in the VIEs.

Certain gains or losses related to assets and liabilities of consolidated VIEs, which are not ultimately attributable to the Company and its subsidiaries, are excluded from segment profits.

The reconciliation of segment totals to consolidated financial statement amounts is as follows. Significant items to be reconciled are segment revenues, segment profits and segment assets. Other items do not have a significant difference between segment amounts and consolidated amounts.


	Millions of yen
	2012			2013			2014
Segment revenues:
Total revenues for segments	¥	947,635		¥	1,039,135		¥	1,332,919
Revenues related to corporate assets		5,564			4,118			4,935
Revenues related to assets of certain VIEs		41,833			33,210			30,404
Revenues from discontinued operations		(30,253	)		(20,699	)		(26,607	)

Total consolidated revenues	¥	964,779		¥	1,055,764		¥	1,341,651

Segment profits:
Total segment profits	¥	142,694		¥	197,329		¥	293,562
Corporate interest expenses, general and administrative expenses		(14,690	)		(23,133	)		(17,387	)
Corporate other gains (losses)		(3,689	)		(11,784	)		(4,467	)
Gains (losses) related to assets or liabilities of certain VIEs		2,583			2,832			17,003
Discontinued operations, pre-tax		(1,775	)		179			(12,182	)
Net income attributable to the noncontrolling interests and net income attributable to the redeemable noncontrolling interests, net of applicable tax effect		2,392			7,149			7,197

Total consolidated income before income taxes and discontinued operations	¥	127,515		¥	172,572		¥	283,726

Segment assets:
Total segment assets	¥	6,123,874		¥	6,382,654		¥	7,281,355
Cash and cash equivalents, restricted cash and time deposits		934,257			941,571			921,499
Allowance for doubtful receivables on direct financing leases and probable loan losses		(136,588	)		(104,264	)		(84,796	)
Other receivables		188,108			196,626			239,958
Other corporate assets		357,244			354,433			458,225
Assets of certain VIEs		865,935			668,690			253,151

Total consolidated assets	¥	8,332,830		¥	8,439,710		¥	9,069,392

The following information represents geographical revenues and income before income taxes, which are attributed to geographic areas, based on the country location of the Company and its subsidiaries.


	Millions of yen
	Year Ended March 31, 2012
	Japan		*America2**		*Other3**		Difference between Geographic Total and Consolidated Amounts			Consolidated Amounts
Total Revenues	¥	768,955	¥	130,717	¥	95,360	¥	(30,253	)	¥	964,779
Income before Income Taxes*1		74,966		26,894		27,430		(1,775	)		127,515

	Millions of yen
	Year Ended March 31, 2013
	Japan		*America2**		*Other3**		Difference between Geographic Total and Consolidated Amounts			Consolidated Amounts
Total Revenues	¥	843,625	¥	130,561	¥	102,277	¥	(20,699	)	¥	1,055,764
Income before Income Taxes*1		116,235		27,458		28,700		179			172,572


	Millions of yen
	Year Ended March 31, 2014
	Japan		*America2**		*Other34*		Difference between Geographic Total and Consolidated Amounts			Consolidated Amounts
Total Revenues	¥	923,242	¥	149,610	¥	295,406	¥	(26,607	)	¥	1,341,651
Income before Income Taxes*1		208,829		42,901		44,178		(12,182	)		283,726

*1	Results of discontinued operations before applicable tax effect are included in each amount attributed to each geographic area.

*2	Mainly United States

*3	Mainly Asia, Europe, Australasia and Middle East

Robeco, one of the Company’s subsidiaries domiciled in the Netherlands, conducts principally an asset management business. Due to the integrated nature of such business with its customer base spread across the world, “Other” locations include the total revenues and the income before income taxes of Robeco, respectively, for the fiscal year ended March 31, 2014. The revenues of Robeco aggregated on a legal entity basis were ¥58,997 million in America and ¥52,030 million in other for the fiscal year ended March 31, 2014.

ASC 280 (“Segment Reporting”) 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 the types of business conducted include the required information.

No single customer accounted for 10% or more of the Company’s total revenues for the fiscal years ended March 31, 2012, 2013 and 2014.