SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K/A
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 OF
THE SECURITIES EXCHANGE Act of 1934
For the month of March, 2012.
ORIX Corporation
(Translation of Registrants Name into English)
Mita NN Bldg., 4-1-23 Shiba, Minato-Ku,
Tokyo, 108-0014, JAPAN
(Address of Principal Executive Offices)
(Indicate by check mark if the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)
Form 20-F x Form 40-F ¨
(Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)
Yes ¨ No x
Table of Documents Filed
Exhibit 101 Instance Document
Exhibit 101 Schema Document
Exhibit 101 Calculation Linkbase Document
Exhibit 101 Definition Linkbase Document
Exhibit 101 Labels Linkbase Document
Exhibit 101 Presentation Linkbase Document
EXPLANATORY NOTE: ORIX Corporation amends its report on Form 6-K furnished to the SEC on February 13, 2012 to provide the unaudited interim consolidated financial statements contained therein in XBRL format. Other than the filing of the Exhibits, no part of the Form 6-K filed on February 13, 2012 is being amended.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ORIX Corporation | ||||||
Date: March 5, 2012 | By: | /s/ Haruyuki Urata | ||||
Name: | Haruyuki Urata | |||||
Title: | Director, Representative Executive Officer, Deputy President & CFO |
Discontinued Operations (Tables)
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9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2011
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Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures | Discontinued operations for the nine months ended December 31, 2010 and 2011 and the three months ended December 31, 2010 and 2011 consist of the following:
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Fair Value Measurements - Additional Information (Detail) (Accounting Standards Update 2009-16 And 2009-17, JPY ¥)
In Millions, unless otherwise specified |
9 Months Ended |
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Dec. 31, 2010
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Specified bonds issued by SPEs in Japan
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Fair Value, Measurement Inputs, Disclosure [Line Items] | |
Transfers into Level 3 | ¥ 9,225 |
Transfers out of Level 3 | 1,296 |
CMBS and RMBS in the U.S., and other asset-backed securities
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Fair Value, Measurement Inputs, Disclosure [Line Items] | |
Transfers out of Level 3 | ¥ 49,408 |
Investment in Affiliates (Detail) (JPY ¥)
In Millions, unless otherwise specified |
Dec. 31, 2011
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Mar. 31, 2011
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Investments in and Advances to Affiliates [Line Items] | ||
Shares | ¥ 297,506 | ¥ 311,556 |
Loans | 42,714 | 61,820 |
Investment in Affiliates | ¥ 340,220 | ¥ 373,376 |
Discontinued Operations (Detail) (JPY ¥)
In Millions, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||||||||
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Dec. 31, 2011
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Dec. 31, 2010
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Dec. 31, 2011
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Dec. 31, 2010
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Revenues | ¥ 2,408 | ¥ 5,614 | ¥ 7,742 | ¥ 24,125 | ||||||
Income from discontinued operations, net | ¥ (309) | [1] | ¥ 3,660 | [1] | ¥ 1,018 | [1] | ¥ 6,785 | [1] | ||
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Variable Interest Entities (Tables)
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9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2011
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Consolidation Of Variable Interest Entities Disclosure | Information about VIEs for the Company and its subsidiaries are as follows:
March 31, 2011
December 31, 2011
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Schedule of Non-Consolidated Variable Interest Entities |
March 31, 2011
December 31, 2011
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Discontinued Operations (Parenthetical) (Detail) (JPY ¥)
In Millions, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2011
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Dec. 31, 2010
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Dec. 31, 2011
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Dec. 31, 2010
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Income from discontinued operations, aggregate gains and losses on sales and liquidation of subsidiaries, business units, and rental properties | ¥ 1,980 | ¥ 5,919 | ¥ 3,900 | ¥ 11,185 |
Dividend Payments (Detail) (JPY ¥)
In Millions, except Per Share data, unless otherwise specified |
9 Months Ended | |
---|---|---|
Dec. 31, 2011
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Dec. 31, 2010
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Dividends Payable [Line Items] | ||
Resolution | May 23, 2011 | May 20, 2010 |
Type of shares | Common stock | Common stock |
Total dividends paid | ¥ 8,599 | ¥ 8,061 |
Dividend per share | ¥ 80.00 | ¥ 75.00 |
Date of record for dividend | Mar. 31, 2011 | Mar. 31, 2010 |
Effective date for dividend | Jun. 02, 2011 | Jun. 02, 2010 |
Dividend resource | Retained earnings | Retained earnings |
Summary of Potential Future Payments and Book Value Recorded as Guarantee Liabilities of Guarantee Contracts Outstanding (Detail) (JPY ¥)
In Millions, unless otherwise specified |
9 Months Ended | 12 Months Ended |
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Dec. 31, 2011
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Mar. 31, 2011
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Guarantor Obligations [Line Items] | ||
Potential future payment | ¥ 490,267 | ¥ 469,030 |
Book value of guarantee liabilities | 7,529 | 6,533 |
Maturity of the longest contract (Years) | - | - |
Corporate loans
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Guarantor Obligations [Line Items] | ||
Potential future payment | 318,832 | 284,851 |
Book value of guarantee liabilities | 1,496 | 1,958 |
Maturity of the longest contract (Years) | 2026 | 2018 |
Transferred Loans
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Guarantor Obligations [Line Items] | ||
Potential future payment | 154,784 | 166,936 |
Book value of guarantee liabilities | 3,800 | 2,218 |
Maturity of the longest contract (Years) | 2043 | 2043 |
Housing Loans
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Guarantor Obligations [Line Items] | ||
Potential future payment | 15,198 | 16,949 |
Book value of guarantee liabilities | 2,228 | 2,353 |
Maturity of the longest contract (Years) | 2051 | 2051 |
Other
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Guarantor Obligations [Line Items] | ||
Potential future payment | 1,453 | 294 |
Book value of guarantee liabilities | ¥ 5 | ¥ 4 |
Maturity of the longest contract (Years) | 2018 | 2018 |
Financing Receivables Modified as Troubled Debt Restructurings within the Previous 12 Months from the Current Period End and for which there was a Payment Default (Detail) (JPY ¥)
In Millions, unless otherwise specified |
3 Months Ended | 9 Months Ended |
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Dec. 31, 2011
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Dec. 31, 2011
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Financing Receivable, Modifications [Line Items] | ||
Recorded Investment | ¥ 43 | ¥ 1,287 |
Consumer Housing loans
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Financing Receivable, Modifications [Line Items] | ||
Recorded Investment | 33 | 33 |
Corporate loans
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Financing Receivable, Modifications [Line Items] | ||
Recorded Investment | 10 | 1,254 |
Other Real estate companies
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Financing Receivable, Modifications [Line Items] | ||
Recorded Investment | 60 | |
All other
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Financing Receivable, Modifications [Line Items] | ||
Recorded Investment | ¥ 10 | ¥ 1,194 |
Write-Downs of Long-Lived Assets - Additional Information (Detail) (JPY ¥)
In Millions, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2011
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Dec. 31, 2010
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Dec. 31, 2011
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Dec. 31, 2010
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Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Impairment losses | ¥ 12,573 | ¥ 1,972 | ¥ 15,531 | ¥ 6,384 |
Write-downs of long-lived assets | 9,582 | 994 | 11,482 | 4,719 |
Corporate Financial Services
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Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Impairment losses | 793 | 793 | 104 | |
Real Estate
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Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Impairment losses | 10,928 | 1,218 | 12,928 | 4,334 |
Investment and Operation
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Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Impairment losses | 66 | 417 | 286 | 935 |
Office Building
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Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Impairment losses | 25 | 159 | ||
Number of impaired assets | 3 | |||
Office Building Held For Sale
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Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Impairment losses | 366 | 54 | 967 | 54 |
Number of impaired assets | 4 | 13 | ||
Commercial Facilities Other Than Office
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Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Impairment losses | 214 | 918 | 248 | 1,702 |
Number of impaired assets | 3 | 3 | 5 | 7 |
Condominiums Held for Sale
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Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Impairment losses | 282 | 66 | 738 | 1,294 |
Number of impaired assets | 6 | 4 | 21 | 24 |
Condominiums
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Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Impairment losses | 689 | 1,328 | ||
Number of impaired assets | 7 | 15 | ||
Land and buildings undeveloped or under construction held for sale
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Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Impairment losses | 2,077 | 2,077 | ||
Land and buildings undeveloped or under construction
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Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Impairment losses | 6,631 | 6,631 | ||
Property, Plant and Equipment, Other Types
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Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Impairment losses | ¥ 3,003 | ¥ 220 | ¥ 4,870 | ¥ 1,847 |
Commitments, Guarantees, and Contingent Liabilities - Additional Information (Detail) (JPY ¥)
In Millions, unless otherwise specified |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
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Dec. 31, 2011
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Dec. 31, 2010
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Dec. 31, 2011
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Dec. 31, 2010
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Mar. 31, 2011
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Commitments and Contingencies Disclosure [Line Items] | |||||
Commitments for purchase of equipment to be leased at cost | ¥ 13,608 | ¥ 11,423 | |||
Total rental payments under operating lease agreements | 1,845 | 2,022 | 5,684 | 6,113 | |
Payments for computer systems under non-cancelable contracts | 116 | 115 | 401 | 643 | |
Estimated construction costs | 93,831 | 93,831 | 135,567 | ||
Total unused credit and capital amount available | 79,479 | 79,479 | 77,694 | ||
Guarantee Obligations Maximum Exposure | 490,267 | 490,267 | 469,030 | ||
Guarantee Obligations Current Carrying Value | 7,529 | 7,529 | 6,533 | ||
Investment in securities pledged for primarily collateral deposits | 1,167,720 | 1,167,720 | 1,175,381 | ||
Securities Pledged as Collateral
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Commitments and Contingencies Disclosure [Line Items] | |||||
Investment in securities pledged for primarily collateral deposits | 27,358 | 27,358 | 58,607 | ||
Corporate loans
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Commitments and Contingencies Disclosure [Line Items] | |||||
Guarantee Obligations Maximum Exposure | 318,832 | 318,832 | 284,851 | ||
Guarantee Obligations Current Carrying Value | 1,496 | 1,496 | 1,958 | ||
Corporate loans | Performance Guarantee
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Commitments and Contingencies Disclosure [Line Items] | |||||
Guarantee Obligations Maximum Exposure | 1,288,700 | 1,288,700 | 1,265,000 | ||
Guarantee Obligations Current Carrying Value | ¥ 684 | ¥ 684 | ¥ 755 |
Reconciliation of the Differences Between Basic and Diluted Earnings Per Share (EPS) (Detail) (JPY ¥)
In Millions, except Share data in Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
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Dec. 31, 2011
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Dec. 31, 2010
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Dec. 31, 2011
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Dec. 31, 2010
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Earnings Per Share, Diluted [Line Items] | ||||
Income attributable to ORIX Corporation from continuing operations | ¥ 23,746 | ¥ 13,152 | ¥ 67,914 | ¥ 44,178 |
Effect of dilutive securities- | ||||
Expense related to convertible bonds | 589 | 328 | 1,767 | 1,801 |
Income from continuing operations for diluted EPS computation | ¥ 24,335 | ¥ 13,480 | ¥ 69,681 | ¥ 45,979 |
Weighted-average shares | 107,511 | 107,487 | 107,506 | 107,487 |
Effect of dilutive securities- | ||||
Conversion of convertible bonds | 24,410 | 21,919 | 24,411 | 24,412 |
Exercise of stock options | 112 | 106 | 111 | 92 |
Weighted-average shares for diluted EPS computation | 132,033 | 129,512 | 132,028 | 131,991 |
Earnings per share for income attributable to ORIX Corporation from continuing operations: | ||||
Basic | ¥ 220.87 | ¥ 122.36 | ¥ 631.72 | ¥ 411.01 |
Diluted | ¥ 184.31 | ¥ 104.08 | ¥ 527.77 | ¥ 348.35 |
The Minimum Future Rentals on Non-Cancelable Operating Leases (Detail) (JPY ¥)
In Millions, unless otherwise specified |
Dec. 31, 2011
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Mar. 31, 2011
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Schedule of Operating Leases [Line Items] | ||
Within one year | ¥ 3,439 | ¥ 3,587 |
More than one year | 24,048 | 26,302 |
Total | ¥ 27,487 | ¥ 29,889 |
Discontinued Operations - Additional Information (Detail) (JPY ¥)
In Millions, unless otherwise specified |
3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||
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Dec. 31, 2011
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Dec. 31, 2010
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Dec. 31, 2011
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Dec. 31, 2010
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Dec. 31, 2011
Subsidiaries
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Jun. 30, 2011
Subsidiaries
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Dec. 31, 2010
Subsidiaries
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Sep. 30, 2010
Subsidiaries
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Dec. 31, 2011
Real Estate
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Dec. 31, 2010
Real Estate
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Dec. 31, 2011
Real Estate
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Dec. 31, 2010
Real Estate
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Mar. 31, 2011
Real Estate
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Gain on sales of subsidiaries and business units | ¥ 1,980 | ¥ 5,919 | ¥ 3,900 | ¥ 11,185 | ¥ 377 | ¥ 162 | ¥ 5,896 | ¥ 263 | |||||
Gain (loss) on liquidation of subsidiaries and business units | (37) | 33 | |||||||||||
Gains (losses) on sales of real estate properties | 1,640 | (10) | 3,398 | 4,993 | |||||||||
Rental properties held for sale | ¥ 22,820 | ¥ 22,820 | ¥ 27,486 |
Combined and Condensed Information Related to Affiliates (Detail) (JPY ¥)
In Millions, unless otherwise specified |
9 Months Ended | |
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Dec. 31, 2011
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Dec. 31, 2010
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Schedule of Equity Method Investments [Line Items] | ||
Total revenues | ¥ 656,633 | ¥ 548,781 |
Income before income taxes | 51,654 | 53,692 |
Net income | 39,953 | 36,054 |
Total assets | 4,235,422 | 4,208,631 |
Total liabilities | 3,236,067 | 3,116,168 |
Shareholders' equity | ¥ 999,355 | ¥ 1,092,463 |
Commitments, Guarantees, and Contingent Liabilities
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Dec. 31, 2011
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Commitments, Guarantees, and Contingent Liabilities |
Commitments—The Company and its subsidiaries have commitments for the purchase of equipment to be leased, having a cost of ¥11,423 million and ¥13,608 million as of March 31, 2011 and December 31, 2011, respectively. The minimum future rentals on non-cancelable operating leases are as follows:
The Company and its subsidiaries lease office space under operating lease agreements, which are primarily cancelable, and made rental payments totaling ¥6,113 million and ¥5,684 million for the nine months ended December 31, 2010 and 2011, respectively, and ¥2,022 million and ¥1,845 million for the three months ended December 31, 2010 and 2011, respectively. Certain computer systems of the Company and its subsidiaries have been operated and maintained under non-cancelable contracts with third-party service providers. For such services, the Company and its subsidiaries made payments totaling ¥643 million and ¥401 million for the nine months ended December 31, 2010 and 2011, respectively, and ¥115 million and ¥116 million for the three months ended December 31, 2010 and 2011, respectively. As of March 31, 2011 and December 31, 2011, the amounts due are as follows:
The Company and its subsidiaries have commitments to fund estimated construction costs to complete ongoing real estate development projects and other commitments, amounting in total to ¥135,567 million and ¥93,831 million as of March 31, 2011 and December 31, 2011, respectively.
The Company and its subsidiaries have agreements to commit to execute loans for customers, and to invest in funds, as long as the agreed-upon terms are met. The total unused credit and capital amount available is ¥77,694 million and ¥79,479 million as of March 31, 2011 and December 31, 2011, respectively. Guarantees—The Company and its subsidiaries apply ASC 460-10 (“Guarantees”), and at the inception of a guarantee, recognize a liability in the consolidated balance sheets for the fair value of the guarantee within the scope of ASC 460-10. The following table represents the summary of potential future payments, book value recorded as guarantee liabilities of the guarantee contracts outstanding and maturity of the longest guarantee contracts as of March 31, 2011 and December 31, 2011:
Guarantee of corporate loans: The Company and certain subsidiaries mainly guarantee corporate loans issued by financial institutions for customers. The Company and its subsidiaries are obliged to pay the outstanding loans when the guaranteed customers fail to pay principal and/or interest in accordance with the contract terms. In some cases, the corporate loans are secured by the guaranteed customers’ assets. Once the Company and its subsidiaries assume the guaranteed customers’ obligation, the Company and its subsidiaries obtain a right to claim the collateral assets. In other cases, certain contracts that guarantee corporate loans issued by financial institutions for customers include contracts that the amounts of performance guarantee are limited to a range of guarantee commissions. As of March 31, 2011 and December 31, 2011, total notional amount of the loans subject to such guarantees are ¥1,265,000 million and ¥1,288,700 million respectively, and book value of guarantee liabilities which amount is included in the table above are ¥755 million and ¥684 million, respectively. The potential future payment amounts included in the table above for these guarantees as are limited to the agreed range of the guarantee commissions, which are less than the total notional amounts of the loans subject to these guarantees. Payment or performance risk of the guarantees is considered based on the historical experience of credit events. There have been no significant changes in the payment or performance risk of the guarantees for the nine months ended December 31, 2011. Guarantee of transferred loans: A subsidiary in the United States is authorized to underwrite, originate, fund, and service multi-family and seniors housing loans without prior approval from Fannie Mae under Fannie Mae’s Delegated Underwriting and Servicing program. As part of this program, Fannie Mae provides a commitment to purchase the loans.
In return for the delegated authority, the subsidiary guarantees the performance of certain housing loans transferred to Fannie Mae and has the payment or performance risk of the guarantees to absorb some of the losses when losses arise from the transferred loans. There have been no significant changes in the payment or performance risk of these guarantees for the nine months ended December 31, 2011. Guarantee of housing loans: The Company and certain subsidiaries guarantee the housing loans issued by Japanese financial institutions to third party individuals. The Company and its subsidiaries are typically obliged to pay the outstanding loans when these loans become delinquent more than three months. The housing loans are usually secured by the real properties. Once the Company and its subsidiaries assume the guaranteed parties’ obligation, the Company and its subsidiaries obtain a right to claim the collateral assets. Other guarantees: Other guarantees include the guarantees to financial institutions and the guarantees derived from collection agency agreements. Pursuant to the contracts of the guarantees to financial institutions, a subsidiary pays to the financial institutions when customers of the financial institutions become debtors and default on the debts. Pursuant to the agreements of the guarantees derived from collection agency agreements, the Company and certain subsidiaries collect third parties’ debt and pay the uncovered amounts. Litigation—The Company and its subsidiaries are involved in legal proceedings and claims in the ordinary course of business. In the opinion of management, none of such proceedings and claims will have a significant impact on the Company’s financial position or results of operations. Collateral—Other than the assets of the consolidated variable interest entities pledged as collateral for financing described in Note 7 (“Variable Interest Entities”), the Company and certain subsidiaries provide the following assets as collateral for the short-term and long-term debt payables to financial institutions as of March 31, 2011 and December 31, 2011:
As of March 31, 2011 and December 31, 2011, investment in securities of ¥58,607 million and ¥27,358 million, respectively, were primarily pledged for collateral deposits. Under loan agreements, the Company and certain subsidiaries are required to provide collateral pledged for short-term and long-term debt from commercial banks and certain insurance companies at anytime if requested by the lenders. The Company did not receive any such requests from the lenders as of December 31, 2011. |
Information about Allowance for Credit Losses (Detail) (JPY ¥)
In Millions, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2011
|
Dec. 31, 2011
|
Mar. 31, 2011
|
||||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||||||||
Allowance for credit losses , Beginning Balance | ¥ 139,134 | ¥ 154,150 | ||||||||
Allowance for credit losses , provision charged to income | (529) | 8,268 | ||||||||
Allowance for credit losses , charge-offs | (7,960) | (29,567) | ||||||||
Allowance for credit losses , Recoveries | 395 | 1,104 | ||||||||
Allowance for credit losses , Others | 498 | [1] | (2,417) | [1] | ||||||
Allowance for Credit Losses, Ending Balance | 131,538 | 131,538 | ||||||||
Allowance for Credit Losses, Individually Evaluated for Impairment | 85,721 | 85,721 | 97,323 | |||||||
Allowance for Credit Losses, Not Individually Evaluated for Impairment | 45,817 | 45,817 | 56,827 | |||||||
Financing receivables, Ending Balance | 3,571,831 | 3,571,831 | 3,800,299 | |||||||
Financing receivables, Individually Evaluated for Impairment | 281,957 | 281,957 | 312,031 | |||||||
Financing receivables, Not Individually Evaluated for Impairment | 3,289,874 | 3,289,874 | 3,488,268 | |||||||
Consumer Loan
|
||||||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||||||||
Allowance for credit losses , Beginning Balance | 16,580 | 17,096 | ||||||||
Allowance for credit losses , provision charged to income | 5 | 576 | ||||||||
Allowance for credit losses , charge-offs | (207) | (1,292) | ||||||||
Allowance for credit losses , Recoveries | 5 | 35 | ||||||||
Allowance for credit losses , Others | 6 | [1] | (26) | [1] | ||||||
Allowance for Credit Losses, Ending Balance | 16,389 | 16,389 | ||||||||
Allowance for Credit Losses, Individually Evaluated for Impairment | 2,850 | 2,850 | 3,016 | |||||||
Allowance for Credit Losses, Not Individually Evaluated for Impairment | 13,539 | 13,539 | 14,080 | |||||||
Financing receivables, Ending Balance | 860,330 | 860,330 | 840,419 | |||||||
Financing receivables, Individually Evaluated for Impairment | 8,930 | 8,930 | 8,312 | |||||||
Financing receivables, Not Individually Evaluated for Impairment | 851,400 | 851,400 | 832,107 | |||||||
Corporate Non-recourse loans
|
||||||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||||||||
Allowance for credit losses , Beginning Balance | 23,086 | 27,426 | ||||||||
Allowance for credit losses , provision charged to income | 137 | 889 | ||||||||
Allowance for credit losses , charge-offs | (1,980) | (5,535) | ||||||||
Allowance for credit losses , Recoveries | 16 | |||||||||
Allowance for credit losses , Others | 253 | [1] | (1,300) | [1] | ||||||
Allowance for Credit Losses, Ending Balance | 21,496 | 21,496 | ||||||||
Allowance for Credit Losses, Individually Evaluated for Impairment | 18,417 | 18,417 | 23,123 | |||||||
Allowance for Credit Losses, Not Individually Evaluated for Impairment | 3,079 | 3,079 | 4,303 | |||||||
Financing receivables, Ending Balance | 793,787 | 793,787 | 952,573 | |||||||
Financing receivables, Individually Evaluated for Impairment | 66,606 | 66,606 | 73,029 | |||||||
Financing receivables, Not Individually Evaluated for Impairment | 727,181 | 727,181 | 879,544 | |||||||
Corporate Other loans
|
||||||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||||||||
Allowance for credit losses , Beginning Balance | 62,663 | 70,972 | ||||||||
Allowance for credit losses , provision charged to income | (1,781) | 3,693 | ||||||||
Allowance for credit losses , charge-offs | (3,399) | (17,215) | ||||||||
Allowance for credit losses , Recoveries | 373 | 1,022 | ||||||||
Allowance for credit losses , Others | 128 | [1] | (488) | [1] | ||||||
Allowance for Credit Losses, Ending Balance | 57,984 | 57,984 | ||||||||
Allowance for Credit Losses, Individually Evaluated for Impairment | 47,786 | 47,786 | 55,170 | |||||||
Allowance for Credit Losses, Not Individually Evaluated for Impairment | 10,198 | 10,198 | 15,802 | |||||||
Financing receivables, Ending Balance | 977,289 | 977,289 | 1,065,119 | |||||||
Financing receivables, Individually Evaluated for Impairment | 174,899 | 174,899 | 194,005 | |||||||
Financing receivables, Not Individually Evaluated for Impairment | 802,390 | 802,390 | 871,114 | |||||||
Purchased loans
|
||||||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||||||||
Allowance for credit losses , Beginning Balance | 17,994 | [2] | 17,455 | [2] | ||||||
Allowance for credit losses , provision charged to income | 568 | [2] | 1,465 | [2] | ||||||
Allowance for credit losses , charge-offs | (112) | [2] | (269) | [2] | ||||||
Allowance for credit losses , Others | 35 | [1],[2] | (166) | [1],[2] | ||||||
Allowance for Credit Losses, Ending Balance | 18,485 | [2] | 18,485 | [2] | ||||||
Allowance for Credit Losses, Individually Evaluated for Impairment | 16,668 | [2] | 16,668 | [2] | 16,014 | [2] | ||||
Allowance for Credit Losses, Not Individually Evaluated for Impairment | 1,817 | [2] | 1,817 | [2] | 1,441 | [2] | ||||
Financing receivables, Ending Balance | 100,795 | [2] | 100,795 | [2] | 111,335 | [2] | ||||
Financing receivables, Individually Evaluated for Impairment | 31,522 | [2] | 31,522 | [2] | 36,685 | [2] | ||||
Financing receivables, Not Individually Evaluated for Impairment | 69,273 | [2] | 69,273 | [2] | 74,650 | [2] | ||||
Direct financing leases
|
||||||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||||||||
Allowance for credit losses , Beginning Balance | 18,811 | 21,201 | ||||||||
Allowance for credit losses , provision charged to income | 542 | 1,645 | ||||||||
Allowance for credit losses , charge-offs | (2,262) | (5,256) | ||||||||
Allowance for credit losses , Recoveries | 17 | 31 | ||||||||
Allowance for credit losses , Others | 76 | [1] | (437) | [1] | ||||||
Allowance for Credit Losses, Ending Balance | 17,184 | 17,184 | ||||||||
Allowance for Credit Losses, Not Individually Evaluated for Impairment | 17,184 | 17,184 | 21,201 | |||||||
Financing receivables, Ending Balance | 839,630 | 839,630 | 830,853 | |||||||
Financing receivables, Not Individually Evaluated for Impairment | ¥ 839,630 | ¥ 839,630 | ¥ 830,853 | |||||||
|
Estimated Fair Value of Financial Instruments (Tables)
|
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Dec. 31, 2011
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Fair Value, by Balance Sheet Grouping | The following information is provided to help readers gain an understanding of the relationship between amounts reported in the accompanying consolidated financial statements and the related market or fair value. The disclosures include financial instruments and derivatives financial instruments, other than investment in direct financing leases, investment in subsidiaries and affiliates, pension obligations and insurance contracts. March 31, 2011
December 31, 2011
|
Net Pension Cost of Defined Benefit Plans (Detail) (JPY ¥)
In Millions, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2011
|
Dec. 31, 2010
|
Dec. 31, 2011
|
Dec. 31, 2010
|
|
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | ¥ 761 | ¥ 776 | ¥ 2,283 | ¥ 2,330 |
Interest cost | 336 | 340 | 1,011 | 1,026 |
Expected return on plan assets | (504) | (506) | (1,514) | (1,525) |
Amortization of transition obligation | 14 | (1) | 42 | (3) |
Amortization of net actuarial loss | 304 | 260 | 913 | 782 |
Amortization of prior service credit | (299) | (298) | (895) | (894) |
Net periodic pension cost | ¥ 612 | ¥ 571 | ¥ 1,840 | ¥ 1,716 |
Selling, General and Administrative Expenses (Tables)
|
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2011
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Selling, General and Administrative Expenses | Selling, general and administrative expenses for the nine months ended December 31, 2010 and 2011, are as follows:
Selling, general and administrative expenses for the three months ended December 31, 2010 and 2011, are as follows:
|
Credit Quality of Financing Receivables and the Allowance for Credit losses - Additional Information (Detail) (JPY ¥)
In Millions, unless otherwise specified |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|---|
Dec. 31, 2011
|
Dec. 31, 2011
|
Mar. 31, 2011
|
|||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||||
Average recorded investments in impaired loans | ¥ 288,545 | [1] | ¥ 296,159 | [1] | ¥ 368,539 | ||
Recognition of interest income on impaired loans | 1,189 | 4,078 | 4,225 | ||||
Interest received in cash on impaired loans | ¥ 1,084 | ¥ 3,394 | ¥ 3,592 | ||||
|
Variable Interest Entities - Additional Information (Detail) (JPY ¥)
|
9 Months Ended | 12 Months Ended |
---|---|---|
Dec. 31, 2011
|
Mar. 31, 2011
|
|
Variable Interest Entity, Not Primary Beneficiary
|
||
Variable Interest Entity [Line Items] | ||
Additional fund contributed to certain non-consolidated VIEs to support their repayment | ¥ 135,000,000 | ¥ 14,613,000,000 |
Accounting Standards Update 2009-16 And 2009-17
|
||
Variable Interest Entity [Line Items] | ||
Increase in total assets due to adoption of accounting standards update | 1,147,000,000,000 | |
Increase in total liabilities due to adoption of accounting standards update | ¥ 1,169,000,000,000 |
Information about Available-for-Sale Securities and Held-to-Maturity Securities with Gross Unrealized Losses and the Length of Time that Individual Securities Have Been in a Continuous Unrealized Loss Position (Detail) (JPY ¥)
In Millions, unless otherwise specified |
Dec. 31, 2011
|
Mar. 31, 2011
|
---|---|---|
Investments, Unrealized Loss Position [Line Items] | ||
Less than 12 months Fair value | ¥ 180,692 | ¥ 337,103 |
Less than 12 months Gross unrealized losses | (10,783) | (6,680) |
12 months or more Fair value | 71,842 | 83,545 |
12 months or more Gross unrealized losses | (5,931) | (4,925) |
Total Fair value | 252,534 | 420,648 |
Total Gross unrealized losses | (16,714) | (11,605) |
Available-for-sale securities
|
||
Investments, Unrealized Loss Position [Line Items] | ||
Total Gross unrealized losses | (16,714) | (11,605) |
Available-for-sale securities | Japanese and foreign government bond securities
|
||
Investments, Unrealized Loss Position [Line Items] | ||
Less than 12 months Fair value | 54,383 | 63,438 |
Less than 12 months Gross unrealized losses | (6) | (169) |
Total Fair value | 54,383 | 63,438 |
Total Gross unrealized losses | (6) | (169) |
Available-for-sale securities | Japanese prefectural and foreign municipal bond securities
|
||
Investments, Unrealized Loss Position [Line Items] | ||
Less than 12 months Fair value | 15,507 | 22,444 |
Less than 12 months Gross unrealized losses | (66) | (92) |
Total Fair value | 15,507 | 22,444 |
Total Gross unrealized losses | (66) | (92) |
Available-for-sale securities | Corporate debt securities
|
||
Investments, Unrealized Loss Position [Line Items] | ||
Less than 12 months Fair value | 67,631 | 184,185 |
Less than 12 months Gross unrealized losses | (3,788) | (2,071) |
12 months or more Fair value | 16,885 | 1,980 |
12 months or more Gross unrealized losses | (203) | (20) |
Total Fair value | 84,516 | 186,165 |
Total Gross unrealized losses | (3,991) | (2,091) |
Available-for-sale securities | Specified bonds issued by SPEs in Japan
|
||
Investments, Unrealized Loss Position [Line Items] | ||
Less than 12 months Fair value | 900 | 49,180 |
Less than 12 months Gross unrealized losses | (2,025) | |
12 months or more Fair value | 32,483 | 49,398 |
12 months or more Gross unrealized losses | (634) | (1,100) |
Total Fair value | 33,383 | 98,578 |
Total Gross unrealized losses | (634) | (3,125) |
Available-for-sale securities | CMBS and RMBS in the U.S., and other asset-backed securities
|
||
Investments, Unrealized Loss Position [Line Items] | ||
Less than 12 months Fair value | 23,252 | 6,660 |
Less than 12 months Gross unrealized losses | (117) | (853) |
12 months or more Fair value | 13,149 | 24,288 |
12 months or more Gross unrealized losses | (3,320) | (2,990) |
Total Fair value | 36,401 | 30,948 |
Total Gross unrealized losses | (3,437) | (3,843) |
Available-for-sale securities | Other Debt Securities
|
||
Investments, Unrealized Loss Position [Line Items] | ||
12 months or more Fair value | 2,988 | |
12 months or more Gross unrealized losses | (12) | |
Total Fair value | 2,988 | |
Total Gross unrealized losses | (12) | |
Available-for-sale securities | Equity securities
|
||
Investments, Unrealized Loss Position [Line Items] | ||
Less than 12 months Fair value | 19,019 | 11,196 |
Less than 12 months Gross unrealized losses | (6,806) | (1,470) |
12 months or more Fair value | 9,325 | 4,891 |
12 months or more Gross unrealized losses | (1,774) | (803) |
Total Fair value | 28,344 | 16,087 |
Total Gross unrealized losses | ¥ (8,580) | ¥ (2,273) |
Reconciliation of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) (Detail) (JPY ¥)
In Millions, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2011
|
Dec. 31, 2010
|
Dec. 31, 2011
|
Dec. 31, 2010
|
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Trading securities
|
||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||||||||
Beginning Balance | ¥ 24 | ¥ 53 | ||||||||||
Gains or losses (realized/ unrealized), included in earnings | (26) | [1] | ||||||||||
Gains or losses (realized/ unrealized), included in other comprehensive income | 1 | (2) | ||||||||||
Gains or losses (realized/ unrealized), total | 1 | (28) | ||||||||||
Purchase, sales, and settlements (net) | (25) | (25) | ||||||||||
Available-for-sale securities
|
||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||||||||
Beginning Balance | 292,909 | 308,955 | 315,676 | 401,804 | ||||||||
Gains or losses (realized/ unrealized), included in earnings | (520) | [1] | (922) | [1] | (1,851) | [1] | (7,705) | [1] | ||||
Gains or losses (realized/ unrealized), included in other comprehensive income | 1,939 | (1,971) | (632) | (3,192) | ||||||||
Gains or losses (realized/ unrealized), total | 1,419 | (2,893) | (2,483) | (10,897) | ||||||||
Purchases | 14,346 | 53,681 | ||||||||||
Sales | (6,452) | (6,777) | ||||||||||
Settlements | (30,379) | (88,254) | ||||||||||
Purchase, sales, and settlements (net) | (6,024) | (47,333) | ||||||||||
Transfers in and/ or out of Level 3 (net) | (43,536) | [2] | ||||||||||
Ending Balance | 271,843 | 300,038 | 271,843 | 300,038 | ||||||||
Change in unrealized gains or losses included in earnings for assets and liabilities still held at the end of period | (978) | [1] | (889) | [1] | (2,487) | [1] | (7,733) | [1] | ||||
Available-for-sale securities | Corporate debt securities
|
||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||||||||
Beginning Balance | 2,681 | 3,147 | 2,573 | 6,841 | ||||||||
Gains or losses (realized/ unrealized), included in earnings | (37) | [1] | (22) | [1] | (105) | [1] | 10 | [1] | ||||
Gains or losses (realized/ unrealized), included in other comprehensive income | 17 | (4) | 203 | (66) | ||||||||
Gains or losses (realized/ unrealized), total | (20) | (26) | 98 | (56) | ||||||||
Purchases | 546 | 2,549 | ||||||||||
Settlements | (318) | (2,331) | ||||||||||
Purchase, sales, and settlements (net) | (473) | (2,080) | ||||||||||
Transfers in and/ or out of Level 3 (net) | (2,057) | [2] | ||||||||||
Ending Balance | 2,889 | 2,648 | 2,889 | 2,648 | ||||||||
Change in unrealized gains or losses included in earnings for assets and liabilities still held at the end of period | (37) | [1] | (23) | [1] | (108) | [1] | (23) | [1] | ||||
Available-for-sale securities | Specified bonds issued by SPEs in Japan
|
||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||||||||
Beginning Balance | 180,191 | 213,852 | 222,314 | 246,305 | ||||||||
Gains or losses (realized/ unrealized), included in earnings | (1,576) | [1] | (183) | [1] | (3,451) | [1] | (4,993) | [1] | ||||
Gains or losses (realized/ unrealized), included in other comprehensive income | 964 | (148) | 3,112 | 1,491 | ||||||||
Gains or losses (realized/ unrealized), total | (612) | (331) | (339) | (3,502) | ||||||||
Purchases | 100 | 100 | ||||||||||
Sales | (10) | (10) | ||||||||||
Settlements | (17,273) | (59,669) | ||||||||||
Purchase, sales, and settlements (net) | (4,262) | (41,473) | ||||||||||
Transfers in and/ or out of Level 3 (net) | 7,929 | [2] | ||||||||||
Ending Balance | 162,396 | 209,259 | 162,396 | 209,259 | ||||||||
Change in unrealized gains or losses included in earnings for assets and liabilities still held at the end of period | (1,601) | [1] | (215) | [1] | (3,476) | [1] | (5,031) | [1] | ||||
Available-for-sale securities | CMBS and RMBS in the U.S., and other asset-backed securities
|
||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||||||||
Beginning Balance | 99,624 | 86,462 | 85,283 | 143,176 | ||||||||
Gains or losses (realized/ unrealized), included in earnings | 1,093 | [1] | (717) | [1] | 1,705 | [1] | (2,722) | [1] | ||||
Gains or losses (realized/ unrealized), included in other comprehensive income | 785 | (1,825) | (3,336) | (4,635) | ||||||||
Gains or losses (realized/ unrealized), total | 1,878 | (2,542) | (1,631) | (7,357) | ||||||||
Purchases | 13,700 | 45,341 | ||||||||||
Sales | (6,442) | (6,767) | ||||||||||
Settlements | (9,788) | (23,254) | ||||||||||
Purchase, sales, and settlements (net) | (1,289) | (3,780) | ||||||||||
Transfers in and/ or out of Level 3 (net) | (49,408) | [2] | ||||||||||
Ending Balance | 98,972 | 82,631 | 98,972 | 82,631 | ||||||||
Change in unrealized gains or losses included in earnings for assets and liabilities still held at the end of period | 660 | [1] | (651) | [1] | 1,097 | [1] | (2,679) | [1] | ||||
Available-for-sale securities | Other Debt Securities
|
||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||||||||
Beginning Balance | 10,413 | 5,494 | 5,506 | 5,482 | ||||||||
Gains or losses (realized/ unrealized), included in other comprehensive income | 173 | 6 | (611) | 18 | ||||||||
Gains or losses (realized/ unrealized), total | 173 | 6 | (611) | 18 | ||||||||
Purchases | 5,691 | |||||||||||
Settlements | (3,000) | (3,000) | ||||||||||
Ending Balance | 7,586 | 5,500 | 7,586 | 5,500 | ||||||||
Derivative assets and liabilities (net)
|
||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||||||||
Beginning Balance | 3,253 | 3,288 | 2,946 | 493 | ||||||||
Gains or losses (realized/ unrealized), included in earnings | 463 | [1] | (2,204) | [1] | 592 | [1] | (2,068) | [1] | ||||
Gains or losses (realized/ unrealized), total | 463 | (2,204) | 592 | (2,068) | ||||||||
Settlements | 10 | 188 | ||||||||||
Transfers in and/ or out of Level 3 (net) | 2,659 | [2] | ||||||||||
Ending Balance | 3,726 | 1,084 | 3,726 | 1,084 | ||||||||
Change in unrealized gains or losses included in earnings for assets and liabilities still held at the end of period | 463 | [1] | (2,204) | [1] | 592 | [1] | (2,068) | [1] | ||||
Derivative assets and liabilities (net) | Options held/written, caps held and other
|
||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||||||||
Beginning Balance | 3,263 | 2,720 | 3,134 | |||||||||
Gains or losses (realized/ unrealized), included in earnings | 463 | [1] | (1,682) | [1] | 592 | [1] | (1,621) | [1] | ||||
Gains or losses (realized/ unrealized), total | 463 | (1,682) | 592 | (1,621) | ||||||||
Transfers in and/ or out of Level 3 (net) | 2,659 | [2] | ||||||||||
Ending Balance | 3,726 | 1,038 | 3,726 | 1,038 | ||||||||
Change in unrealized gains or losses included in earnings for assets and liabilities still held at the end of period | 463 | [1] | (1,682) | [1] | 592 | [1] | (1,621) | [1] | ||||
Derivative assets and liabilities (net) | Credit derivatives held/written
|
||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||||||||
Beginning Balance | (10) | 568 | (188) | 493 | ||||||||
Gains or losses (realized/ unrealized), included in earnings | (522) | [1] | (447) | [1] | ||||||||
Gains or losses (realized/ unrealized), total | (522) | (447) | ||||||||||
Settlements | 10 | 188 | ||||||||||
Ending Balance | 46 | 46 | ||||||||||
Change in unrealized gains or losses included in earnings for assets and liabilities still held at the end of period | ¥ (522) | [1] | ¥ (447) | [1] | ||||||||
|
Significant Accounting and Reporting Policies
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9 Months Ended | ||
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Dec. 31, 2011
|
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Significant Accounting and Reporting Policies |
(a) Principles of consolidation The consolidated financial statements include the accounts of the Company and all of its subsidiaries. Investments in affiliates, where the Company has the ability to exercise significant influence by way of 20%-50% ownership or other means, are accounted for by using the equity method. Where the Company holds majority voting interests but noncontrolling shareholders have substantive participating rights to decisions that occur as part of the ordinary course of their business, the equity method is applied pursuant to FASB Accounting Standards Codification (“ASC”) 810-10-25-2 to 14 (“Consolidation—The effect of Noncontrolling Rights on Consolidation”). In addition, the consolidated financial statements also include variable interest entities to which the Company and its subsidiaries are primary beneficiaries pursuant to ASC 810-10 (“Consolidation—Variable Interest Entities”). A lag period of up to three months is used on a consistent basis when considered necessary and appropriate for recognizing the results of subsidiaries and affiliates. All significant intercompany accounts and transactions have been eliminated in consolidation. (b) Use of estimates The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company has identified ten areas where it believes assumptions and estimates are particularly critical to the financial statements. These are the selection of valuation techniques and determination of assumptions used in fair value measurements (see Note 3), the determination and periodic reassessment of the unguaranteed residual value for direct financing leases and operating leases (see (d)), the determination and reassessment of insurance policy liabilities and deferred policy acquisition costs (see (e)), the determination of the allowance for doubtful receivables on direct financing leases and probable loan losses (see (f)), the determination of impairment of long-lived assets (see (g)), the determination of impairment of investment in securities (see (h)), the determination of valuation allowance for deferred tax assets and the evaluation of tax positions (see (i)), assessment and measurement of effectiveness in hedging relationship using derivative financial instruments (see (k)), the determination of benefit obligation and net periodic pension cost (see (l)) and the determination of impairment of goodwill and intangible assets not subject to amortization (see (w)). (c) Foreign currencies translation The Company and its subsidiaries maintain their accounting records in their functional currency. Transactions in foreign currencies are recorded in the entity’s functional currency based on the prevailing exchange rates on the transaction date. The financial statements of overseas subsidiaries and affiliates are translated into Japanese yen by applying the exchange rates in effect at the end of each fiscal period to all assets and liabilities. Income and expenses are translated at the average rates of exchange prevailing during the fiscal period. The currencies in which the operations of the overseas subsidiaries and affiliates are conducted are regarded as the functional currencies of these companies. Foreign currency translation adjustments reflected in accumulated other comprehensive income (loss) arise from the translation of foreign currency financial statements into Japanese yen. (d) Recognition of revenues Revenues are recognized when persuasive evidence of an arrangement exists, the service has been rendered or the goods have been delivered to the customer, the transaction price is fixed or determinable and collectibility is reasonably assured. In addition to the aforementioned general policy, the policies as specifically described hereinafter are applied for each of the major revenue items. Leases—The Company and its subsidiaries lease various assets to customers under direct financing or operating lease arrangements. Classification of a lease arrangement into either a direct financing lease or an operating lease is dependent upon the specific conditions of the arrangement. Revenue recognition policies applied for direct financing leases and operating leases are specifically described in sections following this paragraph. In providing leasing services, the Company and its subsidiaries execute supplemental services, such as paying insurance and handling taxes on leased assets on behalf of lessees. In some cases, automobile maintenance services are also provided to lessees. Where under terms of the lease or related maintenance agreements the Company and its subsidiaries bear the favorable or unfavorable variability of cost, revenues and expenses are recorded on a gross basis. For those arrangements in which the Company and its subsidiaries do not have substantial risks and rewards of ownership, but instead serve as an agent in collecting from lessees and remitting payments to third parties, the Company and its subsidiaries record revenues net of third-party services costs. Revenues from automobile maintenance services are taken into income over the contract period in proportion to the estimated service costs to be incurred and are recorded in other operating revenues in the accompanying consolidated statements of income.
(1) Recognition of revenues for direct financing leases Direct financing leases consist of full-payout leases for various equipment types, including office equipment, industrial machinery and transportation equipment. The excess of aggregate lease rentals plus the estimated unguaranteed residual value over the cost of the leased equipment constitutes the unearned lease income to be taken into income over the lease term by using the interest method. The estimated residual values represent estimated proceeds from the disposition of equipment at the time the lease is terminated. Estimates of unguaranteed residual values are based on current market values of used equipment, estimates of when and how much equipment will become obsolete, and actual recovery being experienced for similar used equipment. Initial direct costs are being deferred and amortized as a yield adjustment over the life of the related lease by using interest method. The unamortized balance of initial direct costs is reflected as a component of investment in direct financing leases. (2) Recognition of revenues for operating leases Revenues from operating leases are recognized on a straight-line basis over the contract terms. Investment in operating leases is stated at cost less accumulated depreciation, which was ¥402,697 million and ¥413,570 million as of March 31, 2011 and December 31, 2011, respectively. Operating lease assets are depreciated over their estimated useful lives mainly on a straight-line basis. Depreciation expenses are included in costs of operating leases. Gains or losses arising from dispositions of operating lease assets, except real estate under operating leases, are included in operating lease revenues. With respect to some sales of real estate under operating leases such as commercial buildings, the Company or its subsidiaries may retain an interest in some cash flows of the real estate in the form of management or operation of the real estate. Where the Company or its subsidiaries have significant continuing involvement in the operations from the real estate under operating leases which have been disposed of, the gains or losses arising from such disposition are separately disclosed as gains on sales of real estate under operating leases, whereas if the Company or its subsidiaries have no significant continuing involvement in the operations from such disposed real estate, the gains or losses are reported as income from discontinued operations, net. Estimates of residual values are based on current market values of used equipment, estimates of when and how much equipment will become obsolete and actual recovery being experienced for similar used equipment. Installment loans—Interest income on installment loans is recognized on an accrual basis. Certain direct loan origination costs, offset by loan origination fees, are being deferred and amortized over the contractual term of the loan as an adjustment of the related loan’s yield using the interest method. Interest payments received on impaired loans other than purchased loans are recorded as interest income unless the collection of the remaining investment is doubtful at which time payments received are recorded as reductions of principal. For purchased loans, although the acquired assets may remain loans in legal form, collections on these loans often do not reflect the normal historical experience of collecting delinquent accounts, and the need to tailor individual collateral-realization strategies often makes it difficult to reliably estimate the amount, timing, or nature of collections. Accordingly, the Company and its subsidiaries use the cost recovery method of income recognition for such purchased loans regardless of whether impairment is recognized or not. Non-accrual policy—In common with all classes, past-due financing receivables are receivables for which principal or interest is past-due 30 days or more. Loans whose terms have been modified are not classified as past-due financing receivables if the principals and interests are not past-due 30 days or more in accordance with the modified terms. The Company and its subsidiaries suspend accruing revenues on past-due installment loans and direct financing leases when principal or interest is past-due 90 days or more, or earlier, if management determines that their collections are doubtful based on factors such as individual debtors’ creditworthiness, historical loss experience, current delinquencies and delinquency trends. Accrued but uncollected interest is reclassified to investment in direct financing leases or installment loans in the accompanying consolidated balance sheets and becomes subject to the allowance for doubtful receivables and probable loan loss process. Cash repayments received on non-accrual loans are applied first against past due interest and then any surpluses are applied to principal in view of the conditions of the contract and obligors. The Company and its subsidiaries return to accrual status non-accrual loans and lease receivables when it becomes certain that the Company and its subsidiaries will be able to collect all amounts due according to the contractual terms of these loans and receivables, as evidenced by continual payments from the debtors. Brokerage commissions and net gains on investment securities—Brokerage commissions and net gains on investment securities are recorded on a trade date basis. Real estate sales—Revenues from the sales of real estate are recognized when a contract is in place, a closing has taken place, the buyer’s initial and continuing investment is adequate to demonstrate a commitment to pay for the property and the Company and its subsidiaries do not have a substantial continuing involvement in the property.
(e) Insurance premiums and expenses Premium income from life insurance policies is recognized as earned premiums when due. Life insurance benefits are recorded as expenses when they are incurred. Policy liabilities for future policy benefits are established using the net level premium method, based on actuarial estimates of the amount of future policyholder benefits. ASC 944 (“Financial Services—Insurance”) requires insurance companies to defer certain costs associated with writing insurances, or deferred policy acquisition costs, and amortize them over the respective policy periods in proportion to anticipated premium revenue. These deferred policy acquisition costs are the costs related to the acquisition of new and renewal insurance policies and consist primarily of first-year commissions in excess of recurring policy maintenance costs and certain variable costs and expenses for underwriting policies. Amortization charged to income for the nine months ended December 31, 2010 and 2011 amounted to ¥7,015 million and ¥6,433 million, respectively. Amortization charged to income for the three months ended December 31, 2010 and 2011 amounted to ¥2,098 million and ¥1,853 million, respectively. (f) Allowance for doubtful receivables on direct financing leases and probable loan losses The allowance for doubtful receivables on direct financing leases and probable loan losses is maintained at a level which, in the judgment of management, is appropriate to provide for probable losses inherent in lease and loan portfolios. The allowance is increased by provision charged to income and is decreased by charge-offs, net of recoveries. Developing the allowance for doubtful receivables on direct financing leases and probable loan losses is subject to numerous estimates and judgments. In evaluating the adequacy of the allowance, management considers various factors, including the business characteristics and financial conditions of the obligors, current economic conditions and trends, prior charge-off experience, current delinquencies and delinquency trends, future cash flows expected to be received from the direct financing leases and loans and value of underlying collateral and guarantees. Impaired loans are individually evaluated for a valuation allowance based on the present value of expected future cash flows, the loan’s observable market price or the fair value of the collateral securing the loans if the loans are collateral-dependent. For non-impaired loans, including loans that are not individually evaluated for impairment, and direct financing leases, the Company and its subsidiaries evaluate prior charge-off experience segmented by the debtors’ industries and the purpose of the loans, and then develop the allowance for doubtful receivables on direct financing leases and probable loan losses considering the prior charge-off experience and current economic conditions. The Company and its subsidiaries charge off doubtful receivables when the likelihood of any future collection is believed to be minimal considering debtors’ creditworthiness and the liquidation status of collateral. (g) Impairment of long-lived assets The Company and its subsidiaries have followed ASC 360-10 (“Property, Plant, and Equipment—Impairment or Disposal of Long-Lived Assets”). Under ASC 360-10, long-lived assets to be held and used in operations, including tangible assets and intangible assets being amortized, consisting primarily of office building, condominiums, golf courses and other operating assets, shall be tested for recoverability whenever events or changes in circumstances indicate that the assets might be impaired. When the undiscounted future cash flows estimated to be generated by those assets are less than the carrying amount of those assets, the net carrying amount of assets not recoverable is reduced to fair value if lower than the carrying amount. The Company and its subsidiaries determine the fair value 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. (h) Investment in securities Trading securities are reported at fair value with unrealized gains and losses included in income. Available-for-sale securities are reported at fair value, and unrealized gains or losses are recorded in accumulated other comprehensive income (loss), net of applicable income taxes. Held-to-maturity securities are recorded at amortized cost. Other securities are recorded at cost or carrying value that reflects equity income and loss based on the investor’s share.
For available-for-sale securities, the Company and its subsidiaries generally recognize losses related to equity securities for which the fair value has been significantly below the acquisition cost (or current carrying value if an adjustment has been made in the past) for more than six months. Also, the Company and its subsidiaries charge against income losses related to equity securities in situations where, even though the fair value has not remained significantly below the carrying value for six months, the decline in the fair value of an equity security is based on issuer’s specific economic conditions and not just general declines in the related market and where it is considered unlikely that the fair value of the equity security will recover within the six months. For debt securities, in the case of the fair value being below the amortized cost, the Company and its subsidiaries consider whether those securities are other-than-temporarily impaired using all available information about the collectibility. The Company and its subsidiaries do not consider that an other-than-temporary impairment for a debt security has occurred if (1) the Company and its subsidiaries do not intend to sell the debt security, (2) it is not more likely than not that the Company and its subsidiaries will be required to sell the debt security before recovery of its amortized cost basis, and (3) the present value of estimated cash flows will fully cover the amortized cost of the security. On the other hand, the Company and its subsidiaries consider that an other-than-temporary impairment has occurred if (1) the Company and its subsidiaries intend to sell the debt security, (2) it is more likely than not that the Company and its subsidiaries will be required to sell the debt security before recovery of its amortized cost basis, or (3) the present value of estimated cash flows will not fully cover the amortized cost of the security. For the debt security for which an other-than-temporary impairment is considered to have occurred, the Company and its subsidiaries recognize the entire difference between the amortized cost and the fair value in earnings if the Company and its subsidiaries intend to sell the debt security or it is more likely than not that the Company and its subsidiary will be required to sell the debt security before recovery of its amortized cost basis less any current-period credit loss. On the other hand, if the Company and its subsidiaries do not intend to sell the debt security and it is not more likely than not that the Company and its subsidiaries will be required to sell the debt security before recovery of its amortized cost basis less any current-period credit loss, the Company and its subsidiaries separate the difference between the amortized cost and the fair value of the debt securities into the credit loss component and the non-credit loss component. The credit loss component is recognized in earnings, and the non-credit loss component is recognized in other comprehensive income (loss), net of applicable income taxes. For other securities, the Company and its subsidiaries reduce the carrying value of other securities to the fair value and charge against income losses related to other securities in situations where it is considered that the decline in the value of other securities is other than temporary. (i) Income taxes The Company, in general, determines its provision for income taxes for quarterly periods by applying the current estimate of the effective tax rate for the full fiscal year to the actual year-to-date income before income taxes and discontinued operations. The estimated effective tax rate is determined by dividing the estimated provision for income taxes for the full fiscal year by the estimated income before income taxes and discontinued operations for the full fiscal year. At the fiscal year end, income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in income in the period that includes the enactment date. A valuation allowance is recognized if, based on the weight of available evidence, it is “more likely than not” that some portion or all of the deferred tax asset will not be realized. The effective income tax rates including discontinued operations are 38.7% and 31.4% for the nine months ended December 31, 2010 and 2011, respectively. These rates are 38.5% and 8.4% for the three months ended December 31, 2010 and 2011, respectively. The Company and its subsidiaries in Japan are subject to a National Corporate tax of 30%, an Inhabitant tax of approximately 6% and a deductible Enterprise tax of approximately 8%, which in the aggregate resulted in a statutory income tax rate of approximately 40.9%. The effective income tax rate is different from the statutory tax rate primarily because of certain non-deductible expenses for tax purposes, non-taxable income for tax purposes, a change in valuation allowance, the effect of lower income tax rates on foreign subsidiaries and a life insurance subsidiary in Japan and the effect of the tax reforms as discussed in the following paragraph. On November 30, 2011, the bill for reconstruction funding after the March 11, 2011 Great East Japan Earthquake and the bill for the 2011 tax reform were approved by the National Diet of Japan. From fiscal years beginning on or after April 1, 2012, the Japanese corporation tax rate will be reduced, and as a result, the statutory income tax rate for fiscal years beginning between April 1, 2012 and March 31, 2015 will be reduced to approximately 38.3%. The rate for fiscal years beginning after April 1, 2015 will be reduced to approximately 35.9%. In addition, tax loss carry-forward rules have been amended. The Carry-forward period will be extended to 9 years, compared to 7 years under the pre-amendment rules. Further, the deductible amount will be limited to 80% of taxable income for the year, while total amount of taxable income for the year was available for the deduction under the pre-amendment rules. The amendment to the carry-forward period will be applicable for tax losses incurred in fiscal years ending on or after April 1, 2008 and the amendment to the deductible amount will be applicable for fiscal years beginning on or after April 1, 2012. Increase and decrease of the deferred tax assets and liabilities due to these tax reforms resulted in a decrease of provision for income taxes by ¥7,661 million in the accompanying consolidated statements of income. The Company and its subsidiaries have followed ASC 740 (“Income Taxes”). According to ASC 740, the Company and its subsidiaries 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 the tax position that meets the recognition threshold at the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement with the taxing authority. The Company and its subsidiaries classify penalties and interest expense related to income taxes as part of provision for income taxes in the consolidated statements of income. Effective for the fiscal year ended March 31, 2012, the Company and certain consolidated subsidiaries have adopted the consolidated taxation system. (j) Securitized assets The Company and its subsidiaries have securitized and sold to investors certain lease receivables, loan receivables and investment in securities. In the securitization process, the assets to be securitized (“the assets”) are sold to trusts and special-purpose entities that issue asset-backed beneficial interests and securities to the investors. From April 1, 2010, the Company and its subsidiaries have adopted Accounting Standards Update 2009-16 (ASC 860 (“Transfers and Servicing”)), which removed the exemption from consolidation previously given to QSPEs and any SPEs for securitizing financial assets have become subject to the consolidation rule for VIEs. As a result, trusts or SPEs used in securitization transactions including those that were previously considered to be QSPEs of which the Company and its subsidiaries are the primary beneficiary have been consolidated, and the transfers of the financial assets to those consolidated trusts and SPEs are not accounted for as sales. Assets held by consolidated trusts or consolidated SPEs continue to be accounted for as direct financing lease receivables, loan receivable and investment securities, as they were before the transfer, and asset-backed beneficial interests and securities issued to the investors are accounted for as debt. In case the Company and its subsidiaries have transferred financial assets to a transferee which is not subject to consolidation, the Company and its subsidiaries account for the transfer as a sale when control over the transferred assets is surrendered. A certain subsidiary originates and sells loans into the secondary market, while retaining the obligation to service those loans. In addition, it undertakes obligations to service loans originated by others. The subsidiary recognizes servicing assets if it expects the benefit of servicing to more than adequately compensate it for performing the servicing or recognizes servicing liabilities if it expects the benefit of servicing to less than adequately compensate it. These servicing assets and liabilities are initially recognized at fair value and subsequently accounted for using the amortization method whereby the assets and liabilities are amortized in proportion to and over the period of estimated net servicing income or net servicing loss. On a quarterly basis, servicing assets and liabilities are evaluated for impairment or increased obligations. The fair value of servicing assets and liabilities is estimated using an internal valuation model, or by obtaining an opinion of value from an independent third-party vendor. Both methods are based on calculating the present value of estimated future net servicing cash flows, taking into consideration discount rates, prepayments, and servicing costs. The internal valuation model is validated at least semiannually through third-party valuations. (k) Derivative financial instruments The Company and its subsidiaries apply ASC 815 (“Derivatives and Hedging”), and all derivatives held by the Company and its subsidiaries are recognized on the consolidated balance sheets at fair value. The accounting treatment of subsequent changes in their fair value depends on their use, and whether they qualify as effective “hedges” for accounting purposes. Derivatives that are not hedges must be adjusted to fair value through the consolidated statements of income. If a derivative is a hedge, then depending on its nature, changes in its fair value will be either offset against change in the fair value of hedged assets or liabilities through the consolidated statements of income, or recorded in other comprehensive income (loss). If a derivative is held as a hedge of the variability of fair value related to a recognized asset or liability or an unrecognized firm commitment (“fair value” hedge), changes in the fair value of the derivative are recorded in earnings along with the changes in the fair value of the hedged item. If a derivative is held as a hedge of the variability of cash flows related to a forecasted transaction or a recognized asset or liability (“cash flow” hedge), changes in the fair value of the derivative are recorded in other comprehensive income (loss) to the extent that the derivative is effective as a hedge, until earnings are affected by the variability in cash flows of the designated hedged item.
If a derivative is held as a hedge of a foreign-currency fair-value or cash-flow hedge (“foreign currency” hedge), changes in the fair value of the derivative are recorded in either earnings or other comprehensive income (loss), depending on whether the hedged transaction is a fair-value hedge or a cash-flow hedge. However, if a derivative is used as a hedge of a net investment in a foreign operation, changes in its fair value, to the extent effective as a hedge, are recorded in the foreign currency translation adjustments account within other comprehensive income (loss). Changes in the fair value of a derivative, which is not held as a hedge, such as those held for trading use, or the ineffective portion of the change in fair value of a derivative that qualifies as a hedge, are recorded in earnings. For all hedging relationships, at inception the Company and its subsidiaries formally document the details of the hedging relationship and hedged activity. The Company and its subsidiaries also formally assess, both at the hedge’s inception and on an ongoing basis, the effectiveness of the hedge relationship. The Company and its subsidiaries cease hedge accounting prospectively when the derivative no longer qualifies for hedge accounting. (l) Pension plans The Company and certain subsidiaries have contributory and non-contributory pension plans covering substantially all of their employees. The Company and its subsidiaries apply ASC 715 (“Compensation—Retirement Benefits”), and the costs of pension plans are accrued based on amounts determined using actuarial methods under the assumptions of discount rate, rate of increase in compensation level, expected long-term rate of return on plan assets and others. The Company and its subsidiaries also recognize the funded status of pension plans, measured as the difference between the fair value of plan assets and the benefit obligation, on the consolidated balance sheet. Changes in that funded status are recognized in the year in which the changes occur through other comprehensive income (loss), net of applicable income taxes. (m) Stock-based compensation The Company and its subsidiaries apply ASC 718 (“Compensation—Stock Compensation”). ASC 718 requires, with limited exception, that the cost of employee services received in exchange for an award of equity instruments be measured based on the grant-date fair value. The costs are recognized over the requisite employee service period. (n) Stock splits Stock splits implemented prior to October 1, 2001 had been accounted for by transferring an amount equivalent to the par value of the shares from additional paid-in capital to common stock as required by the Japanese Commercial Code (the “Code”) before amendment. However, no such reclassification was made for stock splits when common stock already included a portion of the proceeds from shares issued at a price in excess of par value. This method of accounting was in conformity with accounting principles generally accepted in Japan. As a result of a revision to the Code before amendment effective on October 1, 2001 and the Companies Act implemented on May 1, 2006, the above-mentioned method of accounting required by the Code has become unnecessary. In the United States, stock splits in comparable circumstances are considered to be stock dividends and are accounted for by transferring from retained earnings to common stock and additional paid-in capital amounts equal to the fair market value of the shares issued. Common stock is increased by the par value of the shares and additional paid-in capital is increased by the excess of the market value over par value of the shares issued. Had such stock splits made prior to October 1, 2001 been accounted for in this manner, additional paid-in capital as of December 31, 2011 would have increased by approximately ¥24,674 million, with a corresponding decrease in retained earnings. Total ORIX Corporation shareholders’ equity would remain unchanged. A stock split on May 19, 2000 was excluded from the above amounts because the stock split was not considered to be a stock dividend under U.S. GAAP. (o) Cash and cash equivalents Cash and cash equivalents include cash on hand, deposits placed with banks and short-term highly liquid investments with original maturities of three months or less. (p) Restricted cash Restricted cash consists of deposits related to servicing agreements, deposits collected on behalf of the customers and applied to non-recourse loans, trust accounts under securitization programs and others.
(q) Installment loans Certain loans, which the Company and its subsidiaries have the intent and ability to sell to outside parties in the foreseeable future, are considered held for sale and are carried at the lower of cost or market value determined on an individual basis, except loans held for sale for which the fair value option under ASC825-10 (“Financial Instruments—Fair Value Option”) were elected. A subsidiary elected the fair value option under ASC 825-10 (“Financial Instruments—Fair Value Option”) on its loans held for sale originated on or after October 1, 2011. The subsidiary enters into forward sale agreements to offset the change in the fair value of loans held for sale and the election of the fair value option allows the subsidiary to recognize both the change in the fair value of the loans and the change in the fair value of the forward sale agreements due to changes in interest rates in the same accounting period. These loans held for sale are included in installment loans and the outstanding balances of these loans as of March 31, 2011 and December 31, 2011 were ¥13,718 million and ¥8,896 million, respectively. All of loans held for sale as of December 31, 2011 are measured at fair value by electing the fair value option. (r) Other operating assets Other operating assets consist primarily of operating facilities (including golf courses, hotels, training facilities and senior housing), which are stated at cost less accumulated depreciation, and depreciation is calculated mainly on a straight-line basis over the estimated useful lives of the assets. Accumulated depreciation was ¥34,739 million and ¥37,826 million as of March 31, 2011 and December 31, 2011, respectively. (s) Other receivables Other receivables include primarily payments made on behalf of lessees for property tax, maintenance fees and insurance premiums in relation to direct financing lease contracts, accounts receivables in relation to sales of assets to be leased, residential condominiums and other assets, and derivative assets. (t) Inventories Inventories consist primarily of advance and/or progress payments for development of residential condominiums for sale and completed residential condominiums (including completed residential condominiums waiting to be delivered to buyers under the contracts for sale). Advance and/or progress payments for development of residential condominiums for sale are carried at cost less any impairment losses and finished goods (including completed residential condominiums) are stated at the lower of cost or market. As of March 31, 2011, and December 31, 2011, advance and/or progress payments were ¥96,197 million and ¥86,766 million, respectively, and finished goods were ¥12,213 million and ¥8,643 million, respectively. For the nine months ended December 31, 2010 and 2011, a certain subsidiary recorded ¥2,998 million and ¥1,833 million of write-downs principally for advance and/or progress payments for development of residential condominiums for sale, resulting from an increase in development costs and/or a decrease in expected sales price. The amounts of such write-downs for the three months ended December 31, 2010 and the three months ended December 31, 2011 were ¥2,548 million and ¥1,323 million, respectively. These write-downs were recorded in costs of real estate sales and included in the Real Estate segment. (u) Office facilities Office facilities are stated at cost less accumulated depreciation. Depreciation is calculated on a declining-balance basis or straight-line basis over the estimated useful lives of the assets. Accumulated depreciation was ¥39,057 million and ¥39,051 million as of March 31, 2011 and December 31, 2011, respectively. (v) Other assets Other assets consist primarily of the excess of purchase prices over the net assets acquired in acquisitions (goodwill) and other intangible assets (see (w)), deferred insurance policy acquisition costs which are amortized over the contract periods, leasehold deposits, advance payments made in relation to purchases of assets to be leased and to construction of real estate for operating lease, and deferred tax assets. (w) Goodwill and other intangible assets The Company and its subsidiaries have followed ASC 805 (“Business Combinations”) and ASC 350 (“Intangibles—Goodwill and Other”). ASC 805 requires that all business combinations be accounted for using the acquisition method. ASC 805 also requires that intangible assets acquired in a business combination be recognized apart from goodwill if the intangible assets meet one of two criteria—either the contractual-legal criterion or the separability criterion. ASC 350 establishes how intangible assets (other than those acquired in a business combination) should be accounted for upon acquisition. It also addresses how goodwill and other intangible assets should be accounted for subsequent to their acquisition. Both goodwill and intangible assets that have indefinite useful lives are not amortized but tested at least annually for impairment. The Company and its subsidiaries test the goodwill either at the operating segment level or one level below the operating segments. Intangible assets with finite lives are amortized over their useful lives and tested for impairment in accordance with ASC 360-10 (“Property, Plant, and Equipment—Impairment or Disposal of Long-Lived Assets”). The amount of goodwill is ¥94,790 million and ¥92,685 million as of March 31, 2011 and December 31, 2011, respectively. (x) Trade notes, accounts payable and other liabilities Trade notes, accounts payable and other liabilities include accounts payables, guarantee liabilities, and derivative liabilities. (y) Capitalization of interest costs The Company and its subsidiaries capitalized interest costs related to specific long-term development projects. (z) Advertising The costs of advertising are expensed as incurred. (aa) Discontinued operations The Company and its subsidiaries have followed ASC 205-20 (“Presentation of Financial Statements—Discontinued Operations”). Under ASC 205-20, the scope of discontinued operations includes the operating results of any component of an entity with its own identifiable operations and cash flow and in which operations the Company and its subsidiaries will not have significant continuing involvement. Included in reported discontinued operations are the operating results of operations for the subsidiaries, the business units and certain properties sold or to be disposed of by sale without significant continuing involvements, which results of operations for prior periods presented have also been reclassified as discontinued operations in the accompanying consolidated statements of income. (ab) Earnings per share Basic earnings per share is computed by dividing income attributable to ORIX Corporation from continuing operations and net income attributable to ORIX Corporation by the weighted average number of shares of common stock outstanding in each period and diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. Earnings per share is adjusted for any stock splits and stock dividends retroactively. Furthermore, the Company and its subsidiaries apply ASC 260-10-45-43 to 44 (“Earnings Per Share—Contingently Convertible Instruments”) to Liquid Yield Option NotesTM. (ac) Partial sale and additional acquisition of the parent’s ownership interest in subsidiaries A partial sale and an additional acquisition of the parent’s ownership interest in subsidiaries where the parent continues to retain control of that subsidiary are accounted for as equity transactions. On the other hand, in a transaction that results in the loss of control, the gain or loss recognized in income includes the realized gain or loss related to the portion of ownership interest sold and the gain or loss on the remeasurement to fair value of the interest retained. (ad) Redeemable noncontrolling interests Noncontrolling interest in certain subsidiaries are subject to call and put rights upon certain shareholder events. As redemption of the noncontrolling interest is not solely in the control of the subsidiary, it is recorded between Liabilities and Equity on the consolidated balance sheets at its estimated redemption value in accordance with provisions including EITF Topic No. D-98 (ASC 480-10-s99-3A) (“Classification and Measurement of Redeemable Securities”). (ae) Issuance of stock by an affiliate When an affiliate issues stocks to unrelated third parties, the Company and its subsidiaries’ ownership interest in the affiliate decreases. In the event that the price per share is more or less than the Company and its subsidiaries’ average carrying amount per share, the Company and its subsidiaries adjust the carrying amount of its investment in the affiliate and recognize gain or loss in the consolidated statements of income in the year in which the change in ownership interest occurs. (af) New accounting pronouncements In January 2010, Accounting Standards Update 2010-06 (“Improving Disclosures about Fair Value Measurements”—ASC 820 (“Fair Value Measurements and Disclosures”)) was issued. This Update improves existing disclosures and adds new disclosures. The Company and its subsidiaries adopted certain disclosure requirements in the roll forward of activity in Level 3 fair value measurements on April 1, 2011. The Company and its subsidiaries already adopted the other disclosure requirements in the period ended March 31, 2010. The adoption did not have a material effect on the Company and its subsidiaries’ results of operation or financial position. In July 2010, Accounting Standards Update 2010-20 (“Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses”—ASC 310 (“Receivables”)) was issued. This Update enhances disclosures about the credit quality of financing receivables and the allowance for credit losses, by requiring an entity to provide disaggregated information by portfolio segment or class of financing receivables, credit quality indicators, past due information, and information about modifications of its financing receivables, and other information. This Update requires the disclosures as of the end of a reporting period, and the disclosures about activity that occurs during a reporting period. The Company and its subsidiaries adopted the period-end disclosure requirements for the period ended December 31, 2010, and the activity disclosure requirements for the period beginning on April 1, 2011, respectively. This Update only relates to certain disclosure requirements and its adoption had no effect on the Company and its subsidiaries’ results of operations or financial position. In April 2011, Accounting Standards Update 2011-02 (“A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring”—ASC 310 (“Receivables”)) was issued. This Update clarifies the guidance on a creditor’s evaluation of whether a restructuring constitutes a troubled debt restructuring. Additionally, this Update requires entities to disclose certain information about troubled debt restructuring, which was deferred by the adoption of Accounting Standards Update 2011-01 (“Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in Update No.2010-20”—ASC 310 (“Receivables”)). The Company and its subsidiaries adopted this Update on July 1, 2011 and applied the amendments in this Update retrospectively to restructurings that occurred on or after April 1, 2011. The adoption did not have a material effect on the Company and its subsidiaries’ results of operations or financial position. In October 2010, Accounting Standards Update 2010-26 (“Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts”—ASC 944 (“Financial Services—Insurance”)) was issued. This Update modifies the current definition of the types of costs relating to the acquisition of new and renewal insurance contracts that can be deferred as deferred acquisition costs, and specifies that only certain costs related directly to the successful acquisition of new or renewal insurance contracts should be deferred. In accordance with the amendment in this Update, the advertising cost which does not meet certain capitalization criteria, and the cost relating to unsuccessful contract acquisition should be charged to expense as incurred. The Update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2011 and should be applied prospectively. Retrospective application to all prior periods presented upon the date of adoption, and early adoption are permitted. 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 and financial position. In December 2010, Accounting Standards Update 2010-28 (“When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts”—ASC 350 (“Goodwill and Other”)) was issued. This Update modifies Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For these reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. Any resulting goodwill impairment should be recorded as a cumulative effect adjustment to beginning retained earnings in the period of adoption. Any goodwill impairments occurring after the initial adoption of the Update should be included in earnings. The Company and its subsidiaries adopted this Update on April 1, 2011. The adoption did not have a material effect on the Company and its subsidiaries’ results of operations or financial position. In December 2010, Accounting Standards Update 2010-29 (“Disclosure of Supplementary Pro Forma Information for Business Combinations”—ASC 805 (“Business Combinations”)) was issued. This Update specifies that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The Company and its subsidiaries adopted this Update on April 1, 2011. This Update only relates to certain disclosure requirements and its adoption had no effect on the Company and its subsidiaries’ results of operations or financial position. In May 2011, Accounting Standards Update 2011-04 (“Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”—ASC 820 (“Fair Value Measurement”)) was issued. This Update is intended to result in a consistent definition of fair value and common requirements for measuring fair value and for disclosures about fair value between U.S. GAAP and IFRSs. Consequently, this Update changes some fair value measurement principles and enhances the disclosure requirements. The Update is effective for interim and annual periods beginning after December 15, 2011. Early application is not permitted. The adoption will not have a significant effect on the Company and its subsidiaries’ results of operations or financial position.
In June 2011, Accounting Standards Update 2011-05 (“Presentation of Comprehensive Income”—ASC220 (“Comprehensive Income”)) was issued. Under this Update, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. The Update does not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. The Update does not change the option for an entity to present components of other comprehensive income either net of related tax effects or before related tax effects. The Update does not affect how earnings per share is calculated or presented. In December 2011, Accounting Standards Update 2011-12 (Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No.2011-05) was issued. This Update defers the effective date for certain amendments in Accounting Standards Update 2011-05 which require an entity to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income. These Updates are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 and should be applied retrospectively. Early adoption is permitted. These Updates only relate to certain disclosure requirements and their adoption will have no effect on the Company and its subsidiaries’ results of operations or financial position. In September 2011, Accounting Standards Update 2011-08 (“Testing Goodwill for Impairment”—ASC350 (“Intangibles—Goodwill and Other ”) ) was issued. This Update permits an entity to assess qualitative factor to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount including goodwill before performing the two-step goodwill impairment test. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is not required. The Update is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted. The adoption of this Update will not have a significant effect on the Company and its subsidiaries’ results of operations or financial position. In December 2011, Accounting Standards Update 2011-10 (“Derecognition of in Substance Real Estate—a Scope Clarification”—ASC 360 (“Property, Plant, and Equipment”)) was issued. This Update is intended to resolve the diversity in practice and clarifies that when a parent (reporting entity) ceases to have a controlling financial interest in a subsidiary that is in substance real estate as a result of default on the subsidiary’s non-recourse debt, the reporting entity should apply the guidance in ASC 360-20 (“Property, Plant, and Equipment—Real Estate Sales”) to determine whether it should derecognize the in substance real estate. The Update is effective for fiscal years, and interim periods within those years, beginning on or after June 15, 2012. Early application is permitted. Generally, the effect of adopting this Update on the Company and its subsidiaries’ results of operations or financial position of this Update will depend on future transactions. In December 2011, Accounting Standards Update 2011-11 (“Disclosures about Offsetting Assets and Liabilities”—ASC 210 (“Balance Sheet”)) was issued. This Update requires all entities that have financial instruments and derivative instruments that are either offset in the balance sheet or subject to an enforceable master netting arrangement or similar agreement to disclose information about offsetting and related arrangements. The Update is effective for fiscal years, and interim periods within those years, beginning on or after January 1, 2013. The Update only relates to certain disclosure requirements and its adoption will have no effect on the Company and its subsidiaries’ results of operations or financial position. |
Total Other-Than-Temporary Impairment with an Offset for the Amount of the Total Other-Than-Temporary Impairment Recognized in Other Comprehensive Income (Loss) (Detail) (JPY ¥)
In Millions, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
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Dec. 31, 2011
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Dec. 31, 2010
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Dec. 31, 2011
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Dec. 31, 2010
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Schedule of Gain (Loss) on Investments, Including Marketable Securities and Investments Held at Cost, Income Statement, Reported Amounts, Summary [Line Items] | ||||
Total other-than-temporary impairment losses | ¥ 3,370 | ¥ 6,149 | ¥ 10,463 | ¥ 18,136 |
Portion of loss recognized in other comprehensive income (before taxes) | (134) | (115) | (598) | (206) |
Net impairment losses recognized in earnings | ¥ 3,236 | ¥ 6,034 | ¥ 9,865 | ¥ 17,930 |