Income Taxes (Tables)

12 Months Ended

Mar. 31, 2018

Income before Income Taxes and Provision for Income Taxes

Income before income taxes and the provision for income taxes in fiscal 2016, 2017 and 2018 are as follows:


	Millions of yen
	2016		2017		2018
Income before income taxes:
Japan	¥	228,527	¥	302,995	¥	296,577
Overseas		162,775		121,970		138,924

	¥	391,302	¥	424,965	¥	435,501

Provision for income taxes:
Current—
Japan	¥	34,866	¥	85,963	¥	85,514
Overseas		42,918		32,758		22,810

		77,784		118,721		108,324

Deferred—
Japan		34,315		20,859		5,960
Overseas		8,213		4,459		(372	)

		42,528		25,318		5,588

Provision for income taxes	¥	120,312	¥	144,039	¥	113,912

Reconciliations of Differences between Tax Provision Computed and Consolidated Provisions for Income Taxes

Reconciliations of the differences between the tax provision computed at the statutory rate and the consolidated provision for income taxes in fiscal 2016, 2017 and 2018 are as follows:


	Millions of yen
	2016			2017			2018
Income before income taxes	¥	391,302		¥	424,965		¥	435,501

Tax provision computed at statutory rate	¥	131,086		¥	134,714		¥	138,054
Increases (reductions) in taxes due to:
Change in valuation allowance*		(1,547	)		57			(6,971	)
Nondeductible expenses		2,277			4,550			3,000
Nontaxable income		(3,767	)		(3,504	)		(4,464	)
Effect of lower tax rates on certain subsidiaries		(3,593	)		(2,780	)		(5,713	)
Effect of investor taxes on earnings of subsidiaries		5,279			8,650			3,831
Effect of the tax rate change related to the new tax law		(7,468	)		1,219			(16,232	)
Other, net		(1,955	)		1,133			2,407

Provision for income taxes	¥	120,312		¥	144,039		¥	113,912

*	In fiscal 2016, decreases in the valuation allowance of ¥12 million due to the amendment to tax loss carryforward rules related to the new Japanese tax law are included in “Change in valuation allowance” in the table above.

Total Income Tax Recognized

Total income taxes recognized in fiscal 2016, 2017 and 2018 are as follows:


	Millions of yen
	2016			2017			2018
Provision for income taxes	¥	120,312		¥	144,039		¥	113,912
Income taxes on other comprehensive income (loss):
Net unrealized gains (losses) on investment in securities		(6,003	)		(6,293	)		(11,084	)
Defined benefit pension plans		(2,954	)		2,582			(911	)
Foreign currency translation adjustments		(2,921	)		(8,576	)		(1,517	)
Net unrealized gains (losses) on derivative instruments		(1,696	)		229			139
Direct adjustments to shareholders’ equity		(2	)		(1	)		(2	)

Total income taxes	¥	106,736		¥	131,980		¥	100,537

Deferred Tax Assets and Liabilities

The tax effects of temporary differences giving rise to the deferred tax assets and liabilities at March 31, 2017 and 2018 are as follows:


	Millions of yen
	2017			2018
Assets:
Net operating loss carryforwards	¥	62,953		¥	27,144
Allowance for doubtful receivables on direct financing leases and probable loan losses		13,997			12,984
Investment in securities		13,778			8,650
Accrued expenses		25,973			20,729
Investment in operating leases		16,613			15,400
Property under facility operations		12,299			11,048
Installment loans		6,063			5,916
Other		56,625			53,300

		208,301			155,171
Less: valuation allowance		(43,487	)		(14,676	)

		164,814			140,495
Liabilities:
Investment in direct financing leases		11,217			11,503
Investment in operating leases		90,310			92,243
Unrealized gains (losses) on investment in securities		14,554			4,957
Deferred insurance policy acquisition costs		42,984			49,982
Policy liabilities and policy account balances		57,748			54,202
Property under facility operations		9,610			10,596
Other intangible assets		107,804			99,999
Undistributed earnings		93,021			89,311
Prepaid benefit cost		9,389			9,290
Other		34,325			34,520

		470,962			456,603

Net deferred tax liability	¥	306,148		¥	316,108

Net deferred tax assets and liabilities at March 31, 2017 and 2018 are reflected in the accompanying consolidated balance sheets under the following captions:


	Millions of yen
	2017		2018
Other assets	¥	45,680	¥	32,041
Income taxes: Deferred		351,828		348,149

Net deferred tax liability	¥	306,148	¥	316,108

Net Operating Loss Carryforwards Expire Date

The Company and certain subsidiaries have net operating loss carryforwards of ¥293,622 million at March 31, 2018, which expire as follows:


Year ending March 31,	Millions of yen
2019	¥	21,807
2020		12,618
2021		23,499
2022		18,174
2023		41,048
Thereafter		137,300
Indefinite period		39,176

Total	¥	293,622