Table of Contents for Item 5 Page Overview 40 Results of Operations 41 Liquidity and Capital Resources 96 Cash Flows 102 Commitments for Capital Expenditures 103 Research and Development, Patents and Licenses, etc. 103 Trend Information 103 Critical Accounting Policies and Estimates 104 Fair Value of Investment and Rental Property 115 Recent Developments 116 Risk Management 120 OVERVIEW The following discussion provides management’s explanation of factors and events that have significantly affected our financial condition and results of operations. Also included is management’s assessment of factors and trends which are anticipated to have a material effect on our financial condition and results of operations in the future. However, please be advised that our financial condition and results of operations in the future may also be affected by factors other than those discussed here. This discussion should be read in conjunction with “Item 3. Key Information—Risk Factors” and “Item 18. Financial Statements” included in this annual report. Basic approach to financial and capital strategy Regarding funding activities, we strive to maintain a high ratio of long-term funds procured and staggered repayment periods, keeping in mind the diversification and balance of fund procurement methods and sources. We strive to ensure that liquidity on hand is at an appropriate level through stress testing and other means. With regard to shareholders’ equity, we measure risk in all assets using our own method, and strive to monitor the ratio of use of shareholders’ equity at an appropriate level while considering the balance between flexibility and financial soundness for new investments. ORIX is working to measure and evaluate its capital adequacy, financing conditions, and asset quality internally, and regularly confirm evaluations from credit rating agencies. The issuer ratings (or counterparty ratings) that the ORIX Group has obtained from rating agencies as of the filing date of this annual report are “BBB+” for S&P Global Ratings Japan, “A3” for Moody’s Investors Service, “A-” for Fitch Ratings Japan, “AA” for Rating and Investment Information, Inc. (R&I), and “AA” for Japan Credit Rating Agency, Ltd. (JCR). Major Use of funding The ORIX Group’s major uses of funding include purchases of leased assets, such as office equipment, automobiles, ICT equipment, measuring equipment, real estate, and aircraft, origination of loans, purchases of investment securities, purchases of business assets, and investment in companies. Results Overview In fiscal 2026, net income attributable to ORIX corporation shareholders increased 27% to ¥447.3 billion compared to fiscal 2025. For fiscal 2026, ROE was 10.4%. 40 Table of Contents Total segment profits in fiscal 2026 increased 35% to ¥732.6 billion to compared to fiscal 2025 due to a decrease in segment profit in Banking and Credit, Aircraft and Ships, and ORIX USA, offset by an increase in segment profit in Corporate Financial Services and Maintenance Leasing, Real Estate, PE Investment and Concession, Environment and Energy, Insurance, ORIX Europe, and Asia and Australia. The summary of the main factors behind the consolidated business results for fiscal 2026 is included in “Item 5. Operating and Financial Review and Prospects—The Fiscal Year vs Last Fiscal Year” in this annual report. RESULTS OF OPERATIONS GUIDE TO OUR CONSOLIDATED STATEMENT OF INCOME The following discussion and analysis provide information that management believes to be relevant to an understanding of our consolidated financial condition and results of operations. This discussion should be read in conjunction with our consolidated financial statements, including the notes thereto, included in this annual report. See “Item 18. Financial Statements.” Our consolidated results of operations are presented in the accompanying financial statements with sub-categorization of revenues and expenses designed to enable the reader to better understand the diversified operating activities contributing to our overall operating performance. As further described in “Item 4. Information on the Company,” after developing the Japanese leasing market in 1964, we extended the scope of our operations into various types of businesses which have become significant contributors to our consolidated operating results. Our initial leasing business has expanded into the provision of broader financial services, including direct lending to our lessees and other customers. Initial direct lending broadened into diversified finance such as real estate loans for consumers, loans secured by real estate, unsecured loans and non-recourse loans. Through our lending experience, we developed a loan servicing business and a loan securitization business. Through experience gained by our focus on real estate as collateral for loans, we also developed our real estate leasing, development and management operations. Furthermore, we also expanded our business by adding securities-related operations, to generate capital gains. Thereafter, we established and acquired a number of subsidiaries and affiliates in Japan and overseas to expand our operations into businesses such as banking, life insurance, real estate and asset management. Investment and Operation Headquarters selectively invests in companies and actively seeks to fulfill the needs of companies involved in or considering M&A activity, including, among other things, management buyouts, privatization or carve-outs of subsidiaries or business units and business succession. The diversified nature of our operations is reflected in our presentation of operating results through the categorization of our revenues and expenses to align with operating activities. We categorize our revenues into finance revenues, gains on investment securities and dividends, operating leases, life insurance premiums and related investment income, sales of goods and real estate and services income, and these revenues are summarized into a subtotal of “Total revenues” consisting of our “Operating Income” on our consolidated statements of income. The following provides supplemental explanation of certain account captions on our consolidated statements of income: Finance revenues include primarily finance leases, interest on loans and interest on investment securities because we believe that capital we deploy is fungible and, whether used to provide financing in the form of loans and leases or through investment in debt securities, the decision to deploy the capital is a banking-type operation that shares the common objective of managing earning assets to generate a positive spread over our cost of borrowings. In addition, revenues from guarantees, which are from commission income by guarantees against loans disbursed by other financial institutions, are also included in finance revenues. 41 Table of Contents Securities investment activities originated by the Company were extended to certain group companies, including our subsidiaries operating in the Americas. Sales of goods and real estate consists of revenues from sales of real estate and various types of goods. Services income consists of revenues derived from various operations that are considered a part of our recurring operating activities, such as asset management and servicing, automobile related services, facilities operation, environment and energy services, real estate management, brokerage and contract work, maintenance services of software, measurement equipment and other, and fee business. Similar to our revenues, we categorize our expenses based on our diversified operating activities. “Total expenses” includes mainly interest expense, costs of operating leases, life insurance costs, costs of goods and real estate sold, services expense and selling, general and administrative expenses. Services expense is directly associated with the sales and revenues separately reported within services income. Interest expense is based on monies borrowed mainly to fund revenue-generating assets, including to purchase equipment for leases, extend loans and invest in securities and real estate operations. We also consider the principal part of selling, general and administrative expenses to be directly related to the generation of revenues. Therefore, they have been included within “Total expenses” deducted to derive “Operating Income.” We similarly view the provision for credit losses to be directly related to our finance activities and accordingly have included it within “Total expenses.” As our principal operations consist of providing financial products and/or finance-related services to our customers, these expenses are directly related to the potential risks and changes in these products and services. See “Year Ended March 31, 2026 Compared to Year Ended March 31, 2025” and “Year Ended March 31, 2025 Compared to Year Ended March 31, 2024.” We have historically reflected write-downs of long-lived assets under “Operating Income” as related assets, primarily real estate assets, representing significant operating assets under management or development. Accordingly, the write-downs were considered to represent an appropriate component of “Operating Income” derived from the related real estate investment activities. Similarly, as we have identified investment in securities to represent an operating component of our financing activities, write-downs of securities are presented under “Operating Income.” We believe that our financial statement presentation, as explained above, with the expanded presentation of revenues and expenses, aids in the comprehension of our diversified operating activities in Japan and overseas and supports the fair presentation of our consolidated statements of income. YEAR ENDED MARCH 31, 2026 COMPARED TO YEAR ENDED MARCH 31, 2025 Performance Summary Financial Results Year ended March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except ratios, per Share data and percentages) Total revenues ¥ 2,874,821 ¥ 3,330,831 ¥ 456,010 16 Total expenses 2,542,995 2,874,583 331,588 13 Income before Income Taxes 480,463 691,431 210,968 44 Net Income Attributable to ORIX Corporation Shareholders 351,630 447,265 95,635 27 Earnings per Share (Basic) 307.74 400.27 92.53 30 (Diluted) 307.16 399.40 92.24 30 ROE*1 8.8 10.4 1.6 — ROA*2 2.12 2.57 0.45 — 42 Table of Contents *1 ROE is the ratio of Net Income Attributable to ORIX Corporation Shareholders for the period to average ORIX Corporation Shareholders’ Equity based on fiscal year beginning and ending balances. *2 ROA is the ratio of Net Income Attributable to ORIX Corporation Shareholders for the period to average Total Assets based on fiscal year beginning and ending balances. Total revenues for fiscal 2026 increased 16% to ¥3,330,831 million compared to fiscal 2025 primarily due to increases in gains on investment securities and dividends, including the recognition of valuation gains on fund investments at our U.S. subsidiary and a gain related to the transfer of shares of Greenko Energy Holdings, as well as increases in life insurance premiums and related investment income, and service income. Total expenses for fiscal 2026 increased 13% to ¥2,874,583 million compared to fiscal 2025 primarily due to increases in life insurance costs and selling, general and administrative expenses. Equity in net income of equity method investments for fiscal 2026 increased 117% to ¥123,872 million compared to fiscal 2025 and gains on sales of subsidiaries and equity method investments and liquidation losses, net for fiscal 2026 increased 27% to ¥111,311 million compared to fiscal 2025, primarily due to the recognition of a gain of ¥83,135 million from the transfer of shares of Greenko Energy Holdings. Due to the above results, income before income taxes for fiscal 2026 increased 44% to ¥691,431 million compared to fiscal 2025 and net income attributable to ORIX Corporation Shareholders increased 27% to ¥447,265 million compared to fiscal 2025. Balance Sheet data As of March 31, Change 2025 2026 Amount Percent (%) (Millions of yen except ratios, per share and percentages) Total Assets ¥ 16,866,251 ¥ 18,002,776 ¥ 1,136,525 7 (Segment assets) 16,456,627 17,435,466 978,839 6 Total Liabilities 12,691,036 13,378,965 687,929 5 (Short-term and Long-term debt) 6,282,798 6,537,994 255,196 4 (Deposits) 2,449,812 2,625,556 175,744 7 ORIX Corporation Shareholders’ Equity 4,089,782 4,482,500 392,718 10 ORIX Corporation Shareholders’ Equity per share 3,599.24 4,080.24 481.00 13 ORIX Corporation Shareholders’ Equity ratio* 24.2 % 24.9 % 0.7 % — D/E ratio (Debt-to-equity ratio) (Short-term and Long-term debt (excluding deposits) / ORIX Corporation Shareholders’ Equity) 1.5 x 1.5 x — x — * ORIX Corporation Shareholders’ Equity ratio is the ratio as of the period end of ORIX Corporation Shareholder’s Equity to total assets. Total assets increased 7% to ¥18,002,776 million compared to the balance as of March 31, 2025 primarily due to increases in investment in operating leases, cash and cash equivalents, installment loans and other assets (mainly reinsurance recoverables and goodwill). In addition, segment assets increased 6% to ¥17,435,466 million compared to the balance as of March 31, 2025. Total liabilities increased 5% to ¥13,378,965 million compared to the balance as of March 31, 2025 primarily due to increases in long-term debt and deposits. Shareholders’ equity increased 10% to ¥4,482,500 million compared to the balance as of March 31, 2025. 43 Table of Contents Details of Operating Results The following is a discussion of certain items in the consolidated statements of income, operating assets in the consolidated balance sheets and other selected financial information, including on a segment by segment basis. Segment Information Our operating segments used by the chief operating decision maker to make decisions about resource allocations and assess performance are organized into ten segments based on our business management organization which is classified by the nature of major products and services, customer base, regulations, and business areas. The ten segments are Corporate Financial Services and Maintenance Leasing, Real Estate, PE Investment and Concession, Environment and Energy, Insurance, Banking and Credit, Aircraft and Ships, ORIX USA, ORIX Europe, and Asia and Australia. Financial information about the operating segments reported below is that which is available by segment and regularly reviewed by the chief operating decision maker to make decisions about resource allocations and assess performance. The chief operating decision maker evaluates segment performance based on the amount equivalent to income before income taxes attributable to ORIX Corporation shareholders. Therefore, net income attributable to noncontrolling interests, net income attributable to redeemable noncontrolling interests, and income tax expenses are not included in segment profit or loss. Effective April 1, 2026, we changed our operating segments used by our chief operating decision maker for allocating resources and assessing performance. Accordingly, segment information based on the new operating segment structure will be disclosed beginning in the first quarter of the fiscal year ending March 31, 2027. Year ended March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Segment Revenues: Corporate Financial Services and Maintenance Leasing ¥ 460,699 ¥ 487,842 ¥ 27,143 6 Real Estate 497,780 530,901 33,121 7 PE Investment and Concession 377,931 441,953 64,022 17 Environment and Energy 186,021 209,231 23,210 12 Insurance 518,363 643,045 124,682 24 Banking and Credit 63,304 76,439 13,135 21 Aircraft and Ships 119,592 130,016 10,424 9 ORIX USA 154,228 272,219 117,991 77 ORIX Europe 257,267 291,086 33,819 13 Asia and Australia 236,220 243,414 7,194 3 Segment Total 2,871,405 3,326,146 454,741 16 Difference between Segment Total and Consolidated Amounts 3,416 4,685 1,269 37 Consolidated Amounts ¥ 2,874,821 ¥ 3,330,831 ¥ 456,010 16 44 Table of Contents Year ended March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Segment Profits: Corporate Financial Services and Maintenance Leasing ¥ 90,329 ¥ 100,740 ¥ 10,411 12 Real Estate 70,541 78,509 7,968 11 PE Investment and Concession 98,872 125,611 26,739 27 Environment and Energy (4,923 ) 115,772 120,695 — Insurance 74,399 102,891 28,492 38 Banking and Credit 29,291 27,212 (2,079 ) (7 ) Aircraft and Ships 67,420 66,608 (812 ) (1 ) ORIX USA 39,915 954 (38,961 ) (98 ) ORIX Europe 44,373 63,051 18,678 42 Asia and Australia 34,451 51,249 16,798 49 Segment Total 544,668 732,597 187,929 35 Difference between Segment Total and Consolidated Amounts (64,205 ) (41,166 ) 23,039 — Consolidated Amounts ¥ 480,463 ¥ 691,431 ¥ 210,968 44 As of March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Segment Assets: Corporate Financial Services and Maintenance Leasing ¥ 1,884,565 ¥ 1,876,895 ¥ (7,670 ) (0 ) Real Estate 1,158,293 1,235,906 77,613 7 PE Investment and Concession 1,022,944 1,050,561 27,617 3 Environment and Energy 1,016,175 1,018,777 2,602 0 Insurance 3,009,234 3,198,270 189,036 6 Banking and Credit 3,144,571 3,236,799 92,228 3 Aircraft and Ships 1,231,973 1,211,335 (20,638 ) (2 ) ORIX USA 1,593,939 1,940,471 346,532 22 ORIX Europe 669,306 801,175 131,869 20 Asia and Australia 1,725,627 1,865,277 139,650 8 Segment Total 16,456,627 17,435,466 978,839 6 Difference between Segment Total and Consolidated Amounts 409,624 567,310 157,686 38 Consolidated Amounts ¥ 16,866,251 ¥ 18,002,776 ¥ 1,136,525 7 45 Table of Contents Corporate Financial Services and Maintenance Leasing Segment profits increased 12% to ¥100,740 million compared to the previous fiscal year primarily due to increases in operating leases revenues and equity in net income of equity method investments. Segment assets totaled ¥1,876,895 million, remaining relatively unchanged compared to the end of the previous fiscal year primarily due to decreases in installment loans and loans to ORIX and its subsidiaries, partially offset by an increase in investment in operating leases. Year ended March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Finance revenues ¥ 63,271 ¥ 68,600 ¥ 5,329 8 Gains on investment securities and dividends 2,647 1,639 (1,008 ) (38 ) Operating leases 282,433 301,626 19,193 7 Sales of goods and real estate 4,202 4,689 487 12 Services income 108,146 111,288 3,142 3 Total Segment Revenues 460,699 487,842 27,143 6 Interest expense 7,306 12,025 4,719 65 Costs of operating leases 201,286 211,610 10,324 5 Costs of goods and real estate sold 3,335 3,778 443 13 Services expense 57,372 61,398 4,026 7 Other (income) and expense 18,305 18,505 200 1 Selling, general and administrative expenses 89,599 88,127 (1,472 ) (2 ) Provision for credit losses, and write-downs of long-lived assets and securities 2,199 3,348 1,149 52 Total Segment Expenses 379,402 398,791 19,389 5 Equity in Net income (Loss) of equity method investments and others 9,032 11,689 2,657 29 Segment Profits ¥ 90,329 ¥ 100,740 ¥ 10,411 12 As of March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Net investment in leases ¥ 569,380 ¥ 577,187 ¥ 7,807 1 Installment loans 424,370 393,442 (30,928 ) (7 ) Investment in operating leases 557,625 609,965 52,340 9 Investment in securities 29,690 31,876 2,186 7 Property under facility operations 43,857 42,088 (1,769 ) (4 ) Inventories 433 384 (49 ) (11 ) Advances for finance lease and operating lease 6,177 7,106 929 15 Equity method investments 16,375 8,481 (7,894 ) (48 ) Advances for property under facility operations 143 5 (138 ) (97 ) Goodwill, intangible assets acquired in business combinations 25,268 24,450 (818 ) (3 ) Other assets 211,247 181,911 (29,336 ) (14 ) Total Segment Assets ¥ 1,884,565 ¥ 1,876,895 ¥ (7,670 ) (0 ) 46 Table of Contents Real Estate Segment profits increased 11% to ¥78,509 million compared to the previous fiscal year primarily due to increases in services income and equity in net income of equity method investments, partially offset by a decrease in operating leases revenues. Segment assets increased 7% to ¥1,235,906 million compared to the end of the previous fiscal year primarily due to increases in investment in operating leases, inventories, and equity method investments, partially offset by decreases in property under facility operations. Year ended March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Finance revenues ¥ 4,860 ¥ 5,052 ¥ 192 4 Gains on investment securities and dividends 1,282 953 (329 ) (26 ) Operating leases 61,321 52,300 (9,021 ) (15 ) Sales of goods and real estate 107,859 126,074 18,215 17 Services income 322,458 346,522 24,064 7 Total Segment Revenues 497,780 530,901 33,121 7 Interest expense 2,616 5,721 3,105 119 Costs of operating leases 24,167 24,962 795 3 Costs of goods and real estate sold 89,593 108,329 18,736 21 Services expense 264,952 275,837 10,885 4 Other (income) and expense 1,664 (2,512 ) (4,176 ) — Selling, general and administrative expenses 43,405 46,996 3,591 8 Provision for credit losses, and write-downs of long-lived assets and securities 3,098 878 (2,220 ) (72 ) Total Segment Expenses 429,495 460,211 30,716 7 Equity in Net income (Loss) of equity method investments and others 2,256 7,819 5,563 247 Segment Profits ¥ 70,541 ¥ 78,509 ¥ 7,968 11 As of March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Net investment in leases ¥ 45,810 ¥ 38,903 ¥ (6,907 ) (15 ) Installment loans 30 14 (16 ) (53 ) Investment in operating leases 311,377 369,596 58,219 19 Investment in securities 6,209 9,363 3,154 51 Property under facility operations 175,153 153,861 (21,292 ) (12 ) Inventories 182,652 218,937 36,285 20 Advances for finance lease and operating lease 78,044 50,332 (27,712 ) (36 ) Equity method investments 177,956 214,196 36,240 20 Advances for property under facility operations 7,401 8,136 735 10 Goodwill, intangible assets acquired in business combinations 50,801 48,750 (2,051 ) (4 ) Other assets 122,860 123,818 958 1 Total Segment Assets ¥ 1,158,293 ¥ 1,235,906 ¥ 77,613 7 47 Table of Contents PE Investment and Concession Segment profits increased 27% to ¥125,611 million compared to the previous fiscal year primarily due to increases in equity in net income of equity method investments, sales of goods and real estate, and services income, partially offset by a decrease in gains on sales of subsidiaries and equity method investments. Segment assets increased 3% to ¥1,050,561 million compared to the end of the previous fiscal year primarily due to increases in equity method investments, goodwill, intangible assets acquired in business combinations, and property under facility operations, partially offset by a decrease in installment loans. Year ended March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Finance revenues ¥ 12,140 ¥ 15,243 ¥ 3,103 26 Gains on investment securities and dividends 851 1,861 1,010 119 Operating leases 42,698 36,441 (6,257 ) (15 ) Sales of goods and real estate 252,969 301,345 48,376 19 Services income 69,273 87,063 17,790 26 Total Segment Revenues 377,931 441,953 64,022 17 Interest expense 3,833 5,321 1,488 39 Costs of operating leases 26,389 23,331 (3,058 ) (12 ) Costs of goods and real estate sold 173,652 212,658 39,006 22 Services expense 48,890 59,934 11,044 23 Other (income) and expense 10,622 (3,460 ) (14,082 ) — Selling, general and administrative expenses 88,370 92,620 4,250 5 Provision for credit losses, and write-downs of long-lived assets and securities 1,743 8,044 6,301 362 Total Segment Expenses 353,499 398,448 44,949 13 Equity in Net income (Loss) of equity method investments and others 74,440 82,106 7,666 10 Segment Profits ¥ 98,872 ¥ 125,611 ¥ 26,739 27 As of March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Net investment in leases ¥ 1,640 ¥ 1,510 ¥ (130 ) (8 ) Installment loans 124,411 13,102 (111,309 ) (89 ) Investment in operating leases 46,796 45,398 (1,398 ) (3 ) Investment in securities 6,117 10,905 4,788 78 Property under facility operations 53,832 74,886 21,054 39 Inventories 41,021 44,370 3,349 8 Advances for finance lease and operating lease 3 1 (2 ) (67 ) Equity method investments 148,274 239,127 90,853 61 Advances for property under facility operations 728 3,996 3,268 449 Goodwill, intangible assets acquired in business combinations 331,003 352,682 21,679 7 Other assets 269,119 264,584 (4,535 ) (2 ) Total Segment Assets ¥ 1,022,944 ¥ 1,050,561 ¥ 27,617 3 48 Table of Contents Environment and Energy Segment profits increased by ¥120,695 million to ¥115,772 million compared to the previous fiscal year primarily due to increases in gains on sales of subsidiaries and equity method investments and gains on investment securities and dividends, and a decrease in write-downs of long-lived assets. Segment assets totaled ¥1,018,777 million, remaining relatively unchanged compared to the end of the previous fiscal year primarily due to increases in investment in securities and advances for property under facility operations, partially offset by a decrease in equity method investments. Year ended March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Finance revenues ¥ 1,402 ¥ 11,938 ¥ 10,536 751 Gains on investment securities and dividends 3,128 20,553 17,425 557 Operating leases 79 89 10 13 Sales of goods and real estate 3,307 3,311 4 0 Services income 178,105 173,340 (4,765 ) (3 ) Total Segment Revenues 186,021 209,231 23,210 12 Interest expense 13,170 15,499 2,329 18 Costs of operating leases 18 20 2 11 Costs of goods and real estate sold 1,786 2,050 264 15 Services expense 136,118 131,543 (4,575 ) (3 ) Other (income) and expense 446 (5,158 ) (5,604 ) — Selling, general and administrative expenses 22,582 26,037 3,455 15 Provision for credit losses, and write-downs of long-lived assets and securities 20,573 6,772 (13,801 ) (67 ) Total Segment Expenses 194,693 176,763 (17,930 ) (9 ) Equity in Net income (Loss) of equity method investments and others 3,749 83,304 79,555 — Segment Profits ¥ (4,923 ) ¥ 115,772 ¥ 120,695 — As of March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Net investment in leases ¥ 2,092 ¥ 1,638 ¥ (454 ) (22 ) Installment loans 3,609 6,004 2,395 66 Investment in operating leases 237 241 4 2 Investment in securities 32,032 142,410 110,378 345 Property under facility operations 487,241 496,063 8,822 2 Inventories 2,551 3,401 850 33 Equity method investments 170,946 10,291 (160,655 ) (94 ) Advances for property under facility operations 70,081 115,763 45,682 65 Goodwill, intangible assets acquired in business combinations 120,743 117,197 (3,546 ) (3 ) Other assets 126,643 125,769 (874 ) (1 ) Total Segment Assets ¥ 1,016,175 ¥ 1,018,777 ¥ 2,602 0 49 Table of Contents Insurance Segment profits increased 38% to ¥102,891 million compared to the previous fiscal year primarily due to an increase in life insurance premiums and related investment income. Segment assets increased 6% to ¥3,198,270 million compared to the end of the previous fiscal year primarily due to increases in reinsurance recoverables and investment in securities, partially offset by a decrease in cash and cash equivalents. Year ended March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Finance revenues ¥ 280 ¥ 141 ¥ (139 ) (50 ) Life insurance premiums and related investment income 518,084 642,904 124,820 24 Services income (1 ) 0 1 — Total Segment Revenues 518,363 643,045 124,682 24 Interest expense 256 545 289 113 Life insurance costs 384,910 480,603 95,693 25 Other (income) and expense (110 ) (3 ) 107 — Selling, general and administrative expenses 58,904 58,979 75 0 Provision for credit losses, and write-downs of long-lived assets and securities 4 30 26 650 Total Segment Expenses 443,964 540,154 96,190 22 Equity in Net income (Loss) of equity method investments and others (0 ) (0 ) (0 ) — Segment Profits ¥ 74,399 ¥ 102,891 ¥ 28,492 38 As of March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Installment loans ¥ 12,805 ¥ 15,191 ¥ 2,386 19 Investment in operating leases 26,167 25,457 (710 ) (3 ) Investment in securities 2,234,453 2,288,116 53,663 2 Equity method investments 35,865 46,002 10,137 28 Goodwill, intangible assets acquired in business combinations 4,452 4,452 0 — Other assets 695,492 819,052 123,560 18 Total Segment Assets ¥ 3,009,234 ¥ 3,198,270 ¥ 189,036 6 50 Table of Contents Banking and Credit Segment profits decreased 7% to ¥27,212 million compared to the previous fiscal year primarily due to a decrease in gains on investment securities and dividends. Segment assets increased 3% to ¥3,236,799 million compared to the end of the previous fiscal year primarily due to increases in installment loans and cash and cash equivalents, partially offset by a decrease in investment in securities. Year ended March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Finance revenues ¥ 60,290 ¥ 78,903 ¥ 18,613 31 Gains on investment securities and dividends 100 (5,348 ) (5,448 ) — Services income 2,914 2,884 (30 ) (1 ) Total Segment Revenues 63,304 76,439 13,135 21 Interest expense 7,184 19,809 12,625 176 Services expense 7,590 7,399 (191 ) (3 ) Other (income) and expense 40 (89 ) (129 ) — Selling, general and administrative expenses 20,822 23,854 3,032 15 Provision for credit losses, and write-downs of long-lived assets and securities (176 ) 188 364 — Total Segment Expenses 35,460 51,161 15,701 44 Equity in Net income (Loss) of equity method investments and others 1,447 1,934 487 34 Segment Profits ¥ 29,291 ¥ 27,212 ¥ (2,079 ) (7 ) As of March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Installment loans ¥ 2,511,736 ¥ 2,685,320 ¥ 173,584 7 Investment in securities 305,441 166,331 (139,110 ) (46 ) Equity method investments 43,934 44,544 610 1 Other assets 283,460 340,604 57,144 20 Total Segment Assets ¥ 3,144,571 ¥ 3,236,799 ¥ 92,228 3 51 Table of Contents Aircraft and Ships Segment profits decreased 1% to ¥66,608 million compared to the previous fiscal year primarily due to an increase in selling, general and administrative expenses, and a decrease in equity in net income of equity method investments, partially offset by an increase in services income. Segment assets decreased 2% to ¥1,211,335 million compared to the end of the previous fiscal year primarily due to decreases in investment in operating leases and installment loans, and cash and cash equivalents, partially offset by an increase in goodwill, intangible assets acquired in business combinations. Year ended March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Finance revenues ¥ 5,769 ¥ 3,853 ¥ (1,916 ) (33 ) Gains on investment securities and dividends (24 ) 272 296 — Operating leases 96,856 102,827 5,971 6 Sales of goods and real estate 852 1,093 241 28 Services income 16,139 21,971 5,832 36 Total Segment Revenues 119,592 130,016 10,424 9 Interest expense 20,159 19,386 (773 ) (4 ) Costs of operating leases 40,986 46,309 5,323 13 Costs of goods and real estate sold 864 1,120 256 30 Services expense 6,724 8,268 1,544 23 Other (income) and expense 68 (1,527 ) (1,595 ) — Selling, general and administrative expenses 11,967 15,328 3,361 28 Provision for credit losses, and write-downs of long-lived assets and securities 3 4 1 33 Total Segment Expenses 80,771 88,888 8,117 10 Equity in Net income (Loss) of equity method investments and others 28,599 25,480 (3,119 ) (11 ) Segment Profits ¥ 67,420 ¥ 66,608 ¥ (812 ) (1 ) As of March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Net investment in leases ¥ 0 ¥ 12,372 ¥ 12,372 — Installment loans 36,119 17,078 (19,041 ) (53 ) Investment in operating leases 599,813 590,639 (9,174 ) (2 ) Investment in securities 9,387 2,217 (7,170 ) (76 ) Property under facility operations 28 24 (4 ) (14 ) Inventories 1,588 826 (762 ) (48 ) Advances for finance lease and operating lease 27,816 28,431 615 2 Equity method investments 402,567 410,193 7,626 2 Goodwill, intangible assets acquired in business combinations 43,024 55,804 12,780 30 Other assets 111,631 93,751 (17,880 ) (16 ) Total Segment Assets ¥ 1,231,973 ¥ 1,211,335 ¥ (20,638) (2 ) 52 Table of Contents ORIX USA Segment profits decreased 98% to ¥954 million compared to the previous fiscal year primarily due to increases in impairment of goodwill and intangible assets and selling, general and administrative expenses, a decrease in gains on sales of subsidiaries and equity method investments, and an increase in provision for credit losses, partially offset by an increase in gains on investment securities and dividends. Segment assets increased 22% to ¥1,940,471 million compared to the end of the previous fiscal year due to an increase in goodwill, intangible assets acquired in business combinations as a result of a new acquisition of a subsidiary in the second quarter of fiscal 2026, and increases in installment loans and trade notes, accounts and other receivables. Year ended March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Finance revenues ¥ 102,627 ¥ 106,559 ¥ 3,932 4 Gains on investment securities and dividends 119 89,425 89,306 — Operating leases 861 2,670 1,809 210 Sales of goods and real estate 543 2,535 1,992 367 Services income 50,078 71,030 20,952 42 Total Segment Revenues 154,228 272,219 117,991 77 Interest expense 40,016 52,997 12,981 32 Costs of operating leases 1,496 2,851 1,355 91 Costs of goods and real estate sold 307 1,659 1,352 440 Services expense 2,823 1,947 (876 ) (31 ) Other (income) and expense (3,382 ) 51,322 54,704 — Selling, general and administrative expenses 95,406 123,875 28,469 30 Provision for credit losses, and write-downs of long-lived assets and securities 7,669 25,342 17,673 230 Total Segment Expenses 144,335 259,993 115,658 80 Equity in Net income (Loss) of equity method investments and others 30,022 (11,272 ) (41,294 ) — Segment Profits ¥ 39,915 ¥ 954 ¥ (38,961 ) (98 ) As of March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Net investment in leases ¥ 451 ¥ 433 ¥ (18 ) (4 ) Installment loans 652,805 757,103 104,298 16 Investment in operating leases 21,260 39,605 18,345 86 Investment in securities 487,022 503,966 16,944 3 Property under facility operations and servicing assets 76,469 82,749 6,280 8 Inventories 137 699 562 410 Equity method investments 54,817 65,577 10,760 20 Goodwill, intangible assets acquired in business combinations 171,884 297,167 125,283 73 Other assets 129,094 193,172 64,078 50 Total Segment Assets ¥ 1,593,939 ¥ 1,940,471 ¥ 346,532 22 53 Table of Contents ORIX Europe Segment profits increased 42% to ¥63,051 million compared to the previous fiscal year primarily due to increases in gains on sales of subsidiaries and equity method investments, and services income. Segment assets increased 20% to ¥801,175 million compared to the end of the previous fiscal year primarily due to a general increase as a result of foreign exchange effects. Year ended March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Finance revenues ¥ 4,077 ¥ 3,360 ¥ (717 ) (18 ) Gains on investment securities and dividends 4,408 13,869 9,461 215 Services income 248,782 273,857 25,075 10 Total Segment Revenues 257,267 291,086 33,819 13 Interest expense 665 687 22 3 Services expense 66,446 72,084 5,638 8 Other (income) and expense 4,231 4,586 355 8 Selling, general and administrative expenses 138,859 157,595 18,736 13 Provision for credit losses, and write-downs of long-lived assets and securities 115 148 33 29 Total Segment Expenses 210,316 235,100 24,784 12 Equity in Net income (Loss) of equity method investments and others (2,578 ) 7,065 9,643 — Segment Profits ¥ 44,373 ¥ 63,051 ¥ 18,678 42 As of March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Investment in securities ¥ 86,008 ¥ 114,919 ¥ 28,911 34 Equity method investments 8,578 6,005 (2,573 ) (30 ) Goodwill, intangible assets acquired in business combinations 354,801 393,782 38,981 11 Other assets 219,919 286,469 66,550 30 Total Segment Assets ¥ 669,306 ¥ 801,175 ¥ 131,869 20 54 Table of Contents Asia and Australia Segment profits increased 49% to ¥51,249 million compared to the previous fiscal year primarily due to increases in equity in net income of equity method investments, and gains on sales of subsidiaries and equity method investments. Segment assets increased 8% to ¥1,865,277 million compared to the end of the previous fiscal year primarily due to a general increase as a result of foreign exchange effects. Year ended March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Finance revenues ¥ 74,961 ¥ 73,492 ¥ (1,469 ) (2 ) Gains on investment securities and dividends 1,933 5,830 3,897 202 Operating leases 135,169 139,189 4,020 3 Sales of goods and real estate 751 482 (269 ) (36 ) Services income 23,406 24,421 1,015 4 Total Segment Revenues 236,220 243,414 7,194 3 Interest expense 41,761 38,177 (3,584 ) (9 ) Costs of operating leases 97,249 99,936 2,687 3 Costs of goods and real estate sold 684 407 (277 ) (40 ) Services expense 14,710 15,898 1,188 8 Other (income) and expense (5,654 ) (1,050 ) 4,604 — Selling, general and administrative expenses 44,342 46,707 2,365 5 Provision for credit losses, and write-downs of long-lived assets and securities 9,983 7,169 (2,814 ) (28 ) Total Segment Expenses 203,075 207,244 4,169 2 Equity in Net income (Loss) of equity method investments and others 1,306 15,079 13,773 — Segment Profits ¥ 34,451 ¥ 51,249 ¥ 16,798 49 As of March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Net investment in leases ¥ 547,966 ¥ 615,351 ¥ 67,385 12 Installment loans 315,128 286,330 (28,798 ) (9 ) Investment in operating leases 394,764 463,491 68,727 17 Investment in securities 37,768 38,289 521 1 Property under facility operations 1,844 2,028 184 10 Inventories 615 267 (348 ) (57 ) Advances for finance lease and operating lease 4,833 4,210 (623 ) (13 ) Equity method investments 260,395 261,415 1,020 0 Advances for property under facility operations 51 0 (51 ) — Goodwill, intangible assets acquired in business combinations 6,986 7,098 112 2 Other assets 155,277 186,798 31,521 20 Total Segment Assets ¥ 1,725,627 ¥ 1,865,277 ¥ 139,650 8 55 Table of Contents Revenues, New Business Volumes and Investments Finance revenues Year ended March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Finance revenues: Finance revenues ¥ 328,356 ¥ 365,570 ¥ 37,214 11 Finance revenues increased 11% to ¥365,570 million for fiscal 2026 compared to fiscal 2025 primarily due to an increase in loan balances and higher interest rates in Japan, as well as higher interest on securities. Net investment in leases As of and for the year ended March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Net investment in leases: New equipment acquisitions ¥ 522,223 ¥ 527,639 ¥ 5,416 1 Japan 210,189 214,873 4,684 2 Overseas 312,034 312,766 732 0 Net investment in leases 1,167,380 1,247,491 80,111 7 New equipment acquisitions related to net investment in leases increased 1% to ¥527,639 million compared to fiscal 2025. In Japan, new equipment acquisitions increased 2% in fiscal 2026 compared to fiscal 2025. In overseas, new equipment acquisitions increased ¥732 million in fiscal 2026 compared to fiscal 2025. Net investment in leases as of March 31, 2026 increased 7% to ¥1,247,491 million compared to March 31, 2025 primarily due to an increase in overseas assets resulting from foreign exchange effects. As of March 31, 2026, no single lessee represented more than 1% of the balance of net investment in leases. As of March 31, 2026, 50% of our net investment in leases were to lessees in Japan, while 50% were to overseas lessees. 9% of our net investment in leases were to lessees in Malaysia, 8% of our net investment in leases were to lessees in South Korea and China, and 6% of our net investment in leases were to lessees in Australia. No other overseas country represented 5% or more of our total portfolio of net investment in leases. As of March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Net investment in leases by category: Transportation equipment ¥ 550,810 ¥ 610,964 ¥ 60,154 11 Industrial equipment 213,939 226,039 12,100 6 Electronics 97,461 90,395 (7,066 ) (7 ) Information-related and office equipment 123,092 122,243 (849 ) (1 ) Commercial services equipment 68,995 80,311 11,316 16 Other 113,083 117,539 4,456 4 Total ¥ 1,167,380 ¥ 1,247,491 ¥ 80,111 7 For further information, see Note 6 of “Item 18. Financial Statements.” 56 Table of Contents Installment loans As of and for the year ended March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Installment loans: New loans added ¥ 1,510,598 ¥ 1,646,521 ¥ 135,923 9 Japan 1,165,864 1,152,803 (13,061 ) (1 ) Overseas 344,734 493,718 148,984 43 Installment loans 4,081,019 4,173,582 92,563 2 Note: The balance of installment loans related to our life insurance operations is included in installment loans in our consolidated balance sheets; however, income and losses on these loans are recorded in life insurance premiums and related investment income in our consolidated statements of income. New loans added increased 9% to ¥1,646,521 million compared to fiscal 2025. In Japan, new loans added decreased 1% to ¥1,152,803 million compared to fiscal 2025. In overseas, new loans added increased 43% to ¥493,718 million compared to fiscal 2025. The balance of installment loans as of March 31, 2026 increased 2% to ¥4,173,582 million compared to March 31, 2025, primarily due to new loans originated in Japan, which contributed to the increase in the balance. As of March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Installment loans: Consumer borrowers in Japan Real estate loans ¥ 1,901,794 ¥ 1,989,371 ¥ 87,577 5 Card loans 67,874 64,600 (3,274 ) (5 ) Other 7,259 5,631 (1,628 ) (22 ) Subtotal 1,976,927 2,059,602 82,675 4 Corporate borrowers in Japan Real estate companies 415,666 461,006 45,340 11 Non-recourse loans 301,477 343,121 41,644 14 Commercial, industrial and other companies 233,270 229,097 (4,173 ) (2 ) Subtotal 950,413 1,033,224 82,811 9 Consumer borrowers in overseas Real estate loans 55,022 38,122 (16,900 ) (31 ) Other 39,172 39,302 130 0 Subtotal 94,194 77,424 (16,770 ) (18 ) Corporate borrowers in overseas Real estate companies*1 228,793 216,272 (12,521 ) (5 ) Non-recourse loans 86,724 200,308 113,584 131 Commercial, industrial and other companies 591,103 549,995 (41,108 ) (7 ) Subtotal 906,620 966,575 59,955 7 Equity method investees 131,476 20,543 (110,933 ) (84 ) Purchased loans*2 21,389 16,214 (5,175 ) (24 ) Total ¥ 4,081,019 ¥ 4,173,582 ¥ 92,563 2 57 Table of Contents *1 Includes the outstanding balance of loans that were previously sold with a repurchase option and are recorded as assets for accounting purposes in accordance with ASC 860 (“Transfers and Servicing”.) *2 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. As of March 31, 2026, ¥15,191 million, or 0.4%, of our portfolio of installment loans to consumer and corporate borrowers in Japan related to our life insurance operations. We reflect income from these loans as life insurance premiums and related investment income in our consolidated statements of income. As of March 31, 2026, ¥677,278 million, or 16.2%, of the balance of installment loans were to real estate companies in Japan and overseas. The balance of installment loans to consumer borrowers in Japan as of March 31, 2026 increased 4% to ¥2,059,602 million compared to the balance as of March 31, 2025, primarily due to an increase in new loans added. The balance of installment loans to corporate borrowers in Japan as of March 31, 2026 increased 9% to ¥1,033,224 million compared to the balance as of March 31, 2025, primarily due to an increase in new loans added in the banking business. The balance of installment loans to consumer borrowers in overseas as of March 31, 2026 decreased 18% to ¥77,424 million compared to the balance as of March 31, 2025, primarily due to a decrease of such loans in Asia. The balance of installment loans to corporate borrowers overseas as of March 31, 2026 increased 7% to ¥966,575 million compared to the balance as of March 31, 2025, primarily due to an increase in the Americas. The balance of installment loans to equity method investees as of March 31, 2026 decreased 84% to ¥20,543 million compared to the balance as of March 31, 2025, primarily due to the termination of loans. For further information, see Note 7 of “Item 18. Financial Statements.” Asset quality Net investment in leases As of March 31, 2025 2026 (Millions of yen, except percentage data) Non-performing net investment in leases and allowance for credit losses on net investment in leases: Non-performing net investment in leases ¥ 21,820 ¥ 27,077 Non-performing net investment in leases as a percentage of the balance of net investment in leases 1.87 % 2.17 % Provision for credit losses as a percentage of the average balance of net investment in leases* 0.42 % 0.41 % Allowance for credit losses on net investment in leases ¥ 18,122 ¥ 19,907 Allowance for credit losses on net investment in leases as a percentage of the balance of net investment in leases 1.55 % 1.60 % The ratio of charge-offs as a percentage of the average balance of net investment in leases* 0.29 % 0.38 % * Average balances are calculated on the basis of fiscal year’s beginning balance and fiscal quarter-end balances. The balance of non-performing net investment in leases increased ¥5,257 million to ¥27,077 million as of March 31, 2026 compared to March 31, 2025. As a result, the non-performing net investment in leases as a percentage of net investment in leases as of March 31, 2026 increased 0.3% to 2.17% from March 31, 2025. 58 Table of Contents We believe that the ratio of allowance for credit losses to the balance of investment in net investment in leases provides a reasonable indication that our allowance for credit losses was appropriate as of March 31, 2026 for the following reasons: • lease receivables are generally diversified and the amount of realized loss on any particular contract is likely to be relatively small; and • all lease contracts are secured by collateral consisting of the underlying leased assets, and we can expect to recover at least a portion of the outstanding lease receivables by selling the collateral. Loans not individually assessed for credit losses As of March 31, 2025 2026 (Millions of yen, except percentage data) Non-performing loans not individually assessed for credit losses and allowance for credit losses on installment loans not individually assessed for credit losses: Non-performing loans not individually assessed for credit losses ¥ 30,214 ¥ 18,276 Non-performing loans not individually assessed for credit losses as a percentage of the balance of installment loans not individually assessed for credit losses 0.76 % 0.45 % Provision for credit losses as a percentage of the average balance of installment loans not individually assessed for credit losses* 0.03 % 0.07 % Allowance for credit losses on installment loans not individually assessed for credit losses ¥ 21,355 ¥ 21,585 Allowance for credit losses on installment loans not individually assessed for credit losses as a percentage of the balance of installment loans not individually assessed for credit losses 0.54 % 0.54 % The ratio of charge-offs as a percentage of the average balance of loans not individually assessed for credit losses* 0.07 % 0.07 % Note: The table above excludes the outstanding balance of loans that were previously sold with a repurchase option and are recorded as assets for accounting purposes in accordance with ASC 860 (“Transfers and Servicing”). * Average balances are calculated on the basis of fiscal year’s beginning balance and fiscal quarter-end balances. The provision for credit losses as a percentage of the average balance of installment loans not individually assessed for credit losses increased 0.04% compared to fiscal 2025, primarily due to the impact of the reversal of allowance recorded in the prior fiscal year and increased provision for credit losses in the Americas during the current fiscal year. 59 Table of Contents The balance of non-performing loans not individually assessed that are estimated for credit losses by using installment loans with similar risk characteristics as one pool decreased ¥11,938 million to ¥18,276 million as of March 31, 2026 compared to March 31, 2025. As of March 31, 2025 2026 (Millions of yen) Non-performing loans not individually assessed for credit losses: Consumer borrowers in Japan Real estate loans ¥ 987 ¥ 0 Subtotal 987 0 Corporate borrowers in Japan Real estate companies 8 19 Commercial, industrial and other companies 178 165 Subtotal 186 184 Consumer borrowers in overseas Real estate loans 308 257 Other 452 462 Subtotal 760 719 Corporate borrowers in overseas Real estate companies 648 94 Non-recourse loans 2,183 3,908 Commercial, industrial and other companies 25,450 13,371 Subtotal 28,281 17,373 Total ¥ 30,214 ¥ 18,276 Note: The table above excludes the outstanding balance of loans that were previously sold with a repurchase option and are recorded as assets for accounting purposes in accordance with ASC 860 (“Transfers and Servicing”). We recognize allowances for real estate loans and other loans to individual borrowers after careful evaluation of the value of collateral underlying the loans, past loss experience and any economic conditions that we believe may affect the default rate. We determine the allowance for our other items on the basis of past loss experience, the forecasted future economic indicators correlated with the prior charge-off experience and the current portfolio composition. Loans individually assessed for credit losses As of March 31, 2025 2026 (Millions of yen) Non-performing loans individually assessed for credit losses and allowance for credit losses on installment loans individually assessed for credit losses: Non-performing installment loans individually assessed for credit losses ¥ 62,433 ¥ 67,498 Allowance for credit losses on installment loans individually assessed for credit losses* 16,393 26,422 * The allowance is individually evaluated 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. 60 Table of Contents The provision for credit losses on installment loans individually assessed for credit losses was ¥6,962 million and ¥15,470 million, respectively, in fiscal 2025 and fiscal 2026. The charge-off of installment loans individually assessed for credit losses was ¥4,718 million and ¥6,518 million, respectively, in fiscal 2025 and fiscal 2026. The provision for credit losses on installment loans individually assessed for credit losses increased ¥8,508 million compared to fiscal 2025. The provision for credit losses on loans individually assessed increased mainly in the Americas. The charge-off of installment loans individually assessed for credit losses increased ¥1,800 million compared to fiscal 2025. The table below sets forth the outstanding balance of non-performing loans individually assessed for credit losses by region and type of borrower as of the dates indicated. Consumer loans in Japan primarily consist of restructured smaller-balance homogeneous loans individually assessed for credit losses. As of March 31, 2025 2026 (Millions of yen) Non-performing loans individually assessed for credit losses: Consumer borrowers in Japan Real estate loans ¥ 10,353 ¥ 10,348 Other 86 0 Subtotal 10,439 10,348 Corporate borrowers in Japan Real estate companies 549 535 Commercial, industrial and other companies 598 573 Subtotal 1,147 1,108 Consumer borrowers in overseas Real estate loans 5,368 11,207 Other 1,884 724 Subtotal 7,252 11,931 Corporate borrowers in overseas Real estate companies 2,769 2,087 Non-recourse loans 1,648 8,098 Commercial, industrial and other companies 36,569 33,699 Subtotal 40,986 43,884 Loans to Equity method investees 1,345 0 Purchased loans 1,264 227 Total ¥ 62,433 ¥ 67,498 For further information, see Note 8 of “Item 18. Financial Statements.” 61 Table of Contents Allowance for credit losses We recognize allowances for credit losses on net investment in leases and installment loans. As of March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Allowance for credit losses: Beginning balance ¥ 57,090 ¥ 55,870 ¥ (1,220 ) (2 ) Net investment in leases 16,780 18,122 1,342 8 Loans not individually assessed for credit losses 25,975 21,355 (4,620 ) (18 ) Loans individually assessed for credit losses 14,335 16,393 2,058 14 Provision (Reversal) *1 13,074 23,292 10,218 78 Net investment in leases 4,934 4,933 (1 ) (0 ) Loans not individually assessed for credit losses 1,178 2,889 1,711 145 Loans individually assessed for credit losses 6,962 15,470 8,508 122 Charge-offs (net) (10,823 ) (13,908 ) (3,085 ) 29 Net investment in leases (3,414 ) (4,573 ) (1,159 ) 34 Loans not individually assessed for credit losses (2,691 ) (2,817 ) (126 ) 5 Loans individually assessed for credit losses (4,718 ) (6,518 ) (1,800 ) 38 Other *2 (3,471 ) 9,458 12,929 — Net investment in leases (178 ) 1,425 1,603 — Loans not individually assessed for credit losses (3,107 ) 158 3,265 — Loans individually assessed for credit losses (186 ) 7,875 8,061 — Ending balance 55,870 74,712 18,842 34 Net investment in leases 18,122 19,907 1,785 10 Loans not individually assessed for credit losses 21,355 21,585 230 1 Loans individually assessed for credit losses 16,393 33,220 16,827 103 *1 “Provision for credit losses” in the consolidated statements of income amounted to ¥18,723 million and ¥34,017 million for fiscal 2025 and 2026, respectively, and the amounts include provision for credit losses on other than net investment in leases and installment loans. *2 “Other” mainly includes foreign currency translation adjustments and increases or decreases in allowance due to consolidation or deconsolidation of subsidiaries. As of March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Provision for credit losses: Net investment in leases ¥ 4,934 ¥ 4,933 ¥ (1 ) (0 ) Loans not individually assessed for credit losses 1,178 2,889 1,711 145 Loans individually assessed for credit losses 6,962 15,470 8,508 122 Subtotal 13,074 23,292 10,218 78 Off-balance sheet credit exposures 5,297 7,211 1,914 36 Available-for-sale debt securities 173 2,032 1,859 1,075 Other financial assets measured at amortized cost 179 1,482 1,303 728 Total ¥ 18,723 ¥ 34,017 ¥ 15,294 82 The provision on installment loans not individually assessed for credit losses were ¥1,178 million and ¥2,889 million in fiscal 2025 and 2026, respectively. The provision for credit losses on loans not individually assessed in fiscal 2026 increased compared to fiscal 2025 primarily due to an increase in asset balance and the impact of the reversal of allowance recorded in the prior fiscal year in the Americas. 62 Table of Contents The provision on installment loans individually assessed for credit losses were ¥6,962 million and ¥15,470 million in fiscal 2025 and 2026, respectively. The provision for credit losses on loans individually assessed increased mainly in the Americas. The provision for credit losses on off-balance sheet credit exposures were ¥5,297 million and ¥7,211 million in fiscal 2025 and fiscal 2026, respectively, mainly due to the deterioration in macroeconomic forecasts in certain markets and increases in exposure in the Americas. For further information, see Note 8 of “Item 18. Financial Statements.” In addition, for further information about allowance for off-balance sheet credit exposures and allowance for credit losses on available-for-sale debt securities, see Note 31 and 9 of “Item 18. Financial Statements.” Investment in Securities As of and for the year ended March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Investment in securities: New securities added ¥ 777,170 ¥ 745,123 ¥ (32,047) (4 ) Japan 621,839 629,270 7,431 1 Overseas 155,331 115,853 (39,478 ) (25 ) Investment in securities 3,234,547 3,308,829 74,282 2 Note: The balance of investment in securities related to our life insurance operations is included in investment in securities in our consolidated balance sheets; however, income and losses on investment in securities are recorded in life insurance premiums and related investment income in our consolidated statements of income. New securities added decreased 4% to ¥745,123 million in fiscal 2026 compared to fiscal 2025. New securities added in Japan increased 1% in fiscal 2026 compared to fiscal 2025 primarily due to an increase in investments in corporate debt securities. New securities added overseas decreased 25% in fiscal 2026 compared to fiscal 2025 primarily due to a decrease in CMBS and RMBS in the Americas and other asset-backed securities and debt securities. The balance of our investment in securities as of March 31, 2026 increased 2% to ¥3,308,829 million compared to March 31, 2025. As of March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Investment in securities by security type: Equity securities ¥ 626,910 ¥ 782,413 ¥ 155,503 25 Available-for-sale debt securities 2,607,637 2,526,416 (81,221 ) (3 ) Total ¥ 3,234,547 ¥ 3,308,829 ¥ 74,282 2 Investments in equity securities as of March 31, 2026 increased 25% to ¥782,413 million compared to March 31, 2025 primarily due to the transfer to equity securities from the sale of equity-method investments and increases in fund investments. Investments in available-for-sale debt securities as of March 31, 2026 decreased 3% to ¥2,526,416 million compared to March 31, 2025 primarily due to increases in unrealized losses on government bonds and sales of Japanese prefectural and foreign municipal bonds and corporate debt securities, partially offset by an increase in investments in corporate debt securities. For further information, see Note 9 of “Item 18. Financial Statements.” 63 Table of Contents Gains on investment securities and dividends Year ended March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Gains on investment securities and dividends: Net gains on investment securities ¥ 11,825 ¥ 127,024 ¥ 115,199 974 Dividends income 2,499 1,924 (575 ) (23 ) Total ¥ 14,324 ¥ 128,948 ¥ 114,624 800 Notes: 1. Income and losses on investment in securities related to our life insurance operations are recorded in life insurance premiums and related investment income in our consolidated statements of income. 2. Unrealized changes in fair value of investments in equity securities have been included in “Net gains on investment securities”. Net gains on investment securities increased 974% to ¥127,024 million in fiscal 2026 compared to fiscal 2025 primarily due to an increase in gains on net unrealized holding gains (losses) on fund investments at our U.S. subsidiary and unrealized gains on equity securities. Dividends income decreased 23% to ¥1,924 million in fiscal 2026 compared to fiscal 2025. Due to the above results, gains on investment securities and dividends increased 800% to ¥128,948 million in fiscal 2026 compared to fiscal 2025. As of March 31, 2026, gross unrealized gains on available-for-sale debt securities, including those held in connection with our life insurance operations, were ¥37,254 million, compared to ¥25,470 million as of March 31, 2025. As of March 31, 2026, gross unrealized losses on available-for-sale debt securities, including those held in connection with our life insurance operations, were ¥910,471 million, compared to ¥591,199 million as of March 31, 2025. Operating leases As of and for the year ended March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Operating leases: Operating lease revenues ¥ 624,444 ¥ 641,185 ¥ 16,741 3 Costs of operating leases 394,821 411,939 17,118 4 New equipment acquisitions 758,837 739,416 (19,421 ) (3 ) Japan 316,726 426,604 109,878 35 Overseas 442,111 312,812 (129,299 ) (29 ) Investment in operating leases 1,967,178 2,152,820 185,642 9 Revenues from operating leases in fiscal 2026 increased 3% to ¥641,185 million compared to fiscal 2025 primarily due to an increase in revenues from leases in the measuring and information-related equipment rental business. In fiscal 2025 and 2026, gains from the disposition of operating lease assets were ¥76,633 million and ¥70,115 million, respectively. Costs of operating leases increased 4% to ¥411,939 million in fiscal 2026 compared to fiscal 2025 primarily due to an increase in depreciation expenses resulting from an increase in investments in the measuring and information-related equipment rental business. 64 Table of Contents New equipment acquisitions related to operating leases decreased 3% to ¥739,416 million in fiscal 2026 compared to fiscal 2025 primarily due to a decrease in investments in the aircraft leasing business and investments in the ship leasing business, despite an increase in investments in the measuring and information-related equipment rental business and automobile leasing business. Investment in operating leases as of March 31, 2026 increased 9% to ¥2,152,820 million compared to March 31, 2025 primarily due to an increase in investments in the measuring and information-related equipment rental business and investments in the real estate leasing business. As of March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Investment in operating leases by category: Transportation equipment ¥ 1,292,630 ¥ 1,332,029 ¥ 39,399 3 Measuring and information-related equipment 194,798 246,583 51,785 27 Real estate 309,810 403,421 93,611 30 Other 51,667 58,740 7,073 14 Right-of-use assets 73,518 69,030 (4,488 ) (6 ) Accrued rental receivables 46,248 44,415 (1,833 ) (4 ) Allowance for doubtful receivables on operating leases (1,493 ) (1,398 ) 95 — Total ¥ 1,967,178 ¥ 2,152,820 ¥ 185,642 9 Investment in transportation equipment operating leases as of March 31, 2026 increased 3% to ¥1,332,029 million compared to March 31, 2025 primarily due to an increase in investments in the automobile leasing business. Investment in measuring and information-related equipment operating leases as of March 31, 2026 increased 27% to ¥246,583 million compared to March 31, 2025 primarily due to an increase in investments in the rental business. Investment in real estate operating leases as of March 31, 2026 increased 30% to ¥403,421 million compared to March 31, 2025 primarily due to an increase in investments in real estate under operating leases in Japan. Investment in other operating leases as of March 31, 2026 increased 14% to ¥58,740 million compared to March 31, 2025 primarily due to an increase in investments in the rental business. For further information, see Note 6 of “Item 18. Financial Statements.” Life insurance We reflect all income and losses (other than provision for credit losses) that we recognize on securities and investment in partnerships and other investments, installment loans, real estate under operating leases and other investments held in connection with our life insurance operations as life insurance premiums and related investment income in our consolidated statements of income. Year ended March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Life insurance premiums and related investment income and life insurance costs: Life insurance premiums ¥ 481,432 ¥ 506,120 ¥ 24,688 5 Life insurance-related investment income 33,827 134,039 100,212 296 Total ¥ 515,259 ¥ 640,159 ¥ 124,900 24 Life insurance costs ¥ 384,753 ¥ 479,937 ¥ 95,184 25 65 Table of Contents Year ended March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Breakdown of life insurance-related investment income (loss): Net income on investment securities and investment in partnerships and other investments ¥ 30,574 ¥ 115,906 ¥ 85,332 279 Gains and losses recognized in income on derivative (3,263 ) 6,898 10,161 — Interest on loans, income on real estate under operating leases, and others 6,516 11,235 4,719 72 Total ¥ 33,827 ¥ 134,039 ¥ 100,212 296 Life insurance premiums and related investment income increased 24% to ¥640,159 million in fiscal 2026 compared to fiscal 2025. Life insurance premiums increased 5% to ¥506,120 million in fiscal 2026 compared to fiscal 2025 primarily due to an increase in annualized net premiums from new policies and others. Life insurance-related investment income increased 296% to ¥134,039 million in fiscal 2026 compared to fiscal 2025. Net income on investment securities and investment in partnerships and other investments increased mainly due to higher investment income caused by the significant market improvement in fiscal 2026. Life insurance costs increased 25% to ¥479,937 million in fiscal 2026 compared to fiscal 2025 primarily due to an increase in a provision of liability reserve. As of March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Investments by life insurance operations: Equity securities and Investment in partnerships and other investments ¥ 314,049 ¥ 381,096 ¥ 67,047 21 Available-for-sale debt securities 1,956,269 1,953,022 (3,247 ) (0 ) Subtotal 2,270,318 2,334,118 63,800 3 Installment loans, real estate under operating leases and other investments 38,971 40,646 1,675 4 Total ¥ 2,309,289 ¥ 2,374,764 ¥ 65,475 3 Investment in securities as of March 31, 2026 increased to ¥2,334,118 million compared to March 31, 2025. For further information, see Note 23 and Note 24 of “Item 18. Financial Statements.” Sales of goods and real estate, Inventories Year ended March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Sales of goods and real estate, Inventories: Sales of goods and real estate ¥ 373,155 ¥ 442,586 ¥ 69,431 19 Costs of goods and real estate sold 271,833 331,988 60,155 22 New real estate added 89,632 134,810 45,178 50 Inventories 229,229 269,187 39,958 17 66 Table of Contents Sales of goods and real estate increased 19% to ¥442,586 million compared to fiscal 2025 primarily due to an increase in sales of goods. Costs of goods and real estate sold increased 22% to ¥331,988 million compared to fiscal 2025, primarily due to an increase in costs of goods sold. Costs of goods and real estate sold include the upfront costs associated with advertising and creating model rooms. New real estate added increased 50% to ¥134,810 million in fiscal 2026 compared to fiscal 2025. Inventories as of March 31, 2026 increased 17% to ¥269,187 million compared to March 31, 2025, primarily due to an increase in residential condominiums. For further information, see Note 4 of “Item 18. Financial Statements.” Services, Property under Facility Operations As of and for the year ended March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Services, Property under Facility Operations Services income ¥ 1,019,283 ¥ 1,112,383 ¥ 93,100 9 Services expense 604,145 634,329 30,184 5 New assets added 44,236 33,273 (10,963 ) (25 ) Japan 38,202 12,161 (26,041 ) (68 ) Overseas 6,034 21,112 15,078 250 Property under Facility Operations 771,851 779,075 7,224 1 Services income increased 9% to ¥1,112,383 million in fiscal 2026 compared to fiscal 2025 primarily due to an increase in income related to the asset management and facilities operation business. Services expense increased 5% to ¥634,329 million in fiscal 2026 compared to fiscal 2025 primarily due to an increase in expenses related to the facilities operation business. New assets added for property under facility operations decreased 25% to ¥33,273 million in fiscal 2026 compared to fiscal 2025 primarily due to a decrease in investments in domestic facilities operation business. Property under facility operations as of March 31, 2026 increased 1% to ¥779,075 million compared to March 31, 2025 primarily due to investments in electric power facilities overseas. For further information, see Note 4 of “Item 18. Financial Statements.” Expenses Interest expense Interest expense increased 15% to ¥193,889 million in fiscal 2026 compared to ¥169,051 million in fiscal 2025. Our total outstanding short-term debt, long-term debt and deposits as of March 31, 2026 increased 5% to ¥9,163,550 million compared to ¥8,732,610 million as of March 31, 2025. The average interest rate on our short-term debt, long-term debt and deposits in domestic currency, calculated on the basis of average monthly balances, increased 0.4% to 0.9% in fiscal 2026 compared to 0.5% in 67 Table of Contents fiscal 2025. The average interest rate on our short-term debt, long-term debt and deposits in foreign currency, calculated on the basis of average monthly balances, decreased 0.4% to 4.7% in fiscal 2026 compared to 5.1% in fiscal 2025. For more information regarding our interest rate risk, see “Item 3. Key Information—Risk Factors.” For more information regarding our outstanding debt, see “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources—Short-term and long-term debt and deposits.” Other (income) and expense Other (income) and expense was a net expense of ¥58,803 million during fiscal 2026 compared to a net expense of ¥27,128 million during fiscal 2025. In other (income) and expense, we recognized foreign currency transaction gains of ¥5,289 million during fiscal 2026 compared to foreign currency transaction losses of ¥3,518 million during fiscal 2025, and we recognized impairment losses on goodwill and other intangible assets of ¥57,722 million during fiscal 2026 compared to impairment losses on goodwill and other intangible assets of ¥14,295 million during fiscal 2025. For further information on our goodwill and other intangible assets, see Note 13 of “Item 18. Financial Statements.” Selling, general and administrative expenses Selling, general and administrative expenses increased 10% to ¥711,775 million in fiscal 2026 compared to ¥646,054 million in fiscal 2025. Employee salaries and other personnel expenses accounted for 59% of selling, general and administrative expenses in fiscal 2026, and the remaining portion consists of selling expenses and other administrative expenses, such as IT-related expenses and advertising expenses. Write-downs of long-lived assets As a result of impairment reviews we performed in fiscal 2026 for long-lived assets in Japan and overseas, such as office buildings, commercial facilities other than office buildings, condominiums, hotels, and land undeveloped or under construction, write-downs of long-lived assets decreased by ¥9,691 million to ¥16,242 million in fiscal 2026 compared to ¥25,933 million in fiscal 2025. These write-downs, which are reflected as write-downs of long-lived assets, consisted of impairment losses of ¥696 million on 2 commercial facilities other than office buildings, ¥43 million on 8 condominiums and ¥15,503 million on other long-lived assets, because the assets were classified as held for sale or the carrying amount exceeded the estimated undiscounted future cash flows. For further information, see Note 25 of “Item 18. Financial Statements.” Write-downs of securities Write-downs of securities in fiscal 2026 were mainly in connection with non-marketable equity securities and foreign available-for-sale debt securities. Write-downs of securities increased to ¥1,664 million in fiscal 2026 compared to ¥554 million in fiscal 2025. For further information, see Note 9 of “Item 18. Financial Statements.” Equity in net income (loss) of equity method investments Equity in net income (loss) of equity method investments increased in fiscal 2026 to ¥123,872 million compared to ¥57,182 million in fiscal 2025 primarily due to increases in equity in net income (loss) of equity method investments from domestic partnerships, real estate-related investees. For further information, see Note 12 of “Item 18. Financial Statements.” 68 Table of Contents Gains on sales of subsidiaries and equity method investments and liquidation losses, net Gains on sales of subsidiaries and equity method investments and liquidation losses, net increased to ¥111,311 million in fiscal 2026 compared to ¥87,705 million in fiscal 2025, mainly due to the recognition of a gain of ¥83,135 million on the sale of shares of Greenko Energy Holdings, an equity-method affiliate. For further information, see Note 3 of “Item 18. Financial Statements.” Bargain Purchase Gain In fiscal 2026, we recognized no bargain purchase gain compared to bargain purchase gains of ¥3,750 million associated with one of the acquisitions executed in fiscal 2025. For further information, see Note 3 of “Item 18. Financial Statements.” Provision for income taxes Provision for income taxes increased to ¥233,103 million in fiscal 2026 compared to ¥128,828 million in fiscal 2025 primarily due to an increase in income before income taxes. For further information, see Note 16 of “Item 18. Financial Statements.” Net income (loss) attributable to the noncontrolling interests Net income (loss) attributable to the noncontrolling interests was recorded as a result of the noncontrolling interests in earnings of certain of our subsidiaries. Net loss attributable to the noncontrolling interests in fiscal 2025 was ¥389 million. Net income attributable to the noncontrolling interests in fiscal 2026 was ¥11,821 million. Net income (loss) attributable to the redeemable noncontrolling interests Net income (loss) attributable to the redeemable noncontrolling interests was recorded as a result of the noncontrolling interests in the earnings of our subsidiaries that issued redeemable interests. Net income attributable to the redeemable noncontrolling interests in fiscal 2025 was ¥394 million. Net loss attributable to the redeemable noncontrolling interests in fiscal 2026 was ¥758 million. For further information, see Note 18 of “Item 18. Financial Statements.” YEAR ENDED MARCH 31, 2025 COMPARED TO YEAR ENDED MARCH 31, 2024 Performance Summary Financial Results Year ended March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except ratios, per Share data and percentages) Total revenues ¥ 2,814,361 ¥ 2,874,821 ¥ 60,460 2 Total expenses 2,453,648 2,542,995 89,347 4 Income before Income Taxes 469,975 480,463 10,488 2 Net Income Attributable to ORIX Corporation Shareholders 346,132 351,630 5,498 2 Earnings per Share (Basic) 298.55 307.74 9.19 3 (Diluted) 298.05 307.16 9.11 3 ROE*1 9.2 8.8 (0.4 ) — ROA*2 2.19 2.12 (0.07 ) — *1 ROE is the ratio of Net Income Attributable to ORIX Corporation Shareholders for the period to average ORIX Corporation Shareholders’ Equity based on fiscal year beginning and ending balances. *2 ROA is the ratio of Net Income Attributable to ORIX Corporation Shareholders for the period to average Total Assets based on fiscal year beginning and ending balances. 69 Table of Contents Total revenues for fiscal 2025 increased 2% to ¥2,874,821 million compared to fiscal 2024 primarily due to increases in operating leases revenues and services income, partially offset by decreases in finance revenues, gains on investment securities and dividends and life insurance premiums and related investment income. Total expenses for fiscal 2025 increased 4% to ¥2,542,995 million compared to fiscal 2024 primarily due to increases in costs of operating leases, services expense, other expense and write-downs of long-lived assets, partially offset by decreases in interest expense and life insurance costs. Equity in net income of equity method investments for fiscal 2025 increased 55% to ¥57,182 million compared to fiscal 2024 and gains on sales of subsidiaries and equity method investments and liquidation losses, net for fiscal 2025 increased 21% to ¥87,705 million compared to fiscal 2024. Due to the above results, income before income taxes for fiscal 2025 increased 2% to ¥480,463 million compared to fiscal 2024 and net income attributable to ORIX Corporation shareholders increased 2% to ¥351,630 million compared to fiscal 2024. Balance Sheet data As of March 31, Change 2024 2025 Amount Percent (%) (Millions of yen except ratios, per share and percentages) Total Assets ¥ 16,322,100 ¥ 16,866,251 ¥ 544,151 3 (Segment assets *1) 16,022,129 16,456,627 434,498 3 Total Liabilities 12,297,490 12,691,036 393,546 3 (Short-term and Long-term debt) 6,200,471 6,282,798 82,327 1 (Deposits) 2,245,835 2,449,812 203,977 9 ORIX Corporation Shareholders’ Equity 3,941,466 4,089,782 148,316 4 ORIX Corporation Shareholders’ Equity per share 3,422.94 3,599.24 176.30 5 ORIX Corporation Shareholders’ Equity ratio *2 24.1 % 24.2 % 0.1 % — D/E ratio (Debt-to-equity ratio) (Short-term and Long-term debt (excluding deposits) / ORIX Corporation Shareholders’ Equity) 1.6 x 1.5 x (0.1 )x — *1 Since April 1, 2024, the scope of segment assets was changed to include cash and cash equivalents, trade notes, accounts and other receivable, and others. As a result, segment data as of the end of fiscal 2024 have been retrospectively reclassified. *2 ORIX Corporation Shareholders’ Equity ratio is the ratio as of the period end of ORIX Corporation Shareholder’s Equity to total assets. Total assets increased 3% to ¥16,866,251 million compared to the balance as of March 31, 2024 primarily due to increases in cash and cash equivalents, installment loans and other assets (mainly reinsurance recoverables), partially offset by decreases in restricted cash and office facilities. In addition, segment assets increased 3% to ¥16,456,627 million compared to the balance as of March 31, 2024. Total liabilities increased 3% to ¥12,691,036 million compared to the balance as of March 31, 2024 primarily due to increases in deposits and long-term debt. Shareholders’ equity increased 4% to ¥4,089,782 million compared to the balance as of March 31, 2024. Details of Operating Results The following is a discussion of certain items in the consolidated statements of income, operating assets in the consolidated balance sheets and other selected financial information, including on a segment by segment basis. 70 Table of Contents Segment Information Our operating segments used by the chief operating decision maker to make decisions about resource allocations and assess performance are organized into ten segments based on our business management organization which is classified by the nature of major products and services, customer base, regulations, and business areas. The ten segments are Corporate Financial Services and Maintenance Leasing, Real Estate, PE Investment and Concession, Environment and Energy, Insurance, Banking and Credit, Aircraft and Ships, ORIX USA, ORIX Europe, and Asia and Australia. Financial information about the operating segments reported below is that which is available by segment and regularly reviewed by the chief operating decision maker to make decisions about resource allocations and assess performance. The chief operating decision maker evaluates segment performance based on the amount equivalent to income before income taxes attributable to ORIX Corporation shareholders. Therefore, net income attributable to noncontrolling interests, net income attributable to redeemable noncontrolling interests, and income tax expenses are not included in segment profit or loss. Since April 1, 2024, the interest expense allocation method for each segment was changed to include a part of interest expense in corporate profits (losses) in the reconciliation of segment profits to the condensed consolidated financial statement amounts. As a result, segment data for fiscal 2024 has been retrospectively reclassified. Since April 1, 2024, the scope of segment assets was changed to include cash and cash equivalents, trade notes, accounts and other receivable, and others. As a result, segment data as of the end of fiscal 2024 has been retrospectively reclassified. For a description of the business activities of our segments, see “Item 4. Information on the Company—Business Segments.” See Note 32 of “Item 18. Financial Statements” for additional segment information, a discussion of how we prepare our segment information and the reconciliation of segment totals to consolidated financial statement amounts. Year ended March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Segment Revenues: Corporate Financial Services and Maintenance Leasing ¥ 444,959 ¥ 460,699 ¥ 15,740 4 Real Estate 471,692 497,780 26,088 6 PE Investment and Concession 379,168 377,931 (1,237 ) (0 ) Environment and Energy 165,598 186,021 20,423 12 Insurance 563,869 518,363 (45,506 ) (8 ) Banking and Credit 88,574 63,304 (25,270 ) (29 ) Aircraft and Ships 65,191 119,592 54,401 83 ORIX USA 173,426 154,228 (19,198 ) (11 ) ORIX Europe 227,151 257,267 30,116 13 Asia and Australia 225,293 236,220 10,927 5 Segment Total 2,804,921 2,871,405 66,484 2 Difference between Segment Total and Consolidated Amounts 9,440 3,416 (6,024 ) (64 ) Consolidated Amounts ¥ 2,814,361 ¥ 2,874,821 ¥ 60,460 2 71 Table of Contents Year ended March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Segment Profits: Corporate Financial Services and Maintenance Leasing ¥ 83,244 ¥ 90,329 ¥ 7,085 9 Real Estate 67,055 70,541 3,486 5 PE Investment and Concession 43,967 98,872 54,905 125 Environment and Energy 38,072 (4,923 ) (42,995 ) — Insurance 70,826 74,399 3,573 5 Banking and Credit 97,353 29,291 (68,062 ) (70 ) Aircraft and Ships 44,366 67,420 23,054 52 ORIX USA 27,931 39,915 11,984 43 ORIX Europe 41,638 44,373 2,735 7 Asia and Australia 47,069 34,451 (12,618 ) (27 ) Segment Total 561,521 544,668 (16,853 ) (3 ) Difference between Segment Total and Consolidated Amounts (91,546 ) (64,205 ) 27,341 — Consolidated Amounts ¥ 469,975 ¥ 480,463 ¥ 10,488 2 As of March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Segment Assets: Corporate Financial Services and Maintenance Leasing ¥ 1,777,320 ¥ 1,884,565 ¥ 107,245 6 Real Estate 1,110,087 1,158,293 48,206 4 PE Investment and Concession 1,066,647 1,022,944 (43,703 ) (4 ) Environment and Energy 976,434 1,016,175 39,741 4 Insurance 2,921,927 3,009,234 87,307 3 Banking and Credit 2,934,217 3,144,571 210,354 7 Aircraft and Ships 1,169,641 1,231,973 62,332 5 ORIX USA 1,694,484 1,593,939 (100,545 ) (6 ) ORIX Europe 662,139 669,306 7,167 1 Asia and Australia 1,709,233 1,725,627 16,394 1 Segment Total 16,022,129 16,456,627 434,498 3 Difference between Segment Total and Consolidated Amounts 299,971 409,624 109,653 37 Consolidated Amounts ¥ 16,322,100 ¥ 16,866,251 ¥ 544,151 3 72 Table of Contents Corporate Financial Services and Maintenance Leasing Segment profits increased 9% to ¥90,329 million compared to fiscal 2024 primarily due to increases in gains on sales of subsidiaries and equity method investments and operating leases revenues. Segment assets increased 6% to ¥1,884,565 million compared to the end of fiscal 2024 primarily due to increases in installment loans and investment in operating leases. Year ended March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Finance revenues ¥ 61,428 ¥ 63,271 ¥ 1,843 3 Gains on investment securities and dividends 2,626 2,647 21 1 Operating leases 266,871 282,433 15,562 6 Sales of goods and real estate 3,934 4,202 268 7 Services income 110,100 108,146 (1,954 ) (2 ) Total Segment Revenues 444,959 460,699 15,740 4 Interest expense 5,418 7,306 1,888 35 Costs of operating leases 192,850 201,286 8,436 4 Costs of goods and real estate sold 3,234 3,335 101 3 Services expense 58,896 57,372 (1,524 ) (3 ) Other (income) and expense 14,896 18,305 3,409 23 Selling, general and administrative expenses 88,621 89,599 978 1 Provision for credit losses, and write-downs of long-lived assets and securities 960 2,199 1,239 129 Total Segment Expenses 364,875 379,402 14,527 4 Equity in Net income (Loss) of equity method investments and others 3,160 9,032 5,872 186 Segment Profits ¥ 83,244 ¥ 90,329 ¥ 7,085 9 As of March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Net investment in leases ¥ 567,735 ¥ 569,380 ¥ 1,645 0 Installment loans 346,840 424,370 77,530 22 Investment in operating leases 535,655 557,625 21,970 4 Investment in securities 36,683 29,690 (6,993 ) (19 ) Property under facility operations 17,404 43,857 26,453 152 Inventories 928 433 (495 ) (53 ) Advances for finance lease and operating lease 3,400 6,177 2,777 82 Equity method investments 14,984 16,375 1,391 9 Advances for property under facility operations 0 143 143 — Goodwill, intangible assets acquired in business combinations 28,693 25,268 (3,425 ) (12 ) Other assets 224,998 211,247 (13,751 ) (6 ) Total Segment Assets ¥ 1,777,320 ¥ 1,884,565 ¥ 107,245 6 73 Table of Contents Real Estate Segment profits increased 5% to ¥70,541 million compared to fiscal 2024 primarily due to an increase in operating leases revenues, partially offset by a decrease in equity in net income (loss) of equity method investments. Segment assets increased 4% to ¥1,158,293 million compared to the end of fiscal 2024 due to increases in equity method investments and trade notes, accounts and other receivable. Year ended March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Finance revenues ¥ 6,134 ¥ 4,860 ¥ (1,274 ) (21 ) Gains on investment securities and dividends 857 1,282 425 50 Operating leases 50,205 61,321 11,116 22 Sales of goods and real estate 111,013 107,859 (3,154 ) (3 ) Services income 303,483 322,458 18,975 6 Total Segment Revenues 471,692 497,780 26,088 6 Interest expense 3,016 2,616 (400 ) (13 ) Costs of operating leases 24,972 24,167 (805 ) (3 ) Costs of goods and real estate sold 90,931 89,593 (1,338 ) (1 ) Services expense 248,195 264,952 16,757 7 Other (income) and expense 722 1,664 942 130 Selling, general and administrative expenses 41,542 43,405 1,863 4 Provision for credit losses, and write-downs of long-lived assets and securities 1,285 3,098 1,813 141 Total Segment Expenses 410,663 429,495 18,832 5 Equity in Net income (Loss) of equity method investments and others 6,026 2,256 (3,770 ) (63 ) Segment Profits ¥ 67,055 ¥ 70,541 ¥ 3,486 5 As of March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Net investment in leases ¥ 51,978 ¥ 45,810 ¥ (6,168 ) (12 ) Installment loans 52 30 (22 ) (42 ) Investment in operating leases 278,191 311,377 33,186 12 Investment in securities 4,036 6,209 2,173 54 Property under facility operations 165,387 175,153 9,766 6 Inventories 174,990 182,652 7,662 4 Advances for finance lease and operating lease 114,649 78,044 (36,605 ) (32 ) Equity method investments 143,751 177,956 34,205 24 Advances for property under facility operations 8,183 7,401 (782 ) (10 ) Goodwill, intangible assets acquired in business combinations 52,898 50,801 (2,097 ) (4 ) Other assets 115,972 122,860 6,888 6 Total Segment Assets ¥ 1,110,087 ¥ 1,158,293 ¥ 48,206 4 74 Table of Contents PE Investment and Concession Segment profits increased 125% to ¥98,872 million compared to fiscal 2024 primarily due to increases in equity in net income (loss) of equity method investments and gains on sales of subsidiaries and equity method investments resulting from the sale of investees. Segment assets decreased 4% to ¥1,022,944 million compared to the end of fiscal 2024 primarily due to decreases in investment in securities and goodwill, intangible assets acquired in business combinations, partially offset by an increase in equity method investments. Year ended March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Finance revenues ¥ 6,679 ¥ 12,140 ¥ 5,461 82 Gains on investment securities and dividends 1,207 851 (356 ) (29 ) Operating leases 41,529 42,698 1,169 3 Sales of goods and real estate 249,085 252,969 3,884 2 Services income 80,668 69,273 (11,395 ) (14 ) Total Segment Revenues 379,168 377,931 (1,237 ) (0 ) Interest expense 2,978 3,833 855 29 Costs of operating leases 26,244 26,389 145 1 Costs of goods and real estate sold 168,404 173,652 5,248 3 Services expense 58,677 48,890 (9,787 ) (17 ) Other (income) and expense (2,330 ) 10,622 12,952 — Selling, general and administrative expenses 89,864 88,370 (1,494 ) (2 ) Provision for credit losses, and write-downs of long-lived assets and securities 366 1,743 1,377 376 Total Segment Expenses 344,203 353,499 9,296 3 Equity in Net income (Loss) of equity method investments and others 9,002 74,440 65,438 727 Segment Profits ¥ 43,967 ¥ 98,872 ¥ 54,905 125 As of March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Net investment in leases ¥ 1,238 ¥ 1,640 ¥ 402 32 Installment loans 115,629 124,411 8,782 8 Investment in operating leases 56,286 46,796 (9,490 ) (17 ) Investment in securities 36,729 6,117 (30,612 ) (83 ) Property under facility operations 41,416 53,832 12,416 30 Inventories 47,553 41,021 (6,532 ) (14 ) Advances for finance lease and operating lease 5 3 (2 ) (40 ) Equity method investments 118,310 148,274 29,964 25 Advances for property under facility operations 4,466 728 (3,738 ) (84 ) Goodwill, intangible assets acquired in business combinations 351,202 331,003 (20,199 ) (6 ) Other assets 293,813 269,119 (24,694 ) (8 ) Total Segment Assets ¥ 1,066,647 ¥ 1,022,944 ¥ (43,703 ) (4 ) 75 Table of Contents Environment and Energy Segment profits decreased by ¥42,995 million to segment losses of ¥4,923 million compared to fiscal 2024 primarily due to an increase in write-downs of long-lived assets and a decrease in equity in net income (loss) of equity method investments and an increase in service expense, partially offset by an increase in gains on sales of subsidiaries and equity method investments. Segment assets increased 4% to ¥1,016,175 million compared to the end of fiscal 2024 primarily due to increases in property under facility operations and advances for property under facility operations, partially offset by a decrease in equity method investments. Year ended March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Finance revenues ¥ 1,478 ¥ 1,402 ¥ (76 ) (5 ) Gains on investment securities and dividends 1,784 3,128 1,344 75 Operating leases 79 79 0 — Sales of goods and real estate 3,771 3,307 (464 ) (12 ) Services income 158,486 178,105 19,619 12 Total Segment Revenues 165,598 186,021 20,423 12 Interest expense 11,093 13,170 2,077 19 Costs of operating leases 18 18 0 — Costs of goods and real estate sold 2,236 1,786 (450 ) (20 ) Services expense 110,106 136,118 26,012 24 Other (income) and expense (4,633 ) 446 5,079 — Selling, general and administrative expenses 18,670 22,582 3,912 21 Provision for credit losses, and write-downs of long-lived assets and securities 151 20,573 20,422 — Total Segment Expenses 137,641 194,693 57,052 41 Equity in Net income (Loss) of equity method investments and others 10,115 3,749 (6,366 ) (63 ) Segment Profits ¥ 38,072 ¥ (4,923 ) ¥ (42,995 ) — As of March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Net investment in leases ¥ 3,104 ¥ 2,092 ¥ (1,012 ) (33 ) Installment loans 2,255 3,609 1,354 60 Investment in operating leases 250 237 (13 ) (5 ) Investment in securities 571 32,032 31,461 — Property under facility operations 453,252 487,241 33,989 7 Inventories 2,463 2,551 88 4 Equity method investments 219,018 170,946 (48,072 ) (22 ) Advances for property under facility operations 44,962 70,081 25,119 56 Goodwill, intangible assets acquired in business combinations 121,174 120,743 (431 ) (0 ) Other assets 129,385 126,643 (2,742 ) (2 ) Total Segment Assets ¥ 976,434 ¥ 1,016,175 ¥ 39,741 4 76 Table of Contents Insurance Segment profits increased 5% to ¥74,399 million compared to fiscal 2024 primarily due to a decrease in life insurance costs, partially offset by a decrease in life insurance premiums and related investment income. Segment assets increased 3% to ¥3,009,234 million compared to the end of fiscal 2024 primarily due to an increase in reinsurance recoverables. Year ended March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Finance revenues ¥ 300 ¥ 280 ¥ (20 ) (7 ) Life insurance premiums and related investment income 561,533 518,084 (43,449 ) (8 ) Services income 2,036 (1 ) (2,037 ) — Total Segment Revenues 563,869 518,363 (45,506 ) (8 ) Interest expense 14 256 242 — Life insurance costs 433,827 384,910 (48,917 ) (11 ) Other (income) and expense 98 (110 ) (208 ) — Selling, general and administrative expenses 59,309 58,904 (405 ) (1 ) Provision for credit losses, and write-downs of long-lived assets and securities (2 ) 4 6 — Total Segment Expenses 493,246 443,964 (49,282 ) (10 ) Equity in Net income (Loss) of equity method investments and others 203 (0 ) (203 ) — Segment Profits ¥ 70,826 ¥ 74,399 ¥ 3,573 5 As of March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Installment loans ¥ 11,792 ¥ 12,805 ¥ 1,013 9 Investment in operating leases 26,876 26,167 (709 ) (3 ) Investment in securities 2,236,495 2,234,453 (2,042 ) (0 ) Equity method investments 29,742 35,865 6,123 21 Goodwill, intangible assets acquired in business combinations 4,452 4,452 0 — Other assets 612,570 695,492 82,922 14 Total Segment Assets ¥ 2,921,927 ¥ 3,009,234 ¥ 87,307 3 77 Table of Contents Banking and Credit Segment profits decreased 70% to ¥29,291 million compared to fiscal 2024 primarily due to the absence of gains on sales of subsidiaries and equity method investments recorded in the fourth quarter of fiscal 2024 as a result of the partial sale of shares in ORIX Credit Corporation and a decrease in finance revenues following its transition to an equity method investee. Segment assets increased 7% to ¥3,144,571 million compared to the end of fiscal 2024 primarily due to increases in installment loans and cash and cash equivalents. Year ended March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Finance revenues ¥ 80,653 ¥ 60,290 ¥ (20,363 ) (25 ) Gains on investment securities and dividends 600 100 (500 ) (83 ) Services income 7,321 2,914 (4,407 ) (60 ) Total Segment Revenues 88,574 63,304 (25,270 ) (29 ) Interest expense 5,302 7,184 1,882 35 Services expense 6,254 7,590 1,336 21 Other (income) and expense (306 ) 40 346 — Selling, general and administrative expenses 32,886 20,822 (12,064 ) (37 ) Provision for credit losses, and write-downs of long-lived assets and securities 4,064 (176 ) (4,240 ) — Total Segment Expenses 48,200 35,460 (12,740 ) (26 ) Equity in Net income (Loss) of equity method investments and others 56,979 1,447 (55,532 ) (97 ) Segment Profits ¥ 97,353 ¥ 29,291 ¥ (68,062 ) (70 ) As of March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Installment loans ¥ 2,378,183 ¥ 2,511,736 ¥ 133,553 6 Investment in securities 311,237 305,441 (5,796 ) (2 ) Equity method investments 43,601 43,934 333 1 Other assets 201,196 283,460 82,264 41 Total Segment Assets ¥ 2,934,217 ¥ 3,144,571 ¥ 210,354 7 78 Table of Contents Aircraft and Ships Segment profits increased 52% to ¥67,420 million compared to fiscal 2024 primarily due to an increase in operating leases revenues as a result of a new acquisition of a subsidiary in the fourth quarter of fiscal 2024. Segment assets increased 5% to ¥1,231,973 million compared to the end of fiscal 2024 primarily due to increases in investment in operating leases, goodwill, intangible assets acquired in business combinations and advances for finance lease and operating lease, partially offset by a decrease in installment loans. Year ended March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Finance revenues ¥ 7,769 ¥ 5,769 ¥ (2,000 ) (26 ) Gains on investment securities and dividends (130 ) (24 ) 106 — Operating leases 48,074 96,856 48,782 101 Sales of goods and real estate 97 852 755 778 Services income 9,381 16,139 6,758 72 Total Segment Revenues 65,191 119,592 54,401 83 Interest expense 11,596 20,159 8,563 74 Costs of operating leases 18,853 40,986 22,133 117 Costs of goods and real estate sold 96 864 768 800 Services expense 1,783 6,724 4,941 277 Other (income) and expense (3,600 ) 68 3,668 — Selling, general and administrative expenses 10,345 11,967 1,622 16 Provision for credit losses, and write-downs of long-lived assets and securities 3 3 0 — Total Segment Expenses 39,076 80,771 41,695 107 Equity in Net income (Loss) of equity method investments and others 18,251 28,599 10,348 57 Segment Profits ¥ 44,366 ¥ 67,420 ¥ 23,054 52 As of March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Installment loans ¥ 60,468 ¥ 36,119 ¥ (24,349 ) (40 ) Investment in operating leases 557,867 599,813 41,946 8 Investment in securities 11,960 9,387 (2,573 ) (22 ) Property under facility operations 0 28 28 — Inventories 733 1,588 855 117 Advances for finance lease and operating lease 9,232 27,816 18,584 201 Equity method investments 399,061 402,567 3,506 1 Goodwill, intangible assets acquired in business combinations 19,114 43,024 23,910 125 Other assets 111,206 111,631 425 0 Total Segment Assets ¥ 1,169,641 ¥ 1,231,973 ¥ 62,332 5 79 Table of Contents ORIX USA Segment profits increased 43% to ¥39,915 million compared to fiscal 2024 primarily due to an increase in gains on sales of subsidiaries and equity method investments, partially offset by an increase in selling, general and administrative expenses and a decrease in gains on investment securities and dividends. Segment assets decreased 6% to ¥1,593,939 million compared to the end of fiscal 2024 primarily due to decreases in installment loans and restricted cash and general decrease as a result of foreign exchange effects. Year ended March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Finance revenues ¥ 112,545 ¥ 102,627 ¥ (9,918 ) (9 ) Gains on investment securities and dividends 6,446 119 (6,327 ) (98 ) Operating leases 1,225 861 (364 ) (30 ) Sales of goods and real estate 602 543 (59 ) (10 ) Services income 52,608 50,078 (2,530 ) (5 ) Total Segment Revenues 173,426 154,228 (19,198 ) (11 ) Interest expense 47,466 40,016 (7,450 ) (16 ) Costs of operating leases 547 1,496 949 173 Costs of goods and real estate sold 310 307 (3 ) (1 ) Services expense 4,331 2,823 (1,508 ) (35 ) Other (income) and expense (2,078 ) (3,382 ) (1,304 ) — Selling, general and administrative expenses 85,483 95,406 9,923 12 Provision for credit losses, and write-downs of long-lived assets and securities 7,937 7,669 (268 ) (3 ) Total Segment Expenses 143,996 144,335 339 0 Equity in Net income (Loss) of equity method investments and others (1,499 ) 30,022 31,521 — Segment Profits ¥ 27,931 ¥ 39,915 ¥ 11,984 43 As of March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Net investment in leases ¥ 505 ¥ 451 ¥ (54 ) (11 ) Installment loans 699,384 652,805 (46,579 ) (7 ) Investment in operating leases 9,858 21,260 11,402 116 Investment in securities 509,172 487,022 (22,150 ) (4 ) Property under facility operations and servicing assets 79,747 76,469 (3,278 ) (4 ) Inventories 159 137 (22 ) (14 ) Equity method investments 61,415 54,817 (6,598 ) (11 ) Goodwill, intangible assets acquired in business combinations 176,785 171,884 (4,901 ) (3 ) Other assets 157,459 129,094 (28,365 ) (18 ) Total Segment Assets ¥ 1,694,484 ¥ 1,593,939 ¥ (100,545 ) (6 ) 80 Table of Contents ORIX Europe Segment profits increased 7% to ¥44,373 million compared to fiscal 2024 primarily due to an increase in services income. Segment assets increased 1% to ¥669,306 million compared to the end of fiscal 2024 primarily due to increases in cash and cash equivalents and investment in securities, partially offset by a decrease in goodwill, intangible assets acquired in business combinations. Year ended March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Finance revenues ¥ 2,409 ¥ 4,077 ¥ 1,668 69 Gains on investment securities and dividends 10,711 4,408 (6,303 ) (59 ) Services income 214,031 248,782 34,751 16 Total Segment Revenues 227,151 257,267 30,116 13 Interest expense 289 665 376 130 Services expense 54,224 66,446 12,222 23 Other (income) and expense 2,666 4,231 1,565 59 Selling, general and administrative expenses 130,496 138,859 8,363 6 Provision for credit losses, and write-downs of long-lived assets and securities 217 115 (102 ) (47 ) Total Segment Expenses 187,892 210,316 22,424 12 Equity in Net income (Loss) of equity method investments and others 2,379 (2,578 ) (4,957 ) — Segment Profits ¥ 41,638 ¥ 44,373 ¥ 2,735 7 As of March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Investment in securities ¥ 82,568 ¥ 86,008 ¥ 3,440 4 Equity method investments 11,907 8,578 (3,329 ) (28 ) Goodwill, intangible assets acquired in business combinations 364,773 354,801 (9,972 ) (3 ) Other assets 202,891 219,919 17,028 8 Total Segment Assets ¥ 662,139 ¥ 669,306 ¥ 7,167 1 81 Table of Contents Asia and Australia Segment profits decreased 27% to ¥34,451 million compared to fiscal 2024 primarily due to decreases in gains on investment securities and dividends and equity in net income (loss) of equity method investments in Greater China. Segment assets increased 1% to ¥1,725,627 million compared to the end of fiscal 2024 primarily due to increases in net investment in leases and cash and cash equivalents, partially offset by general decrease as a result of foreign exchange effects. Year ended March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Finance revenues ¥ 70,836 ¥ 74,961 ¥ 4,125 6 Gains on investment securities and dividends 7,885 1,933 (5,952 ) (75 ) Operating leases 122,624 135,169 12,545 10 Sales of goods and real estate 425 751 326 77 Services income 23,523 23,406 (117 ) (0 ) Total Segment Revenues 225,293 236,220 10,927 5 Interest expense 35,737 41,761 6,024 17 Costs of operating leases 90,336 97,249 6,913 8 Costs of goods and real estate sold 400 684 284 71 Services expense 15,039 14,710 (329 ) (2 ) Other (income) and expense (1,490 ) (5,654 ) (4,164 ) — Selling, general and administrative expenses 41,558 44,342 2,784 7 Provision for credit losses, and write-downs of long-lived assets and securities 8,027 9,983 1,956 24 Total Segment Expenses 189,607 203,075 13,468 7 Equity in Net income (Loss) of equity method investments and others 11,383 1,306 (10,077 ) (89 ) Segment Profits ¥ 47,069 ¥ 34,451 ¥ (12,618 ) (27 ) As of March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Net investment in leases ¥ 530,426 ¥ 547,966 ¥ 17,540 3 Installment loans 343,936 315,128 (28,808 ) (8 ) Investment in operating leases 395,573 394,764 (809 ) (0 ) Investment in securities 33,520 37,768 4,248 13 Property under facility operations 1,849 1,844 (5 ) (0 ) Inventories 224 615 391 175 Advances for finance lease and operating lease 3,017 4,833 1,816 60 Equity method investments 271,682 260,395 (11,287 ) (4 ) Advances for property under facility operations 0 51 51 — Goodwill, intangible assets acquired in business combinations 7,313 6,986 (327 ) (4 ) Other assets 121,693 155,277 33,584 28 Total Segment Assets ¥ 1,709,233 ¥ 1,725,627 ¥ 16,394 1 82 Table of Contents Revenues, New Business Volumes and Investments Finance revenues Year ended March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Finance revenues: Finance revenues ¥ 348,001 ¥ 328,356 ¥ (19,645 ) (6 ) Finance revenues decreased 6% to ¥328,356 million for fiscal 2025 compared to fiscal 2024 primarily as a result of DOCOMO Finance, Inc. becoming an equity method investee due to the partial sale of its shares in the fourth quarter of fiscal 2024. Net investment in leases As of and for the year ended March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Net investment in leases: New equipment acquisitions ¥ 535,985 ¥ 522,223 ¥ (13,762 ) (3 ) Japan 212,462 210,189 (2,273 ) (1 ) Overseas 323,523 312,034 (11,489 ) (4 ) Net investment in leases 1,155,023 1,167,380 12,357 1 New equipment acquisitions related to net investment in leases decreased 3% to ¥522,223 million compared to fiscal 2024. In Japan, new equipment acquisitions decreased 1% in fiscal 2025 compared to fiscal 2024. In overseas, new equipment acquisitions decreased 4% in fiscal 2025 compared to fiscal 2024 primarily due to decreases in Asia. Net investment in leases as of March 31, 2025 increased 1% to ¥1,167,380 million compared to March 31, 2024 primarily due to increases in assets in overseas. As of March 31, 2025, no single lessee represented more than 1% of the balance of net investment in leases. As of March 31, 2025, 53% of our net investment in leases were to lessees in Japan, while 47% were to overseas lessees. 9% of our net investment in leases were to lessees in China, 8% of our net investment in leases were to lessees in each of South Korea and Malaysia, respectively, and 5% of our net investment in leases were to lessees in Australia. No other overseas country represented more than 5% of our total portfolio of net investment in leases. As of March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Net investment in leases by category: Transportation equipment ¥ 521,006 ¥ 550,810 ¥ 29,804 6 Industrial equipment 231,867 213,939 (17,928 ) (8 ) Electronics 98,313 97,461 (852 ) (1 ) Information-related and office equipment 118,784 123,092 4,308 4 Commercial services equipment 66,377 68,995 2,618 4 Other 118,676 113,083 (5,593 ) (5 ) Total ¥ 1,155,023 ¥ 1,167,380 ¥ 12,357 1 For further information, see Note 6 of “Item 18. Financial Statements.” 83 Table of Contents Installment loans As of and for the year ended March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Installment loans: New loans added ¥ 1,433,243 ¥ 1,510,598 ¥ 77,355 5 Japan 1,064,986 1,165,864 100,878 9 Overseas 368,257 344,734 (23,523 ) (6 ) Installment loans 3,958,814 4,081,019 122,205 3 Note: The balance of installment loans related to our life insurance operations is included in installment loans in our consolidated balance sheets; however, income and losses on these loans are recorded in life insurance premiums and related investment income in our consolidated statements of income. New loans added increased 5% to ¥1,510,598 million compared to fiscal 2024. In Japan, new loans added increased 9% to ¥1,165,864 million compared to fiscal 2024. In overseas, new loans added decreased 6% to ¥344,734 million compared to fiscal 2024 primarily due to decreased lending activity in Asia. The balance of installment loans as of March 31, 2025 increased 3% to ¥4,081,019 million compared to March 31, 2024, primarily due to increases in the new loans added in Japan, partially offset by decreases in the new loans added in overseas. As of March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Installment loans: Consumer borrowers in Japan Real estate loans ¥ 1,851,214 ¥ 1,901,794 ¥ 50,580 3 Card loans 72,353 67,874 (4,479 ) (6 ) Other 5,680 7,259 1,579 28 Subtotal 1,929,247 1,976,927 47,680 2 Corporate borrowers in Japan Real estate companies 334,506 415,666 81,160 24 Non-recourse loans 145,286 301,477 156,191 108 Commercial, industrial and other companies 187,824 233,270 45,446 24 Subtotal 667,616 950,413 282,797 42 Consumer borrowers in overseas Real estate loans 96,247 55,022 (41,225 ) (43 ) Other 47,415 39,172 (8,243 ) (17 ) Subtotal 143,662 94,194 (49,468 ) (34 ) Corporate borrowers in overseas Real estate companies*1 190,630 228,793 38,163 20 Non-recourse loans 50,263 86,724 36,461 73 Commercial, industrial and other companies 705,494 591,103 (114,391 ) (16 ) Subtotal 946,387 906,620 (39,767 ) (4 ) Equity method investees 251,929 131,476 (120,453 ) (48 ) Purchased loans*2 19,973 21,389 1,416 7 Total ¥ 3,958,814 ¥ 4,081,019 ¥ 122,205 3 *1 Includes the outstanding balance of loans that were previously sold with a repurchase option and are recorded as assets for accounting purposes in accordance with ASC 860 (“Transfers and Servicing”.) *2 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. 84 Table of Contents As of March 31, 2025, ¥12,806 million, or 0.4%, of our portfolio of installment loans to consumer and corporate borrowers in Japan related to our life insurance operations. We reflect income from these loans as life insurance premiums and related investment income in our consolidated statements of income. As of March 31, 2025, ¥644,459 million, or 16%, of the balance of installment loans were to real estate companies in Japan and overseas. The balance of installment loans to consumer borrowers in Japan as of March 31, 2025 increased 2% to ¥1,976,927 million compared to the balance as of March 31, 2024, primarily due to an increase in new loans added. The balance of installment loans to corporate borrowers in Japan as of March 31, 2025 increased 42% to ¥950,413 million compared to the balance as of March 31, 2024, primarily due to an increase in new loans added in the banking business. The balance of installment loans to consumer borrowers in overseas as of March 31, 2025 decreased 34% to ¥94,194 million compared to the balance as of March 31, 2024, primarily due to a decrease in Asia. The balance of installment loans to corporate borrowers in overseas as of March 31, 2025 decreased 4% to ¥906,620 million compared to the balance as of March 31, 2024, primarily due to a decrease in the Americas. The balance of installment loans to equity method investees as of March 31, 2025 decreased 48% to ¥131,476 million compared to the balance as of March 31, 2024, primarily due to the termination of loans. For further information, see Note 7 of “Item 18. Financial Statements”. Asset quality Net investment in leases As of March 31, 2024 2025 (Millions of yen, except percentage data) Non-performing net investment in leases and allowance for credit losses on net investment in leases: Non-performing net investment in leases ¥ 20,805 ¥ 21,820 Non-performing net investment in leases as a percentage of the balance of net investment in leases 1.80 % 1.87 % Provision for credit losses as a percentage of the average balance of net investment in leases* 0.27 % 0.42 % Allowance for credit losses on net investment in leases ¥ 16,780 ¥ 18,122 Allowance for credit losses on net investment in leases as a percentage of the balance of net investment in leases 1.45 % 1.55 % The ratio of charge-offs as a percentage of the average balance of net investment in leases* 0.23 % 0.29 % * Average balances are calculated on the basis of fiscal year’s beginning balance and fiscal quarter-end balances. The balance of non-performing net investment in leases increased ¥1,015 million to ¥21,820 million as of March 31, 2025 compared to March 31, 2024. As a result, the non-performing net investment in leases as a percentage of net investment in leases as of March 31, 2025 increased 0.07% to 1.87% from March 31, 2024. We believe that the ratio of allowance for credit losses to the balance of investment in net investment in leases provides a reasonable indication that our allowance for credit losses was appropriate as of March 31, 2025 for the following reasons: • lease receivables are generally diversified and the amount of realized loss on any particular contract is likely to be relatively small; and 85 Table of Contents • all lease contracts are secured by collateral consisting of the underlying leased assets, and we can expect to recover at least a portion of the outstanding lease receivables by selling the collateral. Loans not individually assessed for credit losses As of March 31, 2024 2025 (Millions of yen, except percentage data) Non-performing loans not individually assessed for credit losses and allowance for credit losses on installment loans not individually assessed for credit losses: Non-performing loans not individually assessed for credit losses ¥ 19,792 ¥ 30,214 Non-performing loans not individually assessed for credit losses as a percentage of the balance of installment loans not individually assessed for credit losses 0.51 % 0.76 % Provision for credit losses as a percentage of the average balance of installment loans not individually assessed for credit losses* 0.17 % 0.03 % Allowance for credit losses on installment loans not individually assessed for credit losses ¥ 25,975 ¥ 21,355 Allowance for credit losses on installment loans not individually assessed for credit losses as a percentage of the balance of installment loans not individually assessed for credit losses 0.67 % 0.53 % The ratio of charge-offs as a percentage of the average balance of loans not individually assessed for credit losses* 0.20 % 0.07 % Note: The table above excludes the outstanding balance of loans that were previously sold with a repurchase option and are recorded as assets for accounting purposes in accordance with ASC 860 (“Transfers and Servicing”). * Average balances are calculated on the basis of fiscal year’s beginning balance and fiscal quarter-end balances. The provision for credit losses as a percentage of the average balance of installment loans not individually assessed for credit losses decreased 0.14% compared to fiscal 2024, primarily due to a reduction in the provision amount resulting from the sale of a subsidiary in fiscal 2024. 86 Table of Contents The balance of non-performing loans not individually assessed that are estimated for credit losses by using installment loans with similar risk characteristics as one pool increased ¥19,792 million to ¥30,214 million as of March 31, 2025 compared to March 31, 2024. As of March 31, 2024 2025 (Millions of yen) Non-performing loans not individually assessed for credit losses: Consumer borrowers in Japan Real estate loans ¥ 861 ¥ 987 Subtotal 861 987 Corporate borrowers in Japan Real estate companies 75 8 Commercial, industrial and other companies 165 178 Subtotal 240 186 Consumer borrowers in overseas Real estate loans 340 308 Other 658 452 Subtotal 998 760 Corporate borrowers in overseas Real estate companies 2,695 648 Non-recourse loans 2,057 2,183 Commercial, industrial and other companies 12,711 25,450 Subtotal 17,463 28,281 Loans to Equity method investees 230 0 Total ¥ 19,792 ¥ 30,214 Note: The table above excludes the outstanding balance of loans that were previously sold with a repurchase option and are recorded as assets for accounting purposes in accordance with ASC 860 (“Transfers and Servicing”). We recognize allowances for real estate loans, card loans and other loans to individual borrowers after careful evaluation of the value of collateral underlying the loans, past loss experience and any economic conditions that we believe may affect the default rate. We determine the allowance for our other items on the basis of past loss experience, the forecasted future economic indicators correlated with the prior charge-off experience and the current portfolio composition. Loans individually assessed for credit losses As of March 31, 2024 2025 (Millions of yen) Non-performing loans individually assessed for credit losses and allowance for credit losses on installment loans individually assessed for credit losses: Non-performing installment loans individually assessed for credit losses ¥ 54,422 ¥ 62,433 Allowance for credit losses on installment loans individually assessed for credit losses* 14,335 16,393 87 Table of Contents * The allowance is individually evaluated 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. The provision for credit losses on installment loans individually assessed for credit losses was ¥10,806 million and ¥6,962 million, respectively, in fiscal 2024 and fiscal 2025. The charge-off of installment loans individually assessed for credit losses was ¥4,295 million and ¥4,718 million, respectively, in fiscal 2024 and fiscal 2025. The provision for credit losses on installment loans individually assessed for credit losses decreased ¥3,844 million compared to fiscal 2024. The provision for credit losses on loans individually assessed decreased mainly in the Americas. The charge-off of installment loans individually assessed for credit losses increased ¥423 million compared to fiscal 2024. The table below sets forth the outstanding balance of non-performing loans individually assessed for credit losses by region and type of borrower as of the dates indicated. Consumer loans in Japan primarily consist of restructured smaller-balance homogeneous loans individually assessed for credit losses. As of March 31, 2024 2025 (Millions of yen) Non-performing loans individually assessed for credit losses: Consumer borrowers in Japan Real estate loans ¥ 11,210 ¥ 10,353 Other 96 86 Subtotal 11,306 10,439 Corporate borrowers in Japan Real estate companies 1,401 549 Commercial, industrial and other companies 392 598 Subtotal 1,793 1,147 Consumer borrowers in overseas Real estate loans 767 5,368 Other 1,702 1,884 Subtotal 2,469 7,252 Corporate borrowers in overseas Real estate companies 1,125 2,769 Non-recourse loans 1,058 1,648 Commercial, industrial and other companies 34,092 36,569 Subtotal 36,275 40,986 Loans to Equity method investees 1,699 1,345 Purchased loans 880 1,264 Total ¥ 54,422 ¥ 62,433 For further information, see Note 8 of “Item 18. Financial Statements.” 88 Table of Contents Allowance for credit losses We recognize allowances for credit losses on net investment in leases and installment loans. As of March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Allowance for credit losses: Beginning balance ¥ 64,540 ¥ 57,090 ¥ (7,450 ) (12 ) Net investment in leases 15,719 16,780 1,061 7 Loans not individually assessed for credit losses 39,460 25,975 (13,485 ) (34 ) Loans individually assessed for credit losses 9,361 14,335 4,974 53 Provision (Reversal) *1 20,652 13,074 (7,578 ) (37 ) Net investment in leases 3,064 4,934 1,870 61 Loans not individually assessed for credit losses 6,782 1,178 (5,604 ) (83 ) Loans individually assessed for credit losses 10,806 6,962 (3,844 ) (36 ) Charge-offs (net) (14,633 ) (10,823 ) 3,810 (26 ) Net investment in leases (2,609 ) (3,414 ) (805 ) 31 Loans not individually assessed for credit losses (7,729 ) (2,691 ) 5,038 (65 ) Loans individually assessed for credit losses (4,295 ) (4,718 ) (423 ) 10 Other *2 (13,469 ) (3,471 ) 9,998 (74 ) Net investment in leases 606 (178 ) (784 ) — Loans not individually assessed for credit losses (12,538 ) (3,107 ) 9,431 (75 ) Loans individually assessed for credit losses (1,537 ) (186 ) 1,351 (88 ) Ending balance 57,090 55,870 (1,220 ) (2 ) Net investment in leases 16,780 18,122 1,342 8 Loans not individually assessed for credit losses 25,975 21,355 (4,620 ) (18 ) Loans individually assessed for credit losses 14,335 16,393 2,058 14 ———————— *1 “Provision for credit losses” in the consolidated statements of income amounted to ¥20,968 million and ¥18,723 million for fiscal 2024 and 2025, respectively, and the amounts include provision for credit losses on other than net investment in leases and installment loans. *2 “Other” mainly includes foreign currency translation adjustments and increases or decreases in allowance due to consolidation or deconsolidation of subsidiaries. As of March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Provision for credit losses: Net investment in leases ¥ 3,064 ¥ 4,934 ¥ 1,870 61 Loans not individually assessed for credit losses 6,782 1,178 (5,604 ) (83 ) Loans individually assessed for credit losses 10,806 6,962 (3,844 ) (36 ) Subtotal 20,652 13,074 (7,578 ) (37 ) Off-balance sheet credit exposures (440) 5,297 5,737 — Available-for-sale debt securities 445 173 (272 ) (61 ) Other financial assets measured at amortized cost 311 179 (132 ) (42 ) Total ¥ 20,968 ¥ 18,723 ¥ (2,245 ) (11 ) The provision on installment loans not individually assessed for credit losses were ¥6,782 million and ¥1,178 million in fiscal 2024 and 2025, respectively. The provision for credit losses on loans not individually assessed in fiscal 2025 increased compared to fiscal 2024 primarily due to a reduction in the provision amount resulting from the sale of a subsidiary in fiscal 2024. 89 Table of Contents The provision on installment loans individually assessed for credit losses were ¥10,806 million and ¥6,962 million in fiscal 2024 and 2025, respectively. The provision for credit losses on loans individually assessed decreased mainly in the Americas. The provision for credit losses on off-balance sheet credit exposures in fiscal 2024 was a reversal of ¥440 million, which was mainly caused by the re-valuation of past loss experience, current economic and business conditions and forecasts in Japan. The provision for credit losses on off-balance sheet credit exposures in fiscal 2025 was ¥5,297 million, which was mainly due to the deterioration in macroeconomic forecasts in certain markets in the Americas. For further information, see Note 8 of “Item 18. Financial Statements.” In addition, for further information about allowance for off-balance sheet credit exposures and allowance for credit losses on available-for-sale debt securities, see Note 31 and 9 of “Item 18. Financial Statements.” Investment in Securities As of and for the year ended March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Investment in securities: New securities added ¥ 628,060 ¥ 777,170 ¥ 149,110 24 Japan 521,835 621,839 100,004 19 Overseas 106,225 155,331 49,106 46 Investment in securities 3,263,079 3,234,547 (28,532 ) (1 ) ———————— Note: The balance of investment in securities related to our life insurance operations is included in investment in securities in our consolidated balance sheets; however, income and losses on these investment in securities are recorded in life insurance premiums and related investment income in our consolidated statements of income. New securities added increased 24% to ¥777,170 million in fiscal 2025 compared to fiscal 2024. New securities added in Japan increased 19% in fiscal 2025 compared to fiscal 2024 primarily due to an increase in investments in government bond securities and corporate debt securities. New securities added overseas increased 46% in fiscal 2025 compared to fiscal 2024 primarily due to an increase in fund investments and other asset-backed securities and debt securities. The balance of our investment in securities as of March 31, 2025 decreased 1% to ¥3,234,547 million compared to March 31, 2024. As of March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Investment in securities by security type: Equity securities ¥ 597,601 ¥ 626,910 ¥ 29,309 5 Available-for-sale debt securities 2,665,478 2,607,637 (57,841 ) (2 ) Total ¥ 3,263,079 ¥ 3,234,547 ¥ (28,532 ) (1 ) Investments in equity securities as of March 31, 2025 increased 5% to ¥626,910 million compared to March 31, 2024 primarily due to the transfer to equity securities from the partial sale of equity-method investments and increases in fund investments, partially offset by sales of trading securities. Investments in 90 Table of Contents available-for-sale debt securities as of March 31, 2025 decreased 2% to ¥2,607,637 million compared to March 31, 2024 primarily due to increases in unrealized losses on government bonds and the redemption of corporate bonds and other asset-backed securities, partially offset by increases in investments in government bonds and corporate bonds. For further information, see Note 9 of “Item 18. Financial Statements.” Gains on investment securities and dividends Year ended March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Gains on investment securities and dividends: Net gains on investment securities ¥ 30,731 ¥ 11,825 ¥ (18,906 ) (62 ) Dividends income 2,292 2,499 207 9 Total ¥ 33,023 ¥ 14,324 ¥ (18,699 ) (57 ) ———————— Notes: 1. Income and losses on investment in securities related to our life insurance operations are recorded in life insurance premiums and related investment income in our consolidated statements of income. 2. Unrealized changes in fair value of investments in equity securities have been included in “Net gains on investment securities”. Net gains on investment securities decreased 62% to ¥11,825 million in fiscal 2025 compared to fiscal 2024 primarily due to a decrease in gains on sales of securities and net unrealized holding gains (losses) on fund investments. Dividends income increased 9% to ¥2,499 million in fiscal 2025 compared to fiscal 2024. Due to the above results, gains on investment securities and dividends decreased 57% to ¥14,324 million in fiscal 2025 compared to fiscal 2024. As of March 31, 2025, gross unrealized gains on available-for-sale debt securities, including those held in connection with our life insurance operations, were ¥25,470 million, compared to ¥41,989 million as of March 31, 2024. As of March 31, 2025, gross unrealized losses on available-for-sale debt securities, including those held in connection with our life insurance operations, were ¥591,199 million, compared to ¥391,817 million as of March 31, 2024. Operating leases As of and for the year ended March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Operating leases: Operating lease revenues ¥ 535,490 ¥ 624,444 ¥ 88,954 17 Costs of operating leases 356,760 394,821 38,061 11 New equipment acquisitions 572,084 758,837 186,753 33 Japan 240,889 316,726 75,837 31 Overseas 331,195 442,111 110,916 33 Investment in operating leases 1,868,574 1,967,178 98,604 5 Revenues from operating leases in fiscal 2025 increased 17% to ¥624,444 million compared to fiscal 2024 primarily due to an increase in revenues from leases in the ship leasing business and in the aircraft leasing business. In fiscal 2024 and 2025, gains from the disposition of operating lease assets were ¥53,441 million and ¥76,633 million, respectively. 91 Table of Contents Costs of operating leases increased 11% to ¥394,821 million in fiscal 2025 compared to fiscal 2024 primarily due to an increase in depreciation expenses resulting from an increase in investments in the ship leasing business and investments in the aircraft leasing business. New equipment acquisitions related to operating leases increased 33% to ¥758,837 million in fiscal 2025 compared to fiscal 2024 primarily due to an increase in investments in the real estate leasing business, investments in the ship leasing business and investments in the aircraft leasing business. Investment in operating leases as of March 31, 2025 increased 5% to ¥1,967,178 million compared to March 31, 2024 primarily due to an increase in investments in the real estate leasing business and investments in the measuring and information-related equipment rental business. As of March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Investment in operating leases by category: Transportation equipment ¥ 1,264,332 ¥ 1,292,630 ¥ 28,298 2 Measuring and information-related equipment 154,794 194,798 40,004 26 Real estate 261,706 309,810 48,104 18 Other 49,286 51,667 2,381 5 Right-of-use assets 87,359 73,518 (13,841 ) (16 ) Accrued rental receivables 54,230 46,248 (7,982 ) (15 ) Allowance for doubtful receivables on operating leases (3,133 ) (1,493 ) 1,640 — Total ¥ 1,868,574 ¥ 1,967,178 ¥ 98,604 5 Investment in transportation equipment operating leases as of March 31, 2025 increased 2% to ¥1,292,630 million compared to March 31, 2024 primarily due to an increase in investments in the ship leasing business and an increase in investments in the aircraft leasing business. Investment in measuring and information-related equipment operating leases as of March 31, 2025 increased 26% to ¥194,798 million compared to March 31, 2024 primarily due to an increase in investments in the rental business. Investment in real estate operating leases as of March 31, 2025 increased 18% to ¥309,810 million compared to March 31, 2024 primarily due to an increase in investments in real estate under operating leases in Japan. Investment in other operating leases as of March 31, 2025 increased 5% to ¥51,667 million compared to March 31, 2024 primarily due to an increase in investments in the rental business. For further information, see Note 6 of “Item 18. Financial Statements.” Life insurance We reflect all income and losses (other than provision for credit losses) that we recognize on securities and investment in partnerships and other investments, installment loans, real estate under operating leases and other investments held in connection with our life insurance operations as life insurance premiums and related investment income in our consolidated statements of income. Year ended March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Life insurance premiums and related investment income and life insurance costs: Life insurance premiums ¥ 459,655 ¥ 481,432 ¥ 21,777 5 Life insurance-related investment income 99,268 33,827 (65,441 ) (66 ) Total ¥ 558,923 ¥ 515,259 ¥ (43,664) (8 ) Life insurance costs ¥ 433,863 ¥ 384,753 ¥ (49,110 ) (11 ) 92 Table of Contents Year ended March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Breakdown of life insurance-related investment income (loss): Net income on investment securities and investment in partnerships and other investments ¥ 95,219 ¥ 30,574 ¥ (64,645 ) (68 ) Gains and losses recognized in income on derivative (2,896 ) (3,263 ) (367 ) — Interest on loans, income on real estate under operating leases, and others 6,945 6,516 (429 ) (6 ) Total ¥ 99,268 ¥ 33,827 ¥ (65,441 ) (66 ) Life insurance premiums and related investment income decreased 8% to ¥515,259 million in fiscal 2025 compared to fiscal 2024. Life insurance premiums increased 5% to ¥481,432 million in fiscal 2025 compared to fiscal 2024 primarily due to an increase in annualized net premium from new policies and others. Life insurance-related investment income decreased 66% to ¥33,827 million in fiscal 2025 compared to fiscal 2024. Net income on investment securities and investment in partnerships and other investments decreased mainly in investment income from assets under variable annuity and variable life insurance contracts. Life insurance costs decreased 11% to ¥384,753 million in fiscal 2025 compared to fiscal 2024 primarily due to a decrease in a provision of liability reserve under variable annuity and variable life insurance contracts. As of March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Investments by life insurance operations: Equity securities and Investment in partnerships and other investments ¥ 305,256 ¥ 314,049 ¥ 8,793 3 Available-for-sale debt securities 1,960,981 1,956,269 (4,712 ) (0 ) Subtotal 2,266,237 2,270,318 4,081 0 Installment loans, real estate under operating leases and other investments 38,667 38,971 304 1 Total ¥ 2,304,904 ¥ 2,309,289 ¥ 4,385 0 Investment in securities as of March 31, 2025 increased to ¥2,270,318 million compared to March 31, 2024. For further information, see Note 23 and Note 24 of “Item 18. Financial Statements.” Sales of goods and real estate, Inventories Year ended March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Sales of goods and real estate, Inventories: Sales of goods and real estate ¥ 373,914 ¥ 373,155 ¥ (759 ) (0 ) Costs of goods and real estate sold 268,627 271,833 3,206 1 New real estate added 148,878 89,632 (59,246 ) (40 ) Inventories 227,359 229,229 1,870 1 93 Table of Contents Sales of goods and real estate remained flat at ¥373,155 million compared to fiscal 2024 primarily due to an increase in sales of goods and a decrease in sales of real estate. Costs of goods and real estate sold increased 1% to ¥271,833 million compared to fiscal 2024, primarily due to an increase in costs of goods sold. Costs of goods and real estate sold include the upfront costs associated with advertising and creating model rooms. New real estate added decreased 40% to ¥89,632 million in fiscal 2025 compared to fiscal 2024. Inventories as of March 31, 2025 increased 1% to ¥229,229 million compared to March 31, 2024, primarily due to an increase in residential condominiums, as an increase in new real estate added exceeded a decrease due to sales. For further information, see Note 4 of “Item 18. Financial Statements.” Services, Property under Facility Operations As of and for the year ended March 31, Change 2024 2025 Amount Percent (%) (Millions of yen, except percentage data) Services, Property under Facility Operations Services income ¥ 965,010 ¥ 1,019,283 ¥ 54,273 6 Services expense 560,101 604,145 44,044 8 New assets added 120,258 44,236 (76,022 ) (63 ) Japan 18,887 38,202 19,315 102 Overseas 101,371 6,034 (95,337 ) (94 ) Property under Facility Operations 689,573 771,851 82,278 12 Services income increased 6% to ¥1,019,283 million in fiscal 2025 compared to fiscal 2024 primarily due to an increase in income related to the asset management business. Services expense increased 8% to ¥604,145 million in fiscal 2025 compared to fiscal 2024 primarily due to an increase in expenses related to the environment and energy business. New assets added for property under facility operations decreased 63% to ¥44,236 million in fiscal 2025 compared to fiscal 2024 primarily due to a decrease in investments in electric power facilities overseas. Property under facility operations as of March 31, 2025 increased 12% to ¥771,851 million compared to March 31, 2024 primarily due to investments in electric power facilities overseas and completion of domestic property under facility operations. For further information, see Note 4 of “Item 18. Financial Statements.” Expenses Interest expense Interest expense decreased 10% to ¥169,051 million in fiscal 2025 compared to ¥188,328 million in fiscal 2024. Our total outstanding short-term debt, long-term debt and deposits as of March 31, 2025 increased 3% to ¥8,732,610 million compared to ¥8,446,306 million as of March 31, 2024. 94 Table of Contents The average interest rate on our short-term debt, long-term debt and deposits in domestic currency, calculated on the basis of average monthly balances, increased 0.1% to 0.5% in fiscal 2025 compared to 0.4% in fiscal 2024. The average interest rate on our short-term debt, long-term debt and deposits in foreign currency, calculated on the basis of average monthly balances, decreased 0.1% to 5.1% in fiscal 2025 compared to 5.2% in fiscal 2024. For more information regarding our interest rate risk, see “Item 3. Key Information—Risk Factors.” For more information regarding our outstanding debt, see “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources—Short-term and long-term debt and deposits.” Other (income) and expense Other (income) and expense was a net expense of ¥27,128 million during fiscal 2025 compared to a net income of ¥4,671 million during fiscal 2024. In other (income) and expense, we recognized foreign currency transaction losses of ¥3,518 million during fiscal 2025 compared to foreign currency transaction losses of ¥1,126 million during fiscal 2024, and we recognized impairment losses on goodwill and other intangible assets of ¥14,295 million during fiscal 2025 compared to impairment losses on goodwill and other intangible assets of ¥0 million during fiscal 2024. For further information on our goodwill and other intangible assets, see Note 13 of “Item 18. Financial Statements”. Selling, general and administrative expenses Selling, general and administrative expenses increased 3% to ¥646,054 million in fiscal 2025 compared to ¥627,633 million in fiscal 2024. Employee salaries and other personnel expenses accounted for 57% of selling, general and administrative expenses in fiscal 2025, and the remaining portion consists of selling expenses and other administrative expenses, such as IT-related expenses and advertising expenses. Write-downs of long-lived assets As a result of impairment reviews we performed in fiscal 2025 for long-lived assets in Japan and overseas, such as office buildings, commercial facilities other than office buildings, condominiums, hotels, and land undeveloped or under construction, write-downs of long-lived assets increased by ¥24,209 million to ¥25,933 million in fiscal 2025 compared to ¥1,724 million in fiscal 2024. These write-downs, which are reflected as write-downs of long-lived assets, consisted of impairment losses of ¥31 million on 20 condominiums and ¥25,902 million on other long-lived assets, because the assets were classified as held for sale or the carrying amount exceeded the estimated undiscounted future cash flows. For further information, see Note 25 of “Item 18. Financial Statements.” Write-downs of securities Write-downs of securities in fiscal 2025 were in connection with non-marketable equity securities. Write-downs of securities decreased to ¥554 million in fiscal 2025 compared to ¥315 million in fiscal 2024. For further information, see Note 9 of “Item 18. Financial Statements.” Equity in net income (loss) of equity method investments Equity in net income (loss) of equity method investments increased in fiscal 2025 to ¥57,182 million compared to ¥36,774 million in fiscal 2024 due to increases in equity in net income (loss) of equity method investments from domestic investees, partially offset by decreases in equity net income (loss) of equity method investments from overseas investees. For further information, see Note 12 of “Item 18. Financial Statements.” 95 Table of Contents Gains on sales of subsidiaries and equity method investments and liquidation losses, net Gains on sales of subsidiaries and equity method investments and liquidation losses, net increased to ¥87,705 million in fiscal 2025 compared to ¥72,488 million in fiscal 2024, due to the favorable profit from sales in Japan and the Americas. For further information, see Note 3 of “Item 18. Financial Statements.” Bargain Purchase Gain In fiscal 2025, we recognized bargain purchase gains of ¥3,750 million associated with one of the acquisitions executed in fiscal 2025 compared to no bargain purchase gain in fiscal 2024. For further information, see Note 3 of “Item 18. Financial Statements.” Provision for income taxes Provision for income taxes decreased to ¥128,828 million in fiscal 2025 compared to ¥131,388 million in fiscal 2024 primarily due to a decrease of the effective tax rate caused by the effect of lower tax rates on certain subsidiaries. For further information, see Note 16 of “Item 18. Financial Statements.” Net income (loss) attributable to the noncontrolling interests Net income (loss) attributable to the noncontrolling interests was recorded as a result of the noncontrolling interests in earnings of certain of our subsidiaries. Net loss attributable to the noncontrolling interests in fiscal 2025 was ¥389 million, compared to ¥7,682 million in fiscal 2024. Net income attributable to the redeemable noncontrolling interests Net income attributable to the redeemable noncontrolling interests was recorded as a result of the noncontrolling interests in the earnings of our subsidiaries that issued redeemable interests. Net income attributable to the redeemable noncontrolling interests in fiscal 2025 was ¥394 million, compared to ¥137 million in fiscal 2024. For further information, see Note 18 of “Item 18. Financial Statements.” LIQUIDITY AND CAPITAL RESOURCES Funding Activities ORIX Group formulates funding policies that are designed to maintain and improve procurement stability and reduce liquidity risk. As a concrete measure to maintain and improve procurement stability while engaging in activities such as borrowing, capital market procurement and securitization of assets, we are diversifying our procurement methods and our country and investor base. To reduce liquidity risk, we are prolonging our borrowings from financial institutions and issuing long-term corporate bonds domestically and internationally with dispersed redemption periods. We are also holding cash and entering into committed credit facilities agreements. In order to maintain an appropriate level of liquidity at hand, we conduct stress tests from the perspective of both procurement stability and financial efficiency and review the necessary levels accordingly. Also, ORIX Group considers reducing procurement costs to be an important issue. For this reason, we place great importance on ratings by rating agencies and strive to maintain a certain level of rating. Furthermore, we believe that maintaining our ratings is effective not only in terms of minimizing procurement costs, but also facilitating capital market procurement when in unstable financial market conditions. Uncertainties caused by geopolitical instability and the outlook for monetary policies of central banks of major countries still continue. Depending on future developments, we expect an increase in liquidity risk, including higher procurement costs. Specifically, we may be unable to borrow new funds or roll-over existing funds; we may be unable to issue bonds, medium-term notes and commercial paper in the capital markets; and 96 Table of Contents we expect there will be an increase in the amount of interest we need to pay if we are able to access such funding. Notwithstanding the current environment, the ORIX Group is working to maintain stable procurement and reduce liquidity risk in accordance with the above policy. In addition, with respect to rising costs, we are working to maintain a high rating from rating agencies and to maintain good communication with the market so that we can raise funds at reasonable interest rates when refinancing our existing funding. ORIX Bank and ORIX Life Insurance are regulated by Japanese financial authorities. They are our main regulated subsidiaries in terms of liquidity controls, although several other subsidiaries also operate under liquidity control related regulations. For more information regarding our liquidity risk management, see “Risk Management” under this Item 5. Group Liquidity Management ORIX is primarily responsible for accessing liquidity for ORIX Group and for managing the allocation of liquidity to domestic and overseas subsidiaries. In managing our capital resources and controlling liquidity risk, we employ various measures, including a cash management system for supplying funds to, and receiving funds from, our major domestic subsidiaries, other than regulated subsidiaries like ORIX Bank and ORIX Life Insurance. Our overseas subsidiaries rely primarily on local funding sources such as borrowings from local financial institutions and issuing bonds in local capital markets, but they may also obtain loans from ORIX. We also support liquidity levels of overseas subsidiaries by establishing local commitment lines and maintaining multi-currency commitment lines available to ORIX and certain of its overseas subsidiaries. ORIX Bank obtains most of the funds it needs to operate its business through deposit taking. Although ORIX Bank provides loans to several companies in the ordinary course of its business, such loans are subject to a maximum limit set by the Japanese Banking Act. Under such regulations, ORIX Bank is restricted from making loans to other members of ORIX Group in an aggregate amount exceeding a regulatory limit. ORIX Life Insurance underwrites insurance, receives insurance premiums from policyholders, and conducts financing and investment activities, including lending. However, lending from ORIX Life Insurance to other members of ORIX Group is subject to regulation, including under the Japanese Insurance Business Act. For these reasons, ORIX Group manages its liquidity separately from ORIX Bank and ORIX Life Insurance. Sources of Liquidity Borrowings from Financial Institutions ORIX Group borrows from a variety of sources, including major banks, regional banks, foreign banks, life insurance companies, casualty insurance companies and financial institutions associated with agricultural cooperatives. As of March 31, 2026, the number of our lenders was about 200. We have promoted regular face-to-face communications and established positive working relationships with financial institutions in Japan and overseas. The majority of our loan balances consists of borrowings from Japanese financial institutions. As of March 31, 2025 and 2026, short-term debt from Japanese and foreign financial institutions were ¥461,466 million and ¥461,154 million, respectively, while long-term debt from financial institutions were ¥4,031,105 million and ¥4,118,393 million, respectively. We intend to continue to strengthen our financial condition, while maintaining appropriately diverse funding. Committed Credit Facilities We regularly enter into committed credit facilities agreements, including syndicated agreements, with financial institutions to secure liquidity. The maturity dates of these committed credit facilities are staggered to 97 Table of Contents prevent an overlap of contract renewal periods. The total amount of our committed credit facilities as of March 31, 2025 and 2026 were ¥795,634 million and ¥1,034,156 million, respectively. Of these figures, the unused amounts as of March 31, 2025 and 2026 were ¥598,079 million and ¥753,645 million, respectively. A portion of these facilities is arranged to be drawn down in foreign currencies by ORIX and certain of our overseas subsidiaries. The decision to enter into a committed credit facility is made based on factors including our balance of cash and cash equivalents and repayment schedules of short-term debt such as commercial paper. Debt from the Capital Markets Our debt from capital markets, excluding equity issuances, consists primarily of bonds, medium-term notes, commercial paper, and securitization of loan receivables and other assets. During the current fiscal year, the Company issued ¥39,000 million of unsecured subordinated bonds with interest payment deferral and optional early redemption provisions (hybrid bonds). The proceeds were used to refinance (i) ¥29,000 million of hybrid bonds with the same features that were issued in the fiscal year ended March 31, 2021 and redeemed early in March 2026, and (ii) ¥10,000 million of subordinated term loans raised in the fiscal year ended March 31, 2022 and repaid early in April 2026. Bonds and Medium-term notes We plan to continue to issue bonds and medium-term notes in a balanced manner to institutional and individual investors both inside and outside Japan in line with our strategy of maintaining and improving procurement stability and reducing liquidity risk. We issue straight bonds, medium-term notes and unsecured subordinated bonds with interest payment deferrable clauses and optional early redemption conditions (hybrid bonds) domestically and internationally, each to diversify our funding sources and maintain longer liability maturities. The total balance of bonds and medium-term notes issued as of March 31, 2025 and 2026 was ¥1,638,436 million and ¥1,816,401 million, respectively, of which bonds and medium-term notes amounting to ¥87,879 million and ¥114,169 million, respectively, were issued by overseas subsidiaries. As of March 31, 2025 and 2026, the balance of bonds issued by ORIX for domestic institutional investors was ¥458,928 million and ¥439,003 million, respectively, while the balance of bonds issued by ORIX for individual investors were ¥114,665 million and ¥124,729 million, respectively. The balances of bonds and medium-term notes issued outside Japan were ¥891,591 million and ¥1,053,454 million as of March 31, 2025 and 2026, respectively. Commercial paper We offer commercial paper as a direct financing source, and have successfully obtained a diverse range of investors such as financial institutions and investment trusts, as well as private corporations. We consider our liquidity levels and stagger the dates of issuance and maturity over time to avoid significant overlap. The balance of outstanding commercial paper as of March 31, 2025 and 2026 was ¥7,588 million and ¥3,986 million, respectively. Securitization We securitize loan receivables and other assets. We recognize liabilities consolidated with such investments as our liabilities when required under applicable accounting standards. The total amounts of payables under securitized loan receivables and other assets as of March 31, 2025 and 2026 were ¥63,577 million and ¥30,965 million, respectively. 98 Table of Contents Deposits ORIX Bank and ORIX Asia Limited each accept deposits from customers. These deposits-taking subsidiaries are regulated institutions, and loans from these subsidiaries to ORIX Group entities are subject to maximum regulatory limits. The majority of deposits are attributable to ORIX Bank, which mainly attracts retail deposits, and which deposit balances remain stable. Deposit balances of ORIX Bank as of March 31, 2025 and 2026 were ¥2,443,577 million and ¥2,623,225 million, respectively. Short-term and long-term debt and deposits Short-term Debt As of March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Short-term debt : Borrowings from financial institutions ¥ 461,466 ¥ 461,154 ¥ (312 ) (0) Secured borrowings on securities lending transactions 80,626 107,095 26,469 33 Commercial paper 7,588 3,986 (3,602 ) (47 ) Total short-term debt ¥ 549,680 ¥ 572,235 ¥ 22,555 4 Note: The total amount includes liabilities of consolidated VIEs, for which creditors (or beneficial interest holders) do not have recourse to the general credit of the Company and subsidiaries. There were no such liabilities recorded as of March 31, 2025 and 2026. Short-term debt as of March 31, 2026 was ¥572,235 million. The ratio was 9% and 9% of total debt (excluding deposits) as of March 31, 2025 and 2026. As of March 31, 2026, 81% of short-term debt was borrowings from financial institutions. Long-term debt As of March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Long-term debt : Borrowings from financial institutions and other ¥ 4,031,105 ¥ 4,118,393 ¥ 87,288 2 Bonds 1,251,120 1,358,146 107,026 9 Medium-term notes 387,316 458,255 70,939 18 Payable under securitized loan receivables and other assets 63,577 30,965 (32,612 ) (51 ) Total long-term debt ¥ 5,733,118 ¥ 5,965,759 ¥ 232,641 4 Note: The total amount includes liabilities of consolidated VIEs, for which creditors (or beneficial interest holders) do not have recourse to the general credit of the Company and subsidiaries. Such liabilities as of March 31, 2025 and 2026 were ¥199,360 million and ¥142,028 million, respectively. 99 Table of Contents Long-term debt as of March 31, 2026 was ¥5,965,759 million. The ratio was 91% and 91% of total debt (excluding deposits) as of March 31, 2025 and 2026. Borrowings from financial institutions and other comprised 69% of the long-term debt as of March 31, 2026. 51% of interest paid on long-term debt in fiscal 2026 was fixed rate interest, with the remainder being floating rate interest. For information regarding the repayment schedule of our long-term debt and interest rates for short-term and long-term debt, see Note 14 of “Item 18. Financial Statements.” We have entered into interest rate swaps and other derivative contracts to manage risk associated with fluctuations in interest rates. For information with respect to derivative financial instruments and hedging, see Note 27 of “Item 18. Financial Statements.” Deposits As of March 31, Change 2025 2026 Amount Percent (%) (Millions of yen, except percentage data) Deposits ¥ 2,449,812 ¥ 2,625,556 ¥ 175,744 7 Note: VIEs did not have any deposits as of March 31, 2025 and 2026. For further information with respect to deposits, see Note 15 of “Item 18. Financial Statements.” Off-Balance Sheet Arrangements Use of Special Purpose Entities We periodically securitize various financial assets such as lease receivables and loan receivables. These securitizations allow us to access the capital markets, provide us with alternative sources of funding and diversify our investor base and help us to mitigate, to some extent, credit risk associated with our customers and risk associated with fluctuations in interest rates. In the securitization process, the assets for securitization are sold to special purpose entities (hereinafter, “SPEs”), which issue asset-backed securities to investors. We expect to continue to utilize SPEs structures for securitization of assets. For further information on our transfer of financial assets, see Note 10 of “Item 18. Financial Statements.” Investment Products We provide investment products to our customers that employ a contractual mechanism known in Japan as a kumiai, which is in effect a type of SPEs. We arrange and market kumiai products to investors as a means to finance the purchase of aircraft, ships or other large-ticket items to be leased to third parties. A portion of the funds necessary to purchase the item is contributed by such investors, while the remainder is borrowed by the kumiai from one or more financial institutions in the form of a non-recourse loan. The kumiai investors (and any lenders to the kumiai) retain all of the economic risks and rewards in connection with the purchase and leasing activities of the kumiai, and all related gains or losses are recorded on the financial statements of investors in the kumiai. We are responsible for the arrangement and marketing of these products, and may act as servicer or administrator in kumiai transactions. Fee income for arranging and administering these transactions is recognized in our consolidated financial statements. In most kumiai transactions, excluding some kumiai and SPEs, we do not guarantee or otherwise have any financial commitments or exposure with respect to the kumiai or its related SPEs and, accordingly, their assets are not reflected on our consolidated balance sheet. 100 Table of Contents Other Financial Transactions We occasionally enter into loans, equity or other investments in SPEs in connection with finance transactions related to aircraft, ships and real estate, as well as transactions involving investment funds, in addition to real estate purchases and development projects. All transactions involving use of SPEs structures are evaluated to determine whether we hold a variable interest that would result in our being defined as the primary beneficiary of the SPEs. When we are considered to own the primary beneficial interest in the SPEs, the SPEs are fully consolidated into our consolidated financial statements. In all other circumstances our loan, equity or other investments are recorded on our consolidated balance sheets as appropriate. For further information concerning our SPEs, see Note 11 of “Item 18. Financial Statements.” Contractual Obligations The table below sets forth the maturities of contractual cash obligations as of March 31, 2026. Payments due by period Total Within 1 year 1-3 years 3-5 years After 5 years (Millions of yen) Contractual cash obligations: Deposits ¥ 2,625,556 ¥ 1,846,727 ¥ 235,039 ¥ 498,521 ¥ 45,269 Long-term debt 5,965,759 1,032,088 1,966,627 1,511,022 1,456,022 Unconditional purchase obligation related to lease agreements 23,487 0 23,487 0 0 Lease liabilities related to lessee leases 308,632 56,772 73,746 52,917 125,197 Unconditional noncancelable contracts for computer systems 15,780 8,029 6,741 1,010 0 Interest rate swaps: Notional amount (floating to fixed) 617,042 125,616 168,229 101,723 221,474 Notional amount (fixed to floating) 1,025 0 980 34 11 Total contractual cash obligations ¥ 9,557,281 ¥ 3,069,232 ¥ 2,474,849 ¥ 2,165,227 ¥ 1,847,973 Items excluded from the above table include short-term debt of ¥572,235 million, trade notes, accounts and other payable of ¥356,008 million and policy liabilities and policy account balances of ¥1,943,710 million as of March 31, 2026. For information on pension plans and derivatives, see Notes 17 and 27 of “Item 18. Financial Statements.” We expect to fund commitments and contractual obligations from one, some or all of our diversified funding sources depending on the amount to be funded, the time to maturity and other characteristics of the commitments and contractual obligations. For a discussion of debt and deposit-related obligations, see Notes 14 and 15 of “Item 18. Financial Statements.” For information on lease liabilities, see Note 6 of “Item 18. Financial Statements.” We secure liquidity by holding cash and entering into committed credit facilities agreements in consideration of known contractual obligations. 101 Table of Contents CASH FLOWS Our cash flows primarily consist of: • cash outflows and inflows which are generated primarily from principal payments received under net investment in lease, life insurance related income and costs, costs of inventories and sales of inventories, and services income and services expense classified as cash flows from operating activities; • cash outflows and inflows which are generated primarily from purchases of lease equipment and proceeds from sales of lease equipment, purchases of securities and proceeds from sales of securities, and originations of installment loans and principal payments received under installment loans classified as cash flows from investing activities; and • cash outflows and inflows which are generated primarily from proceeds from short-term and long-term debt, repayment of short-term and long-term debt, and deposits due to customers classified as cash flows from financing activities. The use of cash is heavily dependent on the volume of operating assets for new business. As new business volumes for assets such as leases and loans increase, we require more cash to meet those needs, while a decrease in new business volumes results in less use of cash and an increase in debt repayment. For cash flow information regarding interest and income tax payments, see Note 5 of “Item 18. Financial Statements.” Year Ended March 31, 2026 Compared to Year Ended March 31, 2025 Cash, cash equivalents and restricted cash as of March 31, 2026 were ¥1,451,099 million due to an increase of ¥129,116 million compared to March 31, 2025. Cash flows provided by operating activities were ¥1,369,567 million during fiscal 2026, up from ¥1,300,193 million during fiscal 2025. This change resulted primarily from an increase in net income and an increase in policy liabilities and policy account balances, excluding the impact of changes in policy liability discount rate. Cash flows used in investing activities were ¥1,114,671 million during fiscal 2026, down from ¥1,309,695 million during fiscal 2025. This change resulted primarily from an increase in principal collected on installment loans and a decrease in purchases of available-for-sale debt securities. Cash flows used in financing activities were ¥160,535 million during fiscal 2026 compared to the inflow of ¥149,322 million during fiscal 2025. This change was primarily due to repayments of debt with maturities longer than three months exceeding the amounts of proceeds and a change from an increase to a decrease in call money, partially offset by a change from a decrease to an increase in debt with maturities of three months or less. Year Ended March 31, 2025 Compared to Year Ended March 31, 2024 Cash, cash equivalents and restricted cash as of March 31, 2025 were ¥1,321,983 million due to an increase of ¥136,676 million compared to March 31, 2024. Cash flows provided by operating activities were ¥1,300,193 million during fiscal 2025, up from ¥1,243,402 million during fiscal 2024. This change resulted primarily from an increase in policy liabilities and policy account balances and a decrease in an increase in inventories. Cash flows used in investing activities were ¥1,309,695 million during fiscal 2025, down from ¥1,372,803 million during fiscal 2024. This change resulted primarily from an increase in proceeds from sales and redemption of available-for-sale debt securities, partially offset by an increase in purchases of lease equipment and available-for-sale debt securities. 102 Table of Contents Cash flows provided by financing activities were ¥149,322 million during fiscal 2025 compared to the outflow of ¥85,477 million during fiscal 2024. This change was primarily due to proceeds from debt with maturities longer than three months exceeding the amounts of repayments and a change from a decrease to an increase in deposits due to customers. COMMITMENTS FOR CAPITAL EXPENDITURES As of March 31, 2026, we had unconditional purchase obligations related to lease agreements in the amount of ¥23,487 million. For information on commitments, guarantees and contingent liabilities, see Note 31 of “Item 18. Financial Statements.” RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC. Not applicable. TREND INFORMATION See the discussion under “—Results of Operations” and “—Liquidity and Capital Resources.” COMMITMENTS The table below sets forth the maturities of guarantees and other commitments as of March 31, 2026. Amount of commitment expiration per period Total Within 1 year 1-3 years 3-5 years After 5 years (Millions of yen) Commitments: Guarantees ¥ 908,434 ¥ 93,590 ¥ 177,409 ¥ 262,442 ¥ 374,993 Committed credit lines and other 1,047,566 324,990 399,879 89,470 233,227 Total commercial commitments ¥ 1,956,000 ¥ 418,580 ¥ 577,288 ¥ 351,912 ¥ 608,220 A subsidiary in the United States is authorized to underwrite, originate, fund and service multi-family and senior housing loans without prior approval from Federal National Mortgage Association (hereinafter, “Fannie Mae”) under the Delegated Underwriting and Servicing program and Federal Home Loan Mortgage Corporation (hereinafter, “Freddie Mac”) under the Delegated Underwriting Initiative program. As part of these programs, Fannie Mae and Freddie Mac provide a commitment to purchase the loans. Under these programs, the subsidiary guarantees the performance of the loans transferred to Fannie Mae and Freddie Mac and has the payment or performance risks of the guarantees to absorb some of the losses when losses arise from the transferred loans. The amount attributable to the guarantee included in the table above is ¥609,536 million as of March 31, 2026. The subsidiary makes certain representations and warranties in connection with the sale of loans through Fannie Mae and Freddie Mac, including among others, that: the mortgage meets Fannie Mae and Freddie Mac requirements; there is a valid lien on the property; the relevant transaction documents are valid and enforceable; and title insurance is maintained on the property. If it is determined that a representation and warranty has been breached, the subsidiary may be required to repurchase the related loans or indemnify Fannie Mae and Freddie Mac for any related losses incurred. The subsidiary had no such repurchase claims during fiscal 2026. For a discussion of commitments, guarantees and contingent liabilities, see Note 31 of “Item 18. Financial Statements.” 103 Table of Contents CRITICAL ACCOUNTING POLICIES AND ESTIMATES Accounting estimates are an integral part of the financial statements prepared by management and are based upon management’s current judgments. Note 1 of “Item 18. Financial Statements” includes a summary of the significant accounting policies used in the preparation of our consolidated financial statements. Certain accounting estimates are particularly sensitive because of their significance to the consolidated financial statements and the possibility that future events affecting the estimates may differ significantly from management’s current judgments. We consider the accounting estimates discussed in this section to be critical for us for two reasons. First, the estimates require us to make assumptions about matters that are highly uncertain at the time the accounting estimates are made. Second, different estimates that we reasonably could have used in the relevant period, or changes in the accounting estimates that are reasonably likely to occur from period to period, could have a material impact on our financial condition or results of operations. We believe the following represent our critical accounting policies and estimates. FAIR VALUE MEASUREMENTS Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, a number of significant judgments, assumptions and estimates may be required. If observable market prices are not available, we use internally-developed valuation techniques, such as discounted cash flow methodologies, to measure fair value. These valuation techniques involve determination of assumptions that market participants would use in pricing the asset or liability. This determination involves significant judgment, and the use of different assumptions and/or valuation techniques could have a material impact on our financial condition or results of operations. Significant assumptions used in measuring fair values have a pervasive effect on various estimates, such as estimates of the allowance for credit losses on real estate collateral-dependent loans, measurement of impairment of investments in securities, measurement of impairment of goodwill and other intangible assets, measurement of impairment of long-lived assets and recurring measurements of loans held for sale, investments in securities and derivative instruments. The Company and its subsidiaries classify and prioritize inputs used in valuation techniques to measure fair value into the following three levels: • Level 1—Inputs of quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. • Level 2—Inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly or indirectly. • Level 3—Unobservable inputs for the assets or liabilities. The Company and its subsidiaries differentiate between those assets and liabilities required to be carried at fair value at every reporting period (recurring) and those assets and liabilities that are only required to be adjusted to fair value under certain circumstances (nonrecurring). We mainly measure certain loans held for sale, trading debt securities, available-for-sale debt securities, certain equity securities, derivatives, certain reinsurance recoverables in other assets, variable annuity and variable life insurance contracts in policy liabilities and policy account balances, and certain accounts payable at fair value on a recurring basis. Certain subsidiaries measure certain loans held for sale, certain foreign government bond securities and foreign corporate debt securities included in available-for-sale debt securities, certain investment funds included in equity securities, certain reinsurance contracts, and variable annuity and variable life insurance contracts at fair value on a recurring basis as they elected the fair value option. 104 Table of Contents The following table presents recorded amounts of major financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2026: March 31, 2026 Total Carrying Value in Consolidated Balance Sheets Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (Millions of yen) Financial Assets: Loans held for sale ¥ 78,020 ¥ 0 ¥ 42,336 ¥ 35,684 Available-for-sale debt securities 2,526,416 7,278 2,243,137 276,001 Equity securities 501,246 150,194 120,456 230,596 Derivative assets 154,513 676 145,850 7,987 Other assets 1,163 0 0 1,163 Total ¥ 3,261,358 ¥ 158,148 ¥ 2,551,779 ¥ 551,431 Financial Liabilities: Derivative liabilities ¥ 118,061 ¥ 148 ¥ 117,356 ¥ 557 Policy Liabilities and Policy Account Balances 138,027 0 0 138,027 Accounts Payable 15,683 0 0 15,683 Total ¥ 271,771 ¥ 148 ¥ 117,356 ¥ 154,267 Compared to financial assets classified as Level 1 and Level 2, measurements of financial assets classified as Level 3 require particularly careful judgment because of their significance to the financial statements and the possibility that future events affecting the fair value measurements may differ significantly from management’s current measurements. As of March 31, 2026, financial assets measured at fair value on a recurring basis and classified as Level 3 and the percentages of total assets are as follows: March 31, 2026 Significant Unobservable Inputs (Level 3) Percentage of Total Assets (%) (Millions of yen, except percentage data) Level 3 Assets: Loans held for sale ¥ 35,684 0 Available-for-sale debt securities 276,001 2 Japanese prefectural and foreign municipal bond securities 10,582 0 Corporate debt securities 118,191 1 Other asset-backed securities and debt securities 147,228 1 Equity securities 230,596 1 Investment funds 230,596 1 Derivative assets 7,987 0 Options held/written and other 7,987 0 Other assets 1,163 0 Reinsurance recoverables 1,163 0 Total Level 3 financial assets ¥ 551,431 3 Total assets ¥ 18,002,776 100 105 Table of Contents As of March 31, 2026, the amount of financial assets classified as Level 3 was ¥551,431 million, among financial assets that we measured at fair value on a recurring basis. Level 3 assets represent 3% of our total assets. Investment funds, Other asset-backed securities and debt securities, and Corporate debt securities classified as Level 3 were ¥230,596 million, ¥147,228 million and ¥118,191 million respectively, as of March 31, 2026, which are 42%, 27% and 21% of total Level 3 financial assets, respectively. Investment funds classified as Level 3 are mainly investments held by the investment companies which are owned by an Americas subsidiary, and certain investments in investment funds for which certain subsidiaries elected the fair value option. With respect to investments held by the investment companies owned by that Americas subsidiary, fair value measurement is based on market multiple valuation methods, or broker quotes. Market multiple valuation methods use earnings before interest, taxes, depreciation and amortization (EBITDA) multiples based on actual and projected cash flows, comparable peer companies, and comparable precedent transactions and others. With respect to certain investments in investment funds for which certain subsidiaries elected the fair value option, the subsidiaries measure their fair value using discounting to net asset value based on inputs that are unobservable in the market, broker quotes, or discounted cash flow methodologies. Discounted cash flow methodologies use future cash flows to be generated from investees, weighted average cost of capital (WACC) and others. With respect to the other asset-backed securities and debt securities, we determined that due to the lack of observable trades for older vintage and below investment grade securities, we continue to limit the reliance on independent pricing service vendors and brokers. As a result, we established internally developed pricing models using valuation techniques such as discounted cash flow methodologies using Level 3 inputs in order to estimate fair value of these debt securities and classified them as Level 3. Under the models, we use anticipated cash flows of the security discounted at a risk-adjusted discount rate that incorporates our estimate of credit risk and liquidity risk that a market participant would consider. The cash flows are estimated based on a number of assumptions such as default rate and prepayment speed, as well as seniority of the security. An increase (decrease) in the discount rate or default rate would result in a decrease (increase) in the fair value of other asset-backed securities. The corporate debt securities classified as Level 3 include a foreign convertible bond issued by AM Green (Luxembourg) S.à.r.l. It was received in conjunction with the partial sale of shares in Greenko Energy Holdings and is measured at fair value using discounted cash flow methodology to estimate the equity value as of the transaction date, then, using a pricing model based on the Monte Carlo simulation to estimate the bond’s future conversion value and discounting it to the present value. The fair value measurement uses discount rates and projected cash flows based on the business plan including future sales prices and sales volumes of green ammonia for the discounted cash flow methodology, and uses discount rate and equity volatility for the pricing model based on the Monte Carlo simulation. Discount rates, equity volatility, and projected cash flows based on the business plan are unobservable inputs. An increase (decrease) in the discount rate and equity volatility and a decrease (increase) in projected cash flows based on the business plan would result in a decrease (increase) in the fair value of corporate debt securities. In determining whether the inputs are observable or unobservable, we evaluate various factors such as the lack of recent transactions, price quotations that are not based on current information or vary substantially over time or among market makers, a significant increase in implied risk premium, a wide bid-ask spread, significant decline in new issuances, little or no public information (e.g., a principal-to-principal market) and other factors. For more discussion, see Note 2 of “Item 18. Financial Statements.” 106 Table of Contents ESTIMATING THE FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED IN A BUSINESS COMBINATION The Company and its subsidiaries account for business combinations using the acquisition method. Under this method, the Company and its subsidiaries recognize and measure the identifiable assets acquired and liabilities assumed at their fair values as of the acquisition date, which is the date on which control is obtained. Intangible assets acquired in a business combination are recognized separately from goodwill if they meet either the contractual legal criterion or the separability criterion. Goodwill is measured as the excess of the sum of the consideration transferred and the fair value of any noncontrolling interests over the net fair value of the identifiable assets acquired and liabilities assumed. A bargain purchase gain is recognized when the net fair value of the identifiable assets acquired and liabilities assumed exceeds the consideration transferred and the fair value of any noncontrolling interests. The determination of the fair values of identifiable assets acquired and liabilities assumed requires management to make significant judgments, estimates, and assumptions. When observable market prices for intangible assets are not available, the Company and its subsidiaries use valuation techniques such as the excess earnings method and the relief from royalty method. These valuation techniques require assumptions relating to future revenue growth, operating margins, and discount rates. Changes in these assumptions or the use of different valuation techniques could have a material impact on the Company and its subsidiaries’ financial position and results of operations. Although management believes the assumptions and valuation methodologies used are reasonable, actual results may differ due to changes in economic conditions, which could require revisions to estimates and assumptions and materially affect the Company and its subsidiaries’ financial position and results of operations. ALLOWANCE FOR CREDIT LOSSES We estimate credit losses expected to occur in future over the remaining life of financial assets, and allowance for credit losses is recognized. This evaluation process is subject to management’s estimates and judgments. The estimate made in determining the allowance for credit losses is a critical accounting estimate for all of our segments. In developing the allowance for credit losses, we consider, among other things, the following factors: • business characteristics and financial conditions of obligors; • prior charge-off experience; • current delinquencies and delinquency trends; • value of underlying collateral and guarantees; and • current economic and business conditions and expected outlook in the future. There are two methods for estimating the allowance for credit losses; collective evaluation and individual evaluation. We also recognize allowances for off-balance sheet credit exposures. Collective evaluation When certain financial assets have similar risk characteristics to other financial assets, we collectively evaluate these financial assets as a pool. The forecasted future economic indicators correlated with the prior charge-off experience are reflected in the estimate of the allowance for credit losses. Economic indicators correlated with prior charge-off experience are determined over a reasonable and supportable forecasted period. Economic indicators include GDP growth rates, consumer price indices, unemployment rates, and government bond interest rates. We also consider forward-looking scenarios of how the selected economic indicators will change in the future. We use the latest economic forecasts available from economic reports published by governments and central banks, as well as from third-party information providers as economic indicators. 107 Table of Contents Individual evaluation When financial assets do not have similar risk characteristics to other financial assets, we evaluate individually the financial assets. In the individual assessment the allowance for credit losses is estimated individually based on the present value of expected future cash flows, and the observable market price or the fair value of the collateral if the financial assets are collateral-dependent. For non-recourse loans and purchased loans, in principle, the estimated collectible amount is determined based on the fair value of the real estate collateral securing the loans as they are real estate collateral-dependent. Further for certain non-recourse loans and purchased 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. We charge off doubtful receivables when the likelihood of any future collection is believed to be minimal considering debtor’s creditworthiness and the liquidation status of collateral. Allowance for off-balance sheet credit exposures If the entity has a present contractual obligation to extend credit and the obligation is not unconditionally cancelable by the entity, credit losses related to the loan commitments of installment loans and financial guarantees are in the scope of the allowance for credit losses. For loan commitments of installment loans, credit losses are recognized on the loan commitments for the portion expected to be drawn. For financial guarantees, the allowance is recognized for the contingent obligation which generates credit risk exposures. The allowance for off-balance sheet credit exposures is measured using the same measurement methodologies as the allowance for loans and net investment leases, considering quantitative and qualitative factors including historical loss experience, current economic and business conditions and reasonable and supportable forecasts. The allowance for these off-balance sheet credit exposures is recorded in other liabilities on the consolidated balance sheets. While management considers the allowance to be adequate based on currently available information, additional provisions may be required due to future uncertain events and factors. IMPAIRMENT OF INVESTMENT IN SECURITIES We make decisions about impairment of investment in debt securities other than trading and investment in equity securities elected for the measurement alternative as follows. As for impairment of available-for-sale debt securities, if the fair value is less than the amortized cost, the debt securities are impaired. We identify per each impaired security whether the decline of fair value is due to 108 Table of Contents credit losses component or non-credit losses component. Impairment related to credit losses is recognized in earnings through an allowance for credit losses. Impairment related to other factors than credit losses is recognized in other comprehensive income (loss), net of applicable income taxes. In estimating an allowance for credit losses, we consider that credit losses exist when the present value of estimated cash flows is less than the amortized cost basis. When we intend to sell the debt securities for which an allowance for credit losses is previously established or it is more likely than not that we will be required to sell the debt securities before recovery of the amortized cost basis, the allowance for credit losses is fully written off and the amortized cost is reduced to the fair value after recognizing additional impairment in earnings. In addition, we recognize in earnings the full difference between the amortized cost and the fair value of the debt securities by direct write-down, without any allowance for credit losses, if the debt securities are expected to be sold and the fair value is less than the amortized cost. In assessing whether available-for-sale debt securities are impaired, we consider all available information relevant to the collectability of the debt security, including but not limited to the following factors: • the extent to which the fair value is less than the amortized cost basis; • continuing analysis of the underlying collateral, age of the collateral, business climate, economic conditions and geographical considerations; • trends in delinquencies and charge-offs; • payment structure and subordination levels of the debt security; and • changes to the rating of the security by a rating agency. For equity securities elected for the measurement alternative, we determine that the investment shall be written down to its fair value with losses included in income if a qualitative assessment indicates that the investment is impaired and the fair value of the investment is less than its carrying value. In assessing whether equity securities elected for the measurement alternative are impaired, we make a qualitative assessment considering impairment indicators, including but not limited to the following factors: • a significant deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee; • a significant adverse change in the regulatory, economic, or technological environment of the investee; • a significant adverse change in the general market condition of either the geographical area or the industry in which the investee operates; • a bona fide offer to purchase, an offer by the investee to sell, or a completed auction process for the same or similar investment for an amount less than the carrying amount of that investment; and • factors that raise significant concerns about the investee’s ability to continue as a going concern, such as negative cash flows from operations, working capital deficiencies, or noncompliance with statutory capital requirements or debt covenants. Determinations of whether investments in securities are impaired often involve estimating the outcome of future events that are highly uncertain at the time the estimates are made. Management judges whether there are any facts that an impairment loss should be recognized, based primarily on objective factors. If the financial condition of an investee deteriorates, its forecasted performance is not met or actual market conditions are less favorable than those projected by management, we may charge against income additional losses on investment in securities. The accounting estimates relating to impairment of investment in securities could affect all segments. 109 Table of Contents IMPAIRMENT OF GOODWILL AND OTHER INTANGIBLE ASSETS We perform an impairment test for goodwill and any indefinite-lived intangible assets at least annually. Additionally, if events or changes in circumstances indicate that the asset might be impaired, we test for impairment whenever such events or changes occur. We have the option to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount before we perform a quantitative goodwill impairment test. We perform the qualitative assessment for some goodwill but bypass the qualitative assessment and proceed directly to the quantitative goodwill impairment test for other goodwill. For the goodwill for which the qualitative assessment is performed, if, after assessing the totality of events or circumstances, we determine that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then we do not perform the quantitative goodwill impairment test. However, if we conclude otherwise or determine to bypass the qualitative assessment, we proceed to perform the quantitative goodwill impairment test. The quantitative goodwill impairment test calculates the fair value of the reporting unit and compares the fair value with the carrying amount of the reporting unit. If the fair value of the reporting unit falls below its carrying amount, an impairment loss is recognized in an amount equal to the difference. We test the goodwill at the reporting unit which is either the same level as an operating segment or one level below an operating segment. We have the option to perform a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired before we perform a quantitative impairment test. We perform the qualitative assessment for some indefinite-lived intangible assets but bypass the qualitative assessment and perform the quantitative impairment test for other indefinite-lived intangible assets. For those indefinite-lived intangible assets for which the qualitative assessment is performed, if, after assessing the totality of events and circumstances, we conclude that it is not more likely than not that the indefinite-lived intangible asset is impaired, then we do not perform the quantitative impairment test. However, if we conclude otherwise or determine to bypass the qualitative assessment, we calculate the fair value of the indefinite-lived intangible asset and perform the quantitative impairment test. We compare the fair value with the carrying amount of the indefinite-lived intangible asset. If the carrying amount of the indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. Intangible assets with finite lives are amortized over their useful lives and tested for impairment. The Company and its subsidiaries perform a recoverability test for the intangible assets whenever events or changes in circumstances indicate that the assets might be impaired. The intangible assets are considered not recoverable when the undiscounted future cash flows estimated to be generated by those assets are less than the carrying amount of those assets, and the net carrying amount of assets not recoverable is reduced to fair value if lower than the carrying amount and an impairment loss is recognized in an amount equal to the difference. The fair value of a reporting unit under the quantitative goodwill impairment test is determined by estimating the outcome of future events and assumptions made by management. Similarly, estimates and assumptions are used in determining the fair value of any intangible assets. When necessary, we refer to an evaluation by a third party in determining the fair value of a reporting unit; however, such determinations are often made by using discounted cash flows analyses performed by us. This approach uses numerous estimates and assumptions, including projected future cash flows of a reporting unit, discount rates reflecting the inherent risk, and growth rates. For example, determining the fair value of an asset management contract included in intangible assets involves the estimated balances of assets under management, including the amounts of inflows and outflows related to the underlying investment funds that provide the asset management service, and estimates and assumptions regarding the WACC. Management believes that the assumptions used in estimating fair value used to determine impairment are reasonable, but we may charge additional losses to income if actual cash flows or any items which affect a fair value are less favorable than those projected by management due to economic conditions or our own risk in the reporting unit. 110 Table of Contents The accounting estimates relating to impairment of goodwill and any intangible assets could affect all segments. IMPAIRMENT OF LONG-LIVED ASSETS We periodically perform an impairment review for long-lived assets held and used in operations, including tangible assets, intangible assets being depreciated or amortized, and real estate development projects, consisting primarily of office buildings, condominiums, aircraft, ships, mega solar facilities and other properties under facility operations. The assets are tested for recoverability whenever events or changes in circumstances indicate that those assets might be impaired, including, but not limited to, the following: • significant decline in the market value of an asset; • significant deterioration in the usage range and method, or physical condition, of an asset; • significant deterioration of legal regulatory or business environments, including an adverse action or assessment by a relevant regulator; • acquisition and construction costs substantially exceeding estimates; • continued operating loss or actual or potential loss of cash flows; or • potential loss on a planned sale. When we determine that assets might be impaired based upon the existence of one or more of the above factors or other factors, we estimate the future cash flows expected to be generated by those assets. For example, we estimate the future cash flows expected to be generated by aircraft mainly based on the underlying operating lease contracts and the appraisals obtained from independent third-party appraisers. Our estimates of the future cash flows are based upon historical trends adjusted to reflect our best estimate of future market and operating conditions. Our estimates also include the expected future periods in which future cash flows are expected. As a result of the recoverability test, when the sum of the estimated future undiscounted cash flows expected to be generated by those assets is less than its carrying amount, and when its fair value is less than its carrying amount, we determine the amount of impairment based on the fair value of those assets. If the asset is considered impaired, an impairment charge is recorded for the amount by which the carrying amount of the asset exceeds fair value. We determine the fair value using appraisals prepared by independent third-party appraisers or our own staff of qualified appraisers, and others based on recent transactions involving sales of similar assets or other valuation techniques, as appropriate. Although management believes that the expected future cash flows and the calculations of fair value used to determine impairment are reasonable, if actual market and operating conditions under which assets are operated are less favorable than those projected by management, resulting in lower expected future cash flows or shorter expected future periods to generate such cash flows, additional impairment charges may be required. In addition, changes in estimates resulting in lower fair values due to unanticipated changes in business or operating assumptions could adversely affect the valuations of long-lived assets. The accounting estimates relating to impairment of long-lived assets could affect all segments. UNGUARANTEED RESIDUAL VALUE FOR FINANCE LEASES AND OPERATING LEASES We estimate unguaranteed residual values of leased equipment (such as automobiles, office equipment, etc.) when we calculate unearned lease income to be recognized as income over the lease term for finance leases and when we calculate depreciation amounts for operating leases that carry inherently higher obsolescence and resale risks. Our estimates are based upon current market values of used equipment and estimates of when and how much equipment will become obsolete, and actual recovery being experienced for similar used equipment. If actual demand for re-lease or actual market conditions of used equipment is less favorable than that projected by management, write-downs of unguaranteed residual value may be required. 111 Table of Contents The accounting estimates relating to unguaranteed residual value for finance leases and operating leases affect mainly the Corporate Financial Services and Maintenance Leasing segment, and the Asia and Australia segment. INSURANCE POLICY LIABILITIES AND DEFERRED POLICY ACQUISITION COSTS Certain subsidiaries write life insurance policies to customers. The policies are classified as long-duration contracts and mainly consist of whole life, term life, endowments, medical insurance and individual annuity insurance contracts. The calculation of liabilities for future policy benefits other than single-payment whole life insurance and individual annuities is computed using the same contract groupings (also referred to as cohorts) by policy year, currency, payment method (full term payment or limited payment) and product category and the liabilities for future policy benefits are computed using the net level premium method based on expected future policy benefit payments. A liability is recorded for the present value of expected future policy insurance benefits to be paid and certain related costs, less the present value of expected future net premium to be earned, at the time the premium revenue is recognized. For limited payment contracts, the excess of gross premiums received over net premium is recorded as a deferred profit liability. The liabilities for future policy benefits are measured using assumptions such as mortality, morbidity, lapse, expense and discount rates. These assumptions are determined based on historical experience, industry data and other factors. Certain subsidiaries review and update future cash flow assumptions at least annually except for expense assumptions. Certain subsidiaries elected to lock in and not to update expense assumptions after expense assumptions are determined based on the most recent actual results at the time of contract issuance. The net premium ratios for calculating the liabilities for future policy benefits are also updated quarterly by cohort, reflecting actual cash flows. Certain subsidiaries remeasure the liabilities for future policy benefits using the updated net premium ratios as of the beginning of the reporting period in which the assumptions are updated and record the change from the remeasurement as gains or losses. For periods subsequent to the remeasurement, certain subsidiaries calculate the liabilities for future policy benefits using updated net premium ratios. If net premiums exceed gross premiums, the liabilities for future policy benefits are increased and the excess is recognized immediately in earnings. Certain subsidiaries use a yield curve based on the yields on single-A rated fixed-income instruments as upper-medium grade fixed-income instrument yields with durations similar to the liabilities for future policy benefits to determine discount rate assumptions. The yields on single-A rated fixed-income instruments are referenced in the index provided by a third-party pricing vendor. The discount rate assumptions are updated quarterly and are used for remeasurement of the liability at the reporting date. Changes in the liabilities for future policy benefits resulting from updates of discount rate assumptions are recognized in other comprehensive income (loss), net of applicable income tax. For periods beyond the observable period of the referenced index, the discount rate yield curve beyond the observable period of the referenced index is interpolated to the ultimate forward rate using the Smith-Wilson method. Certain subsidiaries elected the fair value option for the entire variable annuity and variable life insurance contracts with changes in the fair value recognized in earnings. The changes in fair value of the variable annuity and variable life insurance contracts are linked to the fair value of the investment in securities managed on behalf of variable annuity and variable life policyholders. Additionally, certain subsidiaries provide minimum guarantees to variable annuity and variable life policyholders under which it is exposed to the risk of compensating losses incurred by the policyholders to the extent contractually required. Therefore, certain subsidiaries adjust the fair value of the underlying investments by incorporating changes in fair value of the minimum guarantee risk in the evaluation of the fair value of the entire variable annuity and variable life insurance contracts. The fair value of the minimum guarantee risk is measured using discounted cash flow methodologies based on discount rates, mortality, lapse rates, annuitization rates and other factors. Certain subsidiaries ceded a portion of their minimum guarantee risk related to variable annuity and variable life insurance contracts to reinsurance companies in order to mitigate the risk and elected the fair value option for 112 Table of Contents the reinsurance contracts. In addition, we economically hedge risks that are not covered by reinsurance. The reinsurance contracts do not relieve certain subsidiaries from the obligation as the primary obligor to compensate certain losses incurred by the policyholders, and the default of the reinsurance companies may impose additional losses on certain subsidiaries. Policy liabilities and policy account balances for single-payment whole life insurance and fixed annuity insurance contracts are measured based on the single-premiums plus interest based on expected rate, less withdrawals, expenses and other charges. Certain costs related directly to the successful acquisition of new or renewal insurance contracts are deferred. Deferred policy acquisition costs consist primarily of agent commissions, except for policy maintenance costs, and underwriting expenses. For amortization of deferred policy acquisition costs, insurance contracts are grouped by contract year, currency, payment method (full term payment or limited payment) and product category, using the same contract groupings for the calculation of the liabilities for future policy benefits. Insurance contracts for which the liabilities for future policy benefits are not calculated are grouped by policy year, currency, and product category. Deferred policy acquisition costs are amortized at constant-level basis for each cohort over the expected term of the policies. For all cohorts, the number of policies in force for the amortization of deferred policy acquisition costs is projected using mortality and lapse rates estimated based on historical experience, industry data and other factors, which are consistent with those assumptions used for calculating the liabilities for future policy benefits. When mortality and lapse rates are updated, the effects on the amortization of deferred policy acquisition costs are derived by updating the projected number of policies in force and recognized prospectively over the expected term of the policies. If certain reinsurance commissions (income) corresponding to costs related directly to the successful acquisition of new or renewal insurance contracts are incurred, they are similarly deferred and amortized in accordance with U.S. GAAP at a constant level over the expected insurance period, and deducted from the unamortized balance of deferred acquisition costs related to the contracts subject to the reinsurance contract. The accounting estimates relating to insurance policy liabilities and deferred policy acquisition costs affect the Insurance segment. Although management believes that these estimates relating to insurance policy liabilities and deferred policy acquisition costs are reasonable, they could be affected by future changes in uncertain economic conditions etc., which could require revisions to assumptions, which could have a material impact on the financial position and results of operations of the Company and its subsidiaries. ASSESSING HEDGE EFFECTIVENESS We use foreign currency swap agreements, interest rate swap agreements and foreign exchange contracts for hedging purposes and apply fair value hedge, cash flow hedge or net investment hedge accounting to measure and account for subsequent changes in their fair value. To qualify for hedge accounting, details of the hedging relationship are formally documented at the inception of the arrangement, including the risk management objective, hedging strategy, hedged item, specific risks that are to be hedged, the derivative instrument and how effectiveness is being assessed. Derivatives for hedging purposes must be highly effective in offsetting either changes in fair value or cash flows, as appropriate, for the risk being hedged and effectiveness needs to be assessed at the inception of the relationship. Hedge effectiveness is assessed quarterly on a retrospective and prospective basis. If specified criteria for the assumption of effectiveness are not met at hedge inception or upon quarterly testing, then hedge accounting is discontinued. To assess effectiveness, we use techniques including regression analysis and the cumulative dollar offset method. 113 Table of Contents The accounting estimates used to assess hedge effectiveness could affect mainly the Insurance segment and the Asia and Australia segment. PENSION PLANS The determination of our projected benefit obligation and expense for our employee pension benefits is mainly dependent on the size of the employee population, actuarial assumptions, expected long-term rate of return on plan assets and the discount rate used in the accounting. Pension expense is directly related to the number of employees covered by the plans. Increased employment through internal growth or acquisition would result in increased pension expense. In estimating the projected benefit obligation, actuaries make assumptions regarding mortality rates, turnover rates, retirement rates and rates of compensation increase. Actual results that differ from the assumptions are accumulated and amortized over future periods and, therefore, affect expense in future periods. We determine the expected long-term rate of return on plan assets annually based on the composition of the pension asset portfolios and the expected long-term rate of return on these portfolios. The expected long-term rate of return is designed to approximate the long-term rate of return actually earned on the plans’ assets over time to ensure that funds are available to meet the pension obligations that result from the services provided by employees. We use a number of factors to determine the reasonableness of the expected rate of return, including actual historical returns on the asset classes of the plans’ portfolios and independent projections of returns of the various asset classes. We use March 31 as a measurement date for our pension assets and projected benefit obligation balances under all of our material plans. If we were to assume a 1% increase or decrease in the expected long-term rate of return, holding the discount rate and other actuarial assumptions constant, pension expense for fiscal 2026 would decrease or increase, respectively, by approximately ¥3,252 million. Discount rates are used to determine the present value of our future pension obligations. The discount rates are reflective of rates available on long-term, high-quality fixed-income debt instruments with maturities that closely correspond to the timing of defined benefit payments. Discount rates are determined annually on the measurement date. If we were to assume a 1% increase in the discount rate, and keep the expected long-term rate of return and other actuarial assumptions constant, pension expense for fiscal 2026 would decrease by approximately ¥1,774 million. If we were to assume a 1% decrease in the discount rate, and keep other assumptions constant, pension expense for fiscal 2026 would increase by approximately ¥1,153 million. While we believe the estimates and assumptions used in our pension accounting are appropriate, differences in actual results or changes in these assumptions or estimates could adversely affect our pension obligations and future expenses. INCOME TAXES In preparing the consolidated financial statements, we make estimates relating to income taxes of the Company and its subsidiaries in each of the jurisdictions in which we operate. The process involves estimating our actual current income tax position together with assessing temporary differences resulting from different treatment of items for income tax reporting and financial reporting purposes. Such differences result in deferred tax assets and liabilities, which are included within the consolidated balance sheets. We must then assess the likelihood of whether our deferred tax assets will be recovered from future taxable income, and, to the extent we believe that realizability is not more likely than not, we must establish a valuation allowance. When we establish a valuation allowance or increase this allowance during a period, we must include an expense within the provision for income taxes in the consolidated statements of income. 114 Table of Contents Significant management judgments are required in determining our provision for income taxes, current income taxes, deferred tax assets and liabilities and any valuation allowance recorded against our deferred tax assets. We file tax returns in Japan and certain foreign tax jurisdictions and recognize the financial statement effects of a tax position taken or expected to be taken in a tax return when it is more likely than not, based on the technical merits, that the position will be sustained upon tax examination, including resolution of any related appeals or litigation processes, and measure tax positions that meet the recognition threshold at the largest amount of tax benefit that is greater than 50 percent likely to be realized upon settlement with the taxing authority. Management judgments, including the interpretations about the application of the complex tax laws of Japan and certain foreign tax jurisdictions, are required in the process of evaluating tax positions; therefore, these judgments may differ from the actual results. We have recorded a valuation allowance due to uncertainties about our ability to utilize certain deferred tax assets, primarily certain tax loss carryforwards, before they expire. The valuation allowance is primarily recognized for deferred tax assets of consolidated subsidiaries with tax loss carryforwards. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible and tax loss carryforwards are utilizable. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax-planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that all of the deferred tax assets, net of the valuation allowance, will be realized. The valuation allowance is based on our estimates of taxable income by jurisdiction in which we operate and the period over which our deferred tax assets will be recoverable. If actual results differ from these estimates or if we adjust these estimates in future periods, we may need to establish additional valuation allowances, which could materially impact the consolidated financial position and results of operations. DISCUSSION WITH AND REVIEW BY THE AUDIT COMMITTEE Our management discussed the development and selection of important accounting policies, including accounting estimate of particular importance with our Audit Committee. FAIR VALUE OF INVESTMENT AND RENTAL PROPERTY We own real estate such as rental office buildings, rental logistics centers, rental commercial facilities other than office buildings, rental condominiums and land which is utilized for development as operating leases. A large portion of our real estate held for investment and rental is located around major cities in Japan such as Tokyo. The following table sets forth the carrying amount of investment and rental property as of the beginning and end of fiscal 2026, as well as the fair value as of the end of fiscal 2026. Year ended March 31, 2026 Carrying amount *1 Balance at April 1, 2025 Change amount Balance at March 31, 2026 Fair value at March 31, 2026 *2 (Millions of yen) ¥388,415 ¥65,806 ¥454,221 ¥539,678 ———————— *1 Carrying amounts are stated as cost less accumulated depreciation and accumulated impairment loss. *2 Fair value is either obtained from appraisal reports by external qualified appraisers, calculated by internal appraisal department in accordance with “Real estate appraisal standards,” or calculated by other reasonable internal calculation utilizing similar methods. 115 Table of Contents Investment and rental property revenue and expense for fiscal 2026 were as follows: Year Ended March 31, 2026 Revenue*1 Expense*2 Net (Millions of yen) ¥65,337 ¥ 35,492 ¥ 29,845 ———————— *1 Revenue consists of revenue from leases and gains on sales of real estate under operating leases. Revenue from leases is composed of real estate-related revenues from “Operating leases” and “Life insurance premiums and related investment income.” *2 Expense consists of costs related to the above revenue such as rental payment, depreciation expense, repair cost, insurance cost, tax and duty which are included in “Costs of operating leases,” and “Write-downs of long-lived assets.” RECENT DEVELOPMENTS NEW ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED In November 2024, Accounting Standards Update 2024-03 (“Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures”—(Subtopic 220-40)) was issued, and related update clarifying effective date was issued thereafter. This update requires that entities disclose purchases of inventory, employee compensation, depreciation, intangible asset amortization and depletion for each income statement line item that contains those expenses. It also requires specified expenses, gains or losses that are already disclosed under existing U.S. GAAP to be included in the disclosure of the relevant expense captions, and any remaining amounts to be described qualitatively. Additionally, separate disclosures of total selling expenses and their definition are also required. This update is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, and early adoption is permitted. This update will either be applied prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements. The Company and its subsidiaries will adopt this update on April 1, 2027, for annual disclosure and on April 1, 2028, for interim disclosure. The Company and its subsidiaries are currently evaluating the effect that the adoption of this update will have on the Company and its subsidiaries’ disclosures. In November 2024, Accounting Standards Update 2024-04 (“Induced Conversions of Convertible Debt Instruments”—Subtopic 470-20 (“Debt—Debt with Conversion and Other Options”)) was issued. This update clarifies the application requirements for accounting treatment when conversions are induced by incentives. The update is effective for fiscal years and interim periods beginning after December 15, 2025, with early adoption permitted. Entities may elect either to apply the update retrospectively to all prior periods presented or prospectively from the date of adoption. The Company and its subsidiaries plan to adopt this update prospectively on April 1, 2026. The Company does not expect the adoption of this update to have a material impact on its results of operations, financial position, or disclosures. In May 2025, Accounting Standards Update 2025-03 (“Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity”—ASC 805 (“Business Combinations”), ASC 810 (“Consolidation”)) was issued. This update requires an entity involved in an acquisition transaction effected primarily by exchanging equity interests when the legal acquiree is a VIE that meets the definition of a business to consider the factors in the guidance of Subtopic 805-10 (“Business Combinations—Overall”) to determine which entity is the accounting acquirer. This update is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted. This update requires that an entity apply the new guidance prospectively to any acquisition transaction that occurs after the initial application date. The 116 Table of Contents Company and its subsidiaries will adopt this update on April 1, 2027. The Company and its subsidiaries are currently evaluating the effect that the adoption of this update will have on the Company and its subsidiaries’ results of operations or financial position. In May 2025, Accounting Standards Update 2025-04 (“Clarifications to Share-Based Consideration Payable to a Customer”—ASC 718 (“Compensation—Stock Compensation”), ASC 606 (“Revenue from Contracts with Customers”)) was issued. This update revised the definition of the term performance conditions for share-based consideration payable to a customer, including conditions based on the volume or monetary amount of a customer’s purchase of goods or services. When share-based consideration payable to a customer included service conditions, it eliminated the policy election permitting the entity to account for forfeitures as they occur, and the entity is required to estimate the number of forfeitures expected to occur. Additionally, it clarifies that share-based consideration payable to a customer is not subject to the constraint on estimates of variable consideration in ASC 606. This update is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted. This update will either be applied using a modified retrospective approach, with a cumulative-effect adjustment to retained earnings as of the fiscal year of adoption, or retrospectively to all prior periods presented in the financial statements. The Company and its subsidiaries will adopt this update on April 1, 2027. The Company and its subsidiaries are currently evaluating the effect that the adoption of this update will have on the Company and its subsidiaries’ results of operations or financial position, as well as disclosures. In July 2025, Accounting Standards Update 2025-05 (“Measurement of Credit Losses for Accounts Receivable and Contract Assets”—ASC 326 (“Financial Instruments—Credit Losses”)) was issued. This update revised the guidance for estimating expected credit losses on trade receivables and contract assets arising from transactions within the scope of ASC 606, Revenue from Contracts with Customers. The amendments allow all entities to apply a practical expedient when developing reasonable and supportable forecasts for credit loss estimates. Under this expedient, entities may assume that the economic conditions existing as of the reporting date will remain unchanged over the remaining life of the financial asset. Nevertheless, entities are required to adjust historical loss information to reflect current conditions if those conditions differ from those in the historical data. This update is effective for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years. Early adoption is permitted. This update requires that an entity apply the new guidance prospectively. The Company and its subsidiaries will adopt this update on April 1, 2026. The Company and its subsidiaries expect that the adoption of this update will have no material impact on the Company and its subsidiaries’ results of operations or financial position, as well as disclosures. In September 2025, Accounting Standards Update 2025-06 (“Targeted Improvements to the Accounting for Internal-Use Software”—Subtopic 350-40 (“Intangibles—Goodwill and Other—Internal-Use Software”)) was issued. This update eliminates accounting consideration of software project stages and requires capitalization to begin when management has authorized and committed to funding the software project and it is probable that the project will be completed and the software will be used to perform the function intended. This update also requires that capitalized internal-use software costs are subject to the disclosure requirements under Subtopic 360-10 (“Property, Plant, and Equipment”), regardless of how such those costs are presented in the financial statements. Furthermore, it also modifies the website development costs guidance by eliminating Subtopic 350-50 and relocating any remaining relevant guidance into Subtopic 350-40. This update is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years. Early adoption is permitted. This update will either be applied to a prospective transition approach, a modified transition approach, under which a cumulative-effect adjustment is recognized in retained earnings as of the beginning of the adoption period, or retrospectively to all prior periods presented in the financial statements. The Company and its subsidiaries will adopt this update on April 1, 2028. The Company and its subsidiaries are currently evaluating the effect that the adoption of this update will have on the Company and its subsidiaries’ results of operations, financial position, and disclosures. 117 Table of Contents In October 2025, Accounting Standards Update 2025-08 (“Purchased Loans: Financial Instruments—Credit Losses”—ASC 326 (“Financial Instruments—Credit Losses”)) was issued. This update broadens the population of financial assets that are within the scope of the gross-up approach under ASC 326 to include purchased seasoned loans that are not considered purchased credit-deteriorated assets. This update is effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted. This update requires that an entity apply prospectively to loans that are acquired on or after the initial application date. The Company and its subsidiaries will adopt this update on April 1, 2027. The Company and its subsidiaries are currently evaluating the effect that the adoption of this update will have on the Company and its subsidiaries’ results of operations or financial position, as well as disclosures. In November 2025, Accounting Standards Update 2025-09 (“Hedge Accounting Improvements”—ASC 815 (“Derivatives and Hedging”)) was issued. This update expands the scope of hedge accounting in the following five areas. (1) This update expands the hedged risks permitted to be aggregated in a group of individual forecasted transactions in a cash flow hedge. (2) This update provides a model to facilitate the application of cash flow hedge accounting to forecasted interest payments on choose-your-rate debt instruments. (3) This update permits an entity to designate the variability in cash flows attributable to changes in a variable price component of a forecasted purchase or sale of a nonfinancial asset as the hedged risk, provided that the component is clearly and closely related to the nonfinancial asset being purchased or sold. (4) This update eliminates the requirement to apply the net written option test to a compound derivative comprising a swap and a written option designated as the hedging instrument of interest rate risk. (5) The amendments require that an entity exclude the debt instrument’s fair value hedge basis adjustment from the net investment hedge effectiveness assessment and recognize in earnings the gains and losses from the remeasurement of the debt instrument’s fair value hedge basis adjustment at the spot exchange rate. This update is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted. This update requires that an entity apply the new guidance prospectively for all hedging relationships and permits an entity to elect to apply it to hedging relationships that exist as of the date of adoption. The Company and its subsidiaries will adopt this update on April 1, 2027. The Company and its subsidiaries are currently evaluating the effect that the adoption of this update will have on the Company and its subsidiaries’ results of operations or financial position, as well as disclosures. In December 2025, Accounting Standards Update 2025-10 (“Accounting for Government Grants Received by Business Entities”—ASC 832 (“Government Assistance”)) was issued. This update establishes authoritative guidance on the recognition, measurement, presentation and disclosure of government grants received by business entities. This update requires an entity to recognize a government grant only when it is probable that the entity will both comply with the conditions attached to the grant and the grant will be received, and when the related expenses or costs have been incurred. This update provides specific accounting models for grants related to assets and grants related to income. For grants related to assets, it permits an entity to either recognize government grants as deferred income or as an adjustment to the carrying amount of the asset. For grants related to income, it requires an entity to recognize the grant in earnings over the periods in which the entity recognizes the related costs as expenses, which the grant is intended to compensate. It also requires additional disclosures regarding the nature of government grants, significant terms and conditions, accounting policies applied, and amounts recognized in the financial statements. This update is effective for fiscal years beginning after December 15, 2028, including interim periods within those fiscal years. Early adoption is permitted. This update will be applied using either a modified prospective approach for government grants entered into on or after the effective date, a modified retrospective approach for government grants entered into on or after the beginning of the earliest period presented, or a retrospective approach for all government grants. The Company and its subsidiaries will adopt this update on April 1, 2029. The Company and its subsidiaries are currently evaluating the effect that the adoption of this update will have on the Company and its subsidiaries’ results of operations, financial position, as well as disclosures. 118 Table of Contents In April 2026, Accounting Standards Update 2026-01 (“Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock”—ASC 505 (“Equity”)) was issued. This update requires an entity that paid-in-kind dividends on equity-classified preferred stock be initially measured on the basis of the paid-in-kind dividend rate stated in the preferred stock agreement. This update is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted. This update will either be applied prospectively to paid-in-kind dividends recognized on preferred stock on or after the initial application date, or retrospectively to paid-in-kind dividends recognized on preferred stock outstanding as of the initial application date for all prior periods presented in the financial statements. The Company and its subsidiaries will adopt this update from April 1, 2027. The Company and its subsidiaries are currently evaluating the effect that the adoption of this update will have on the Company and its subsidiaries’ results of operations or financial position, as well as disclosures. In May 2026, Accounting Standards Update 2026-02 (“Environmental Credits and Environmental Credit Obligations”—ASC 818) was issued. This update establishes new accounting guidance on the recognition, measurement, presentation, and disclosure of environmental credits generated, purchased, or received by an entity, as well as environmental credit obligations arising from regulatory compliance requirements related to the prevention, control, reduction, or removal of emissions or other pollution. This update requires that environmental credits that are probable of being used to settle environmental credit obligations, or of transfer in exchange transactions or of use in a nonreciprocal transfer, be recognized as assets at cost, while costs to obtain all other environmental credits be recognized as an expense when incurred. In addition, among the environmental credits recognized as assets, those expected to be used to settle such obligations are subsequently measured at cost, whereas other environmental credits are subject to impairment testing at the end of each reporting period, with impairment losses recognized to the extent that the carrying amount exceeds fair value. This update requires the recognition of liabilities for environmental credit obligations arising from regulatory compliance requirements existing at the reporting date. Such obligations are measured based on the carrying amount of environmental credits held and expected to be used for settlement, or, if such credits are not held, based on the fair value of the environmental credits required to settle the obligation. This update is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years. Early adoption is permitted. This update requires a modified retrospective approach, with a cumulative effect adjustment to retained earnings as of the fiscal year of adoption. The Company and its subsidiaries will adopt this update on April 1, 2028. The Company and its subsidiaries are currently evaluating the effect that the adoption of this update will have on the Company and its subsidiaries’ results of operations or financial position, as well as disclosures. 119 Table of Contents RISK MANAGEMENT Group-Wide Risk Management System Risk Management System The allocation of management resources within ORIX Group is conducted taking into consideration group-wide risk preferences determined by management and the business strategies of individual business units. We have established our risk management system to appropriately recognize risks relating to Group businesses on a global scale, to realize allocations of management resources that are appropriate for the risks we face and report such risks to the Board of Directors, the Audit Committee of the Board of Directors, the Executive Committee, and other internal committees as the situation warrants. The Board of Directors and executive bodies comprehensively evaluate the performance of business units and the characteristics of the risks they face and implement necessary measures in response thereto. Through this process, we are able to control our balance sheet, allocate additional management resources to business units with strong potential for growth, and work together with internal control-related functions to analyze and manage risks. The internal audit department conducts internal audits focusing on important risks of the ORIX Group based on the annual internal audit plan. The risk management system has been adopted by the board of directors as a part of our internal control system. The status of the operation of such internal control system is examined and reported to the board of directors annually. For descriptions of our Board of Directors, Audit Committee, Executive Committee and other internal committees, see “Item 6. Directors, Senior Management and Employees—Corporate Governance System.” Management of Principal Risks We recognize the following risks as principal risks: credit risk, business risk, market risk, liquidity risk (risk relating to funding), compliance risk, legal risk, information / cybersecurity risk and IT risk, operational risk and other risks, and external environment-related risk. Each of these risks is managed according to its characteristics. Credit Risk Management Our fundamental approach in analyzing credit risk is to evaluate factors such as the adequacy of collateral and guarantees, and the diversification of our customers’ industries and businesses. A comprehensive customer credit evaluation is typically conducted based on the customer’s financial position, cash flows, underlying security interests, profitability and other factors pertaining to individual credit transactions. By conducting portfolio analysis and implementing measures to establish appropriate credit limits, we control our exposure in potentially higher risk markets. We recognize that certain assets require extra monitoring of debtors, credit extended to debtors who have petitioned for bankruptcy, civil rehabilitation or other insolvency proceedings, debtors whose bank transactions have been suspended, bills have been dishonored, or debts that have not been collected for three months or more. The relevant business units, in cooperation with the credit department, take measures to secure collateral or other guarantees and to begin the collection process. All information and knowledge gathered from the collection process, starting from the initial demand to the foreclosure of the collateral, is consolidated by the credit department and reflected in our evaluation criteria used for individual credit transactions and portfolio analysis. Business Risk Management With regards to new businesses and investments, scenario analyses and stress tests are conducted at the initial stage of investment. Business plans and operations are continuously monitored thereafter and we periodically evaluate and verify the cost of withdrawal from a business, business area or investment. 120 Table of Contents For our products and services offerings, in addition to continuous monitoring, we regularly review the contents of our products and services offerings in response to changes in the business environment and evolving customer needs and strive to maintain or improve their quality. A principal risk relating to operating leases is fluctuations in the residual value of leased properties. To mitigate this risk, we monitor our leased properties inventory, the relevant market environments and the overall business environment. We limit our operating leases to leased properties and other assets with high versatility, and evaluate the sale of such properties and other assets depending on changes in market conditions. We aim to minimize the risk related to fluctuations in market prices for real estate by appropriately considering trends in market prices based on knowledge accumulated thus far, including our experiences during the financial crises. Market Risk Management We strive to comprehensively verify and understand the market risks that we face. We have established and maintain Group-wide ALM rules to address these risks. Interest rate risk is comprehensively evaluated based on factors such as the expected impact of interest rate changes on periodic profit and loss and/or the balance sheet, the assets and liabilities positions and the funding environment. The analysis methods we use are modified, as required, depending on the situation. We monitor and manage exchange rate risk using indicators such as VaR (value at risk) for exchange rate volatility in our business transactions in foreign currencies and overseas investments. We appropriately manage exchange rate risk by using means such as foreign currency-denominated loans, foreign exchange contracts and currency swaps to hedge exchange rate volatility in our business transactions in foreign currencies and overseas investments. We manage counterparty credit risk and other risks involved in hedging derivative transactions in accordance with internal rules on derivative transaction management. For quantitative and qualitative analysis information on market risk, please see “Item 11. Quantitative and Qualitative Disclosures about Market Risk.” Liquidity Risk Management To reduce liquidity risk, we diversify fund procurement methods and sources and constantly monitor liquidity on hand. To manage liquidity on hand, we project future cash flows and analyze liquidity risk using hypothetical stress scenarios. We take necessary measures so that our businesses may withstand adverse market changes. The effect on the business of each subsidiary is monitored by ascertaining liquidity risk in each subsidiary and in every country in which ORIX operates. We take appropriate measures to mitigate liquidity risk, including through such action as parent-to-subsidiary lending. ORIX Bank and ORIX Life Insurance are regulated by Japanese financial authorities and are required to manage liquidity risk independently from other ORIX Group companies based on their internal regulations formulated according to the relevant regulations. ORIX Bank categorizes the degree of cash-flow tightness into several stages, and has established measures to strengthen its liquidity risk management system according to each stage. In addition, ORIX Bank has established limits on the required amount of liquid assets and the amount of market-based funding, and the department in charge of risk management monitors compliance with these limits. 121 Table of Contents ORIX Life Insurance strives to maintain appropriate liquidity by setting standards for its holdings of cash and highly liquid governmental and corporate bonds by period and purpose. In addition to assessing current and future funding needs, ORIX Life Insurance established standards and contingency plans so that it can swiftly and appropriately respond to situations that take place within each stress. Compliance Risk Management ORIX Group views compliance as one of the top priorities of management. The ORIX Group strives to build a robust and comprehensive compliance program and promote a culture of compliance, with an emphasis on high standards of ethical behavior at all levels of the organization, and to conduct its business activities in a sincere, fair and transparent manner. The compliance department requires companies in ORIX Group to formulate a compliance plan and monitors compliance risks within ORIX Group to avoid, mitigate or prevent the realization of such risks. By implementing programs that sustain a culture of compliance, the compliance department seeks to prevent or mitigate compliance risk, and thereby contribute to the sound business and management of ORIX Group. In addition, ORIX Group strives to raise awareness for compliance matters among its executives and employees by establishing and disseminating various regulations in accordance with the ORIX Group Code of Conduct, which articulates our core standards and expectations for all executives and employees in the ORIX Group. Progress in sustaining a culture of compliance through internal training and other activities is regularly reported to our Audit Committee. As part of our internal control system, we have established internal whistleblower systems for use by executives and employees in the ORIX Group and external whistleblower systems for use by business partners outside the ORIX Group, and developed internal and external systems designed to mitigate compliance risk. We have also established a system whereby material matters that are reported through the internal and external whistleblower systems and those that relate to legal or other violations are promptly reported to the representative executive officer and appropriate actions are taken in response to instructions received from the representative executive officer. The statuses of responses to material matters are reported to our Audit Committee and information is appropriately shared. Furthermore, from the perspective of compliance with applicable tax laws, we are committed to paying taxes in conformance with tax laws of relevant jurisdictions, tax treaties and guidelines, and internal rules, to managing our tax affairs in good faith and in compliance with applicable tax systems and to achieving tax transparency on a group-wide basis. Legal Risk Management In addition to establishing internal rules necessary for ensuring compliance with laws and regulations, in order to comply appropriately with revisions in laws and regulations, we have also taken measures to understand the applicability of such laws and regulations to each business in ORIX Group and provide instructions to business units to which such laws and regulations apply. To avoid, reduce and prevent transactional legal risk, we generally require that the legal department and the compliance department both be involved in evaluating and/or executing transactions. For transactional agreements relating to business transactions, we have established a contract review and approval process involving the legal department in accordance with our prescribed internal rules. To ensure that proper legal procedures are followed in connection with actual or potential disputes and litigation, we require that the legal department and the compliance department both be involved in the 122 Table of Contents management of such disputes and litigation, including lawsuits that have been, or are expected to be, brought against us and lawsuits that we bring, or expect to bring, against third parties. In addition, we have in place systems such as a system for monitoring for trademark applications that could infringe on trademarks held by ORIX Group. The legal department manages intellectual property rights and takes necessary protective measures immediately if an actual or potential infringement of ORIX Group’s intellectual property rights is discovered. Information / Cybersecurity Risk and IT Risk Management ORIX Group’s technology management department provides rules and guidelines such as information system development and operational governance bylaws, engages in reviews of system investments (with system investments above a certain size being deliberated by the Information Technology Management Committee) and the governance of systems quality and development projects from the development stage to the system’s final launch to reduce the risk of system failures. In addition, there are ongoing efforts to strengthen the management of IT services to ensure stability in the system operations for systems that are currently in operation and the evaluation of the appropriateness of measures to prevent the recurrence of major failures in systems managed by Group companies. For more information regarding our Information Technology Management Committee, see “Item 6. Directors, Senior Management and Employees—Corporate Governance System—Executive Officers—Information Technology Management Committee.” For information / cybersecurity risk, see “Item 16K. Cybersecurity.” Operational Risk and Other Risks Management We have established internal regulations and are regularly conducting training to increase awareness of such regulations to clarify internal processes used in business operations. In addition, we are focusing on developing and evaluating our internal controls for compliance purposes. In order to reliably secure and retain a diverse workforce, we continuously strive to promote diversity, equity and inclusion, ensuring that every employee can fully utilize their individual skills. We are also committed to creating a working environment where employees can stay healthy and feel motivated to work. In addition to structuring our human resources systems to flexibly respond to factors such as national and regional labor markets, market practices, compensation standards, laws and regulations, job descriptions and business characteristics, we are continuously creating a work environment that respects human rights and making efforts to improve productivity and to achieve and promote employee well-being in response to a changing environment. Additionally, we have established a system for teams to contact risk management departments promptly in cases where an operational risk incident, customer claim or similar matter has arisen so that we can respond quickly and carefully and take measures to prevent reoccurrences. External Environment-related Risk Management Among the external environment-related risks that we face such as those relating to the business environment, we are particularly focused on developing our systems to address and manage risks related to natural disasters and other unexpected risks. We have established internal rules to manage risks associated with disasters and implemented a framework for organizational implementation of basic principles to manage risks arising from events such as natural disasters, terrorism and infectious diseases, as well as related activities. For example, we have established systems to confirm the safety and status of all employees in the event our offices are closed due to events such as a disaster or the spread of an infectious disease. To prepare for situations 123 Table of Contents where it is impossible or inadvisable for employees to work from our offices, we have also introduced systems to allow employees to work remotely so that our business operations will not be disrupted. ORIX Group is prepared for the occurrence of unexpected events, by diversifying its profit structure through a diversified business portfolio and ensuring sufficient liquidity, which allow it to maintain sound financial health. Individual Business Risk Management We engage in a broad spectrum of businesses, including financial service operations. We seek to perform complete and transparent monitoring and risk management according to the characteristics of each business segment. Corporate Financial Services and Maintenance Leasing Business risk, legal risk and credit risk are the main risks of the corporate financial services and maintenance leasing segment. Our services might fall short of customer expectations due to changes in the operating environment or changes in and diversification of client needs. We monitor our service quality quantitatively and qualitatively and continuously strive to provide services at a level that meets our clients’ expectations and to improve our services in line with the operating environment. In the maintenance leasing business, to manage the risk of changes in the market value of property under operating leases, we continuously monitor market conditions and fluctuations in the value of leased property and reassess residual value estimates of leased property in new investment transactions accordingly. Cost fluctuation is a risk that may occur when providing various services associated with operating leases. In response to this, we analyze initial cost planning and performance, monitor future forecasts and control costs at an appropriate level. Due to the offering of various products and services, the enactment of or revisions to related laws, regulations, taxation systems, and accounting standards may adversely affect the products and services we offer and lead to a decline in income. In order to reduce such risk, business units conduct information gathering and coordinate with the legal department with regard to information on changes in relevant laws and regulation, as well as reassessing their business strategies as necessary. With regard to credit transactions, the business department regularly monitors the performance, related collateral, and collection status of customers whose balances exceed specified levels. The credit department regularly evaluates customers with large credit balances. We analyze current conditions and the outlook for specific business types and industries, examine the potential impact on customers, and consider the views of each business unit and specialized department to make decisions about future transactions in that specific business type or industry. For assets requiring extra monitoring, particularly in transactions secured by real estate, we take various measures such as capitalizing on our network of real estate-related departments to sell properties or introduce tenants. Real Estate Business risk and market risk are the main risks of the Real Estate segment. 124 Table of Contents With respect to our real estate investments, before making an investment decision we evaluate the actual cash flow performance of the target as against the initial plan and forecasts, and monitor investment strategies and schedules after execution. Upon a major divergence from the initial forecast, we reevaluate our strategy. Furthermore, when we invest in large scale or long-term projects, we consider diversifying risk by making joint investments with our partners. In our development and leasing business, we monitor development and retention schedules and net operating income yield. We capitalize on the Group’s network to improve occupancy rates and promote sales. In our facility operation business, we monitor performance indicators such as occupancy and utilization rates and profitability. We conduct market analysis and take initiatives to improve the desirability of our facilities, such as through renovations. To improve the quality of our services and facilities, we take into consideration customers’ feedback and also implement training programs for our employees. In our condominium business (new and used), we monitor sales figures and profitability of individual businesses while keeping in mind the market environment, construction costs, relevant interest rates and real estate-related taxation systems. Additionally, in our construction business, we seek to control construction costs and construction periods, while also focusing on health and safety management. In the integrated resort business, we are jointly developing a specified integrated resort facility in cooperation with Osaka Prefecture and Osaka City through our affiliated entity. As a key characteristic of this business, we ensure strict compliance with applicable laws and regulations, including the Act on Development of Specified Integrated Resort Districts, and execute our operations appropriately. In order to maintain the integrity of management, it is essential to establish a sound and highly transparent corporate governance framework. Furthermore, we must address risks unique to the integrated resort business, including risks related to the renewal or revocation of certification of the District Development Plans, risks associated with obtaining and maintaining a casino business license, and risks inherent in large-scale development projects. We collaborate with business partners possessing deep expertise in integrated resort operations to provide training to our personnel, and we are committed to ensuring compliance and mitigating risks on an organization-wide basis. PE Investment and Concession Business risk, market risk, legal risk and operational risk are the main risks of PE Investment and Concession segment. When making investment decisions with regard to potential investees in the private equity business, we validate the business plan, analyzing the investee’s financial condition and assessing its cash flow, as is done for credit examinations. We also perform a multi-faceted evaluation of the characteristics of the business operation, risks related to legal, accounting, and tax matters and investment scheme, in which administrative departments such as accounting and legal are also involved. In addition, after the initial investment, individual transactions are monitored for divergence from the initial scenario. We emphasize monitoring the progress of the business plan and financial condition of a company when increasing the corporate value of a company since cash flow is a key factor during such period. We also monitor market risk as the time for collection nears, measuring corporate value by referencing the corporate value of similar business types. The frequency of monitoring may increase based on changes in the business environment, and we simultaneously verify the adequacy of investment scenarios and take any necessary action. Furthermore, for investments that have a significant impact on the profitability of ORIX Group, we work to strengthen management through measures such as seconding of management personnel. 125 Table of Contents We conduct our concession business in public facilities such as airports, together with business partners. The long-term nature of this business adds uncertainty and, therefore, we conduct stress tests in advance to evaluate the effect of disaster recovery or business withdrawal costs on operating revenue and cash flow based on demand forecasts and monitor business plans and operations on a regular basis and as the situation warrants. We also strive to train staff with expertise on the management of public facilities and reduce operational risk by establishing a management system with business partners and strengthening governance. Environment and Energy Business risk, legal risk and operational risk are the main risks of the Environment and Energy segment. In the environment and energy business, we conduct various businesses in the renewable energy, energy conservation, electricity retail, resource recycling and waste processing operations sectors both in and outside of Japan. They are easily impacted by factors such as the external environment, and changes in social trends, systems and legal regulations, a surge in commodity prices, an increase in volatility for electricity prices, and disruption in supply chains can be ongoing threats. Due to these potential factors, while there are cases when it becomes necessary to change the revenue structure of individual businesses, we are able to quickly identify trend changes in the external environment and seek new revenue generation opportunities through business model shifts, new business developments, and business portfolio shuffles. In each business, we operate a wide variety of facilities related to electricity generation, resource recycling and waste processing operations, and proactively seek out investment opportunities in various M&As and strategic alliances to further expand our businesses, but we also continue to strengthen internal governance by reassuring internal controls set in place. We also make efforts to optimize our operations mainly together with specialist groups with technical expertise in order to develop business continuity plan structures that ensure safety and appropriateness of each facility and develop readiness for situations such as natural disasters, accidents, and epidemics. Insurance Business risk and market risk are the main risks in the Insurance segment. In insurance underwriting, we risk sustaining losses due to changes in the economic environment or insurance accident rates over time such that they differ significantly from the assumptions made when the insurance premiums were set. Through monitoring of these factors that could cause losses, we re-evaluate underwriting standards, develop new products, update or discontinue existing products. Furthermore, we employ reinsurance as one means of ensuring payments of insurance claims and the stability of our business management. When utilizing reinsurance, we determine standards for reinsurance according to the characteristic of the transferred risk and effect of reinsurance. When choosing a reinsurance company, we focus on ensuring that there is a high probability we can recover the fees reinsurance claims by taking into account underwriting capacity and financial health. With respect to market risk, to prepare for changes in the value of our assets and liabilities, we establish monitoring items and assess the risks for general account assets. Furthermore, from an asset liability management perspective we strive to limit interest rate risk through the purchase of super long-term bonds to match their duration with liabilities. Banking and Credit Credit risk is the main risk of the Banking and Credit segment. 126 Table of Contents Regarding each real estate investment loan we extend for the purchase of condominiums and apartments for investment purposes, we conduct screenings through individual interviews, which consist of a comprehensive evaluation including not only the client’s real estate investment appetite, supporting documentation, and ability to repay but also the cash flows that can be derived from the property and its collateral value. Throughout this process, we utilize the real estate market information and industry know-how we have built over many years. Decision making for corporate loans is based on an investigation of the client’s performance, business plan, intended use of proceeds, expected source of repayment and industry trends. We also reduce risk by avoiding overconcentration in any particular business type and product in our portfolio. The consumer finance business uses a proprietary scoring system incorporating credit underwriting standards. We set interest rates and credit limits in line with each customer’s credit risk profile, after evaluating their creditworthiness based on an analysis of certain customer attributes or payment history, as well as other factors that might affect their ability to repay. Also, we undertake subsequent credit evaluations at regular intervals to monitor changes in the customer’s financial condition. Aircraft and Ships In the aircraft business, we engage in operating lease and aircraft asset management activities, where the major risks include business risk, credit risk, market risk and operational risk. We generally focus on aircraft types with high liquidity that are comparatively easy to re-lease and evaluate sales depending on changes in market conditions. In addition, we conduct comprehensive assessments of the counterparties’ financial performance and related collateral at the time of transaction. With regard to our affiliate, Avolon, we continuously monitor its business plan and operations. In addition, we support the sound management of Avolon through the exercise of our rights as a shareholder and through our members of its board of directors. In the ships business, we engage in the financing business, including operating leases, maritime asset management business, and ship brokerage business, where the major risks include credit risk, business risk, market risk and operational risk. Credit risk is managed at the time of transactions through comprehensive assessments of the counterparties’ performance and related collateral. After conducting the transactions, we continue to monitor counterparties and, for counterparties that require caution, our policy requires management to consider the collectability of debts and investments, and to determine the necessity of an allowance for credit losses or an impairment. We generally focus on the ships with high liquidity that are comparatively easy to re-lease and evaluate sales depending on changes in market conditions. Operational risk primarily arises from the risk of managing ships that we own, but we are able to substantially mitigate the possibility of unforeseen events by reliable in-house ship management and limiting the outsourcing of ship management to experienced and stable partners and conducting regular assessments. ORIX USA Credit risk and market risk related to lending and investment are the main risks facing the lending investment business and finance business in the ORIX USA segment. Regarding credit risk, at the time an investment or loan is made, we assign an internal risk rating to such investment or loan taking into consideration various standard credit metrics, collateral value, and enterprise value. The loan or investment is continuously monitored and the risk rating is periodically reviewed and updated if necessary. For any investments and/or loans for which the rating of the customer has reached or exceeded the cautionary level, our policy requires management to determine the necessity of an allowance for credit losses or 127 Table of Contents an impairment. Regarding market risk, we monitor market values while referring to credit risk information and manage risk by pursuing early sales as appropriate to secure profits or minimize losses. Operational risk is the main risk for the agency lending business in the United States. We make and sell loans and mortgage-backed securities and provide servicing and asset management services with regard to those loans and mortgage-backed securities. The majority of those loans and mortgage-backed securities are insured by the Federal Housing Administration or guaranteed by a government-sponsored financial institution such as Fannie Mae and Freddie Mac. We conduct our agency lending business in accordance with the designated procedures set forth by these government agencies and government-sponsored institutions; and monitor and manage loan servicing and asset management quality through internal auditing for compliance with the designated procedures. Operational risk is the main risk for the asset management business. We promote the standardization of business processes, regulations and manuals and seek to prevent omissions and mistakes in conducting business operations and to improve efficiency generally. In addition, we ensure proper risk management by clarifying operating procedures and the authority and the responsibilities of administrators and supervisors in business operations. In addition to monitoring to maintain and ensure satisfactory levels of credit, market and operational risk, we review our products and services to constantly maintain and improve performance and quality in response to changes in the business environment and evolving customer needs. ORIX Europe In the ORIX Europe segment, we mainly operate in the asset management industry, where the main risks they face are operational risk and compliance risk. To mitigate operational and compliance risks in the asset management business, particularly risks related to acting as a fiduciary manager for customer and client property, we promote a transparent risk culture and the standardization of business processes, internal regulations and procedures. Some operational risk in the asset management business stems from changes in the highly regulated environment of jurisdictions in which the companies operate so ORIX Corporation Europe (“OCE”) group companies actively monitor regulatory developments at an early stage to address these risks, both directly and through representative associations. OCE group companies further ensure proper risk management by implementing risk management policies and frameworks in compliance with applicable regulations, client demand, and sound risk management practices. OCE’s role within the OCE group is to oversee and monitor the risk management and internal control frameworks of each OCE group company. Asia and Australia Our local subsidiaries in the Asia and Australia segment primarily operate leasing, loan, automobile leasing and investment businesses. The main risks those businesses face are credit risk, business risk and market risk. In the leasing and loan businesses, comprehensive assessments of customers’ business performance and collateral are conducted. Regular monitoring is conducted for purposes such as tracking unpaid amounts and preventing deviations in portfolios at the local subsidiary level and corrective action is taken when necessary. In the automobile leasing business, risk management is conducted by considering factors that vary from country to country like lease taxation systems and characteristics of the used automobile market. In the investment business, investments are conducted in a manner similar to domestic investments, with an assessment of the transaction conducted initially and regular monitoring conducted after the transaction takes place. In cases where we have rights as a shareholder as a result of the transaction or have dispatched a director, we support sound management of the investee through our involvement in its board of directors. 128 Table of Contents