Corporate Information

Shareholder Information
Total Number of Shares Authorized:
     259,000,000 shares
Total Number of Shares Outstanding:
     84,366,314 shares
Number of Shareholders:
     9,259
(As of March 31, 2004)

Stock Exchange Listings
Tokyo Stock Exchange
Osaka Securities Exchange
Nagoya Stock Exchange
     Securities Code—8591
New York Stock Exchange
     Trading Symbol—IX

Financial Reports on ORIX’s Web Site
Annual Report
Update Newsletter
Quarterly Financial Results
Analysis of Quarterly Financial Results
US SEC Form 20-F

For Further Information, Please Contact:
ORIX Corporation
Corporate Communications,
Office of the President
3-22-8, Shiba, Minato-ku,
Tokyo 105-8683, Japan
Tel: 81-3-5419-5102
Fax: 81-3-5419-5901
E-mail: orixir@orix.co.jp
Website: http://www.orix.co.jp/grp/index_e.htm

Summary of Consolidated Financial Results

1. First Quarter Highlights (April 1—June 30, 2004)
Revenues in the first quarter for the fiscal year ending March 31, 2005, increased 14% year on year, to ¥193,313 million, income before income taxes rose 51%, to ¥37,075 million, and net income grew 67%, to ¥23,527 million.
     Revenues from direct financing leases and residential condominium sales were down compared with the same period of the previous fiscal year. However, revenues from operating leases, interest on loans and investment securities, brokerage commissions and net gains on investment securities, and other operating revenues increased. In addition, a lower interest expense and provision for doubtful receivables and probable loan losses and an increase in equity in net income of affiliates contributed to the higher earnings.
     The Corporate Financial Services segment achieved higher profits due to the strong performance of automobile leasing operations and an increase in loans to corporate customers, while profits were up for the Rental Operations segment thanks to the improved profitability of precision measuring and other equipment rental operations. The Real Estate-Related Finance segment saw contributions from housing loan operations and real estate finance operations, including non-recourse loans. In the Asia and Oceania segment, higher earnings from most companies in the region added to profits.
     Operating assets and total assets were both flat compared with those at March 31, 2004, at ¥4,852,290 million and ¥5,651,018 million, respectively. Shareholders’ equity increased 5%, to ¥594,779 million, and the shareholders’ equity ratio was 10.5%, compared with 10.0% at March 31,

2004. ROE (annualized) rose from 10.9% to 16.2% and ROA (annualized) improved from 0.95% to 1.67% compared with the same period of the previous fiscal year.

2. Forecasts for the Fiscal Year Ending March 31, 2005
For the fiscal year ending March 31, 2005, we forecast revenues of ¥760,000 million (up 5% compared with the fiscal year ended March 31, 2004), income before income taxes of ¥109,000 million (up 7%), and net income of ¥60,000 million (up 11%). At this time, we have not made any changes to our original forecasts, which we announced on April 26, 2004, in our earnings announcement for the fiscal year ended March 31, 2004.

     For details on the first quarter earnings announcement, please access “First Quarter Results 2004/6” and “Analysis of First Quarter Results 2004/6” from ORIX’s website at:
http://www.orix.co.jp/grp/ir_e/data/report/index.htm
     In addition, ORIX is scheduled to announce its interim results (second quarter) for the year ending March 31, 2005, on Tuesday, October 26, 2004.

A Discussion of
the Future
Direction of ORIX

Early Days: ORIX Decides to Pursue
Independent Operations

operations independently of its parent companies. I think this is what determined ORIX’s destiny. A year after its founding, ORIX began independently hiring its own staff, and during its sixth year of operations it completely discontinued the use of staff seconded from parent companies. It was similarly assertive regarding marketing, undertaking the autonomous development of business by marketing office equipment leases to customers without assistance from its shareholder trading companies. In 1970, ORIX was able to publicly list its shares—quite soon after its establishment—and this was quite an unexpected turn of events from its parent companies’ perspective. I recall that there was considerable opposition to the listing.
Harada: There are few examples in the world of a leasing company developing its operations in such diverse fields and becoming such a huge global group. It seems quite clear at this point that the decision of Mr. Inui and yourself to develop ORIX’s business independently was correct, and that you were right to stick with that decision consistently thereafter.
Miyauchi: In the early 1970s, leasing companies sprang up like bamboo shoots during the rainy season, leading to a period of excessive competition in the leasing industry. At that time, there were many people within the Company who questioned whether we could really expand our leasing business

as a specialized leasing company or whether we could more effectively strengthen the Company by instead relinquishing our exclusive focus on leasing. There was quite a bit of debate on this subject. Ultimately, we decided to proactively address new types of business challenges. This major strategic shift was intended to make ORIX more dynamic and strong. In line with this decision, ORIX began diversifying its operations as it took steps to meet customer needs by initiating operations in fields closely associated with leasing, such as installment loans and the rental business and later other types of loans, including investment-purpose housing loans. We then extended our operations into new business fields, and our business structure became still more diversified as a result.
Harada: In Japan, you established such specialized leasing companies as ORIX Auto Leasing Corporation and ORIX Rentec Corporation one after another, and then you decided to expand overseas.
Miyauchi: Since leasing had became widespread in Japan, we naturally began considering the numerous promising opportunities in other Asian countries. We started by conducting market research in Southeast Asia. Then in 1971 we established our first overseas subsidiary in Hong Kong. That was followed by the creation of a Singapore-based subsidiary in 1972 and another in Malaysia in 1973. We went on to establish the first leasing company, at a pace of about one company per year, in many other countries.

ORIX’s Transformation from a Leasing
Company into a Financial Services Company

Seven Consecutive Years of Increased Profit
Following the Bursting of the Economic Bubble

Ordinarily, issue number one will be envisioning the corporate strategy for the next 5 to 10 years. During the extraordinary time following the bursting of the economic bubble, however, issue number one was taking care of problem assets. During that period of time, I would, without telling anyone, go off on Saturdays and Sundays with just the manager responsible for a particular batch of problem assets, inspect the real estate securing the problem assets, and give instructions on what to do. If I had just issued a statement that problem assets were very difficult to deal with, it would have been unsettling for those within the Company.
Harada: The largest financial institutions are still having trouble disposing of their problem assets, but ORIX quickly began working very hard to recover the recoverable portions of such assets. Furthermore, the Company has gone on to use the related know-how accumulated during and since that time to create new businesses.
Miyauchi: Yes, we are proactively developing our loan servicing business, which has been making an important contribution to our earnings. Moreover, despite the harsh operating environment at that time, we continued planting the seeds of future business growth by taking such initiatives as those to establish ORIX Life Insurance Corporation and to augment our card loan operations. These are the reasons why we were able to increase our profits for seven consecutive years at that time.
Harada: I think you clearly demonstrated some key ways to be an excellent CEO. The 1998 listing of ORIX shares on the

New York Stock Exchange was a striking testimony to ORIX’s special strengths, coming at a time when most companies in Japan’s financial sector were still struggling. From the perspective of corporate governance, also, I think that move was extremely valuable.

ORIX Seeks Additional Challenges
as a Pioneer on the Forefront of
Progress in Financial Services

with needs that ORIX has for many years monitored and addressed through its nationwide marketing network, and you have also been expanding your cross-selling and provision of financial solutions for your extensive clientele. Are you planning to further strengthen your relationship with such customers?
Miyauchi: In this particular business field, we are quite confident that ORIX is second to none regarding competitive strengths.
Harada: Since the bursting of the economic bubble, Japan’s financial industry has fallen far behind many global trends, and we can expect the incipient recovery in Japan’s economy to be accompanied by numerous rapid changes as Japan’s financial industry tries to catch up with the rest of the world. Such changes will present ORIX with important business opportunities. ORIX has shown its ability to maintain consistently high profitability while launching new businesses, and I expect that the Company will further display its capabilities in the near future.
Miyauchi: I also expect a particularly large number of new opportunities to arise in Japan’s financial business fields. In response, ORIX will be seeking to further reinforce the diverse strengths of the business foundation it has built thus far and welcome new challenges in the spirit that has characterized the Company since its founding. As a result, ORIX will continue to be a business pioneer creating new value on the leading edge of progress in the financial services industry and providing that new value to its customers throughout the world.
     Moreover, we are aiming for the highest level of profits in the financial services industry as well as the industry’s strongest financial position and will take on the challenge of developing new business sectors. We want to consistently be the top company in every one of our business fields by whatever standard of measurement one wants to use. What’s more, we would like to consolidate solid preeminent positions in these business fields by the time we celebrate the 50th anniversary of our founding.
Harada: I’m expecting a surge of growth in ORIX’s operations, not just in Japan, but overseas as well. Thank you for speaking with me today.

		Teruo Isogai President, ORIX Auto Leasing Corporation Q: I understand that ORIX has been putting a strategic focus on its automobile maintenance leasing operations in recent years. Please tell us about the market scale as well as the ORIX Group’s positioning within this market.

Isogai: As distinct from ordinary finance leasing, maintenance leasing requires the lessor to undertake all aspects of automobile maintenance and management on behalf of its customers. Maintenance services include vehicle spot checks, vehicle inspection and repair services, post-breakdown repairs, replacement vehicle provision and other services.
     There are currently about 75 million registered motor vehicles in Japan, of which about 7 million are owned by companies with fleets of 10 or more vehicles. About 30% of the vehicles in these fleets are under lease. The ORIX Group owns more than 470,000 vehicles, most of which have maintenance lease contracts, making it the top company in the automobile leasing industry. Maintenance leasing has substantial benefits for corporate customers as it enables them to outsource all their vehicle administration work. Therefore, we expect that 60% to 70% of corporate customers will adopt maintenance leasing for their fleets in the future.

Q: What are ORIX’s principal strengths considering that it is the top company in the industry in terms of the number of vehicles that it has under management?

Isogai: The large size of our fleet enables us to procure vehicles, tires, lubricants and other goods at relatively low prices. This scale merit helps boost the profitability of our operations and also allows us to offer lower prices that improve our competitiveness and benefit customers.
     Regarding services, the ORIX Group has about 10,000 contracted maintenance facilities throughout Japan, and these facilities all offer consistently high-quality inspection and maintenance work. Besides basic inspection and maintenance services, we offer such diverse services as vehicle administration information and driver-diagnostic services, vehicle-related risk management consulting services, comprehensive fuel cost management and reduction services through special fuel-purchase cards, and services involving the creation of vehicle-related environmental management plans. Therefore, the superior breadth and depth of our service menu is another large competitive advantage.

     Currently, the ORIX Group includes ORIX Auto Leasing and three other automobile leasing companies. The marketing power of these four companies is greatly enhanced by cooperation from the ORIX Group’s nationwide network of sales and marketing offices. This is another significant strength that other automobile leasing companies do not have. In fact, it can be said that it is our close two-way communication with customers through our extensive marketing network that has enabled us to become Japan’s top automobile leasing company.

Q: ORIX announced in July that it would merge seven group companies involved in automobile leasing and rental services. How will this affect the future development of the ORIX Group’s automobile-related business?

Isogai: ORIX is seeking to increase the synergies among the seven group companies involved in automobile-related services—including four leasing and three rental companies—through their integration next January. We have already been progressively integrating the “backyard” operations of our leasing and rental operations centered on vehicle maintenance and management, and have worked to improve their vehicle administration systems with the objectives of reducing costs and providing additional services. As already mentioned, automobile leasing is a business field in which scale merit is highly beneficial. To maximize our scale merit, we are planning to expand our fleet, which includes about 40,000 vehicles from our automobile rental operations, to more than 1 million vehicles by fiscal 2008. ORIX’s automobile leasing fleet has expanded at a compounded annual growth rate of approximately 15% during the past five years, reflecting its powerful marketing capabilities and M&A strategy. To further expand the fleet to the 1-million-vehicle mark, we are considering further measures to generate marketing synergies within the ORIX Group as well as additional initiatives to create alliances with other leasing companies or undertake M&A transactions.
     There is also the issue of how to stimulate demand for automobile leasing among individuals whose utilization rate is still low. Currently, automobile leasing services have not penetrated this market very deeply. As one means of offering individuals highly appealing services, ORIX is striving to develop services that combine the best characteristics of the respective services of the automobile leasing and rental operations. The first result of this campaign was the March 2004 launch of a special service that allows individuals who have automobile leasing contracts with ORIX to rent vehicles at advantageous rates. This kind of service helps make the most of the ORIX Group’s capabilities for both leasing and rental businesses, and we expect the development of new products for individuals to accelerate following the seven-company merger.

Start of ETC Card Business for Corporate Users
From September 2004, ORIX will begin issuing its own ETC (electronic toll collection) Cards to corporate customers, starting primarily with customers who already have automobile leasing agreements with ORIX.
     The post-payment system that has long enabled businesses in Japan to save up to 30% on their highway toll fees is scheduled for elimination by March 2005. For companies that have chosen to use prepaid ETC cards, obtaining discounts represents a large up-front financial burden—one card worth ¥58,000 in toll payments costs the buyer ¥50,000—especially for companies operating a number of vehicles (as each vehicle requires its own card).
     ORIX has found a way to solve these problems. ORIX ETC Cards are prepaid by ORIX itself, which then charges the discounted rate to its customers only when they use the card; thus, its customers need not make any prepayments and can enjoy the benefits of discounted tolls when using their cards. In addition, ORIX’s Automatic Charge Service automatically covers shortfalls when the balance of prepayments falls below a predetermined level.
     The initiation of the ETC Card business will create a significant new source of fee income for the ORIX Group, which is working to strengthen its business in automobile-related services through such strategic measures as the upcoming integration of seven Group companies involved in automobile leasing and rental services in January 2005.

Corporate Rehabilitation Funds Established with Regional Banks
Since the beginning of 2004, the ORIX Group has worked to expand its corporate rehabilitation business in Japan by establishing a number of corporate rehabilitation funds in cooperation with regional banks.
     Funds established so far include the Nagasaki Corporate Rehabilitation Fund, established in March in cooperation with the Eighteenth Bank, Ltd.; the Kyushu Regional Corporate Rehabilitation Fund, established in March in cooperation with the Bank of Saga Ltd., the Shinwa Bank, Ltd., the Kumamoto Family Bank, Ltd., and the Oita Bank, Ltd. The Nishi-Nippon Bank Group is also expected to invest in this fund in October 2004. Another fund, the Mandegan Corporate Rehabilitation Fund, was established in July in cooperation with the principal regional financial institutions of Kagawa Prefecture.
     The establishment of each fund reflects a growing desire among regional banks to strengthen their relationship-banking capabilities. It also reflects the banks’ high evaluation of ORIX’s corporate rehabilitation know-how and track record as well as its long-established nationwide network with offices that are deeply rooted throughout Japan. ORIX is considering establishing additional corporate rehabilitation funds throughout the country.

About ORIX
ORIX Corporation (TSE: 8591; NYSE: IX) is an integrated financial services group based in Tokyo, Japan, providing innovative value-added products and services to both corporate and retail customers. With operations in 23 countries worldwide, ORIX’s activities include

     
leasing, corporate and consumer finance, real estate-related finance and development, life insurance, and investment banking. For more details, please visit our website at: http://www.orix.co.jp/grp/index_e.htm

These documents may contain forward-looking statements about expected future events and financial results that involve risks and uncertainties. Such statements are based on our current expectations and are subject to uncertainties and risks that could cause actual results to differ materially from those described in the forward-looking statements. Factors that could cause such a difference include, but are not limited to, those described under “Risk Factors” in the Company’s annual report on Form 20-F filed with the United States Securities and Exchange Commission.