IX

MARKET RISKS Our primary market risk exposures are interest rate risk, exchange rate risk and risk of market prices in stocks. We enter into derivative transactions to hedge interest rate risk and exchange rate risk. Our risk management for market risk exposure and derivative transactions is described under “Item 5. Operating and Financial Review and Prospects—Risk Management.” The following quantitative information about the market risk of our financial instruments does not include information about financial instruments to which the requirements under ASC 825 (“Financial Instruments”) do not apply, such as net investment in leases, investment in operating leases, and insurance contracts. As a result, the following information does not present all the risks of our financial instruments. We omitted the disclosure of financial instruments for trading purposes because the amount is immaterial. Interest Rate Risk Many of our assets and liabilities are composed of floating and fixed rate assets and liabilities. Our floating rate assets and liabilities utilize various rates to determine interest amounts receivable and payable thereunder, including TIBOR, prime rates and U.S. dollar SOFR, etc. Movements in market interest rates affect gains and losses in those assets and liabilities. Accordingly, we endeavor to reduce interest rate risk through techniques such as funding interest rate bearing assets through liabilities with similar interest rate characteristics, e.g., financing floating-rate assets with floating-rate liabilities and financing fixed-rate assets with fixed-rate liabilities. In order to manage assets and liabilities in an appropriate risk position, we conduct various types of analysis for interest rate sensitivity including gains and losses impact analysis and fair value analysis of assets and liabilities. The table below of interest rate sensitivity for financial instruments summarizes installment loans, investment in securities (floating and fixed rate) and short-term and long-term debt. These instruments are further classified under fixed or floating rates. For such items, the principal collection and repayment schedules and the weighted average interest rates for collected and repaid portions are disclosed. Concerning interest rate swaps, under derivative instruments, the estimated notional principal amount for each contract period and the weighted 178 Table of Contents average of swap rates are disclosed. The average interest rates of financial instruments as of March 31, 2026 were 4.1% for installment loans, 2.6% for investment in securities (floating and fixed rate), 2.8% for short-term and long-term debt and 0.9% for deposits. As of March 31, 2026, the average payment rate of interest rate swaps was 1.6% and the average receipt rate was 1.8%. The average interest rates of financial instruments as of March 31, 2025 were: 4.0% for installment loans, 2.1% for investment in securities (floating and fixed rate), 2.7% for short-term and long-term debt and 0.5% for deposits. As of March 31, 2025, the average payment rate of interest rate swaps was 1.5% and the average receipt rate was 2.2%. As of March 31, 2026, there was no material change in the balance or in the average interest rate of financial instruments from March 31, 2025. The table below shows our interest rate risk exposure and the results of our interest rate sensitivity analysis. INTEREST RATE SENSITIVITY NONTRADING FINANCIAL INSTRUMENTS Expected Maturity Date Total March 31, 2026 Estimated Fair Value Years ending March 31, 2027 2028 2029 2030 2031 Thereafter (Millions of yen) Assets: Installment loans (fixed rate) ¥ 207,002 ¥ 97,913 ¥ 89,660 ¥ 53,462 ¥ 60,719 ¥ 386,204 ¥ 894,960 ¥ 873,171 Average interest rate 5.7 % 8.3 % 8.2 % 8.0 % 5.8 % 3.9 % 5.6 % — Installment loans (floating rate) ¥ 439,670 ¥ 320,434 ¥ 287,903 ¥ 215,180 ¥ 213,833 ¥ 1,785,388 ¥ 3,262,408 ¥ 3,207,888 Average interest rate 4.4 % 5.5 % 5.3 % 4.4 % 3.8 % 2.8 % 3.6 % — Investment in securities (fixed rate) ¥ 53,697 ¥ 167,250 ¥ 70,009 ¥ 70,172 ¥ 85,370 ¥ 2,740,007 ¥ 3,186,505 ¥ 2,314,353 Average interest rate 1.1 % 10.7 % 1.9 % 2.1 % 2.4 % 1.8 % 2.3 % — Investment in securities (floating rate) ¥ 2,194 ¥ 6,381 ¥ 8,035 ¥ 9,924 ¥ 955 ¥ 189,144 ¥ 216,633 ¥ 212,063 Average interest rate (0.2 %) 3.2 % 3.0 % 3.7 % (1.6 %) 6.5 % 6.0 % — Liabilities: Short-term debt ¥ 572,235 ¥ 0 ¥ 0 ¥ 0 ¥ 0 ¥ 0 ¥ 572,235 ¥ 572,235 Average interest rate 3.1 % — — — — — 3.1 % — Deposits ¥ 1,846,727 ¥ 159,040 ¥ 75,999 ¥ 176,685 ¥ 321,836 ¥ 45,269 ¥ 2,625,556 ¥ 2,635,326 Average interest rate 0.8 % 0.7 % 0.7 % 0.9 % 1.3 % 0.7 % 0.9 % — Long-term debt (fixed rate) ¥ 442,252 ¥ 538,324 ¥ 505,479 ¥ 351,899 ¥ 400,157 ¥ 829,558 ¥ 3,067,669 ¥ 2,992,647 Average interest rate 2.3 % 2.5 % 1.9 % 3.1 % 2.3 % 2.7 % 2.5 % — Long-term debt (floating rate) ¥ 589,836 ¥ 428,965 ¥ 493,859 ¥ 456,431 ¥ 302,535 ¥ 626,464 ¥ 2,898,090 ¥ 2,896,388 Average interest rate 3.7 % 3.6 % 3.5 % 3.7 % 2.1 % 2.3 % 3.2 % — NONTRADING DERIVATIVE FINANCIAL INSTRUMENTS Expected Maturity Date Total March 31, 2026 Estimated Fair Value Years ending March 31, 2027 2028 2029 2030 2031 Thereafter (Millions of yen) Interest rate swaps: Notional amount (floating to fixed) ¥ 125,616 ¥ 56,743 ¥ 111,486 ¥ 27,227 ¥ 74,496 ¥ 221,474 ¥ 617,042 ¥ 24,071 Average pay rate 2.5 % 2.3 % 1.2 % 1.0 % 1.0 % 1.3 % 1.6 % — Average receive rate 3.5 % 2.1 % 1.2 % 1.0 % 0.9 % 1.5 % 1.8 % — Notional amount (fixed to floating) ¥ 0 ¥ 980 ¥ 0 ¥ 34 ¥ 0 ¥ 11 ¥ 1,025 ¥ (2 ) Average pay rate — 3.7 % — 3.7 % — 3.7 % 3.7 % — Average receive rate — 4.3 % — 3.7 % — 3.1 % 4.3 % — 179 Table of Contents The above table excludes purchased loans, which are exposed to interest rate risk, because it is difficult to estimate the timing and extent of collection of such loans. Purchased loans are deteriorated credit loans which we acquire at a discount and for which full collection of all contractually required payments from the debtors is unlikely. The total book value of our purchased loans as of March 31, 2026 was ¥16,214 million. Long-term debt (fixed rate) in the table above includes the amount of ¥44,000 million of subordinated syndicated loan (hybrid loan). Out of this amount, ¥10,000 million was executed in fiscal 2022, and will mature in fiscal 2082 and may be redeemed after 5 years from the execution. ¥34,000 million was executed in fiscal 2023, and will mature in fiscal 2083 and may be redeemed after 5 years from the execution. In addition, long-term debt (fixed rate) in the table above includes ¥160,000 million of unsecured subordinated bonds with interest deferral features and optional early redemption clauses (hybrid bonds). This amount consists of: - ¥40,000 million issued in fiscal 2020, maturing in fiscal 2080, with optional early redemption on or after March 2030; - ¥21,000 million issued in fiscal 2021, maturing in fiscal 2081, with optional early redemption on or after March 2031; - ¥60,000 million issued in fiscal 2025, maturing in fiscal 2060, with optional early redemption on or after March 2030; and - ¥39,000 million issued in fiscal 2026, maturing in fiscal 2061, with optional early redemption on or after March 2031. We are also exposed to interest rate risks in our life insurance businesses because revenues from life insurance related investment income fluctuate based on changes in market interest rates, while life insurance premiums and costs do not. Exchange Rate Risk We hold foreign currency-denominated assets and liabilities and deal in foreign currencies. It is our policy to match balances of foreign currency-denominated assets and liabilities as a means of hedging exchange rate risk. There are, however, cases where a certain part of our foreign currency-denominated investments are not hedged for such risk. We have identified all positions that are subject to exchange rate risk, including retained earnings accumulated in foreign currencies in our overseas subsidiaries, which is translated to Japanese yen upon consolidation. ORIX shareholders’ equity is subject to exchange rate risk arising from such translations. Other positions, such as potential losses in future earnings, are calculated using several hypothetical scenarios based on 10% changes in the relevant currencies. Based on these scenarios, exchange losses in future earnings were estimated to be ¥928 million and ¥103 million as of March 31, 2025 and 2026, respectively. The largest of such losses were estimated in scenarios where the U.S. dollar appreciated 10% against the Japanese yen from the rate in effect on March 31, 2025 and 2026. Risk of Market Prices in Stocks We have marketable stocks that are subject to price risk arising from changes in their market prices. Our shareholders’ equity and net income bear risks due to changes in the market prices of these securities. To manage these risks of market price fluctuations, we assume a scenario of a 10% uniform downward movement in stock prices compared with stock prices as of March 31, 2025 and 2026, respectively, and under such circumstances estimate ¥12,416 million and ¥13,272 million decrease in the fair value of our equity securities as of March 31, 2025 and 2026. 180 Table of Contents

SELECTED FINANCIAL DATA The following selected consolidated financial information has been derived from our consolidated financial statements as of each of the dates and for each of the periods indicated below except for “Number of employees.” This information should be read in conjunction with and is qualified in its entirety by reference to our consolidated financial statements, including the notes thereto, included in this annual report in Item 18, which have been audited by KPMG AZSA LLC. Year ended March 31, 2022 2023 2024 2025 2026 (Millions of yen) Income statement data: Total revenues ¥ 2,508,043 ¥ 2,663,659 ¥ 2,814,361 ¥ 2,874,821 ¥ 3,330,831 Total expenses 2,215,160 2,327,736 2,453,648 2,542,995 2,874,583 Operating Income 292,883 335,923 360,713 331,826 456,248 Equity in Net Income of Equity method investments 24,565 22,081 36,774 57,182 123,872 Gains on Sales of Subsidiaries and Equity method investments and Liquidation Losses, net 191,999 33,000 72,488 87,705 111,311 Bargain Purchase Gain 0 1,174 0 3,750 0 Income before Income Taxes 509,447 392,178 469,975 480,463 691,431 Net Income 322,853 296,933 338,587 351,635 458,328 Net Income (Loss) Attributable to the Noncontrolling Interests 5,477 6,561 (7,682 ) (389 ) 11,821 Net Income (Loss) Attributable to the Redeemable Noncontrolling Interests 0 32 137 394 (758 ) Net income attributable to ORIX Corporation Shareholders 317,376 290,340 346,132 351,630 447,265 1 Table of Contents As of March 31, 2022 2023 2024 2025 2026 (Millions of yen, except number of shares) Balance sheet data: Net investment in Leases*1 ¥ 1,057,973 ¥ 1,087,563 ¥ 1,155,023 ¥ 1,167,380 ¥ 1,247,491 Installment Loans*1 3,899,503 3,905,026 3,958,814 4,081,019 4,173,582 Allowance for Credit Losses (71,415 ) (65,373 ) (58,110 ) (56,769 ) (80,194 ) Investment in Operating Leases 1,463,202 1,537,178 1,868,574 1,967,178 2,152,820 Investment in Securities 2,761,698 2,852,378 3,263,079 3,234,547 3,308,829 Property under Facility Operations 561,846 620,994 689,573 771,851 779,075 Others 4,607,877 5,351,619 5,445,147 5,701,045 6,421,173 Total Assets ¥ 14,280,684 ¥ 15,289,385 ¥ 16,322,100 ¥ 16,866,251 ¥ 18,002,776 Short-term Debt, Long-term Debt and Deposits ¥ 7,142,843 ¥ 7,964,864 ¥ 8,446,306 ¥ 8,732,610 ¥ 9,163,550 Policy Liabilities and Policy Account Balances 1,912,698 1,832,057 1,892,510 1,948,047 1,943,710 Common Stock 221,111 221,111 221,111 221,111 221,111 Additional Paid-in Capital 260,479 233,169 233,457 234,193 235,239 ORIX Corporation Shareholders’ Equity 3,304,196 3,543,607 3,941,466 4,089,782 4,482,500 Number of Issued Shares 1,258,277,087 1,234,849,342 1,214,961,054 1,162,962,244 1,124,106,624 Number of Outstanding Shares*2 1,193,399,778 1,170,305,869 1,151,485,206 1,136,289,549 1,098,586,820 As of and for the Year Ended March 31, 2022 2023 2024 2025 2026 (Yen and dollars, except ratios and number of employees) Key ratios (%)*3: Return on ORIX Corporation Shareholders’ equity (“ROE”) 10.0 8.5 9.2 8.8 10.4 Return on assets (“ROA”) 2.28 1.96 2.19 2.12 2.57 ORIX Corporation Shareholders’ equity ratio 23.1 23.2 24.1 24.2 24.9 Allowance for credit losses/net investment in leases and installment loans 1.4 1.3 1.1 1.1 1.5 Per share data and employees: ORIX Corporation Shareholders’ equity per share*4 ¥ 2,768.72 ¥ 3,027.93 ¥ 3,422.94 ¥ 3,599.24 ¥ 4,080.24 Basic earnings per share for net income attributable to ORIX Corporation Shareholders 263.72 245.98 298.55 307.74 400.27 Diluted earnings per share for net income attributable to ORIX Corporation Shareholders 263.42 245.65 298.05 307.16 399.40 Dividends applicable to fiscal year per share 85.60 85.60 98.60 120.01 156.10 Dividends applicable to fiscal year per share*5 $ 0.70 $ 0.62 $ 0.66 $ 0.82 $ 0.99 Number of employees 32,235 34,737 33,807 33,982 37,286 *1 The sum of net investment in leases and installment loans considered non-performing amounted to ¥85,303 million, ¥86,047 million, ¥95,019 million, ¥114,467 million and ¥112,851 million as of March 31, 2022, 2023, 2024, 2025 and 2026, respectively. These sums included: (i) net investment in leases considered non-performing of ¥19,224 million, ¥16,841 million, ¥20,805 million, ¥21,820 million and ¥27,077 million as of March 31, 2022, 2023, 2024, 2025 and 2026, respectively, (ii) non-performing installment loans not 2 Table of Contents individually assessed for credit losses of ¥13,600 million, ¥20,902 million, ¥19,792 million, ¥30,214 million and ¥18,276 million as of March 31, 2022, 2023, 2024, 2025 and 2026, respectively, and (iii) non-performing installment loans individually assessed for credit losses of ¥52,479 million, ¥48,304 million ¥54,422 million, ¥62,433 million and ¥67,498 million, as of March 31, 2022, 2023 2024, 2025 and 2026, respectively. See “Item 5. Operating and Financial Review and Prospects—Results of Operations—Year Ended March 31, 2026 Compared to Year Ended March 31, 2025—Details of Operating Results—Revenues, New Business Volumes and Investments—Asset quality.” *2 The Company’s shares held through the Board Incentive Plan Trust, which was established in July 2014 to provide shares at the time of retirement as compensation, are included in the number of treasury stock and excluded from the number of outstanding shares. The Board Incentive Plan Trust held 1,963,282 shares, 2,800,866 shares, 2,727,686 shares, 3,413,000 shares and 3,035,102 shares as of March 31, 2022, 2023, 2024, 2025 and 2026, respectively. *3 Return on ORIX Corporation Shareholders’ equity 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 for the period. Return on assets 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 for the period. ORIX Corporation Shareholders’ equity ratio is the ratio as of the period end of ORIX Corporation Shareholders’ equity to total assets. Allowance for credit losses/net investment in leases and installment loans is the ratio as of the period end of the allowance for credit losses on net investment in leases and installment loans to the sum of net investment in leases and installment loans. *4 ORIX Corporation Shareholders’ equity per share is the amount derived by dividing ORIX Corporation Shareholders’ equity by the number of outstanding shares. *5 The U.S. dollar amounts represent translations of the Japanese yen amounts using noon buying rates for Japanese yen per $1.00 in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York in effect on the respective dividend payment dates. 3 Table of Contents RISK FACTORS Investing in our securities involves risks. You should carefully consider the risks described below as well as all the other information in this annual report, including, but not limited to, our consolidated financial statements and related notes and “Item 11. Quantitative and Qualitative Disclosures about Market Risk.” Our business activities, financial condition and results of operations and the trading prices of our securities could be adversely affected by any of the factors discussed below or other factors. Even if we do not incur direct financial loss as a result of these risks, our reputation may be adversely affected. This annual report also contains forward-looking statements that involve uncertainties. Our actual results could differ from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to, the risks faced by us described below and elsewhere in this annual report. See “Forward-Looking Statements.” Forward-looking statements in this section are made only as of the filing date of this annual report. For information about our management of the principal risks we face, see “Item 5. Operating and Financial Review and Prospects—Risk Management—Management of Principal Risks.” 1. Risks Related to our External Environment (1) Global economic weakness and instability or political turmoil could adversely affect our business activities, financial condition and results of operations. We conduct business operations in Japan and other areas of Asia, as well as in the Americas, Europe, and Australia. Our business may be affected by general geopolitical, economic and financial conditions in the countries and regions in these areas. More specifically, the uncertainties of policy changes under the second Trump administration in the United States, the geopolitical risks resulting from the prolonged armed conflict between Russia and Ukraine, the tensions and conflicts in the Middle East, the occurrence of wars and riots, fluctuations in commodity market prices, increases in raw material and construction costs, decreases in consumer demand, trade frictions and technology disputes among major trading partners, including the United States and China, and other factors may result in increased uncertainties in our business environment, making it harder to predict the adverse effects of such factors, which could adversely affect our business activities, financial condition and results of operations. (2) Competition could affect our business We compete on the basis of pricing, transaction structure, service quality and other terms. It is possible that our competitors may seek to compete aggressively on the basis of pricing and other terms through their low funding costs or without regard to their profitability. In addition, technological advances and innovation may result in the emergence of new competitors and as a result, we may be forced to adapt our business to compete more effectively. As a result of such aggressive competition by our competitors, our market share or our profitability may decline. (3) Negative publicity could affect our business activities, financial condition, results of operations and share price Our business is built upon the confidence of our customers and market participants. Whether based on facts or not, negative publicity about our activities, our industries or the parties with whom we do business could harm our reputation and diminish confidence in our business. In such an event, we may lose customers or business opportunities, which could adversely affect our business activities, financial condition and results of operations, as well as our share price. (4) Climate change could impact our business Physical risks and transition risks associated with climate change may adversely affect the ORIX Group’s business activities, financial condition and results of operations. 4 Table of Contents Physical risks may arise from the intensification and increased frequency of extreme weather events and natural disasters, which could result in interruptions to our business due to damage to operating facilities and business locations, as well as increased costs associated with recovery efforts and the implementation of countermeasures. In addition, damage to customers and investees may lead to an increase in credit-related costs, and the value of assets held or invested in could decline. Transition risks may arise from changes in climate change policies and regulations, technological innovations and shifts in market conditions associated with the transition to a decarbonized society, which could result in constraints on our business activities and increased costs. Transition risks may also cause deterioration in the performance of customers and changes in the business environment of investees, which may lead to increased credit-related costs, and the value of assets held by us or investees may decline. For further information, see “Item 4. Information on the Company—Sustainability at ORIX and Our Initiatives.” (5) Risk related to natural disasters and other calamities could impact our business Unpredictable events such as earthquakes, storms, floods, tsunamis and other natural phenomena, extreme weather conditions, fires, pandemics, etc. may, among other things, cause unexpectedly large market changes or unanticipated deterioration of economic conditions in a country or a region, or cause major injuries to our personnel or damages to our facilities, equipment and other properties. As a result of such events, our business activities, financial condition and results of operations could be adversely affected. 2. Credit Risk We maintain an allowance for credit losses mainly on finance leases and loans. However, we cannot be sure that the allowance will be adequate to cover all future credit losses. This allowance could be inadequate in the case of unexpected adverse changes in the Japanese and overseas economies in which we operate, or unexpected deterioration of specific industries, markets or customers’ business performance. While we constantly strive to diversify risks through portfolio management, we could be required to make additional provisions in the future depending on rapid interest rate fluctuations, economic trends and other factors. Furthermore, if adverse economic or market conditions affect the value of underlying collateral, secondhand equipment, or other collateral measures, our credit-related costs other than the allowance might increase. If any such event occurs, our business activities, financial condition and results of operations could be adversely affected. 3. Business Risk We define business risk as the uncertainty of recovery of investments caused by the negative performance of our businesses or investees, variability in market prices for the types of products or services we offer or the potential degradation or obsolescence of the products or services we offer or a decline in their quality. (1) We are exposed to risks from expansion of our businesses, acquisitions of companies and assets, entry into joint ventures and alliances with other companies and similar activities with uncertain outcomes We are engaged in a broad range of businesses in Japan and overseas and continue to expand such range, including through acquisitions of companies and businesses. The breadth of our business and continued expansion may expose us to new and complex risks that we may be unable to fully control or foresee, and, as a result, we may incur unexpected and potentially substantial costs or losses. Such unexpected costs and losses, which may result from regulatory, technological or other factors, may be particularly acute when we expand our business through acquisitions. In addition, we may not achieve targeted results if our business or business 5 Table of Contents opportunities do not develop as expected or if competitive pressures undermine profitability. Furthermore, when we acquire companies or businesses to expand our business, we could be required to make large write-downs of goodwill or other assets if the results of operations of an acquired company or business are lower than what we expected at the time we made such acquisition, or if they encounter other financial or operational difficulties. We have a wide range of investments in business operations, including operations that are very different from our financial services business. If we fail to manage our investee companies effectively, we may experience financial losses as well as losses of future business opportunities. In addition, we may not be able to sell or otherwise dispose of investments at the times or prices we initially expected or at all. We may also need to provide financial support, including credit support or equity investments, to some investee companies if their financial condition deteriorates. From time to time we also enter into joint ventures and other alliances, and the success of these alliances is often dependent upon the operational capabilities, the financial stability and the legal environment of our counterparties. If an alliance suffers a decline in its financial condition or is subject to operational instability because of a change in applicable laws or regulations, we may be required to pay in additional capital, reduce our investment at a loss, or terminate the alliance. If any such events occur, our business activities, financial condition results of operations and reputation may be adversely affected. (2) We are exposed to risks related to asset value volatility In the management of our businesses, we hold various classes of assets and investments, including real estate, aircraft, ships and other assets in Japan and overseas, which we may hold for our own use or lease to our customers. The market values of these assets and investments may be volatile and may decline substantially in the future. Asset valuation losses are recorded based on the fair market values at the time when revaluation is conducted in accordance with applicable accounting principles. However, losses from the sale of these assets, including as a result of a sudden need for liquidity or to mitigate an adverse credit event at one of our customers, may exceed the amount of recorded valuation losses. We estimate the residual value for certain operating leases at the time of contract. Our estimates of the residual value of equipment are based on current market values of used equipment and assumptions about when and to what extent the equipment will become obsolete; however, we may need to recognize additional valuation losses if our estimates differ from actual trends in equipment valuation and the secondhand market, and we may incur losses if we are unable to collect such estimated residual amounts. In addition, due to our operation of asset management businesses, if there are changes in the market value of asset such as shares and other securities, it could affect the results of our asset management services, which could lead to reductions in our assets under management and related fees and negatively impact our revenue. If any event described above occurs, our business activities, financial condition and results of operations may be adversely affected. (3) Risks related to our other businesses We operate a wide range of businesses in Japan and overseas, including financial services businesses. Entry into new businesses, and the results of operations following such entry, are accompanied by various uncertainties, and if any unanticipated risk does occur, it may adversely affect our business activities, financial condition and results of operations. 6 Table of Contents 4. Market Risk (1) Changes in market interest rates and currency exchange rates could adversely affect our assets and our business activities, financial condition and results of operations Our business activities are subject to risks relating to changes in market interest rates and currency exchange rates in Japan and overseas. Although we conduct asset-liability management (“ALM”), changes in the yield curve and currency exchange rates could adversely affect our results of operations. When funding costs increase due to actual or perceived increases in market interest rates, financing lease terms and loan interest rates for new transactions may diverge from the trend in market interest rates. Changes in market interest rates could have an adverse effect on the credit quality of our assets and our asset structure. For example, with respect to floating-rate loan assets, if market interest rates increase, the repayment burdens of our customers may also increase, which could adversely affect the financial condition of such customers and their ability to repay their obligations to us. Alternatively, a decline in interest rates could result in an increase in early repayment of loans and a corresponding decrease in our assets, which could adversely impact our revenue generation capabilities. Although we enter into derivative investments to hedge our market interest and currency risks, we may not be able to perfectly hedge against all risks arising from our business operations in foreign currencies and overseas investments. As a result, a significant change in interest rates or currency exchange rates could have an adverse impact on our business activities, financial condition and results of operations. (2) Our risk management strategy of using derivatives for hedging purposes may not be effective We may use derivative instruments to reduce fluctuations in the value of our investments and to hedge against interest rate and currency risks. However, it is possible that this risk management strategy may not be fully effective in all circumstances due to our failure to appraise the value of assets being hedged or execute such derivative instruments properly or at all, or our failure to achieve the intended results of such hedging due to the unavailability of offsetting or roll-over transactions in the event of sudden turbulence in the market or otherwise. Furthermore, our derivatives counterparties could fail to honor the terms of their contracts with us. Our existing derivative contracts and new derivative transactions may also be adversely affected if our credit ratings are downgraded. In such instances, our business activities, financial condition and results of operations could be adversely affected. (3) Fluctuations in market prices of stocks and bonds may adversely affect our business activities, financial condition and results of operations We hold investments in shares of private and public company stock and corporate and government bonds in Japan and overseas. The market values of our investment assets are volatile and may fluctuate substantially in the future. A significant decline in the value of our investment assets could adversely affect our business activities, financial condition and results of operations. 5. Liquidity Risk Our primary sources of financing include: borrowings from banks and other institutional lenders, funding from capital markets (such as through issuances of bonds, medium-term notes or commercial paper (“CP”), securitization of loans receivables and other assets) and deposits. Such sources include a significant amount of short-term debt, such as CP and other short-term borrowings from various institutional lenders and the portion of our long-term debt maturing in the current fiscal year. Some of our financing arrangements include conditions such as compliance with financial covenants. 7 Table of Contents For the ORIX Group, an increase in liquidity risk means an increase in the likelihood that it will be difficult to raise new funds and renew existing funding, and/or that funding costs will increase. If our access to liquidity is restricted, or if we are unable to obtain our required funding at acceptable costs, our business activities, financial condition and results of operations may be significantly and adversely affected. We obtain credit ratings from ratings agencies. Downgrades of our credit ratings due to reasons such as market turmoil or the worsening of our financial condition could result in increases in our interest expenses and could have an adverse effect on our fund-raising ability by increasing costs of issuing CP and corporate debt securities and borrowing from banks and other financial institutions, reducing the amount of bank credit available to us or decreasing the attractiveness of our equity securities to investors. As a result, our business activities, financial condition and results of operations may be significantly and adversely affected. 6. Compliance Risk Our efforts to implement and maintain thorough internal controls for appropriate compliance and legal risk management, as well as compliance education programs for our directors, officers and other employees across the ORIX Group, in order to prevent violations of applicable laws, regulations and internal rules may not be fully effective in preventing all violations. In addition, we engage in a wide range of businesses, and our expansion into new businesses through acquisitions may cause our current internal controls to not be fully effective. If we are unable to implement and maintain robust internal controls to prevent any such violations and adjust such controls in response to expansion of our business, we may be subject to sanctions, which could also apply to our officers or employees. Such events could adversely affect our business activities, financial condition, results of operations and reputation. In addition, we are also indirectly exposed to compliance risk through our joint venture and alliance partners, investee companies and other business partners or counterparties, whom we may not be able to control. If any of those parties engage in violations of applicable laws or regulations, our business activities, financial condition, results of operations and reputation may be adversely affected. 7. Legal Risk (1) We are subject to various laws and regulations in Japan and overseas that may affect our business Our businesses and employees are subject to domestic and international laws, as well as regulatory oversight by government authorities that implement those laws, relating to the various sectors in which we operate and to our business operations generally. These include laws and regulations applicable to specific businesses and industries, such as moneylending, financial instruments exchange, construction, real estate transactions, hotels, insurance, banking and trust services, as well as laws applicable more generally, such as laws and regulations on antitrust, personal data protection, anti-money laundering and anti-bribery and those applicable due to our public listing in Japan and the United States. Regardless of whether we have violated any laws, if we become the subject of a governmental investigation, litigation or other proceeding in connection with our businesses, our business activities, financial condition, results of operations and reputation may be adversely affected. For information on the regulations that apply to our businesses, see “Item 4. Information on the Company—Business Regulation.” (2) Enactment of, or changes in, laws, regulations and accounting standards may affect our business activities, financial condition and results of operations Enactment of, or changes in, laws and regulations may adversely affect the way that we conduct our business and the products or services that we may offer, as well as limit our investing and funding activities. 8 Table of Contents Such enactment or changes may increase our compliance costs. In recent years, foreign laws and regulations on subject matters such as personal data protection, anti-money laundering, anti-bribery and antitrust have been enacted and strengthened such that they may directly apply to the activities of our businesses, even if conducted outside the relevant jurisdiction. If such pattern continues and it becomes necessary for us to comply with different countries’ regulations, in addition to significantly increasing the number of laws and regulations that we need to comply with, it may also significantly increase our compliance costs. If accounting standards are changed, even if such changes do not directly affect our profitability or financial soundness, industries related to our businesses, our clients or the financial market may be negatively affected. As a result of such enactments or changes, our business activities, financial condition and results of operations could be adversely affected. (3) Contractual deficiencies may affect our business and other initiatives When engaging in business and other transactions, deficiencies, including our failure to execute legally required or binding agreements or our execution of agreements that do not reflect our intentions regarding parties’ contractual obligations, may lead to adverse events such as our being the target of infringement, breach of contract and other legal claims by contractual counterparties and third parties or disruption of our ability to obtain rights we expected as part of such transactions. Such events may adversely affect our business activities, financial condition and results of operations. 8. Information / Cybersecurity Risk and IT Risk (1) Risks relating to loss, theft, damage or leakage of information We maintain various information such as customer information including information on individuals, accounting information and personnel information. If such information is lost, stolen, damaged or leaked due to cyber attacks or other unauthorized acts, the ORIX Group may be subject to investigations, corrective orders or administrative monetary penalties imposed by supervisory or regulatory authorities pursuant to applicable data protection laws and regulations, such as the Act on the Protection of Personal Information of Japan and the General Data Protection Regulation adopted in the EU. In addition, we may be subject to claims for damages or other legal liabilities asserted by affected individuals or business partners. If any event described above occurs, our business activities, financial condition and results of operations may be adversely affected. (2) The impact of cybersecurity attacks or breaches on our information systems and our business generally We utilize information systems for managing customer information and financial transactions and for business operations, and in using these diverse information systems, the Company is connected via external networks to organizations within the Group, as well as to employees working remotely from home and subcontractors. Cyber attacks on these information systems or information networks, or other forms of cyber-terrorism could have adverse effects on our operations, by causing, for example, the suspension of certain products or services we provide to our customers or other interruptions of our business activities. In addition to direct impacts of an attack on a given information system, an attack may also result in widespread impacts throughout the network. Cybersecurity risks and the frequency and sophistication of cyber attacks have significantly increased in recent years. The prolonged Russia-Ukraine conflict, as well as conflicts and increasing geopolitical tensions in various regions, including the Middle East and Asia, may heighten the risk of cyber attacks arising from international sanctions or conflicts between states, as well as cyber attacks carried out by other actors seeking to take advantage of such geopolitical conditions. In addition, we also face indirect cybersecurity risks relating to 9 Table of Contents our customers and other third parties, including counterparties in the financial services industry. For example, vulnerabilities in third-party technology systems may increase the risk that our information systems are exposed to cyber attacks. This may result in significant costs to restore business operations, or regulatory sanctions for violations of relevant laws and regulations, or the potential for damages judgments. As a result of the above, our business activities, reputation, financial condition and results of operations may be adversely affected. (3) Impact of system failures System shutdowns, malfunctions or failures, the mishandling of data or fraudulent acts by employees, vendors or other third parties, or inaccurate information resulting from the use of IT tools could have adverse effects on our operations, by causing, for example, delays in the receipt and payment of funds, disruptions to our financial transactions, the generation of errors in information used by our management for business decision-making and risk management evaluation and planning, the suspension of certain products or services we provide to our customers or other interruptions of our business activities. In such event, our liquidity could be adversely affected. We may also incur substantial costs to recover our business functionality and our business activities, financial condition, results of operations and reputation may be adversely affected. 9. Operational Risk and Other Risks (1) Operational Risk Our business involves many types of operational risks. Examples include inappropriate sales practices; inadequate handling of client and customer complaints; inadequate internal communication of necessary information; misconduct of officers, employees, agents, franchisees, trading associates, vendors or other third parties; errors in the settlement of accounts and conflicts with employees concerning labor and workplace management. When we offer new products or services, we must ensure that we have the capacity to properly undertake and perform such operations. If we lack such capacity or fail to perform such operations successfully, we may lose the confidence of the market and our customers, which may cause us to suffer decreased profitability or force us to withdraw from such operations. Our management attempts to manage operational risk and maintain it at a level that we believe is appropriate. However, operational risk is part of the business environment in which we operate, and despite our control measures, our business activities, financial condition results of operations and reputation may be adversely affected at any time due to this risk. (2) Our risk management may not be effective We continuously seek to improve our risk management function. However, due to the rapid expansion of our business or significant changes in the business environment, our risk management may not always be effective. As a result, our business activities, financial condition and results of operations may be adversely affected. For a detailed discussion of our risk management system, see “Item 5. Operating and Financial Review and Prospects—Risk Management.” (3) We may not be able to hire or retain qualified personnel Our businesses require a considerable investment in human resources and the retention of qualified personnel in order to successfully compete in markets in Japan and overseas. If we cannot develop, hire or retain 10 Table of Contents the necessary qualified personnel, we may incur additional costs to hire specialists or the quality of our products and services may decline, which could prevent us from continuing our business operation in a stable manner and adversely affect our business activities, financial condition and results of operations. For further information about our initiatives related to human resources strategy, see “Item 4. Information on the Company—Sustainability at ORIX and Our Initiatives.” (4) Our internal control over financial reporting in future periods may be found insufficient We have established and assessed our internal control over financial reporting in a manner intended to ensure compliance with the requirements of various laws and regulations. However, in such cases as unpredictable problems should occur, the evaluation process of our internal control over financial reporting may be partially unfulfilled, or such problems may cause us to report the presence of material deficiencies in our internal control, which could cause a loss of investor confidence in the reliability of our financial statements and cause our share price to fall. As a result, our business activities, financial condition, results of operations and reputation may be adversely affected. 10. Risks Related to Holding or Trading our Shares and ADRs (1) Rights of shareholders under Japanese law may be different from those under the laws of other jurisdictions Our Articles of Incorporation, the regulations of our board of directors and the Companies Act govern our corporate affairs. Legal principles relating to matters such as the validity of corporate procedures, directors’ and officers’ fiduciary duties and shareholders’ rights are different from those that would apply if we were incorporated elsewhere. Shareholders’ rights under Japanese law are different in some respects from shareholders’ rights under the laws of jurisdictions within the United States and other countries. You may have more difficulty in asserting your rights as a shareholder than you would as a shareholder of a corporation organized in a jurisdiction outside Japan. For a detailed discussion of the relevant provisions of the Companies Act and our Articles of Incorporation, see “Item 10. Additional Information—Memorandum and Articles of Incorporation.” (2)Because ORIX and its directors and executive officers are located outside the United States, investors may have difficulty serving legal process on them in the United States or enforcing U.S. court judgments, including judgments based on U.S. federal securities laws ORIX is a joint stock corporation formed in Japan. Almost all of ORIX’s directors and executive officers are residents of countries other than the United States. Although some of ORIX’s subsidiaries have substantial assets in the United States, substantially all of ORIX’s assets and the assets of ORIX’s directors and executive officers are located outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon ORIX or ORIX’s directors and executive officers or to enforce against ORIX or those persons, in U.S. courts, judgments of U.S. courts predicated upon the civil liability provisions of U.S. securities laws. ORIX has been advised by its Japanese counsel that there is doubt, in original actions or in actions to enforce judgments of U.S. courts, as to the enforceability in Japan of civil liabilities based solely on U.S. securities laws. A Japanese court may refuse to allow an original action based on U.S. securities laws. The United States and Japan do not currently have a treaty providing for reciprocal recognition and enforcement of judgments, other than arbitration awards, in civil or commercial matters. Therefore, if you obtain a civil judgment by a U.S. court, you will not necessarily be able to enforce such judgment directly in Japan. (3) We may be a passive foreign investment company, which could result in adverse U.S. federal income tax consequences to U.S. investors We believe that we may have been a passive foreign investment company (a “PFIC”) under the U.S. Internal Revenue Code of 1986, as amended, for the year to which this report relates because of the composition of our 11 Table of Contents assets and the nature of our income. In addition, we may be a PFIC in the foreseeable future. Assuming this is the case, U.S. investors in our Shares or ADSs will be subject to special rules of taxation in respect of certain dividends or gains on such Shares or ADSs, including the treatment of gains realized on the disposition of, and certain dividends received on, the Shares or ADSs as ordinary income earned pro rata over a U.S. investor’s holding period for such Shares or ADSs, taxed at the maximum rate applicable during the years in which such income is treated as earned, with the resulting tax liability subject to interest charges for a deemed deferral benefit. In addition, in the case of any dividends that are not subject to the foregoing rule, the favorable rates of tax applicable to certain dividends received by certain non-corporate U.S. investors would not be available. See “Item 10. Additional Information—Taxation—United States Taxation.” Investors are urged to consult their own tax advisors regarding all aspects of the income tax consequences of investing in our Shares or ADSs. (4) If you hold fewer than 100 Shares, you will not have all the rights of shareholders with 100 or more Shares One “unit” of our Shares is comprised of one hundred Shares. Each unit of the Shares has one vote. A holder who owns Shares other than in multiples of one hundred will own less than a whole unit (i.e., for the portion constituting of fewer than one hundred Shares.) The Companies Act imposes significant restrictions on the rights of holders of shares constituting less than a whole unit, which include restrictions on the right to vote. Under the unit share system, a holder of Shares constituting less than a unit has the right to require ORIX to purchase its Shares and the right to require ORIX to sell it additional Shares to create a whole unit. However, a holder of ADRs is not permitted to withdraw underlying Shares representing less than one unit, which is equivalent to 100 ADSs, and, as a practical matter, is unable to require ORIX to purchase those underlying Shares. The unit share system, however, does not affect the transferability of ADSs, which may be transferred in lots of any number of whole ADSs. (5) Foreign exchange fluctuations may affect the value of our securities and dividends Market prices for our ADSs may decline if the value of the yen declines against the dollar. In addition, the dollar amount of cash dividends or other cash payments made to holders of ADSs will decline if the value of the yen declines against the dollar. (6) A holder of ADRs has fewer rights than a shareholder and must act through the depositary to exercise those rights The rights of shareholders under Japanese law to take various actions, including voting shares, receiving dividends and distributions, bringing derivative actions, examining a company’s accounting books and records and exercising dissenters’ rights, are available only to holders of record on a company’s register of shareholders. The shares represented by our ADSs are registered in the name of a nominee of the depositary, through its custodian agent. Only the depositary is able to exercise those rights in connection with the deposited shares. The depositary will make efforts to vote the shares represented by our ADSs as instructed by the holders of the ADRs representing such ADSs and will pay to those holders the dividends and distributions collected from us. However, a holder of ADRs will not be able to directly bring a derivative action, examine our accounting books and exercise dissenters’ rights through the depositary unless the depositary specifically undertakes to exercise those rights and is indemnified to its satisfaction by the holder for doing so. 12 Table of Contents

GENERAL ORIX is a joint stock corporation (kabushiki kaisha) formed under Japanese law. Our principal place of business is at World Trade Center Building, SOUTH TOWER, 2-4-1 Hamamatsu-cho, Minato-ku, Tokyo 105-5135, Japan, and our phone number is: +81 3 3435 3000. Our general contact URL is https://www.orix.co.jp/grp/en/contact/inquiry-eng.html and our corporate website URL is: https://www.orix.co.jp/grp/en. The information on our website is not incorporated by reference into this annual report. ORIX Corporation USA is ORIX’s agent in the United States, and its principal place of business is at 2001 Ross Avenue, Suite 1900, Dallas, Texas 75201, USA. CORPORATE HISTORY ORIX was established in April 1964 in Osaka, Japan as Orient Leasing Co., Ltd. by three trading companies and five banks that included Nichimen Corporation, Nissho Corporation and Iwai Corporation (presently Sojitz Corporation), the Sanwa Bank (presently The Bank of Mitsubishi UFJ, Ltd.), Toyo Trust & Banking (presently Mitsubishi UFJ Trust and Banking Corporation), the Industrial Bank of Japan and Nippon Kangyo Bank (presently Mizuho Bank, Ltd.), and the Bank of Kobe (presently Sumitomo Mitsui Banking Corporation). Our initial development occurred during the period of sustained economic growth in Japan during the 1960s and the early 1970s. We capitalized on the growing demand in this period by expanding our portfolio of leasing assets. During this time, our marketing strategy shifted from a focus on using the established networks of the trading companies and other initial shareholders to one that concentrated on independent marketing as the number of our branches expanded. In April 1970, we listed our Shares on the second section of the Osaka Securities Exchange. Since February 1973, our Shares had been listed on the first sections of the Tokyo Stock Exchange and the Osaka Securities Exchange (which was integrated into the Tokyo Stock Exchange in 2013). Since April 2022, we have transitioned from the First Section to the Prime Market under the restructure of the Tokyo Stock Exchange’s market segments. ORIX was also listed on the first section of the Nagoya Stock Exchange from February 1973 to October 2004. ORIX set up a number of specialized leasing companies to tap new market potential, starting with the establishment of Orient Auto Leasing Corporation (presently ORIX Auto Corporation) in 1973 and Orient Instrument Rentals Corporation (presently ORIX Rentec Corporation), Japan’s first electric measuring equipment rental company, in 1976. With the establishment of the credit company Family Consumer Credit Corporation (ORIX Credit Corporation (presently DOCOMO Finance, Inc.) (“ORIX Credit (presently DOCOMO Finance)”), concentrating on card loans) in 1979, ORIX began to move into the retail market by offering financing services to individuals. It was also during this time that ORIX began expanding overseas, commencing with the establishment of its first overseas office in Hong Kong in 1971, followed by Singapore (1972), Malaysia (1973), Indonesia (1975), the Philippines (1977) and Thailand (1978). In the 1980s and early 1990s, ORIX established offices in the United States (1981), Australia (1986), Pakistan (1986) and Taiwan (1991). The Japanese company Budget Rent-a-Car (presently ORIX Auto Corporation) was also established in 1985. In 1989, we introduced a corporate identity program and changed our name to ORIX Corporation from Orient Leasing Co., Ltd. to reflect our increasingly international profile and diversification into financial services other than leasing. In 1991, ORIX established ORIX Aviation Systems Limited in Ireland. In the same year, ORIX established ORIX Omaha Life Insurance Corporation (presently ORIX Life Insurance Corporation (“ORIX Life Insurance”)) 13 Table of Contents and entered the life insurance business. In 1998, ORIX purchased Yamaichi Trust & Bank, Ltd. (presently ORIX Bank Corporation (“ORIX Bank”)). In 1998, ORIX listed on the New York Stock Exchange (Ticker Symbol: IX) and, through registration with the U.S. Securities and Exchange Commission (“SEC”), has worked to further strengthen its corporate governance regulations. ORIX Real Estate Corporation was established in 1999 to concentrate on condominium development that was first begun in 1993 as well as develop office buildings in pursuit of improved real estate expertise. In 1999, we established ORIX Asset Management and Loan Services Corporation, the shares of which were all sold in July 2025. Since 2000, we have actively expanded our automobile-related operations by acquiring companies and assets. We combined seven automobile-related companies into ORIX Auto Corporation in 2005. We have also continued our overseas expansion. In China, we established a rental company in Tianjin in 2004 and in 2005 established a leasing company in Shanghai. In 2009, we established a Chinese Headquarters in Dalian. We also set up local subsidiaries in Saudi Arabia (2001), and the United Arab Emirates (2002). In 2006, we entered the investment banking field in the United States with the acquisition of Houlihan Lokey, Inc., the shares of which were all sold by July 2019. In 2010, we acquired RED Capital Group (presently ORIX Real Estate Capital Holdings, LLC), a U.S.-based company that provides financing for multi-family, senior living and healthcare-related real estate development projects in the United States. In 2010, we also acquired Mariner Investment Group LLC, a leading independent SEC-registered hedge fund manager, the shares of which were all sold in July 2020. We managed ORIX Credit (presently DOCOMO Finance) over a continuous three-year period jointly with Sumitomo Mitsui Banking Corporation pursuant to an alliance established in July 2009. In June 2012, ORIX purchased all the shares of ORIX Credit (presently DOCOMO Finance), making it a wholly-owned subsidiary of ORIX. In July 2013, ORIX acquired Robeco Groep N.V. (presently ORIX Corporation Europe N.V. (“OCE”)), a holding company of global asset management companies based in the Netherlands, to pursue a new business model by combining finance with related services. In October 2016, ORIX purchased the remaining shares of Robeco, making it a wholly-owned subsidiary of ORIX. In July 2014, we acquired Hartford Life Insurance K.K. (presently ORIX Life Insurance). In December 2014, we acquired Yayoi Co., Ltd. (“Yayoi”), a software service provider targeting small businesses, which we sold in March 2022. In December 2015, ORIX and VINCI Airports S.A.S., an airport concession holder and operator based in France, established Kansai Airports to operate and manage Kansai International Airport and Osaka International Airport. In November 2018, ORIX acquired 30% of the shares of Avolon Holdings Limited (“Avolon”), a leading global aircraft leasing company located in Ireland. In January 2019, ORIX made DAIKYO INCORPORATED (“DAIKYO”) a wholly-owned subsidiary due to the acquisition of common shares of DAIKYO through a tender offer. In July 2021, ORIX acquired 80% of the shares of Elawan Energy S.L.(“Elawan”), a renewable energy company located in Spain. In February 2023, ORIX purchased the remaining shares of Elawan, making it a wholly-owned subsidiary of ORIX. In March 2024, ORIX sold 66% of the shares of ORIX Credit (presently DOCOMO Finance) to NTT DOCOMO, INC.. In January 2025, ORIX purchased the remaining shares of ORIX Leasing Singapore Limited, making it a wholly-owned subsidiary of ORIX. 14 Table of Contents STRATEGY ORIX Group Purpose & Culture The Company established “ORIX Group Purpose & Culture” in 2023, which is the basis for our medium- to long-term business strategy and targeted management indicators. Our Purpose and Culture is the foundation on which to foster an enhanced sense of unity globally and build our corporate value further into the future. Our Purpose defines why ORIX Group exists in our world and is at the core of everything we do. Our Culture is a set of shared values that ORIX Group employees around the world live and champion to achieve our Purpose. [Our Purpose] Finding Paths. Making Impact. We combine innovative thinking and diverse expertise to find pathways to impact in a world of change. [Our Culture] • Find Power in Diversity • Find Adventure in Challenge • Find Opportunity in Change Medium- to Long-term Business Strategy In pursuit of its Purpose, ORIX has identified three focus areas and is advancing its business strategy, “ORIX Group Growth Strategy 2035,” leveraging its two core business models, “Alternative Investment & Operations” and “Business Solutions,” to deliver both societal impact and sustainable growth, enhance corporate value and earn the trust of society over the medium- to long-term. [Focus Areas] “PATHWAYS”: Find new pathways to impact in the future economy. “GROWTH”: Support sustainable growth in a constantly changing world. “IMPACT”: Deliver positive impact today for a planet with limited resources. By combining the strengths of each segment and further strengthening collaborations in these areas, we intend to achieve business expansion with a sense of scale. [Business Strategy] “Alternative Investment & Operations”: This model involves fund-raising from third-party capital to fund assets that ORIX has invested in and managed, while continuing to manage and operate those assets to generate both asset value growth and fee income. “Business Solutions”: This model creates added value by addressing customer challenges and providing solutions that leverage resources both within and outside ORIX Group, including people, information and technology. 15 Table of Contents Target Performance Indicators and Major Corporate Agenda The Company positions ROE in addition to net income growth as its most important management indicators, and strives toward higher total shareholder return (TSR). For stable shareholder returns, the Company has implemented flexible stock buybacks while placing importance on ROE targets premised on continuing with a dividend distribution of “the higher value of a payout ratio of 39% or the result for the previous fiscal year” while maintaining financial soundness with an A equivalent credit rating. Our performance indicators for each of the three fiscal years ended March 31, 2024, 2025 and 2026 were as follows. As of March 31, 2024 2025 2026 Net income attributable to ORIX Corporation Shareholders (Millions of yen ) ¥ 346,132 ¥ 351,630 ¥ 447,265 ROE*1 (%) 9.2 8.8 10.4 *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. To achieve Target Performance Indicators, the Group intends to address the following Major Corporate Agenda. Business Model Transformation: Businesses that generate profits by utilizing their own balance sheet face constraints on asset growth, as funding from financial institutions and capital markets is dependent on the company’s equity capital and credit profile. Consequently, profit growth through asset expansion alone is inherently limited. To achieve sustainable profit growth for ORIX Group, it is essential to accelerate the shift toward businesses that can generate earnings efficiently from a limited amount of capital. Accordingly, we intend to promote a transformation toward business models with higher capital profitability. Portfolio Optimization: Maintaining assets or continuing businesses with relatively low capital efficiency leads to capital being tied up in those assets and businesses, which in turn becomes a constraint on improving group-wide ROE and maximizing corporate value. Therefore, it is important to continuously reassess capital efficiency and growth potential for each existing asset and business, as well as for each new investment opportunity, and to reallocate capital appropriately. Taking into account the impact on the Group’s overall funding capabilities, including potential changes in credit ratings, we intend to advance portfolio optimization on a group-wide basis. Creation of New Businesses: In pursuing profit growth toward our target of JPY 1 trillion in net income attributable to owners of the parent, it is necessary to establish new sources of earnings that are not constrained by existing frameworks, including business domains, earnings structures, or organizational structures. By capturing global trends and creating new value in high potential areas—such as the strategic investment areas defined in the “ORIX Group Growth Strategy 2035”—we intend to promote the diversification of the Group’s earnings base and aim to achieve both growth in net income and improvements in capital efficiency. Operating Environment When we look at the operating environment surrounding the Company, geopolitical risks remain elevated due to the heightened tensions and conflicts in the Middle East and the prolonged Russia-Ukraine conflict. In addition, the global business environment continues to be unstable, driven by factors such as U.S. tariffs, high energy costs and the economic slowdown in China. 16 Table of Contents In Japan, a challenging operating environment persists for companies, reflecting a decline in the number of visitors from China due to changes in diplomatic relations between Japan and China, the increasing severity of labor shortages, and rising business costs stemming from higher resource prices and construction costs. Under these circumstances, we recognize the need to continue to carefully monitor changes in the business conditions of our clients and investments, as well as the impact on each of our businesses, including our Environment and Energy business and our facility operation businesses such as hotels and Japanese inns. Furthermore, if geopolitical risks become prolonged or intensify further, our operating environment could become even more unstable due to tighter supply and demand for resources and energy, as well as disruptions to global supply chains. Accordingly, we plan to raise the level of monitoring as appropriate and respond in a timely and flexible manner, depending on developments in the external environment. Sustainability at ORIX and Our Initiatives ORIX Group operates under its “ORIX Group Purpose & Culture” and its medium- to long-term business strategy, “ORIX Group Growth Strategy 2035”. In this context, ORIX positions as an important management theme the creation of new value through its businesses to address social issues and generate appropriate returns, as well as the goal of continuous provision of value that it believes exceeds stakeholder expectations, thereby contributing to the sustainable enhancement of corporate value. At the same time, the business environment surrounding ORIX Group has become increasingly complex, with risks that require consideration, including heightened geopolitical risks, accelerated technological innovation, and instability in energy and resource supply and demand. Taking into account the “ORIX Group Purpose & Culture,” the “ORIX Group Growth Strategy 2035”, as well as global developments relating to sustainability and the Group’s business environment, we updated its material issues. In conducting this update, we also held multiple roundtable discussions with executives at the business unit head level to discuss expectations from customers and society. In parallel, the Sustainability Department conducted a risk mapping exercise by identifying potential risks and opportunities related to the sustainability of ORIX, taking into consideration their potential financial impact and likelihood of occurrence, and referring to the Sustainability Accounting Standards Board (“SASB”) Standards (last updated in December 2023) relevant to industries associated with ORIX Group. The status of these analyses was reported to the Board of Directors in November 2025 and March 2026. Based on these discussions, the Board of Directors resolved to update the material issues at its meeting held in May 2026, subsequent to the end of the fiscal year. The updated material issues resolved by the Board of Directors consist of six items: “Climate Change”, “Circular Economy”, “Empowering Communities”, “Business Ecosystem”, “Human Capital Management”, and “Governance”. Please refer to the table below for the respective subtitles and the rationale for their designation as material issues. Among these, “Human Capital Management” and “Governance” are positioned as fundamental management bases supporting the Group’s growth strategy. Of the 14 previously identified material issues established in November 2021, the priority of four items has declined as they have already entered the phase of execution and implementation of policies and targets, while the remaining 10 items, for which the underlying issues continue to be recognized, have been incorporated into the updated material issues. In preparation for the application of the Sustainability Disclosure Standards from the fiscal year ending March 31, 2027 onward, we will proceed with updating the risks and opportunities, strategies, metrics and targets corresponding to each material issue. The material issues established in November 2021 and updated in May 2026 were each determined based on the medium- to long-term management policies and the business environment as of the time of the respective resolution, and will be reviewed periodically in the future in response to significant changes in the Group’s management policies or external environment. 17 Table of Contents Note: The Sustainability Disclosure Standards developed by the Sustainability Standards Board of Japan (“SSBJ”), which are designed to be consistent with the IFRS Sustainability Disclosure Standards developed by the International Sustainability Standards Board (ISSB). Material issues and Subtitles Reasons for Selection of Material Issues Climate Change Capture opportunities arising from the energy transition and use them to evolve our business. Business The ORIX Group has been engaged in renewable energy businesses in Japan and overseas since the 2000s and has expanded its operations to include areas such as energy storage and solar power plant management services. Addressing decarbonization represents a medium- to long-term business opportunity and its positioned as one of the strategic investment areas under “ORIX Group Growth Strategy 2035”, where the ORIX Group can leverage its long-standing expertise and investment track record in renewable energy. By further evolving its investment experience and operational expertise across developed and emerging markets, the Group believes it can capture new business opportunities over the medium to long term. Circular Economy Leverage our expertise in asset selection and management to maintain, enhance and recycle asset value. Business The ORIX Group considers its “Alternative Investment & Operations” model as one of its core strengths, whereby it involves fund-raising from third-party capital to fund assets in which the ORIX Group has invested in and managed, while continuing to manage and operate those assets to generate both asset value growth and fee income. Efficient use of finite resources is a significant social issue and is positioned as one of the strategic investment areas under “ORIX Group Growth Strategy 2035”. By leveraging its asset selection and operational capabilities developed through leasing and asset management businesses, the ORIX Group believes that it can capture business opportunities over the medium to long term. Empowering Communities Revitalize communities and economic activity by maximizing local assets and human capital. Business The ORIX Group considers its “Business Solutions” model as one of its core strengths, whereby it creates added value by addressing customer challenges and providing solutions that leverage resources both within and outside ORIX Group including its business platforms and human resources. For the ORIX Group, which serves a broad customer base of small- and medium-sized enterprises, the sustainable development of local communities and society, including the resilience of such communities, is essential to sustaining this value creation. By contributing to the vitality of its customers, primarily small- and medium-sized enterprises, as well as their management and employees, and the communities in 18 Table of Contents Material issues and Subtitles Reasons for Selection of Material Issues which they operate, the ORIX Group believes it can enhance its own sustainability over the medium to long term. Business Ecosystem Create new value through strategic collaboration with a diverse range of business partners. Business The ORIX Group provides value to its customers through collaboration with a wide range of stakeholders, including suppliers that provide products and services. It is difficult to sustain value creation that earns strong support from customers without such collaboration, and working together with these stakeholders on issues such as environmental impact reduction and respect for human rights is essential for business sustainability and the stable access to key management resources. Through such collaborative efforts, the ORIX Group believes it can both enhance the sustainability of its business foundation and create new value and solutions over the medium to long term. Human Capital Management Strengthen innovation and competitiveness by fostering an environment where diverse talent can thrive. Management ORIX Group’s approach to human capital management has three components: instilling our unique core values that underlie our actions; enhancing our core capabilities, which serve as our capacity for organizational innovation; and providing a workplace in which diverse human resources can play an active role. The objective of our approach is to create new businesses and increase the value of existing operations to generate sustainable business growth. The ORIX Group believes that such an approach to human capital management contributes to its sustainable growth. Governance Enhance our Board of Directors’ oversight capabilities and reinforce systems for managing compliance and information security risks. Management The ORIX Group considers the strengthening of its corporate governance framework to be one of its key management priorities in order to ensure the proper execution of business activities in line with its fundamental management policies and to maintain management fairness, and it continuously works to enhance the effectiveness of its Board of Directors and to establish a sound and transparent corporate governance structure. Under a management structure without a parent company or controlling shareholder, the ORIX Group believes that gaining the trust of a wide range of stakeholders enhances its management independence and flexibility and contributes to the enhancement of corporate value. In addition, the ORIX Group believes that risks related to compliance and information security could have a significant impact on its business continuity and corporate value, and therefore considers it necessary to strengthen its management systems for such risks. 19 Table of Contents As described above, the material issues were updated at the meeting of the Board of Directors held in May 2026, subsequent to the end of the fiscal year. The matters described below relate to initiatives implemented during the fiscal year and are, based on the material issues and key targets (both established in November 2021) that were effective during that fiscal year. Note on disclosure frameworks Certain sustainability-related disclosures included in ORIX’s statutory filings and other public disclosures in Japan are prepared under Japanese laws, regulations and stock exchange rules and may differ in scope, format and level of detail from the disclosures included in this annual report, which is prepared in accordance with U.S. securities laws and reporting requirements of the Securities and Exchange Commission. Such differences are intended to reflect the respective disclosure frameworks and do not, by themselves, indicate a difference in the ORIX Group’s underlying governance, policies or practices. Overview 1. Governance The Board of Directors is responsible for overseeing sustainability-related risks and opportunities across the ORIX Group. The Board receives regular reports from the Sustainability Committee and other relevant bodies, approves sustainability-related policies and overseas progress toward material issues and key targets, providing guidance as necessary. The Board includes directors with extensive experience in ESG matters and provides appropriate oversight. In addition, the Audit Committee receives regular reports from the responsible departments and the internal audit function regarding progress on sustainability-related initiatives and responses to disclosure regulations, and reviews the status of such matters. At the execution level, the Sustainability Committee deliberates important matters related to sustainability across the Group. Additionally, depending on the nature of the issue, specialized bodies established for specific areas may work in coordination with the Sustainability Committee to examine and advance initiatives from a more specialized perspective. The Sustainability Committee discusses, among other matters, group-wide sustainability policies, the identification and review of material issues and key targets; and strategies, KPIs, operational procedures and promotion frameworks related to those targets. The Committee reports the substance of its deliberations to the Board of Directors. During the fiscal year, the Sustainability Committee met four times. In addition to reviewing the prior year’s activities and the policy for the current fiscal year, the Committee deliberated matters including the formulation of supplier codes of conduct at ORIX Auto Corporation and within Real Estate segment, as well as progress on the update of the ORIX Group’s material issues. Date Key Matters Discussed April 18, 2025 (i) Formulation of the “ORIX Auto Corporation Supplier Code of Conduct” (ii) Formulation of the “ORIX Group Real Estate segment Supplier Code of Conduct” May 19, 2025 Report on sustainability initiatives for the fiscal year ended March 2025 and approval of policies for the fiscal year ending March 2026 October 23, 2025 Direction of the update of material issues March 24, 2026 Progress of the update of material issues 20 Table of Contents In our current Compensation Policy for Executive Officers (applicable also to those who concurrently serve as directors), the status of ESG initiatives has been added to the qualitative evaluation items for determining annual bonuses from the fiscal year ended March 31, 2022. In addition, progress of the key ESG-related goals for the ORIX Group has been added as a quantitative evaluation item for Executive Officers at the Managing Executive Officer level and above beginning in the fiscal year ended March 31, 2024. The objective is to have directors and officers set an example by considering the impact of the efforts of each division on the environment, economy, and society in conducting corporate initiatives from a mid- to long-term perspective. The ORIX Group has established the ORIX Sustainable Investing and Lending Policy to promote sustainable investing and lending. The Group also prohibits transactions with companies where human rights concerns are identified, as well as transactions related to certain sectors and business activities. For individual investment and lending transactions, the Investment and Credit Committee (“ICC”) deliberates submitted proposals. Transactions submitted to the ICC are evaluated by the relevant business divisions and the Sustainability Department, using the ORIX Group’s proprietary checklist as well as information from external vendors. Where concerns are identified from environmental or social perspectives, such matters are reported to the ICC together with other relevant information regarding the transaction. 2. Strategy In order to realize a sustainable society and achieve sustainable growth for ORIX, in November 2021 we set forth issues that we perceive as material in the fields of environment, society and governance. As described above, the Board of Directors resolved to update these material issues at its meeting held in May 2026, subsequent to the end of the fiscal year; however, this section describes the material issues established in November 2021 and the initiatives undertaken in relation thereto. (a) Material issues and focus areas to reduce climate-change related risks. i. Set GHG emissions reduction goals. ii. Continue to contribute to the development of renewable energy investment and production. iii. Quantify and reduce our climate change-related risks and continue to implement TCFD recommendations. iv. Continue to promote a circular economy and reduce and appropriately manage waste. v. Formulate an exit strategy for existing exposure to high environmental risk business areas and create bright-line exclusion criteria in any new investing or lending. vi. Work with our stakeholders to promote a healthier environment through goods and services that help mitigate adverse environmental impacts. (b) Material issues and focus areas to reduce social risks, including human rights risk. i. Continue to strengthen our Sustainable Investing and Lending Policy, Code of Conduct, and risk management system to adequately cover new and emerging social risk areas. ii. Share a common and agreed respect for fundamental human rights with all of our stakeholders such as support for the UN Universal Declaration of Human Rights, worker health and safety, diversity, equity and inclusion and non-discrimination. iii. Continue to improve employee satisfaction by respecting the diversity of our employees and creating an inclusive working environment that promotes flexible working styles and provides career development support, fair performance review and compensation schemes, and employee health support systems. 21 Table of Contents (c) Material issues and focus areas to strengthen governance based on transparency, compliance, and integrity. i. Continue to strengthen the independence of the Board of Directors so that the Board may provide appropriate and effective oversight over the management’s business execution from an independent and objective perspective. ii. The Group CEO will be responsible for all execution matters including responding to these material issues under the oversight of the Board of Directors. iii. Emphasis on client satisfaction and developing and offering sustainable products and services. iv. Endeavour to gain and keep the trust of our clients in all of our business areas. v. Promote a strong culture of compliance with all applicable laws and regulations, including paying our fair share of taxes. The principal initiatives undertaken during the fiscal year are as follows. With respect to (a) mitigation of climate change risks, the Group continuously examined measures to reduce greenhouse gas (GHG) emissions, including reductions achieved through facility modifications at coal and biomass co-firing power plants, which account for the majority of Scope 1 emissions. For Scope 2 emissions, the Group has formulated plans for major emission sites and is promoting step-by-step reductions. In addition, with respect to (b) mitigation of social risks, including human rights issues, the Group continued to advance its human capital management initiatives. Specifically, it promoted three pillars, “instilling core values,” “enhancing core capabilities,” and “providing a workplace in which diverse human resources can play active roles”, and monitored progress accordingly. Furthermore, to enhance understanding and awareness of its Human Rights Policy, the Group developed training tools and implemented human rights-related training as part of compliance training and level-based training programs. With respect to (c) strengthening governance based on transparency, compliance, and integrity, corporate governance initiatives were advanced through the Board of Directors and the three internal committees (Nomination, Audit, and Compensation). During the fiscal year, the Nomination Committee deliberated matters including the selection of business unit COOs and the Group CFO, as well as the consideration of candidates for outside directors. The Audit Committee, in addition to handling matters for resolution and reporting, regularly reviewed audit plans and discussed the results and future direction of audit activities. The Compensation Committee examined executive compensation linked to performance indicators such as consolidated ROE. In addition, the Group revised its “Code of Conduct” applicable to all officers and employees in April 2025 and established four Compliance Values. Further details are described below. “Addressing Climate Change”, “Addressing Human Capital”, and Item 6. Directors, Senior Management and Employees, Corporate Governance System. 3. Risk Management The ORIX Group has established an enterprise-wide risk management framework to identify, assess and manage various risks arising from its business activities. Sustainability-related risks and opportunities are continuously identified through changes in the business environment, regulatory developments and engagement with stakeholders, including shareholders and investors, local communities, customers, employees, suppliers, and business partners. The Sustainability Committee monitors and evaluates progress toward key targets. In addition, depending on the nature of the issue, specialized bodies established for specific areas work in coordination with the Sustainability Committee to conduct more detailed examinations from a specialized perspective. Matters discussed by the Sustainability Committee and such other bodies are reported to the Board of Directors on a regular basis and are subject to its approval. 22 Table of Contents Within each business division, information relevant to the characteristics of each business is collected, and sustainability-related risks and opportunities are continuously analyzed. The ORIX Group has established a Sustainable Investing and Lending Policy to promote sustainable investing and lending. The Policy prohibits transactions with companies where human rights concerns are identified, as well as transactions related to certain sectors and business activities. For individual investment and lending transactions, the Investment and Credit Committee deliberates submitted proposals. Transactions submitted to the Committee are evaluated by the relevant business divisions and the Sustainability Department using the ORIX Group’s proprietary checklist as well as information from external vendors. Where concerns are identified from environmental or social perspectives, such matters are reported to the Committee together with other relevant information regarding the transaction. We have also established a human rights policy as a guideline for promoting efforts to respect human rights. We expanded the scope of human rights from “its own employees and business partners” to include “suppliers and local communities,” and clarifying its policies on education and training, relief measures, disclosure, and other areas. In addition, as disclosed in our UK Modern Slavery Act Statement, we review the risk profile of the different sectors and geographies in which we operate, maintain reporting mechanisms to encourage reporting of misconduct, and train our employees. Regarding supply chain management, to build a sustainable supply chain, ORIX works with its suppliers to establish firm and consistent compliance with laws and regulations related to occupational health and safety and environmental protection. In fiscal 2026, ORIX Auto Corporation and within Real Estate segment worked on efforts such as organizing suppliers, risk analysis and evaluation, and establishing supplier action guidelines. Regarding environmental issues, we have established an environmental policy and promote solutions to environmental and energy problems, compliance with laws and regulations, and information disclosure. Regarding compliance and information security, we have established systems and internal regulations that cover the entire company, and we also conduct regular training for employees. 4. Metrics and Goals In November 2021, ORIX established certain key sustainability goals and reviews progress in relation to those goals through its governance processes. Key sustainability goals include, among others, (i) the ratio of outside directors, (ii) the ratio of female directors, (iii) the ratio of female management positions, (iv) reduction of GHG (CO2) emissions (Scope 1 and Scope 2), and (v) reduction of the balance of financing and investments in certain high GHG (CO2) emitting industries. * During the fiscal year, the Group continued its efforts to reduce Scope 1 and Scope 2 emissions. In addition, the ratio of female managers increased compared with the previous year both at ORIX Corporation on a stand-alone basis and across eight major domestic Group companies, and the ratio of female directors exceeded 30% for the first time. In preparation for the application of the Sustainability Disclosure Standards from the fiscal year ending March 31, 2027 onward, the ORIX Group will also examine metrics and targets corresponding to the material issues updated in May 2026. As a result, these targets may be subject to change. 23 Table of Contents All key sustainability goals are subject to compliance with applicable local laws and regulations. In jurisdictions where application of certain targets is not feasible under applicable laws or regulations, such targets may not apply. * Refers to fossil fuel mining, palm oil plantations and forestry financed by ORIX Group overseas subsidiaries. Addressing Climate Change Climate change-related matters are addressed in accordance with the ORIX Group’s sustainability governance and enterprise-wide risk management framework as described in “Overview”, and are managed at both the corporate level (group-wide themes) and the business segment level. 1. Governance At the corporate level (group-wide themes), climate change-related matters are addressed by the Sustainability Committee. The Committee discusses matters including the results of scenario analyses based on the TCFD recommendations, progress on initiatives to reduce GHG emissions, global developments and expected trends in regulatory developments, as well as requests and expectations from business partners. The Committee reports the substance of its deliberations to the Board of Directors and receives guidance as appropriate. At the business segment level, each business division addresses climate-related risks under the responsibility of the head of the division. Specifically, for businesses with GHG emissions above a certain threshold, reduction measures are planned and implemented. In addition, where scenario analyses indicate that climate-related risks could have a material financial impact on the Group, appropriate response measures are examined. In addressing these risks, the Group considers various approaches tailored to the characteristics of each business, including not only initiatives through its own operations, but also engagement with investees, business partners, and the supply chain. Initiatives by each business division are determined following discussions at business strategy meetings involving top management, including internal directors, and are reported to the Sustainability Committee and the Board of Directors. 2. Strategy For business segments with a high relevance to climate change, scenario analyses are conducted based on the TCFD recommendations. Based on these scenario analyses, the principal risks and opportunities common across multiple segments, as well as their potential impacts, are as follows. (a) Transition Risks Transition risks may arise from regulatory changes, technological innovation and changes in business models associated with the transition to a decarbonized society. Such developments may adversely affect customers’ business performance and could result in increased credit-related expenses. (b) Physical Risks Physical risks may arise from extreme weather events and natural disasters, including temporary suspension of operations, increased operating costs or difficulty in continuing business operations. In addition, abnormal weather events such as storms and natural disasters may impair investment and asset values. 24 Table of Contents (c) Climate-Related Opportunities Climate-related opportunities include the expansion of business opportunities associated with increased demand for renewable energy. The ORIX Group recognizes that, while these climate-related risks and opportunities are relatively unlikely to result in significant one-off financial impacts in the short term (within one year), their impacts may become apparent over the medium to long term (beyond one year) as multiple factors accumulate. The Group also considers that the principal actions to address these risks and opportunities are as follows. With respect to initiatives to reduce GHG emissions, the ORIX Group is considering emissions reduction measures, including potential facility modifications such as conversion to biomass-only fuel use, at two coal-biomass co-firing power plants that account for slightly less than 80% of the Group’s total GHG (CO2) emissions (Scope 1 and Scope 2). At other major emission sites, the Group has formulated plans to reduce Scope 2 emissions, including at investees of its investment business segments, and is implementing such plans in phases. In addition, the ORIX Group conducts renewable energy power generation businesses in various countries. To further promote the widespread adoption of renewable energy, the Group is advancing initiatives such as power plant operation, management and maintenance services, as well as battery storage businesses. 3. Risk Management Climate change-related risks are managed in accordance with the ORIX Group’s enterprise-wide risk management framework described in the sustainability disclosure above. Such climate-related risks are positioned within the Sustainability Committee’s group-wide risk assessment process and are managed together with other significant sustainability risks. 4 Metrics and Goals ORIX Group has identified GHG (CO2) emissions as a principal metric for evaluating and managing climate change-related risks. The Group has established medium- and long-term internal targets for GHG emissions as part of its climate-related management framework. Actual GHG (CO2) emissions (Scope 1 and Scope 2) are measured and monitored on a consolidated basis. For the fiscal year ended March 31, 2026, total GHG (CO2) emissions (Scope 1 and Scope 2) of the ORIX Group amounted to 1,005 thousand metric tons, representing a decrease of 261 thousand metric tons (approximately 20.6%) compared to the fiscal year ended March 31, 2020. Of this total, emissions from two coal-biomass co-firing power plants amounted to 789 thousand metric tons, representing approximately 78.5% of total emissions. Emission levels may fluctuate depending on changes in the Group’s business portfolio and external conditions. In addition, the ORIX Group monitors the balance of financing and investments in certain high GHG (CO2) emitting industries as part of its climate-related risk management. Addressing Human Capital 1. Governance Decisions on important basic policies related to human capital management and major personnel systems are deliberated by the Executive Committee and determined as management decisions. In addition, the Human Capital Council is convened on a regular basis, with the officer overseeing the Responsible for HR and Administration Unit serving as the secretariat and with participation from the Group CEO, the Business Unit 25 Table of Contents COOs, the Group CFO and other relevant executives. Through this council, the status of initiatives to strengthen human capital across the ORIX Group is shared and reviewed, and various measures based on policies decided by the Executive Committee are discussed. Furthermore, matters of significance in human resources strategy are reported by the officer overseeing the Responsible for HR and Administration Unit to the Board of Directors, and a framework is in place under which the Board of Directors exercises appropriate oversight. At each ORIX Group company, personnel-related regulations, human resources measures and related initiatives are examined under the supervision of the officer responsible for human resources at each company. In principle, significant human resources measures and initiatives at ORIX Group companies are subject to prior consultation with or reporting to the Company’s Human Resources Department, thereby ensuring alignment with group-wide policies before implementation. 2. Strategy (a) ORIX Group’s Human Capital Management ORIX Group has expanded outward from its core financial businesses into neighboring fields and has grown into a unique corporate group with a diversified business portfolio. We want to continue generating sustainable growth in an array of businesses, so we need to bring together diverse people with their own experience and skills and accelerate the fusion of knowledge that drives innovation. ORIX Group’s approach to human capital management has three components: instilling our unique core values that underlie our actions; enhancing our core capabilities, which serve as our capacity for organizational innovation; and providing a workplace in which diverse human resources can play an active role. The objective of our approach is to create new businesses and increase the value of existing operations to generate sustainable business growth. i. Instill core values We define the core values of human capital management as realizing sustainable business growth that befits ORIX with behaviors that are aligned with the three values defined in the ORIX Group Purpose & Culture. To assess how well these values are being practiced, we have adopted the “ORIX Value Score (OVS)” as a key indicator. Human Capital Management Goals for Behaviors Arising from The Three Values Three Values Behaviors Find Power in Diversity Share ideas and collaborate, explore different perspectives and transcend boundaries. Find Adventure in Challenge Strive for originality and identify opportunities and risks while seeking adventure in new challenges. Find Opportunity in Change Recognize trends from a big-picture perspective, act promptly on signs of change, and find opportunities to evolve. ii. Enhance core capabilities ORIX Group’s core capabilities are the unique organizational transformation capabilities that come from the expertise gained in growing a diverse business portfolio. We define “Multi-capability” as the power to drive entire businesses from a management perspective, which emerges from the combination of the three core capabilities. To identify and systematically develop individuals who possess multi-capability and can lead business growth with a management-level perspective, we are working to enhance the effectiveness of our succession management framework. As a key performance indicator to track progress, we monitor the “Succession Readiness Ratio” for key positions. 26 Table of Contents Our Core Capabilities Business Design The ability to create new businesses and services Generating new business opportunities by anticipating emerging market and customer demands helps ORIX Group grow. Value Enhancement The ability to increase the value of businesses Enhancing the quality of services and operations helps ORIX Group increase the value and profitability of existing businesses. Risk Management The ability to identify and assess business risks Accurately assessing business risks and returns helps ORIX Group make appropriate decisions for business growth. iii. Provide a workplace in which diverse human resources can play an active role ORIX Group has created a series of valuable new businesses by bringing together diverse talent and engaging in ongoing discussions across organizational boundaries. Sustainable business growth requires a workplace in which diverse human resources can play an active role as the basis for instilling core values and enhancing core capabilities. We therefore accept people with diverse backgrounds and values, regardless of gender, nationality, or age, and are committed to maintaining a workplace in which employees can work in their own way with peace of mind. To quantitatively assess the quality of the workplace environment, we monitor the “Engagement Score”: a comprehensive indicator that measures both employee motivation and ease of working. (b) Specific Initiatives and Achievements i. Promoting Diversity, Equity & Inclusion We promote various initiatives to support flexible working styles and ensure that employees feel motivated to work, fostering an inclusive and respectful environment for our diverse workforce. ORIX also focuses on recruiting mid-career employees and conducting overseas hiring for new graduates outside of Japan. Creating a work environment where employees can work healthily and with peace of mind In line with a policy of developing a wide range of options so that each employee can combine and utilize personnel systems according to their situation, we are promoting flexible working styles by establishing telecommuting systems, a super flextime system (flextime system without core working hours), an hourly paid leave system, introducing flexible seating arrangements, satellite offices and well-equipped mobile work environments. Women’s success in the workplace and creating an environment that supports work-life balance and shared parenting Taking the lead in women’s active participation in the workplace from a very early stage, ORIX began recruiting female university graduates for comprehensive work positions in 1982 before the enforcement of Japan’s Equal Employment Opportunity Law in 1986. To enable individuals to build their careers regardless of gender and participate in decision-making processes, we create a pipeline for future female leaders. We offer mentoring programs with department heads at the managerial level and facilitate external exchanges through cross-industry study groups. Additionally, in our selective training programs, we ensure equal opportunities by striving to align the gender ratio of participants with that of our workforce. We visualize the pipeline in collaboration with officers responsible for each division and the HR department, promoting the appointment of qualified individuals to management roles and providing appropriate job assignments based on their motivation and abilities to support their career development. In addition, as part of our efforts to support women’s success in the workplace, we offer work-life balance seminars in which couples can participate and promote childcare leave for men. We are also committed to 27 Table of Contents creating an environment that supports dual-income and shared parenting. Furthermore, we are actively working to raise awareness among all employees about the importance of creating a workplace where diverse talent, including women, can thrive. We pursue initiatives to increase the ratio of female managers, which is one of our key goals of promoting active participation by employees. It is also an important benchmark for degree of participation in decision making and equal leadership opportunities of employees from diverse backgrounds. For information on diversity-related metrics, see “Item 6. Directors, Senior Management and Employees—Employees—2.Employees—Indicators related to diversity.” ii. Human resource development and autonomous career development support ORIX places great importance on knowledge and growth gained through business activities, considering them to be pillars of development. As a foundation to support these efforts, in addition to various training systems and self-development support systems, we have established a fair performance review and compensation scheme to increase employee motivation. By working to develop employee growth with responsibility and enhancing communication with employees, we invest in the future of our employees. At the same time, ORIX supports the growth of employees by providing them with opportunities and an environment that enables them to make their own career choices by supplying practical information to help chart their mid- to long-term careers as well as opportunities to acquire skills in new fields. Specifically, through systems such as the internal intern program—where employees can work in a department of their choice for a designated period—and the career challenge program, which allows employees to directly appeal to a department to which they wish to transfer, ORIX allows employees to encounter and experience various work environments and jobs while remaining within the company. In addition to these, ORIX has established a career consultation service where employees can seek advice from qualified professionals both within and outside the company. These foster increased employee motivation, encourage active challenges, and support autonomous career development. Furthermore, the “Self-application system,” which allows employees to directly state to the human resources department where they wish to transfer, is available for all employees once a year, and is used by employees as a great opportunity to think about their own careers. 3. Risk Management The ORIX Group has achieved sustainable business growth by bringing together a diverse workforce and creating new business value through ongoing dialogue across organizational boundaries. We believe that fostering a workplace in which employees with diverse backgrounds can fully demonstrate their abilities, while enhancing employee motivation and ease of working, is essential to attracting, developing, and retaining talented human resources. To identify risks related to human capital, employee perceptions and issues concerning the workplace environment, the ORIX Group conducts the ORIX Group Employee Engagement Survey on a regular basis. The survey results are analyzed by department and by theme, and are reported to management. In addition, the status of succession readiness levels and potential successor candidates in each division is regularly shared among senior management. Through these discussions, we identify human capital-related issues necessary for the execution of management strategies and promote talent management from a medium- to long-term perspective. 28 Table of Contents 4 Metrics and Goals To realize the ORIX Group Purpose & Culture and enhance corporate value by maximizing the value of its human capital, ORIX has established key indicators for each of the three pillars of human capital as described in “2. Strategy (a) ORIX Group’s Human Capital Management,” and continuously monitors its progress. ORIX Value Score(OVS)*1 Degree of implementation of behaviors based on the ORIX Group Purpose & Culture Results Year ended March 31, 2024 Year ended March 31, 2025 Year ended March 31, 2026 ORIX Group 57 % 60 % 64 % ORIX Corporation 60 % 63 % 67 % Group companies worldwide 57 % 59 % 64 % *1 The percentage of employees who answered affirmatively (highest two points on a five-point scale) to the statement, “The ORIX Group Purpose & Culture is in practice in my workplace” in the annual company engagement survey. Succession Readiness Ratio Average number of employees who could serve as successor candidates per key business leadership role Results As of October 31, 2024 As of June 30, 2025 2.3 people 2.5 people Engagement Score*2 Comprehensively measures employee motivation and work environment Results Year ended March 31, 2024 Year ended March 31, 2025 Year ended March 31, 2026 ORIX Group 62 % 65 % 67 % ORIX Corporation 73 % 76 % 78 % Group companies worldwide 61 % 64 % 66 % *2 The percentage of employees who answered affirmatively (highest two points on a five-point scale) to the question in the Group’s annual engagement survey, “Overall, how satisfied are you with your company at present?” PROFILE OF BUSINESS BY SEGMENT For a discussion of the basis for the breakdown of segments, see Note 32 of “Item 18. Financial Statements.” The following table shows a breakdown of profits by segment for fiscal 2024, 2025 and 2026. Since April 1, 2024, the interest expense allocation method for each segment was changed to include a part of interest expenses 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. 29 Table of Contents Years ended March 31, 2024 2025 2026 (Millions of yen) Corporate Financial Services and Maintenance Leasing ¥ 83,244 ¥ 90,329 ¥ 100,740 Real Estate 67,055 70,541 78,509 PE Investment and Concession 43,967 98,872 125,611 Environment and Energy 38,072 (4,923 ) 115,772 Insurance 70,826 74,399 102,891 Banking and Credit 97,353 29,291 27,212 Aircraft and Ships 44,366 67,420 66,608 ORIX USA 27,931 39,915 954 ORIX Europe 41,638 44,373 63,051 Asia and Australia 47,069 34,451 51,249 Total segment profits 561,521 544,668 732,597 Difference between segment total and consolidated amounts (91,546 ) (64,205 ) (41,166 ) Total Consolidated Amounts ¥ 469,975 ¥ 480,463 ¥ 691,431 Each of our segments is briefly described below. BUSINESS SEGMENTS ORIX Group organizes its businesses into ten segments to facilitate strategy formulation, resource allocation and portfolio balancing at the segment level. These ten business 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. Management believes that organizing our business into large, strategic units allows us to maximize our corporate value by identifying and cultivating strategic advantages vis-à-vis anticipated competitors in each area and by helping ORIX Group achieve competitive advantage overall. An overview of operations, operating environment and operating strategy for each of the ten segments follows. However, the operating strategy of each business may change in the future due to macroeconomic and other developments, for example those relating to the heightened tensions and conflicts in the Middle East, the Russia-Ukraine conflict, supply chain issues and inflation, and the impact of market volatility and potential economic or geopolitical instability around the world. Corporate Financial Services and Maintenance Leasing This segment consists of finance and fee business; leasing and rental of automobiles, electronic measuring instruments, and ICT-related equipment. In corporate financial services, we are engaged in financial businesses with a focus on profitability, and fee businesses by providing life insurance and real estate brokerage products and services to domestic small and medium-sized enterprise customers, as well as business succession support and M&A broking. In the automobile-related businesses, we possess an industry-leading number of fleets and provide one-stop access to a full range of automobile services. In the rental business operated by ORIX Rentec Corporation, we are not only providing electronic measuring instruments, ICT-related equipment and power transformers lending, but we are also developing new services relating to robots, 3D printing, etc. 30 Table of Contents Real Estate This segment consists of real estate development, rental and management, facility operation, and real estate asset management. We are promoting portfolio rebalancing by taking advantage of favorable market conditions, while also making carefully selected investments in real estate projects based on thorough assessments of profitability and risk, in light of rising construction costs and other external factors. To stabilize our earnings base, we are developing businesses that are less susceptible to real estate market fluctuations, such as asset management, housing-related businesses focused on residential condominium development, and the operation of hotels and Japanese inns. From an operational perspective, we are working to strengthen the entire value chain by improving efficiency and service quality, including the use of digital transformation. PE Investment and Concession This segment consists of private equity investment and concession. In the private equity business, we aim to enhance the corporate value of investees and to earn sustainable gains on sales through rebalancing our portfolio. We are expanding investments in our focus industries and, in addition to rollups starting from existing investees, we seek to capture investment opportunities arising from business succession needs due to the absence of a successor, as well as carve-outs and take-private transactions as part of corporate restructurings. We also seek diversified investment methods. In the concession business, we aim to strengthen our operations in the three airports in Kansai (Kansai International Airport, Osaka International Airport and Kobe Airport), and proactively engage in the operation of public infrastructures other than airports. Environment and Energy This segment consists of domestic and overseas renewable energy, electric power retailing, ESCO services, sales of solar panels, and recycling and waste management. We aim to increase services revenue as a comprehensive energy service provider by promoting our renewable energy business and electric power retailing business. In our solar power generation business, we have owned and operated one of the largest solar power capacities in total in Japan. We intend to accelerate our renewable energy business overseas by utilizing the expertise we have gained in the domestic market. In the recycling and waste management business, we are making new investments in facilities with the aim of further expansion of business. Insurance This segment consists of life insurance. In the life insurance business, we sell life insurance through agents, banks and other financial institutions, face-to-face sales through our own consulting services, and online sales. With a core policy in product development to promptly provide products that meet the diverse and evolving needs of our customers, we have constantly expanded the product lineup and aim to increase corporate value. In addition, we are aiming to improve investment returns by expanding investments in high-yield assets, including alternative assets, and by flexibly reallocating our investment portfolio. 31 Table of Contents Banking and Credit This segment consists of banking and consumer finance. In the banking business, we aim to improve profitability by expanding the scope of our merchant banking operations in addition to the origination of real estate investment loans, which remains the core of our banking business. In the consumer finance business, we aim to enhance our personal financial services by forming joint ventures with companies that have a strong customer and business base. Aircraft and Ships This segment consists of aircraft investment and management, and ship-related finance and investment, maritime asset management and ship brokerage. In the aircraft-related business, we are focusing on a wide range of profit opportunities, including operating leases of owned aircraft, sale of aircraft to investors, and asset management services for aircraft owned by domestic and overseas investors. We aim for medium- and long-term growth by further enhancing our presence in the global aircraft-leasing market through various initiatives, including mutually complementary relationships with Avolon. In the ship-related business, we are promoting asset replacement based on market conditions, while expanding fee income through investment arrangements for domestic corporate investors, ship asset management, and ship brokerage, as well as expanding our business scope by leveraging capital and business alliances. ORIX USA This segment consists of finance, investment, asset management, and advisory services. ORIX Corporation USA has been strategically expanding its business domains and developing a diverse range of businesses, including corporate finance, bond investment, real estate finance, and private equity investment. In addition, by managing third-party off-balance sheet assets, we are working to appropriately control asset size and secure stable fee income, while aiming to improve capital efficiency and achieve sustainable profit growth. ORIX Europe This segment consists of asset management of global equity and fixed income. In this segment we are engaged in the asset management business through investments in stocks, bonds, etc. In addition to the focus on expanding the existing businesses by leveraging our expertise as a pioneer in sustainable investment, we are working to increase assets under management and enhance profitability through initiatives such as broadening our lineup of active ETFs and offering white-label products. We are also engaged in capturing a wide range of business opportunities including M&A as the strategic business location of ORIX Group in Europe. Asia and Australia This segment consists of finance and investment businesses in Asia and Australia. Our overseas subsidiaries are primarily engaged in financial services such as leasing and lending across Asian countries and Australia and also invest in private equity in Asian countries, particularly in China. We will further enhance the functions of our overseas subsidiaries and invest in targeted markets in order to expand our business with an emphasis on profitability. 32 Table of Contents DIVISIONS, MAJOR SUBSIDIARIES AND AFFILIATES A list of major subsidiaries and affiliates can be found in Exhibit 8.1. CAPITAL PRINCIPAL EXPENDITURES AND DIVESTITURES We are a financial services company with significant leasing, lending, real estate development and other operations based on investment in tangible assets. As such, we are continually acquiring and developing such assets as part of our business. A detailed discussion of these activities is presented elsewhere in this annual report, including in other parts of “Item 4. Information on the Company” and in “Item 5. Operating and Financial Review and Prospects.” In general, we seek to expand and deepen our product and service offerings and enhance our financial performance through acquisitions of businesses or assets. We continually review acquisition opportunities, and selectively pursue such opportunities. We have in the past deployed a significant amount of capital for acquisition activities and expect to continue to make investments, on a selective basis. For a discussion of certain of our past acquisitions, see “Item 4. Information on the Company—Corporate History.” PROPERTY, PLANT AND EQUIPMENT As our primary business is to provide various financial services to our clients, we do not own any material factories or facilities that manufacture products. We have no plans to build any factories that manufacture products. The following table shows the book values of the primary facilities we own, which include three office buildings and a hotel. As of March 31, 2026 Book Value*1 Land Space*2 (Millions of yen) (Thousands of m²) Office building (Tachikawa, Tokyo) ¥ 8,057 2 Office building (Shiba, Minato-ku, Tokyo) 30,734 2 Office building (Osaka, Osaka) 8,668 2 Hotel (Beppu, Oita)*3 50,135 166 *1 Right-of-use assets (hereinafter, “ROU assets”) are included in the book value. *2 Land space is provided only for those facilities where we own the land. *3 Book value of hotel (Beppu, Oita) includes advances for property under facility operations of ¥21 million. Our operations are generally conducted in leased office space in cities throughout Japan and in other countries in which we operate. We believe our leased office space is suitable and adequate for our needs. We utilize, or expect to utilize in the near future, substantially all of our leased office space. We own office buildings, apartment buildings and recreational facilities for our employees and others with an aggregate book value of ¥203,169 million as of March 31, 2026. As of March 31, 2026, the acquisition cost of equipment we held for operating leases amounted to ¥3,074,066 million, consisting of ¥1,987,797 million of transportation equipment, ¥523,388 million of measuring and information-related equipment, ¥461,203 million of real estate and ¥101,678 million of others, before accumulated depreciation. Accumulated depreciation on equipment held for operating leases was 33 Table of Contents ¥1,033,293 million. We also recognized ¥69,030 million of ROU assets of operating leases, ¥44,415 million of accrued rental receivables and ¥(1,398) million of allowance for doubtful receivables on operating leases as of the same date. As of March 31, 2026, we have no plans for construction of significant new office facilities, property under facility operations and operating lease equipment and property. SEASONALITY Our business is not materially affected by seasonality. RAW MATERIALS Our business does not materially depend on the supply of raw materials. PATENTS, LICENSES AND CONTRACTS Our business and profitability are not materially dependent on any patents or licenses, industrial, commercial or financial contracts, or new manufacturing processes. BUSINESS REGULATION ORIX and its group companies in Japan are incorporated under, and our corporate activities are primarily governed by, the Companies Act and other Japanese laws. However, because certain of ORIX’s group companies are organized in jurisdictions other than Japan, and ORIX and its group companies are involved in diverse businesses, joint ventures and acquisitions in overseas jurisdictions, including in the United States, Europe, Asia and Oceania, we are subject to various laws and regulations in each jurisdiction in which they are organized or operate, including, but not limited to, regulations relating to corporate governance, business and investment approvals, competition, anti-corruption, anti-money laundering and terrorism financing, consumer and business taxation, foreign exchange controls, intellectual property and personal information protection. In recent years, there has been an increasing number of laws and regulations on competition, anti-corruption, anti-money laundering and terrorism financing, and personal data protection that can apply directly to business activities taking place outside of the jurisdiction that enacted such law or regulation (extraterritorial application). Given the need for ORIX and its group companies to deal with the laws and regulations of multiple countries on each legal topic, there has been a tendency for costs to increase as a result of the increasing number of laws and regulations that need to be assessed. In addition, there is an increasing number of cases where significant fines and penalties have been imposed for violations of such laws and regulations. For example, fines for violations of the European Union’s General Data Protection Regulation can be up to 4% of total global turnover and fines for violations of the U.S. Foreign Corrupt Practices Act can be up to twice the benefit sought, in addition to penalties such as disgorgement of profits and prejudgment interest. The next section describes the main laws and regulations applicable to each of our business segments. 1. Corporate Financial Services and Maintenance Leasing ORIX and certain of our group companies are engaged in the moneylending business in Japan. The Moneylending Business Act requires that all companies engaged in moneylending business register with the Prime Minister or the relevant prefectural governors. Moneylenders permitted to register are regulated by the 34 Table of Contents Financial Services Agency (“FSA”), and are required to file various notifications and provide documents such as their annual business reports. Further, moneylenders are required to comply with applicable laws and to establish an internal management system to ensure the appropriate management of money lending operations. These obligations are supervised by the FSA. Accordingly, pursuant to the Moneylending Business Act, ORIX and certain of our group companies have registered with the Prime Minister or various prefectural governors, established the necessary internal systems, and provide the necessary reporting and notification to the FSA. The FSA has the power to issue business improvement orders, suspend all or part of a money lender’s activities, or to revoke the registration of a moneylender that has violated the law, depending on the severity of the violation. Certain businesses conducted by ORIX and our group companies are governed by the Financial Instruments and Exchange Act. The act was established to regulate activities such as the issuance, sale and purchase of stocks and other securities in order to protect investors and facilitate finance, and requires that any person conducting such activities register with the Prime Minister as a “financial instruments traders.” Financial instruments traders are divided among four classifications depending on the type of business: (1) Type I Financial Instruments Business (2) Type II Financial Instruments Business, (3) Investment Management Business, and (4) Investment Advisory and Agency Business, and companies in the Corporate Financial Services and Maintenance Leasing segment conducting such activities are registered with the Prime Minister as Type II Financial Instruments Business. Registered financial instruments traders are obligated to establish an internal management system to ensure compliance with relevant laws and regulations and appropriate management of its business, as well as to provide and deliver material information and explain risks to their customers. The relevant supervisory authority, the FSA, monitors registered financial instruments traders and has the power to order improvement of a business, or suspension of a part or the whole of a business, or to revoke the registration of such a trader that has violated the law, depending on the severity of the violation: While the ORIX Group includes a life insurance company engaged in the insurance business, ORIX and certain of our group companies are also separately registered with the Prime Minister as insurance agencies for life insurance and/or non-life insurance and are subject to Insurance Business Act. As insurance agencies, the companies are obligated to establish certain systems and provide and deliver material information and explain risks to their customers. In the event an insurance agency violates such obligations, the FSA has the power to order improvement of a business, or suspension of a part or the whole of a business, or to revoke the registration of the insurance agency that has violated the law, depending on the severity of the violation. For information on regulations applicable to our insurance business other than our insurance agencies, see “—5. Insurance” below. Leasing and rental businesses generally do not require registration or licenses. However, the renting of automobiles (operation of a car rental business) and car-sharing business is subject to licensing by the Minister of the Ministry of Land, Infrastructure Transport and Tourism (“MLIT”). In addition, the leasing or renting of some types of goods may require compliance with regulations that specify reporting or notification obligations based on certain characteristics of the goods. 2. Real Estate There are various regulations that apply to real estate activities. Certain of our group companies have obtained Construction Business Licenses from MLIT for constructing buildings and conducting interior finishing work. Furthermore, ORIX and certain of our group companies, including ORIX Real Estate Corporation and DAIKYO, are required to be licensed by MLIT or relevant prefectural governors under the Building Lots and Buildings Transaction Business Act to engage in activities such as the buying and selling land and buildings in Japan, and their operations are regulated by such laws, including the maintenance of registered real estate transaction managers on staff and the duty to provide and deliver material information to counterparties. In addition, lodging facilities, such as Japanese inns and hotels, operated by ORIX Hotel Management Corporation have licenses from relevant prefectural governors under the Inns and Hotels Act, etc. 35 Table of Contents ORIX’s wholly owned subsidiaries ORIX Asset Management Corporation (“OAM”) and ORIX Real Estate Investment Advisors Corporation (“ORIA”) are each registered with the Prime Minister under the Financial Instruments and Exchange Act as an investment manager and regulated by the FSA. ORIA is also registered to engage in the Type II Financial Instruments Business and the Investment Advisory and Agency Business. Under the Financial Instruments and Exchange Act, any entity possessing voting rights in an investment manager at or above a specified threshold is considered a major shareholder and must report its shareholding to the Prime Minister. ORIX has filed such report as a major shareholder of OAM and ORIA. 3. PE Investment and Concession ORIX conducts investment activities in a broad range of fields without regard for the specific industry. Due to this, we are subject to a wide variety of regulations, including those that are applicable to our investment activities and those that apply due to the type of business conducted by our investees. ORIX is generally less directly involved in the management of its investees in comparison to group companies in other segments, but it is necessary for us to pay attention to regulations that apply to our investees so that we can monitor their management. 4. Environment and Energy The businesses that comprise our renewable energy business, such as our solar power generation business, are subject to and must comply with various requirements and regulations in the jurisdictions where they operate, including the Electricity Business Act, Environmental Impact Assessment Act and Act on Special Measures Concerning Procurement of Electricity from Renewable Energy Sources by Electricity Utilities in Japan and similar laws and regulations in other jurisdictions, when setting up a power generation facility, including business notification requirements, regulations relating to the facility location, and other various regulations, such as those designed to protect the environment and visual landscape and ensure safety from the perspective of disaster prevention. 5. Insurance In order to engage in the life insurance business, ORIX Life Insurance has obtained and maintains a license from the Prime Minister under the Insurance Business Act. The relevant supervisory authority, the FSA, has the power to conduct broad supervision and guidance of the life insurance industry and to issue business improvement orders, suspend all or part of an insurance company’s activities, or to revoke the license of an insurance company that has violated the law or that has been determined to have an insufficient internal management system, depending on the severity of the violation or insufficiency. It is also generally necessary to receive FSA approval for the sale of new products and to revise pricing terms for existing products. Any entity attempting to acquire voting rights in an insurance company at or above a specified threshold must receive permission from the Prime Minister in accordance with the Insurance Business Act. ORIX has received such permission as a major shareholder of ORIX Life Insurance. 6. Banking and Credit ORIX Bank is licensed by the Prime Minister to engage in the banking and trust business and is regulated under the Banking Act and the Act on Engagement in Trust Business by Financial Institutions. The Banking Act governs the general banking business and the Act on Engagement in Trust Business by Financial Institutions and the Trust Business Act govern the trust business. A bank must establish a system for the protection of customers’ interests, which is supervised by the FSA. In addition, any entity that attempts to obtain voting rights in a bank at or above a specified threshold must receive permission from the Prime Minister in accordance with the Banking Act. ORIX has received such permission as a major shareholder of ORIX Bank. 36 Table of Contents 7. Aircraft and Ships The business of leasing aircraft and ships generally does not require a license, however it is necessary to register the ownership of aircraft and ships. In most jurisdictions, the lessee under an aircraft lease is responsible for registering the aircraft, while the lessor under a ship lease registers the ship with the appropriate flag state. In the case of ship leases, there are certain regulations that we must comply with because they apply directly not just to the lessee but also the lessor, such as environmental regulations. 8. ORIX USA Certain of our businesses in our ORIX USA segment are subject to extensive regulation in the United States. Certain subsidiaries of ORIX Corporation USA manage private investments, collateralized loan obligations and separately managed accounts and are registered as investment advisers with the SEC under the U.S. Investment Advisers Act of 1940, as amended (“Advisers Act”) and are subject to the requirements and regulations of the Advisers Act. Such requirements relate to, among other things, fiduciary duties to advisory clients, maintaining an effective compliance program and code of ethics, operational and marketing requirements, recordkeeping and reporting requirements, disclosure obligations and general anti-fraud prohibitions. Lument Securities, a wholly owned subsidiary of ORIX Corporation USA, through which we conduct an investment banking, private placement and municipal securities business, is registered as a broker-dealer with the SEC and is a member of the Financial Industry Regulatory Authority (“FINRA”). Lument Securities is also a municipal securities dealer registered with the SEC and the Municipal Securities Rulemaking Board (“MSRB”), and hence is subject to regulation and oversight by the MSRB. Hilco Corporate Finance, a majority-owned subsidiary of ORIX Corporation USA, conducts investment banking and private placement services, and is registered as a broker-dealer with the SEC and is a member of FINRA. Lument Securities is registered as a broker-dealer in 53 U.S. jurisdictions,and Hilco Corporate Finance is registered as a broker-dealer in 24 U.S. jurisdictions, and as a result both are members of and subject to regulation by FINRA, a self-regulatory organization subject to oversight by the SEC that adopts and enforces rules governing the conduct, and examines the activities, of its member firms. State securities regulators also have regulatory oversight authority over Lument Securities and Hilco Corporate Finance. Broker-dealers are subject to regulations that cover all aspects of the securities business, including, among others, the implementation of a supervisory control system over the securities business, advertising and sales practices, conduct of and compensation in connection with public securities offerings, maintenance of adequate net capital, record keeping and the conduct and qualifications of employees. By virtue of their involvement in the multifamily and seniors housing mortgage lending business, Lument and its mortgage company subsidiaries must comply with rules and regulations administered by the Government National Mortgage Association, the Federal National Mortgage Association, the Department of Housing and Urban Development/Federal Housing Administration, the United States Department of Agriculture, and the Federal Home Loan Mortgage Corporation. Hilco Receivables, LLC, a majority-owned subsidiary of ORIX Corporation USA, is licensed in various U.S. states in connection with the purchase of consumer-purpose and business-purpose loans, and is subject to various state compliance regulations, including, among others, maintenance of surety bonds and adequate net capital, record keeping and business conduct. Certain of ORIX Corporation USA’s subsidiaries are licensed California Finance Lenders. Boston Financial Investment Management, LP (“Boston Financial”), a subsidiary of ORIX Corporation USA, is a provider of syndication services as well as asset and portfolio management in the U.S. Low Income Housing Tax Credit (“LIHTC”) industry in connection with financing for the construction and rehabilitation of affordable housing. As the beneficiary of tax credits and often other subsidy and loan programs, a LIHTC 37 Table of Contents property is typically regulated at the U.S. federal, state, and local levels. Further, day-to-day responsibility of the property resides with a third party property level general partner, who in addition to directing the agent that manages the property, has responsibility for compliance with applicable laws and regulations. As the general partner of the investment fund which invests as a limited partner in the property level partnership, Boston Financial monitors such compliance on behalf of the fund. In addition to LIHTC, certain Boston Financial sponsored investment funds invest in affordable housing with a social sustainability focus. These investments share a similar structure to the LIHTC investments, but do not involve tax credits. American Community Capital, LLC, a wholly owned subsidiary of Boston Financial, is certified as a Community Development Financial Institution (“CDFI”) eligible to serve a national low-income targeted population by the U.S. Department of the Treasury’s Community Development Financial Institutions Fund and is required to submit annual filings with the U.S. Department of Treasury to maintain its CDFI designation. 9. ORIX Europe Certain of our businesses in our ORIX Europe segment, which includes entities and businesses that are organized in or operating in jurisdictions outside of Europe, are subject to extensive regulation in various jurisdictions across Europe, the United States and Asia. Dutch-regulated subsidiaries of OCE are subject to European financial supervisory regulation, including, amongst others and as the case may be, the Alternative Investment Fund Managers Directive, the Undertakings for Collective Investment in Transferable Securities (“UCITS”) Directive, the Markets in Financial Instruments Directive, the European Market Infrastructure Regulation, the Market Abuse Regulation, the 5th Anti-Money Laundering Directive, the Benchmark Regulation, the Securities Financing Transactions Regulation and the Shareholder Rights Directive II. A Swiss regulated subsidiary of OCE is subject to the Swiss equivalent of these financial supervisory regulations (such as the Federal Act on Collective Investment Schemes, the Federal Ordinance on Collective Investment Schemes, the FINMA Collective Investment Schemes Ordinance, the Financial Services Act, the Financial Institutions Act, the Anti-Money Laundering Act, the Anti-Money Laundering Ordinance, the FINMA Anti-Money Laundering Ordinance). UK-regulated subsidiaries of OCE are subject to the UK Financial Conduct Authority (“FCA”), including, as the case may be, applicable provisions of the FCA Handbook. U.S.-regulated subsidiaries of OCE are subject to regulation, primarily at the federal level, by, as the case may be, the SEC, Department of Labor, Federal Reserve, Office of the Comptroller of the Currency, FINRA, National Futures Association (“NFA”), Department of Justice, Commodity Futures Trading Commission (“CFTC”) and New Hampshire Banking Department (“NHBD”), as well as being subject to the Advisers Act. Robeco Institutional Asset Management B.V. (“RIAM”), a subsidiary of OCE and part of the Robeco group, is registered as an alternative investment fund manager (“AIFM”) and fund manager of UCITS in the Netherlands and regulated by the Dutch Authority for the Financial Markets (“AFM”) and the Dutch Central Bank (“DNB”). RIAM is also licensed and registered with regulators in other jurisdictions, including those in Canada, China, India, Korea and Singapore. Furthermore, RIAM has branches and representative offices worldwide, including in Dubai, Germany, Spain and Italy, each of which either benefits from RIAM’s European passport or is subject to regulatory supervision by local regulators. Certain other subsidiaries of OCE located across Europe, the United States and Asia that are affiliated with the Robeco group are registered, licensed or approved, as the case may be, by regulators in the jurisdictions in which they operate and subject to local regulations regarding their businesses. Such regulators include the Swiss Financial Market Supervisory Authority (“FINMA”), AFM, FCA, SEC, Securities & Futures Commission of Hong Kong, Financial Services Commission of Korea (“FSC”), Australian Securities and Investments Commission and Monetary Authority of Singapore. 38 Table of Contents Transtrend B.V., a wholly owned subsidiary of OCE that offers asset management and commodity trading advisory services, is registered as an AIFM in the Netherlands and regulated by the AFM and DNB. Transtrend is also registered with the NFA, regulated by the CFTC and licensed by the China Securities Regulatory Commission. Boston Partners Global Investors, Inc. (“Boston Partners”) is a subsidiary of OCE and registered with the SEC as an investment adviser. Boston Partners is also a member of the NFA and is registered as a commodity pool operator and as a commodity trading adviser with the CFTC. Furthermore, Boston Partners is registered with the FSC. Certain subsidiaries of Boston Partners located in the United States and the United Kingdom are also registered with the SEC, New Hampshire Banking Department (“NHBD”), FINRA, the Ontario Securities Commission (“OSC”) and the FCA. Harbor Capital Advisors, Inc. (“Harbor”) is a subsidiary of OCE and is registered with the SEC as an investment adviser. Harbor is also a member of the NFA and is registered as a commodity pool operator with the CFTC. Certain subsidiaries of Harbor are registered with the SEC, NHBD and a member of FINRA. Gravis Capital Management Ltd (“Gravis”), a subsidiary of OCE, is a UK asset manager and is authorized as a full-scope UK AIFM by the FCA. A subsidiary of Gravis is also authorized by the FCA. 10. Asia and Australia Our group companies in our Asia and Australia segment are subject to the laws and regulations of the various jurisdictions across Asia and Oceania in which they operate. Many of the businesses are also subject to oversight by regulatory authorities in those jurisdictions due to the industries in which they operate, particularly those businesses that offer of financial services, such as leasing, lending and banking. Regulatory authorities in these jurisdictions have authority with respect to financial services and can grant, suspend or cancel licenses or registrations that are necessary for our businesses to conduct certain of their operations. Among group companies in the segment, ORIX Asia Limited is registered with the Hong Kong Monetary Authority as a restricted license bank. A wholly owned subsidiary of ORIX Leasing Malaysia Berhad has a money lending license from the Malaysia Ministry of Housing and Local Government, and is registered with Bank Negara Malaysia. PT. ORIX Indonesia Finance has a financial institution business license and is regulated by the Indonesia Financial Services Authority. ORIX Australia Corporation Limited is registered with the Australian Prudential Regulation Authority as a registered finance corporation. ORIX Capital Korea Corporation is registered with the Korea Financial Supervisory Service as a specialized credit finance business company.

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