Income Taxes (Tables)

12 Months Ended

Mar. 31, 2024

Income Tax Disclosure [Abstract]

Income before Income Taxes and Provision for Income Taxes

Income before income taxes and the provision for income taxes in fiscal 2022, 2023 and 2024 are as follows:

	Millions of yen
	2022			2023		2024
Income before income taxes:
Japan	¥	315,922		¥	201,168	¥	298,321
Overseas		193,525			191,010		171,654
	¥	509,447		¥	392,178	¥	469,975
Provision for income taxes:
Current—
Japan	¥	136,623		¥	30,808	¥	80,274
Overseas		38,433			27,490		31,114
		175,056			58,298		111,388
Deferred—
Japan		(1,301	)		22,047		9,049
Overseas		12,839			14,900		10,951
		11,538			36,947		20,000
Provision for income taxes	¥	186,594		¥	95,245	¥	131,388

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 income tax rate of 31.5%, the aggregate statutory income tax rate of the Company’s tax domicile, and the consolidated provision for income taxes in fiscal 2022, 2023 and 2024 are as follows:

	Millions of yen
	2022			2023			2024
Income before income taxes	¥	509,447		¥	392,178		¥	469,975
Tax provision computed at the statutory rate	¥	160,476		¥	123,536		¥	148,042
Increases (reductions) in taxes due to:
Change in valuation allowance		11,464			2,533			5,441
Nondeductible expenses		4,066			4,794			4,762
Nontaxable income		(2,611	)		(3,347	)		(3,574	)
Effect of lower tax rates on certain subsidiaries		(18,694	)		(19,764	)		(17,627	)
Effect of investor taxes on earnings of subsidiaries		8,155			4,789			7,674
Effect of sale or liquidation of subsidiaries		25,642			(16,754	)		(14,995	)
Other, net		(1,904	)		(542	)		1,665
Provision for income taxes	¥	186,594		¥	95,245		¥	131,388

Total Income Tax Expense Recognized

Total income tax expense recognized in fiscal 2022, 2023 and 2024 was allocated as follows:

	Millions of yen
	2022			2023			2024
Provision for income taxes	¥	186,594		¥	95,245		¥	131,388
Income tax expense (benefit) allocated to other comprehensive income (loss):
Net change of unrealized gains (losses) on investment in securities		(21,897	)		(41,961	)		(27,157	)
Net change of impact of changes in policy liability discount rate		23,126			43,576			32,471
Net change of debt valuation adjustments		(131	)		20			(74	)
Net change of defined benefit pension plans		4,889			1,630			5,554
Net change of foreign currency translation adjustments		(17,347	)		(17,325	)		(30,992	)
Net change of unrealized gains (losses) on derivative instruments		4,734			3,514			(1,523	)
Adjustments to retained earnings for changes in accounting principles*		(4,511	)		0			0
Other direct adjustments to shareholders’ equity		214			36			32
Total income tax expense	¥	175,671		¥	84,735		¥	109,699

* The amount for fiscal 2022 reflects the tax effect of the adoption of Accounting Standards Update 2019-12 (“Simplifying the Accounting for Income Taxes”—ASC 740 (“Income Taxes”)), and Accounting Standards Update 2018-12 (“Targeted Improvements to the Accounting for Long-Duration Contracts”—ASC 944 (“Financial Services—Insurance”).

Deferred Tax Assets and Liabilities

The tax effects of temporary differences and carryforwards giving rise to the deferred tax assets and liabilities as of March 31, 2023 and 2024 are as follows:

	Millions of yen
	2023			2024
Assets:
Net operating loss carryforwards	¥	59,516		¥	62,493
Allowance for credit losses		16,382			8,650
Investment in securities		10,515			14,382
Accrued expenses		25,735			26,401
Investment in operating leases		14,999			12,728
Property under facility operations		24,615			24,996
Installment loans		5,445			5,459
Unrealized losses on investment in securities		71,277			98,025
Lease liabilities		79,636			69,697
Other*		103,210			156,516
		411,330			479,347
Less: valuation allowance		(37,287	)		(39,046	)
		374,043			440,301
Liabilities:
Net investment in leases		10,599			10,867
Investment in operating leases		137,618			175,727
Unrealized gains on investment in securities		4,779			9,139
Deferred insurance policy acquisition costs		80,706			85,830
Policy liabilities and policy account balances		150,137			194,713
Property under facility operations		22,022			22,615
Other intangible assets		141,864			152,125
Undistributed earnings		74,935			95,720
Prepaid benefit cost		17,290			23,473
Advances paid		8,346			8,102
Right-of-use assets		78,631			68,715
Other		27,887			31,946
		754,814			878,972
Net deferred tax liability	¥	380,771		¥	438,671

* As of March 31, 2023 and 2024, other deferred tax assets includes amounts related to net investment hedges of ¥52,262 million and ¥95,551 million.

Net Deferred Tax Assets and Liabilities

Net deferred tax assets and liabilities at March 31, 2023 and 2024 are reflected in the accompanying consolidated balance sheets under the following captions:

	Millions of yen
	2023		2024
Other assets	¥	48,292	¥	66,519
Income taxes: Deferred		429,063		505,190
Net deferred tax liability	¥	380,771	¥	438,671

Net Operating Loss Carryforwards Expire Date

The Company and certain subsidiaries have net operating loss carryforwards of ¥440,411 million at March 31, 2024, which expire as follows:

Years ending March 31,	Millions of yen
2025	¥	17,610
2026		23,722
2027		10,222
2028		4,238
2029		31,118
Thereafter		280,775
Indefinite period		72,726
Total	¥	440,411