Form 6-K
Table of Contents

 

 

FORM 6-K

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

Commission File Number: 1-15270

Supplement for the month of April 2008.

 

 

NOMURA HOLDINGS, INC.

(Translation of registrant’s name into English)

 

 

9-1, Nihonbashi 1-chome

Chuo-ku, Tokyo 103-8645

Japan

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F      X            Form 40-F              

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):              

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):              

Indicate by check mark whether by furnishing the information contained in this Form, the registrant 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    

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-            .

 

 

 


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Information furnished on this form:

EXHIBIT

 

Exhibit Number

1.   Financial Highlights – Year ended March 2008


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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.

 

  NOMURA HOLDINGS, INC.
Date: April 28, 2008   By:  

/s/ Toshio Hirota

    Toshio Hirota
    Executive Managing Director


Table of Contents

Financial Summary For the Year Ended March 31, 2008 (US GAAP)

 

Date:   April 25, 2008
Company name (code number):   Nomura Holdings, Inc. (8604)
Stock exchange listings:   (In Japan) Tokyo, Osaka, Nagoya
  (Overseas) New York, Singapore
Representative:   Kenichi Watanabe
  President and Chief Executive Officer, Nomura Holdings, Inc.
For inquiries:   Tomoyuki Funabiki
  Managing Director, Investor Relations Department, Nomura Holdings, Inc.
  Tel: (Country Code 81) 3-5255-1000
  URL http://www.nomura.com

1. Consolidated Operating Results

(1) Operating Results

 

      For the year ended March 31  
     2008     2007  
     (Yen amounts in millions, except per share data)  
           % Change from
March 31, 2007
       

Total revenue

   1,593,722     (22.2 )%   2,049,101  

Net revenue

   787,257     (27.8 )%   1,091,101  

Income (loss) before income taxes

   (64,588 )   —       321,758  

Net income (loss)

   (67,847 )   —       175,828  

Basic net income (loss) per share

   (35.55 )     92.25  

Diluted net income (loss) per share

   (35.57 )     92.00  

Net income to shareholders’ equity (ROE)

   (3.3 )%     8.3 %

Income before income taxes to total assets (ROA)

   (0.2 )%     0.9 %

Income before income taxes divided by total revenue

   (4.1 )%     15.7 %

Equity in earnings of affiliates

   10,416       53,367  

(2) Financial Position

 

     At March 31  
     2008     2007  
     (Yen amounts in millions, except per share data)  

Total assets

   26,298,798     35,873,374  

Shareholders’ equity

   1,988,124     2,185,919  

Shareholders’ equity as a percentage of total assets

   7.6 %   6.1 %

Shareholders’ equity per share

   1,042.60     1,146.23  

(3) Cash flows

 

     For the year ended March 31  
     2008     2007  
     (Yen amounts in millions)  

Net cash used in operating activities

   (647,906 )   (1,627,156 )

Net cash used in investing activities

   (102,019 )   (533,813 )

Net cash provided by financing activities

   942,879     1,568,703  

Cash and cash equivalents at end of period

   507,236     410,028  

2. Cash dividends

 

     For the year ended March 31
     2007     2008     2009 (Plan)
     (Yen amounts, except Total annual dividends)

Target dividends per share See note 1

      

dividends record dates

      

At June 30

   8.00     8.50     8.50

At September 30

   8.00     8.50     8.50

At December 31

   8.00     8.50     8.50

At March 31

   8.00     8.50     8.50

Additional payout based on the level of profit See note 2

      

At March 31

   12.00     —       Unconfirmed

Total at March 31

   20.00     8.50     Unconfirmed

For the year

   44.00     34.00     34.00

Total annual dividends (Yen amounts in millions)

   83,939     64,921     —  

Consolidated payout ratio

   47.7 %   —       —  

Consolidated dividends as a percentage of shareholders’ equity per share

   3.9 %   3.1 %   —  

Note:

1. Target dividends are minimum level of cash dividends.
2. When Nomura achieves a sufficient level of profit, additional dividend will be added to its annual target dividends per share taking into consideration the consolidated payout ratio of over 30%.

3. Earnings forecasts for the year ending March 31, 2009

Nomura provides investment, financing and related services in the capital markets on a global basis. In the global capital markets there exist uncertainties due to, but not limited to, economic and market conditions. Nomura, therefore, does not present earnings forecasts.

 

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4. Other

 

(1) Significant changes to consolidated subsidiaries during the period : None

Note: Please refer to page 14 “Organizational Structure” for details.

 

(2) Changes in accounting basis, procedure and presentation for the consolidated financial statements

The items described in “Significant changes for presenting the consolidated financial statements”.

a) Changes in accounting principles : Yes

b) Other changes : None

Note: Please refer to page 23 “Note 1. Summary of accounting policies” for details.

 

(3) Number of shares issued (common stock)

 

     At March 31
     2008    2007

Number of shares outstanding (including treasury stock)

   1,965,919,860    1,965,919,860

Treasury stock

   57,886,944    57,730,371

Note:

1. Treasury stock represents the number of share owned by Parent Company.
2. Please refer to page 24 “Note 2. Per share data” for the number of shares used in basic net income per share calculation.

Parent Company Only Operating Results (Japanese GAAP)

(1) Operating Results

 

     For the year ended March 31
     2008     2007
     (Yen amounts in millions, except per share data)
          % Change from
March 31, 2007
     

Operating revenue

   419,649    23.1 %   340,886

Operating income

   244,380    19.0 %   205,358

Ordinary income

   246,231    18.8 %   207,221

Net profit

   53,985    (65.9 )%   158,235

Net profit per share

   28.27      82.97

Fully diluted net profit per share

   28.07      82.59

(2) Financial Position

 

     At March 31  
     2008     2007  
     (Yen amounts in millions, except per share data)  

Total assets

   4,449,810     4,438,039  

Total net assets

   1,423,661     1,475,328  

Total net assets as a percentage of total assets

   31.7 %   33.2 %

Total net assets per share

   740.17     772.51  

Shareholders’ equity

   1,412,260     1,474,104  

 

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Financial Summary for the Fiscal Year Ended March 31, 2008

Results of Operations

US GAAP Figures

 

     Billions of yen     % Change  
     For the year ended     (%)  
     March 31, 2008
(2007.4.1~

2008.3.31)
(A)
    March 31, 2007
(2006.4.1~

2007.3.31)
(B)
    (A-B)/(B)  

Net revenue

   787.3     1,091.1     (27.8 )

Non-interest expenses

   851.8     769.3     10.7  
                  

Income (loss) before income taxes

   (64.6 )   321.8     —    

Income tax expense

   3.3     145.9     (97.8 )
                  

Net income (loss)

   (67.8 )   175.8     —    
                  

Return on equity (ROE)

   (3.3 )%   8.3 %   —    
                  

Nomura Holdings, Inc. and its consolidated entities (“Nomura”) reported net revenue of 787.3 billion yen for the fiscal year ended March 31, 2008, a decrease of 27.8% from the previous year, and non-interest expenses of 851.8 billion yen, a 10.7% year-on-year increase. Loss before income taxes was 64.6 billion yen, while net loss was 67.8 billion yen. As a result, ROE for the full year was minus 3.3%.

Total of business segments

 

     Billions of yen    % Change  
     For the year ended    (%)  
     March 31, 2008
(2007.4.1~

2008.3.31)
(A)
    March 31, 2007
(2006.4.1~

2007.3.31)
(B)
   (A-B)/(B)  

Net revenue

   837.4     1,057.7    (20.8 )

Non-interest expenses

   851.8     680.5    25.2  
                 

Income (loss) before income taxes

   (14.4 )   377.3    —    
                 

In business segment totals, which exclude unrealized gains (losses) on investments in equity securities held for operating purposes, net revenue for the year ended March 31, 2008, decreased 20.8% from the prior year to 837.4 billion yen. Non-interest expenses increased 25.2% year-on-year to 851.8 billion yen, and loss before income taxes was 14.4 billion yen. Nomura engages in private equity investing through its Global Merchant Banking division. Nomura’s US GAAP consolidated financial information for the fiscal year ended March 31, 2007, includes the effect of consolidation/deconsolidation of certain private equity investee companies1. Please refer to page 25 for an explanation of the differences between US GAAP and business segment values.

 

1 The above amounts reflect retrospective application of Statement of Position 07-1, “Clarification of the Scope of the Audit and Accounting Guide—Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies” for the year ended March 31, 2008.

 

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Income (loss) before income taxes by business segment

 

     Billions of yen    % Change  
     For the year ended    (%)  
     March 31, 2008
(2007.4.1~

2008.3.31)
(A)
    March 31, 2007
(2006.4.1~

2007.3.31)
(B)
   (A-B)/(B)  

Domestic Retail

   122.3     160.9    (24.0 )

Global Markets

   (226.2 )   58.8    —    

Global Investment Banking

   22.8     44.4    (48.7 )

Global Merchant Banking

   53.3     52.8    1.0  

Asset Management

   31.0     36.5    (15.0 )
                 

Sub Total

   3.2     353.3    (99.1 )

Other

   (17.6 )   23.9    —    
                 

Income (loss) before income taxes

   (14.4 )   377.3    —    
                 

In Domestic Retail, income before income taxes decreased 24.0% from the previous year to 122.3 billion yen. The overall market slump triggered by turmoil in the global financial markets led to a drop off in stock subscriptions and purchases as well as weaker sales of investment trusts during the second half of the year, resulting in a decline in brokerage commissions and commissions for distribution of investment trusts. Distribution of newly-launched investment trusts remained robust, especially for bond investment trusts. Sales of structured bonds declined as a result of the rapid rise of the yen, leading to lower sales credit. However, sales of foreign currency bonds were strong in the second half of the year. Although Domestic Client Assets1 declined by 13 trillion yen from the prior year to 72.2 trillion yen due to the impact of the downturn in the stock market, our client base steadily expanded with net asset inflow of 4.9 trillion yen and an increase of 213 thousand accounts with balance to a total of 4.165 million accounts.

In Global Markets, loss before income taxes was 226.2 billion yen. The environment in Fixed Income remained harsh as a global credit crunch sparked by subprime problems hit and the yen appreciated sharply. Amid this environment, Fixed Income revenue declined as a result of significantly increased provisions made for transactions with monoline insurers, a realized loss booked on our exit from the US RMBS-related business, and a realized and unrealized loss in the US CMBS-related business. In Equity, although trading revenue from MPOs and credit derivatives declined, revenue increased as Instinet, which was acquired in February 2007, contributed to revenue, order flow for non-Japanese equities expanded, and trading of listed equities contributed to revenue. Meanwhile, expenses increased due to the acquisition of Instinet.

Global Investment Banking income before income taxes was 22.8 billion yen, a 48.7% decline from the prior year. While the M&A-related business remained strong and we maintained our high market share, revenue decreased due to a marked decline in overall transaction value in the equity finance market. In equity financing, we acted as lead manager on major deals for Sony Financial Holdings and Yamada Denki, and ranked number one in the Global Equity and Equity-related (Japan) league table2 for the seventh straight year in fiscal 2007.

In M&A, we acted as financial advisor on All Nippon Airways’ sale of its hotel business and the tender offer by Japan Tobacco for Katokichi. We topped the fiscal 2007 Any Japanese Involvement Financial Advisor M&A league table3. Internationally, we were global coordinator on Russia’s largest-ever IPO for PIK Group, a major Russian residential property developer.

  

 

2 Domestic Client Assets refers to the sum of assets under custody in the Domestic Retail segment (including regional financial institutions) and the Financial Management Division.

3

Source: Thomson Financial

 

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Global Merchant Banking income before income taxes increased 1.0% year-on-year to 53.3 billion yen. We booked realized and unrealized gains on the sale of Deutsche Annington and valuation at fair value of Annington in the UK, both investee companies of Terra Firma, as well as on the sale of our stake in Nomura Principal Finance investee companies Sliontec and Wanbishi Archives.

Asset Management income before income taxes declined 15.0% from the prior year to 31 billion yen. Firm sales of newly-launched funds, such as the Nomura New Global High Interest Rate Currencies Fund, and existing balanced funds, such as the My Story Profit Distribution-type Course B Fund, as well as new mandates in the domestic and overseas investment advisory business, helped boost assets under management. However, deteriorating market conditions due to the slump in stock prices and appreciation of the yen led to a 1.2 trillion yen decline in the outstanding balance of assets under management from the prior year to 25.8 trillion yen.

Although asset management fees increased, unrealized losses were booked on pilot funds and seed money for new product development and revenue was flat compared to the prior year, which included realized gains booked on sales of affiliated companies. Compensation and benefits were up due to increased headcount and information technology expenses increased due to new investment.

Loss before income taxes in Other was 17.6 billion yen. Total loss before income taxes for all business segments was 14.4 billion yen.

 

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Financial Position

Total assets as of March 31, 2008, were 26.3 trillion yen, a decrease of 9.6 trillion yen compared to March 31, 2007, reflecting primarily a decrease in Collateralized agreements and Trading assets. Total liabilities as of March 31, 2008, were 24.3 trillion yen, a decrease of 9.4 trillion yen compared to March 31, 2007, mainly due to a decrease in Collateralized financing. Total shareholders’ equity at March 31, 2008, was 2.0 trillion yen, a decrease of 198 billion yen compared to March 31, 2007, mainly due to a decrease in Retained earnings.

Cash and cash equivalents as of March 31, 2008, increased by 97 billion yen compared to March 31, 2007. During the fiscal year ended on March 31, 2008, Net cash used in operating activities amounted to 648 billion yen mainly due to an increase in Securities purchased under agreements to resell net of securities sold under agreements to repurchase, an increase in Securities borrowed net of securities loaned, and an increase in Loans and receivables net of allowance. Net cash used in investing activities during the period was 102 billion yen, mainly due to Payments for purchase of office buildings, land, equipment and facilities. Net cash provided by financing activities during the period was 943 billion yen mainly due to an increase in long term and short term borrowings.

 

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Financial Summary for the Three Months Ended March 31, 2008

Results of Operations

US GAAP Figures

 

     Billions of yen     % Change     Billions of yen     % Change  
     For the three months ended     (%)     For the three months ended     (%)  
     March 31, 2008
(2008.1.1~
2008.3.31)

(A)
    December 31, 2007
(2007.10.1~
2007.12.31)

(B)
    (A-B)/(B)     March 31, 2007
(2007.1.1~
2007.3.31)
(C)
    (A-C)/(C)  

Net revenue

   21.5     244.3     (91.2 )   311.3     (93.1 )

Non-interest expenses

   219.8     199.9     10.0     228.1     (3.6 )
                              

Income (loss) before income taxes

   (198.3 )   44.4     —       83.2     —    

Income tax expense

   (44.5 )   22.6     —       50.1     —    
                              

Net income (loss)

   (153.9 )   21.8     —       33.1     —    
                              

Return on equity (ROE, annualized)

   (29.2 )%   3.9 %   —       6.0 %   —    
                              

Nomura reported net revenue of 21.5 billion yen for the three months ended March 31, 2008, a 91.2% decrease from the previous quarter and a 93.1% decline compared to the prior-year fourth quarter. Non-interest expenses increased 10.0% from the previous quarter and decreased 3.6% compared to the same period last year, to 219.8 billion yen. Loss before income taxes was 198.3 billion yen, while net loss was 153.9 billion yen. As a result, ROE for the fourth quarter was minus 29.2%.

Total of business segments

 

     Billions of yen    % Change     Billions of yen    % Change  
     For the three months ended    (%)     For the three months ended    (%)  
     March 31, 2008
(2008.1.1~
2008.3.31)
(A)
    December 31, 2007
(2007.10.1~

2007.12.31)
(B)
   (A-B)/(B)     March 31, 2007
(2007.1.1~
2007.3.31)
(C)
   (A-C)/(C)  

Net revenue

   38.5     251.4    (84.7 )   283.6    (86.4 )

Non-interest expenses

   219.8     199.9    10.0     202.3    8.6  
                            

Income (loss) before income taxes

   (181.4 )   51.5    —       81.2    —    
                            

In business segment totals, which exclude unrealized gains (losses) on investments in equity securities held for operating purposes, net revenue for the three months ended March 31, 2008, decreased 84.7% from the third quarter and 86.4% from the same period last year to 38.5 billion yen. Non-interest expenses increased 10.0% from the prior quarter and 8.6% year-on-year to 219.8 billion yen, and loss before income taxes was 181.4 billion yen. Nomura engages in private equity investing through its Global Merchant Banking division. Nomura’s US GAAP consolidated financial information for the fiscal year ended March 31, 2007, includes the effect of consolidation/deconsolidation of certain private equity investee companies4. Please refer to page 36 for an explanation of the differences between US GAAP and business segment values.

 

4 The above amounts reflect retrospective application of Statement of Position 07-1, “Clarification of the Scope of the Audit and Accounting Guide—Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies” for the year ended March 31, 2008.

 

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Income (loss) before income taxes by business segments

 

     Billions of yen     % Change     Billions of yen      % Change  
     For the three months ended     (%)     For the three months ended      (%)  
     March 31, 2008
(2008.1.1~

2008.3.31)
(A)
    December 31, 2007
(2007.10.1~

2007.12.31)
(B)
    (A-B)/(B)     March 31, 2007
(2007.1.1~
2007.3.31)
(C)
     (A-C)/(C)  

Domestic Retail

   11.1     28.5     (61.2 )   43.3      (74.5 )

Global Markets

   (208.9 )   24.4     —       23.9      —    

Global Investment Banking

   0.2     5.7     (95.9 )   11.6      (98.0 )

Global Merchant Banking

   20.1     (12.3 )   —       (5.2 )    —    

Asset Management

   2.5     8.6     (71.2 )   8.0      (68.9 )
                               

Sub Total

   (175.1 )   54.9     —       81.7      —    

Other

   (6.3 )   (3.4 )   —       (0.5 )    —    
                               

Income (loss) before income taxes

   (181.4 )   51.5     —       81.2      —    
                               

Fourth quarter income (loss) before income taxes was 11.1 billion yen in Domestic Retail, down 61.2% from the third quarter and 74.5% lower than the same period last year; minus 208.9 billion yen in Global Markets; 235 million yen in Global Investment Banking, down 95.9% from the third quarter and 98.0% from the same period last year; 20.1 billion yen in Global Merchant Banking; and 2.5 billion yen in Asset Management, down 71.2% from the third quarter and 68.9% from the same period last year.

Loss before income taxes in Other was 6.3 billion yen. Total loss before income taxes for all business segments was 181.4 billion yen.

 

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Business Segment Results for the Three Months Ended March 31, 2008

Operating Results of Domestic Retail

 

     Billions of yen    % Change  
     For the three months ended    (%)  
     March 31, 2008
(2008.1.1~
2008.3.31)
(A)
   December 31, 2007
(2007.10.1~
2007.12.31)
(B)
   (A-B)/(B)  

Net revenue

   78.5    98.4    (20.2 )

Non-interest expenses

   67.5    69.9    (3.5 )
                

Income (loss) before income taxes

   11.1    28.5    (61.2 )
                

Net revenue decreased 20.2% from the previous quarter to 78.5 billion yen. Non-interest expenses decreased 3.5% to 67.5 billion yen. Income before income taxes was 11.1 billion yen, down 61.2% compared to the prior quarter.

Domestic Client Assets5 declined by 9.1 trillion yen from the end of December to 72.2 trillion yen due to the downturn in the stock market. However, net asset inflow remained steady at 700 billion yen, while the number of accounts with balance increased to 4.165 million.

Turmoil in the global financial markets led to slower sales of investment trusts and structured bonds, causing commissions for distribution of investment trusts, investment trust administration fees and other, and sales credit to decline. Moreover, stock brokerage commissions fell due to an overall market decline in equity transaction value from individual investors.

Operating Results of Global Markets

 

     Billions of yen    % Change  
     For the three months ended    (%)  
     March 31, 2008
(2008.1.1~
2008.3.31)
(A)
    December 31, 2007
(2007.10.1~
2007.12.31)

(B)
   (A-B)/(B)  

Net revenue

   (133.3 )   103.2    —    

Non-interest expenses

   75.6     78.8    (4.0 )
                 

Income (loss) before income taxes

   (208.9 )   24.4    —    
                 

Net revenue was minus 133.3 billion yen. Non-interest expenses decreased 4.0% to 75.6 billion yen. Loss before income taxes was 208.9 billion yen.

Fixed Income booked a significant loss in the fourth quarter due to increased credit provisions for transactions with monoline insurers and unrealized losses in the US CMBS-related business as a result of the dislocation in the credit markets.

In Equity, despite strong revenue at Instinet, net revenue declined due primarily to weak trading on the back of the slump in the stock market.

 

5

Domestic Client Assets refers to the sum of assets under custody in the Domestic Retail segment (including regional financial institutions) and the Financial Management Division.

 

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Operating Results of Global Investment Banking

 

     Billions of yen    % Change  
     For the three months ended    (%)  
     March 31, 2008
(2008.1.1~
2008.3.31)
(A)
   December 31, 2007
(2007.10.1~
2007.12.31)
(B)
   (A-B)/(B)  

Net revenue

   14.8    20.8    (28.7 )

Non-interest expenses

   14.6    15.0    (3.1 )
                

Income (loss) before income taxes

   0.2    5.7    (95.9 )
                

Net revenue decreased 28.7% from the previous quarter to 14.8 billion yen. Non-interest expenses declined 3.1% to 14.6 billion yen, while income before income taxes declined 95.9% to 235 million yen.

The slump in the domestic stock market continued during the fourth quarter and the overall market for equity finance declined further. In spite of this, we acted as lead manager on a number of major deals including a recapitalization convertible bond issued for recapitalization by Yamada Denki and the IPO of Seven Bank. As such, we retained our high market share and topped the Global Equity and Equity-related (Japan) league table6 for fiscal 2007 fourth quarter.

In M&A, we were financial advisor on the tender offer by Fujifilm Holdings for Toyama Chemical and topped the fiscal 2007 fourth quarter Any Japanese Involvement Financial Advisor M&A league table6.

Operating Results of Global Merchant Banking

 

     Billions of yen     % Change
     For the three months ended     (%)
     March 31, 2008
(2008.1.1~
2008.3.31)
(A)
   December 31, 2007
(2007.10.1~

2007.12.31)
(B)
    (A-B)/(B)

Net revenue

   23.1    (10.2 )   —  

Non-interest expenses

   3.0    2.1     40.7
               

Income (loss) before income taxes

   20.1    (12.3 )   —  
               

Net revenue was 23.1 billion yen, primarily due to an unrealized gain on the valuation at fair value of Terra Firma investee company Annington. Non-interest expenses increased by 40.7% from the previous quarter to 3 billion yen. Income before income taxes was 20.1 billion yen.

 

6

Source: Thomson Financial

 

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Operating Results of Asset Management

 

     Billions of yen    % Change  
     For the three months ended    (%)  
     March 31, 2008
(2008.1.1~

2008.3.31)
(A)
   December 31, 2007
(2007.10.1~

2007.12.31)
(B)
   (A-B)/(B)  

Net revenue

   17.3    23.2    (25.3 )

Non-interest expenses

   14.8    14.6    1.7  
                

Income (loss) before income taxes

   2.5    8.6    (71.2 )
                

Net revenue decreased 25.3% from the previous quarter to 17.3 billion yen, non-interest expenses increased 1.7% to 14.8 billion yen, and income before income taxes decreased 71.2% to 2.5 billion yen.

The concerns over global credit markets, the downturn in the stock market, and the sharp appreciation of the yen compounded to push sales of investment trusts down to a low level. As a result, the outstanding balance of assets under management declined by 3.9 trillion yen from the end of December to 25.8 trillion yen. In addition, unrealized losses were booked on pilot funds and seed money used in the development of new products.

Other Operating Results

 

     Billions of yen     % Change
     For the three months ended     (%)
     March 31, 2008
(2008.1.1~
2008.3.31)
(A)
    December 31, 2007
(2007.10.1~

2007.12.31)
(B)
    (A-B)/(B)

Net revenue

   38.0     15.9     138.4

Non-interest expenses

   44.3     19.4     128.9
                

Income (loss) before income taxes

   (6.3 )   (3.4 )   —  
                

Net revenue in Other increased 138.4% from the prior quarter to 38.0 billion yen. Loss before income taxes was 6.3 billion yen.

 

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Non-interest Expenses (Segment Total)

 

     Billions of yen    % Change  
     For the three months ended    (%)  
     March 31, 2008
(2008.1.1~

2008.3.31)
(A)
   December 31, 2007
(2007.10.1~
2007.12.31)
(B)
   (A-B)/(B)  

Compensation and benefits

   78.4    93.4    (16.0 )

Commissions and floor brokerage

   24.5    20.4    20.3  

Information processing and communications

   37.2    33.9    9.9  

Occupancy and related depreciation

   19.5    14.3    37.0  

Business development expenses

   10.0    9.5    5.8  

Other

   50.1    28.5    75.7  
                

Non-Interest Expenses

   219.8    199.9    10.0  
                

Business segment non-interest expenses increased 10.0% from the previous quarter to 219.8 billion yen.

 

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Table of Contents

Nomura’s Capital Management

Capital Management Policy

Nomura seeks to enhance shareholder value by capturing business opportunities as they develop. To achieve this goal, Nomura maintains sufficient capital to support its business. Nomura reviews its sufficiency of capital as appropriate, taking into consideration economic risks inherent in its businesses, regulatory requirements, and maintenance of a sufficient debt rating for a global financial institution.

Dividend

In regard to cash dividends, Nomura first decides target dividend amounts, minimum level of cash dividend, taking into account the firm’s dividend-on-equity ratio (DOE) of about 3%. When Nomura achieves a sufficient level of profit, it will decide the amount of the year-end cash dividend taking into consideration a pay-out ratio of over 30%. Nomura seeks to ensure sustainable growth of its target dividend in the medium to long term. As for retained profits, Nomura intends to invest in business areas where high profitability and growth may reasonably be expected, including development and expansion of infrastructure, to maximize value for shareholders.

Stock Repurchase

Nomura repurchases shares when it recognizes the need to set out flexible financial strategies that allow the Board to respond quickly to changes in the business environment. When Nomura decides to set up a share buyback program, the firm will announce the decision soon after it is made and purchase the shares following internal guidelines.

The annual dividend for the current fiscal year is 34 yen per share, in line with Nomura’s capital management policy.

Nomura provides investment, financing and services in the capital markets on a global basis. In the global capital markets there exist uncertainties due to, but not limited to, economic and market conditions. Nomura, therefore, does not present earnings forecasts and dividend forecasts.

 

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Table of Contents

Organizational Structure

Nomura Holdings, Inc. and its consolidated subsidiaries, with a core of broker-dealer business, provide a wide range of investment, financing and related services to customers on a global basis. The services we provide include trading, underwriting, and offering securities, asset management services, and others.

The following table lists Nomura Holdings, Inc. and its significant subsidiaries, affiliates or equity-method investments.

 

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Table of Contents

Nomura Holdings, Inc.

Domestic Subsidiaries

Nomura Securities Co., Ltd.

Nomura Asset Management Co., Ltd.

The Nomura Trust & Banking Co., Ltd.

Nomura Babcock & Brown Co., Ltd.

Nomura Capital Investment Co., Ltd.

Nomura Investor Relations Co., Ltd.

Nomura Principal Finance Co., Ltd.

Nomura Funds Research and Technologies Co., Ltd.

Nomura Pension Support & Service Co., Ltd.

Nomura Research & Advisory Co., Ltd.

Nomura Business Services Co., Ltd.

Nomura Facilities, Inc.

Nomura Institute of Capital Markets Research

Joinvest Securities Co., Ltd.

Nomura Healthcare Co., Ltd.

Private Equity Funds Research and Investments Co., Ltd.

Overseas Subsidiaries

Nomura Holding America Inc.

Nomura Securities International, Inc.

Nomura Corporate Research and Asset Management Inc.

Nomura Derivative Products, Inc.

Nomura Global Financial Products, Inc.

Nomura America Mortgage Finance, LLC

Nomura Europe Holdings plc

Nomura International plc

Nomura Bank International plc

Banque Nomura France

Nomura Bank (Luxembourg) S.A.

Nomura Bank (Deutschland) GmbH

Nomura Bank (Switzerland) Ltd.

Nomura Italia S.I.M. p.A.

Nomura Investment Banking (Middle East) B.S.C. (Closed)

Nomura Funding Facility Corporation Limited

Nomura Global Funding plc

Nomura Europe Finance N.V.

Nomura Principal Investment plc

Nomura Capital Markets plc

NHI Acquisition Holding Inc.

Instinet Incorporated

Nomura Asia Holding N.V.

Nomura International (Hong Kong) Limited

Nomura Singapore Limited

Nomura Malaysia Sdn. Bhd.

Nomura Australia Limited

PT Nomura Indonesia

Affiliates

Nomura Research Institute, Ltd.

JAFCO Co., Ltd.

Nomura Land and Building Co., Ltd.

Capital Nomura Securities Public Company Limited

 

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Table of Contents

Corporate Goals and Principles

Fundamental Management Policy

Nomura Group is committed to a management vision of firmly establishing itself as a globally competitive financial services group. We have also set a management target of maintaining an average consolidated return on equity (ROE) of 10% to 15% on a consolidated basis over the medium to long term.

In pursuing this vision, we put our clients first and contribute to the creation of an affluent society based on investment by listening closely to the needs of our clients and delivering superior investment services and high value added solutions via the financial and capital markets. We aim to go beyond the boundaries of the traditional securities business to take the lead in expanding into new business areas, and thereby construct new growth models, diversify our sources of earnings, and achieve a profit structure resilient to changes in the market environment. In addition, we will promote compliance with applicable laws, regulations and ensure proper corporate behavior.

Structure of Business Operations

Nomura Group is organized around globally-linked business divisions under a unified strategy, rather than individual legal entities. Nomura Group’s operations are comprised of Domestic Retail, Global Markets, Global Investment Banking, Global Merchant Banking and Asset Management. We will strive to achieve a higher level of specialization in each division, advance and progress our business in each respective area, and maximize the collective strength of Nomura Group by enhancing collaboration between business divisions.

Management Challenges and Strategies

The outlook of the global economy is becoming increasingly clouded due to an adjustment in the U.S. housing market. That said, the Asian economy remains robust on the whole. Credit tightening triggered by subprime issues has compounded with this economic environment, causing continued instability in the global financial and capital markets, and the business environment is expected to remain unfavorable.

In this environment, we aim to realize our management vision and continue growing by thoroughly understanding client trends and needs, anticipating risks, and developing new business. To do so, we will implement the following initiatives to address the current challenges we face.

In Domestic Retail, we will enhance collaboration between branch offices, online services and call centers to create a seamless service network and provide customers with the most suitable products and services. We aim to continue being a trusted partner for our clients by promptly providing products and services that meet their individual needs.

 

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Table of Contents

Global Market will be the product supply hub for Nomura Group and provide high value-added products and solutions by enhancing product development expertise in areas such as derivatives and by making full use of Instinet’s global trading infrastructure. In the fixed income business, we will rebuild our global structure in order to strengthen our business with global clients. In the equity business, we aim to establish ourselves as a bulge bracket firm in the pan-Asian equity brokerage business, while maintaining our dominance in the Japanese market.

In Global Investment Banking, we will expand our M&A advisory and corporate financing businesses by providing high value-added solutions in line with each client’s individual needs. We aim to expand our presence globally as the competitive investment bank in Asia, while expanding our business based on the Japanese market. In other words, our aim is to establish ourselves as the representative investment bank of Asia and to be recognized as the investment bank that provides the best services in Asia.

In Global Merchant Banking, we aim at further growth as one of the largest private equity firms in Japan by improving the enterprise value of companies we invest in. In Asia and Europe, we intend to maximize the value of our investments by pursuing operations suitable to the distinct characteristics of each region and utilizing the resources of the Group.

In Asset Management, we aim to further enhance our investment capabilities globally and increase competitiveness especially in Japan and Asia. In Japan, we intend to be recognized increasingly by individual investors and institutional investors and to raise our brand value through the diversification of the investment opportunities we can offer and the expansion of our sales channels. Internationally, we will increase assets under management by meeting the needs for investment in Japan and Asia.

In addressing the challenges and implementing the strategies outlined above, we will bring together the collective strengths of our domestic and international operations to expand and develop financial and capital markets, while also increasing profitability across Nomura Group to realize our management vision and maximize shareholder value.

 

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NOMURA HOLDINGS, INC.

CONSOLIDATED INCOME STATEMENT INFORMATION

(UNAUDITED)

 

     Millions of yen     % Change  
     For the year ended        
     March 31, 2008
(A)
    March 31, 2007
(B)
    (A-B)/(B)  

Revenue:

      

Commissions

   404,659     337,458     19.9  

Fees from investment banking

   85,096     99,276     (14.3 )

Asset management and portfolio service fees

   189,712     145,977     30.0  

Net gain on trading

   61,720     290,008     (78.7 )

Gain on private equity investments

   76,505     47,590     60.8  

Interest and dividends

   796,540     981,344     (18.8 )

(Loss) gain on investments in equity securities

   (48,695 )   (20,103 )   —    

Private equity entities product sales

   —       100,126     —    

Other

   28,185     67,425     (58.2 )
                  

Total revenue

   1,593,722     2,049,101     (22.2 )

Interest expense

   806,465     958,000     (15.8 )
                  

Net revenue

   787,257     1,091,101     (27.8 )
                  

Non-interest expenses :

      

Compensation and benefits

   366,805     345,936     6.0  

Commissions and floor brokerage

   90,192     50,812     77.5  

Information processing and communications

   135,004     109,987     22.7  

Occupancy and related depreciation

   64,841     61,279     5.8  

Business development expenses

   38,135     38,106     0.1  

Private equity entities cost of goods sold

   —       57,184     —    

Other

   156,868     106,039     47.9  
                  
   851,845     769,343     10.7  
                  

Income (loss) before income taxes

   (64,588 )   321,758     —    

Income tax expense

   3,259     145,930     (97.8 )
                  

Net income (loss)

   (67,847 )   175,828     —    
                  

Per share of common stock:

      
     Yen     % Change  

Basic-

      

Net income (loss)

   (35.55 )   92.25     —    
                  

Diluted-

      

Net income (loss)

   (35.57 )   92.00     —    
                  

 

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NOMURA HOLDINGS, INC.

CONSOLIDATED BALANCE SHEET INFORMATION

(UNAUDITED)

 

     Millions of yen  
     March 31,
2008
    March 31,
2007
    Increase/(Decrease)  

ASSETS

      

Cash and cash deposits:

      

Cash and cash equivalents

   507,236     410,028     97,208  

Time deposits

   758,130     546,682     211,448  

Deposits with stock exchanges and other segregated cash

   168,701     97,302     71,399  
                  
   1,434,067     1,054,012     380,055  
                  

Loans and receivables:

      

Loans receivable

   784,262     935,711     (151,449 )

Receivables from customers

   43,623     47,518     (3,895 )

Receivables from other than customers

   1,045,541     637,209     408,332  

Allowance for doubtful accounts

   (1,399 )   (2,027 )   628  
                  
   1,872,027     1,618,411     253,616  
                  

Collateralized agreements:

      

Securities purchased under agreements to resell

   3,233,200     8,061,805     (4,828,605 )

Securities borrowed

   7,158,167     9,776,422     (2,618,255 )
                  
   10,391,367     17,838,227     (7,446,860 )
                  

Trading assets and private equity investments*:

      

Trading assets

   10,325,760     12,830,826     (2,505,066 )

Private equity investments

   330,745     347,394     (16,649 )
                  
   10,656,505     13,178,220     (2,521,715 )
                  

Other assets:

      

Office buildings, land, equipment and facilities (net of accumulated depreciation and amortization of ¥260,910 million at March 31, 2008 and ¥249,592 million at March 31, 2007, respectively)

   389,151     422,290     (33,139 )

Non-trading debt securities*

   246,108     255,934     (9,826 )

Investments in equity securities*

   139,330     195,238     (55,908 )

Investments in and advances to affiliated companies*

   361,334     441,536     (80,202 )

Other

   808,909     869,506     (60,597 )
                  
   1,944,832     2,184,504     (239,672 )
                  

Total assets

   26,298,798     35,873,374     (9,574,576 )
                  

 

* Including securities pledged as collateral

 

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NOMURA HOLDINGS, INC.

CONSOLIDATED BALANCE SHEET INFORMATION

(UNAUDITED)

 

     Millions of yen  
     March 31,
2008
    March 31,
2007
    Increase/(Decrease)  
LIABILITIES AND SHAREHOLDERS’ EQUITY       

Short-term borrowings

   1,426,266     1,093,529     332,737  

Payables and deposits:

      

Payables to customers

   396,629     304,462     92,167  

Payables to other than customers

   569,294     623,143     (53,849 )

Deposits received at banks

   362,775     418,250     (55,475 )
                  
   1,328,698     1,345,855     (17,157 )
                  

Collateralized financing:

      

Securities sold under agreements to repurchase

   4,298,872     11,874,697     (7,575,825 )

Securities loaned

   3,753,730     7,334,086     (3,580,356 )

Other secured borrowings

   2,488,129     1,390,473     1,097,656  
                  
   10,540,731     20,599,256     (10,058,525 )
                  

Trading liabilities

   5,154,369     4,800,403     353,966  

Other liabilities

   636,184     845,522     (209,338 )

Long-term borrowings

   5,224,426     5,002,890     221,536  
                  

Total liabilities

   24,310,674     33,687,455     (9,376,781 )
                  

Shareholders’ equity:

      

Common stock

      

Authorized - 6,000,000,000 shares

      

Issued - 1,965,919,860 shares at March 31, 2008 and March 31, 2007, respectively

      

Outstanding - 1,906,885,059 shares at March 31, 2008 and 1,907,049,871 shares at March 31, 2007

   182,800     182,800     —    

Additional paid-in capital

   177,227     165,496     11,731  

Retained earnings

   1,779,783     1,910,978     (131,195 )

Accumulated other comprehensive income

   (71,111 )   6,613     (77,724 )
                  
   2,068,699     2,265,887     (197,188 )

Common stock held in treasury, at cost -

      

59,034,801 shares and 58,869,989 shares at March 31, 2008 and March 31, 2007, respectively

   (80,575 )   (79,968 )   (607 )
                  

Total shareholders’ equity

   1,988,124     2,185,919     (197,795 )
                  

Total liabilities and shareholders’ equity

   26,298,798     35,873,374     (9,574,576 )
                  

 

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NOMURA HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(UNAUDITED)

 

     Millions of yen  
     For the year ended  
     March 31,
2008
    March 31,
2007
 

Common stock

    

Balance at beginning of year

   182,800     182,800  
            

Balance at end of year

   182,800     182,800  
            

Additional paid-in capital

    

Balance at beginning of year

   165,496     159,527  

Loss on sales of treasury stock

   (1,458 )   (556 )

Issuance of common stock options

   13,189     6,525  
            

Balance at end of year

   177,227     165,496  
            

Retained earnings

    

Balance at beginning of year

   1,910,978     1,819,037  

Net income

   (67,847 )   175,828  

Cash dividends

   (64,883 )   (83,887 )

Adjustments to initially apply FIN 48

   1,266     —    

Adjustments to initially apply EITF 06-2

   (1,119 )   —    

Adjustments to initially apply SOP 07-1

   2,049     —    

Loss on sales of treasury stock

   (661 )   —    
            

Balance at end of year

   1,779,783     1,910,978  
            

Accumulated other comprehensive income

    

Cumulative translation adjustments

    

Balance at beginning of year

   36,889     (1,129 )

Net change during the year

   (65,305 )   38,018  
            

Balance at end of year

   (28,416 )   36,889  
            

Defined benefit pension plans

    

Balance at beginning of year

   (30,276 )   (14,096 )

Pension liability adjustment

   (12,419 )   (387 )

Adjustments to initially apply SFAS 158(1)

   —       (15,793 )
            

Balance at end of year

   (42,695 )   (30,276 )
            

Balance at end of year

   (71,111 )   6,613  
            

Common stock held in treasury

    

Balance at beginning of year

   (79,968 )   (82,812 )

Repurchases of common stock

   (3,525 )   (204 )

Sale of common stock

   85     25  

Common stock issued to employees

   2,862     2,910  

Other net change in treasury stock

   (29 )   113  
            

Balance at end of year

   (80,575 )   (79,968 )
            

Total shareholders’ equity

    

Balance at end of year

   1,988,124     2,185,919  
            

 

(1) For the initial year of application, the adjustments are not reflected on the consolidated comprehensive income.

Note: Reclassifications -

Certain prior period amounts have been reclassified to conform to the current period presentation.

 

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NOMURA HOLDINGS, INC.

CONSOLIDATED INFORMATION OF CASH FLOWS

(UNAUDITED)

 

     Millions of yen  
     For the year ended  
     March 31,
2008
    March 31,
2007
 

Cash flows from operating activities:

    

Net (loss) income

   (67,847 )   175,828  

Adjustments to reconcile net (loss) income to net cash used in operating activities:

    

Depreciation and amortization

   63,463     50,432  

Loss on investments in equity securities

   48,695     20,103  

Changes in operating assets and liabilities:

    

Time deposits

   (314,240 )   24,395  

Deposits with stock exchanges and other segregated cash

   (82,817 )   (30,186 )

Trading assets and private equity investments

   1,790,764     1,039,123  

Trading liabilities

   841,065     (1,986,980 )

Securities purchased under agreements to resell, net of securities sold under agreements to repurchase

   (2,562,836 )   1,243,337  

Securities borrowed, net of securities loaned

   (1,036,076 )   (177,234 )

Other secured borrowings

   1,097,679     (1,612,879 )

Loans and receivables, net of allowance

   (599,995 )   95,843  

Payables

   347,224     (154,665 )

Other, net

   (172,985 )   (314,273 )
            

Net used in operating activities

   (647,906 )   (1,627,156 )
            

Cash flows from investing activities:

    

Payments for purchases of office buildings, land, equipment and facilities

   (126,285 )   (101,784 )

Proceeds from sales of office buildings, land, equipment and facilities

   15,621     634  

Payments for purchases of investments in equity securities

   (615 )   (9,284 )

Proceeds from sales of investments in equity securities

   7,887     25,109  

Decrease (increase) in loans receivable at banks, net

   14,042     (73,611 )

Decrease (increase) in non-trading debt securities, net

   2,665     (37,861 )

Other, net

   (15,334 )   (337,016 )
            

Net cash used in investing activities

   (102,019 )   (533,813 )
            

Cash flows from financing activities:

    

Increase in long-term borrowings

   2,425,393     2,736,688  

Decrease in long-term borrowings

   (1,722,644 )   (1,451,500 )

Increase in short-term borrowings, net

   386,048     377,788  

(Decrease) increase in deposits received at banks, net

   (57,756 )   17,947  

Proceeds from sales of common stock

   828     2,379  

Payments for repurchases of common stock

   (3,525 )   (204 )

Payments for cash dividends

   (86,866 )   (114,395 )

Proceeds from issuances of stock by a subsidiary

   1,401     —    
            

Net cash provided by financing activities

   942,879     1,568,703  
            

Effect of initial adoption of SOP 07-1 on cash and cash equivalents

   (38,427 )   —    

Effect of exchange rate changes on cash and cash equivalents

   (57,319 )   10,333  
            

Net increase (decrease) in cash and cash equivalents

   97,208     (581,933 )

Cash and cash equivalents at beginning of the period

   410,028     991,961  
            

Cash and cash equivalents at end of the period

   507,236     410,028  
            

 

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NOMURA HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION

(UNAUDITED)

 

1. Summary of accounting policies:

Basis of presentation—

The consolidated financial information herein has been prepared in accordance with Nomura’s accounting policies which are disclosed in the notes of Nomura Holdings, Inc.’s Annual Securities Report (the annual report filed in Japan on June 28, 2007) and Form 20-F (the annual report filed with the U.S. Securities and Exchange Commission on July 12, 2007) for the year ended March 31, 2007.

Presentations of significant changes in accounting principles are as follows:

Accounting for uncertainty in income taxes —

Nomura adopted Financial Accounting Standards Board (“FASB”) Interpretation No.48, “Accounting for Uncertainty in Income Taxes — an Interpretation of FASB Statement No. 109” on April 1, 2007. In accordance with this standard, the adjusted amount due to the initial adoption was recorded in the retained earnings.

Accounting for sabbatical leave and other similar benefits —

Nomura adopted FASB Emerging Issues Task Force (“EITF”) Issue No.06-2, “Accounting for Sabbatical Leave and Other Similar Benefits Pursuant to FASB Statement No.43” on April 1, 2007. In accordance with this standard, the adjusted amount due to the initial adoption was recorded in the retained earnings.

Accounting for Investment companies —

Nomura early adopted Statement of Position 07-1, “Clarification of the Scope of the Audit and Accounting Guide—Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies” (“SOP 07-1”) issued by the AICPA in June 2007. SOP 07-1 addresses whether the accounting principles of the Audit and Accounting Guide for Investment Companies should be applied to an entity by clarifying the definition of an investment company, and whether those accounting principles should be retained by a parent company in consolidation or by an investor in the application of the equity method of accounting. All investments made by investment companies within the scope of the guide are carried at fair value, with changes in fair value recognized through earnings. SOP 07-1 also addresses if adoption of the SOP was made in other than the first interim period of the year of change, the change is reported by retrospective application to the previous interim periods of the year. Therefore Nomura adopted the SOP as of April 1, 2007 and the adjusted amount due to the initial adoption was recorded in the retained earnings as of the beginning of the year.

 

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2. Per share data

Shareholders’ equity per share is calculated based on the following number of shares.

 

Number of shares outstanding (March 31, 2008)

   1,906,885,059

Net income (loss) per share is calculated based on the following number of shares.

 

Average number of shares outstanding (March 31, 2008)

   1,908,399,176

 

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3. Segment Information-Operating segment:

The following table shows business segment information and reconciliation items to the consolidated income statement information.

 

(1) Net revenue

 

     Millions of yen     % Change  
     For the year ended        
     March 31,
2008 (A)
    March 31,
2007 (B)
    (A-B)/(B)  
      

Business segment information:

      

Domestic Retail

   402,018     440,118     (8.7 )

Global Markets

   95,597     290,028     (67.0 )

Global Investment Banking

   83,109     99,187     (16.2 )

Global Merchant Banking

   64,793     64,969     (0.3 )

Asset Management

   90,641     90,106     0.6  
                  

Sub Total

   736,158     984,408     (25.2 )

Other

   101,268     73,338     38.1  
                  

Net revenue

   837,426     1,057,746     (20.8 )
                  

Reconciliation items:

      

Unrealized gain (loss) on investments in equity securities held for operating purposes

   (50,169 )   (38,232 )   —    

Effect of consolidation/deconsolidation of certain private equity investee companies

   —       71,587     —    
                  

Net revenue

   787,257     1,091,101     (27.8 )
                  

 

(2)    Non-interest expenses

 

                  

Business segment information:

      

Domestic Retail

   279,702     279,253     0.2  

Global Markets

   321,794     231,222     39.2  

Global Investment Banking

   60,336     54,783     10.1  

Global Merchant Banking

   11,473     12,153     (5.6 )

Asset Management

   59,652     53,649     11.2  
                  

Sub Total

   732,957     631,060     16.1  

Other

   118,888     49,397     140.7  
                  

Non-interest expenses

   851,845     680,457     25.2  
                  

Reconciliation items:

      

Unrealized gain (loss) on investments in equity securities held for operating purposes

   —       —       —    

Effect of consolidation/deconsolidation of certain private equity investee companies

   —       88,886     —    
                  

Non-interest expenses

   851,845     769,343     10.7  
                  

 

(3)    Income (loss) before income taxes

 

                  

Business segment information:

      

Domestic Retail

   122,316     160,865     (24.0 )

Global Markets

   (226,197 )   58,806     —    

Global Investment Banking

   22,773     44,404     (48.7 )

Global Merchant Banking

   53,320     52,816     1.0  

Asset Management

   30,989     36,457     (15.0 )
                  

Sub Total

   3,201     353,348     (99.1 )

Other *

   (17,620 )   23,941     —    
                  

Income (loss) before income taxes

   (14,419 )   377,289     —    
                  

Reconciliation items:

      

Unrealized gain (loss) on investments in equity securities held for operating purposes

   (50,169 )   (38,232 )   —    

Effect of consolidation/deconsolidation of certain private equity investee companies

   —       (17,299 )   —    
                  

Income (loss) before income taxes

   (64,588 )   321,758     —    
                  

 

* Major components

Transactions between operating segments are recorded within segment results on commercial terms and conditions and are eliminated in “Other.”

The following table presents the major components of income (loss) before income taxes in “Other.”

 

     Millions of yen     % Change  
     For the year ended        
     March 31,
2008 (A)
    March 31,
2007 (B)
    (A-B)/(B)  

Net gain/loss on trading related to economic hedging transactions

   (9,740 )   (38,383 )   —    

Realized gain on investments in equity securities held for operating purposes

   1,474     18,129     (91.9 )

Equity in earnings of affiliates

   4,743     53,169     (91.1 )

Corporate items

   (13,424 )   (11,111 )   —    

Others

   (673 )   2,137     —    
                  

Total

   (17,620 )   23,941     —    
                  

 

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4. Other:

The consolidated financial information herein does not include all footnotes required under US GAAP.

 

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Supplemental Consolidated Financial Information

(Unaudited)

This supplemental information (unaudited) contains the following items, where “After Retrospective Application” information are amounts which reflect retrospective application of Statement of Position 07-1, “Clarification of the Scope of the Audit and Accounting Guide—Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies” (“SOP 07-1”) and “Before Retrospective Application” information are amounts which were reported previously without application of SOP 07-1.

 

   

1Q, 2Q and 3Q Cumulative Results Summary of Difference between amounts “After Retrospective Application” and amounts “Before Retrospective Application”

 

   

1Q, 2Q and 3Q Cumulative Results (“After Retrospective Application” and “Before Retrospective Application”)

- Consolidated Income Statement

- Consolidated Balance Sheets

- Consolidated Statements of Changes in shareholder’s Equity

- Consolidated Cash Flows

- Business Segment

 

   

Quarterly Results (“After Retrospective Application”)

- Consolidated Income Statement

- Business Segment

 

   

Commissions/fees received and Net gain on trading (“After Retrospective Application”)

 

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NOMURA HOLDINGS, INC.

CONSOLIDATED INCOME STATEMENT INFORMATION

(UNAUDITED)

 

     in Yen millions, except per share data  
     As of or For
the three months ended
June 30, 2007
    As of or For
the six months ended
September 30, 2007
    As of or For
the nine months ended
December 31, 2007
 
        

Net income:

      

As previously reported

   76,742     66,226     88,872  

Adjustment

   (804 )   (1,995 )   (2,866 )
                  

As adjusted

   75,938     64,231     86,006  
                  

Total assets:

      

As previously reported

   37,368,364     29,333,718     26,106,403  

Adjustment

   (118,309 )   (162,415 )   (164,675 )
                  

As adjusted

   37,250,055     29,171,303     25,941,728  
                  

Shareholder’s equity:

      

As previously reported

   2,284,350     2,233,928     2,234,581  

Adjustment

   (547 )   (1,372 )   (1,581 )
                  

As adjusted

   2,283,803     2,232,556     2,233,000  
                  

Basic earnings per share:

      

As previously reported

   40.22     34.70     46.57  

Adjustment

   (0.42 )   (1.04 )   (1.51 )
                  

Revised basic earnings per share

   39.80     33.66     45.06  
                  

Diluted earnings per share:

      

As previously reported

   40.09     34.59     46.42  

Adjustment

   (0.42 )   (1.04 )   (1.50 )
                  

Revised basic earnings per share

   39.67     33.55     44.92  
                  

The above table sets forth difference between “After Retrospective Application” amounts which reflect retrospective application of Statement of Position 07-1, “Clarification of the Scope of the Audit and Accounting Guide—Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies” (“SOP 07-1”) and “Before Retrospective Application” amounts which were reported previously without application of SOP 07-1.

 

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NOMURA HOLDINGS, INC.

CONSOLIDATED INCOME STATEMENT INFORMATION

(UNAUDITED)

The following table contains “After Retrospective Application” information which are amounts reflecting retrospective application of Statement of Position 07-1, “Clarification of the Scope of the Audit and Accounting Guide—Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies” (“SOP 07-1”) and “Before Retrospective Application” information which were amounts reported previously without application of SOP 07-1.

 

    After Retrospective Application     Before Retrospective Application  
    Millions of yen     Millions of yen  
    For the three months
ended
June 30,
2007
    For the six months
ended
September 30,
2007
    For the nine months
ended
December 31,
2007
    For the three months
ended
June 30,
2007
    For the six months
ended
September 30,
2007
    For the nine months
ended
December 31,
2007
 
             

Revenue:

           

Commissions

  112,953     219,836     323,270     112,962     219,849     323,291  

Fees from investment banking

  29,890     46,066     66,406     29,890     46,066     66,406  

Asset management and portfolio service fees

  47,311     98,221     145,857     47,311     98,221     145,857  

Net gain on trading

  99,767     108,436     173,526     99,683     107,215     172,322  

Gain on private equity investments

  46,159     52,933     49,946     45,819     63,652     58,988  

Interest and dividends

  294,783     540,695     717,975     294,697     540,731     717,509  

(Loss) gain on investments in equity securities

  (540 )   (24,756 )   (31,733 )   (540 )   (24,756 )   (31,733 )

Private equity entities product sales

  —       —       —       36,479     70,827     104,679  

Other

  16,309     25,940     22,496     16,400     25,355     22,594  
                                   

Total revenue

  646,632     1,067,371     1,467,743     682,701     1,147,160     1,579,913  

Interest expense

  301,830     545,869     701,988     301,964     546,223     702,882  
                                   

Net revenue

  344,802     521,502     765,755     380,737     600,937     877,031  
                                   

Non-interest expenses :

           

Compensation and benefits

  100,653     195,023     288,384     105,571     203,223     300,350  

Commissions and floor brokerage

  22,684     45,263     65,658     23,011     46,351     65,842  

Information processing and communications

  29,188     63,907     97,776     29,332     64,204     98,226  

Occupancy and related depreciation

  15,917     31,048     45,306     17,442     33,879     49,584  

Business development expenses

  8,811     18,677     28,132     9,597     20,061     30,192  

Private equity entities cost of goods sold

  —       —       —       22,899     44,118     64,932  

Other

  27,609     78,232     106,757     30,051     92,727     125,448  
                                   
  204,862     432,150     632,013     237,903     504,563     734,574  
                                   

Income before income taxes

  139,940     89,352     133,742     142,834     96,374     142,457  

Income tax expense

  64,002     25,121     47,736     66,092     30,148     53,585  
                                   

Net income

  75,938     64,231     86,006     76,742     66,226     88,872  
                                   

Per share of common stock:

           
    Yen     Yen  

Basic-

           

Net income

  39.80     33.66     45.06     40.22     34.70     46.57  
                                   

Diluted-

           

Net income

  39.67     33.55     44.92     40.09     34.59     46.42  
                                   
    (%)     (%)  

Net income to shareholders’ equity (ROE)

  13.6     5.8     5.2     13.7     6.0     5.4  
                                   

 

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NOMURA HOLDINGS, INC.

CONSOLIDATED INCOME STATEMENT INFORMATION

(UNAUDITED)

The following table contains “After Retrospective Application” information which are amounts reflecting retrospective application of Statement of Position 07-1, “Clarification of the Scope of the Audit and Accounting Guide—Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies” (“SOP 07-1”) and “Before Retrospective Application” information which were amounts reported previously without application of SOP 07-1.

 

     After Retrospective Application     Before Retrospective Application  
     Millions of yen     Millions of yen  
     June 30,
2007
    September 30,
2007
    December 31,
2007
    June 30,
2007
     September 30,
2007
     December 31,
2007
 

ASSETS

              

Cash and cash deposits:

              

Cash and cash equivalents

   389,787     622,310     628,182     429,774      660,404      662,633  

Time deposits

   505,411     945,879     702,402     515,757      955,859      706,982  

Deposits with stock exchanges and other segregated cash

   135,119     147,505     120,711     135,119      147,505      120,711  
                                      
   1,030,317     1,715,694     1,451,295     1,080,650      1,763,768      1,490,326  
                                      

Loans and receivables:

              

Loans receivable

   1,261,531     964,092     902,962     1,261,701      964,214      903,084  

Receivables from customers

   39,040     34,354     38,233     39,040      34,354      38,233  

Receivables from other than customers

   737,389     1,232,553     917,802     770,737      1,262,415      950,818  

Allowance for doubtful accounts

   (1,752 )   (1,217 )   (1,632 )   (2,269 )    (1,526 )    (1,933 )
                                      
   2,036,208     2,229,782     1,857,365     2,069,209      2,259,457      1,890,202  
                                      

Collateralized agreements:

              

Securities purchased under agreements to resell

   8,049,668     3,517,842     2,934,054     8,049,668      3,517,842      2,934,054  

Securities borrowed

   10,898,493     7,886,590     5,659,339     10,898,493      7,886,590      5,659,339  
                                      
   18,948,161     11,404,432     8,593,393     18,948,161      11,404,432      8,593,393  
                                      

Trading assets and private equity investments*:

              

Trading assets

   12,311,017     11,329,299     11,625,383     12,321,297      11,338,576      11,634,860  

Private equity investments

   563,504     372,539     372,771     357,948      239,843      239,624  
                                      
   12,874,521     11,701,838     11,998,154     12,679,245      11,578,419      11,874,484  
                                      

Other assets:

              

Office buildings, land, equipment and facilities (net of accumulated depreciation and amortization of 238,809 million and 249,074 million at June 30, 2007, 245,977 million and 255,979 million at September 30, 2007 and 257,929 million and 268,370 million at December 31, 2007, respectively)

   355,943     382,457     386,697     430,795      449,209      456,596  

Non-trading debt securities*

   287,411     283,640     257,747     288,297      288,765      262,849  

Investments in equity securities*

   191,915     162,280     159,581     191,915      162,280      159,581  

Investments in and advances to affiliated companies*

   393,323     393,390     390,237     449,577      438,610      436,004  

Other

   1,132,256     897,790     847,259     1,230,515      988,778      942,968  
                                      
   2,360,848     2,119,557     2,041,521     2,591,099      2,327,642      2,257,998  
                                      

Total assets

   37,250,055     29,171,303     25,941,728     37,368,364      29,333,718      26,106,403  
                                      

 

* Including securities pledged as collateral

 

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NOMURA HOLDINGS, INC.

CONSOLIDATED INCOME STATEMENT INFORMATION

(UNAUDITED)

 

     After Retrospective Application     Before Retrospective Application  
     Millions of yen     Millions of yen  
     June 30,
2007
    September 30,
2007
    December 31,
2007
    June 30,
2007
     September 30,
2007
     December 31,
2007
 
LIABILITIES AND SHAREHOLDERS’ EQUITY               

Short-term borrowings

   1,362,834     1,337,925     1,259,790     1,370,874      1,346,591      1,268,476  

Payables and deposits:

              

Payables to customers

   353,765     333,375     300,847     353,963      333,445      300,928  

Payables to other than customers

   549,497     430,468     603,105     565,861      448,544      620,332  

Deposits received at banks

   465,165     496,792     438,543     463,615      495,770      437,522  
                                      
   1,368,427     1,260,635     1,342,495     1,383,439      1,277,759      1,358,782  
                                      

Collateralized financing:

              

Securities sold under agreements to repurchase

   12,105,010     5,619,336     4,632,093     12,105,010      5,619,336      4,632,093  

Securities loaned

   5,589,077     4,236,458     3,101,114     5,589,077      4,236,458      3,101,114  

Other secured borrowings

   1,103,900     2,342,188     1,746,309     1,103,900      2,342,188      1,746,309  
                                      
   18,797,987     12,197,982     9,479,516     18,797,987      12,197,982      9,479,516  
                                      

Trading liabilities

   6,984,916     5,559,848     5,006,307     6,984,916      5,559,848      5,006,307  

Other liabilities

   1,117,197     831,951     751,265     1,190,306      900,760      814,832  

Long-term borrowings

   5,334,891     5,750,406     5,869,355     5,356,492      5,816,850      5,943,909  
                                      

Total liabilities

   34,966,252     26,938,747     23,708,728     35,084,014      27,099,790      23,871,822  
                                      

Shareholders’ equity:

              

Common stock

              

Authorized*—6,000,000,000 shares

              

Issued*—1,965,919,860 shares at June 30, 2007, September 30, 2007, and December 31, 2007 respectively

              

Outstanding*—1,908,390,828 shares at June 30, 2007, 1,908,831,093 shares at September 30, 2007 and 1,909,085,123 shares at December 31, 2007

   182,800     182,800     182,800     182,800      182,800      182,800  

Additional paid-in capital

   166,891     170,267     173,828     166,891      170,267      173,828  

Retained earnings

   1,972,854     1,944,616     1,949,920     1,972,728      1,944,562      1,950,737  

Accumulated other comprehensive income

   39,445     12,485     3,731     40,118      13,911      4,495  
                                      
   2,361,990     2,310,168     2,310,279     2,362,537      2,311,540      2,311,860  

Common stock held in treasury, at cost*—57,529,032 shares, 57,088,767 shares and 56,834,737 shares at June 30, 2007,
September 30, 2007 and December 31, 2007 respectively

   (78,187 )   (77,612 )   (77,279 )   (78,187 )    (77,612 )    (77,279 )
                                      

Total shareholders’ equity

   2,283,803     2,232,556     2,233,000     2,284,350      2,233,928      2,234,581  
                                      

Total liabilities and shareholders’ equity

   37,250,055     29,171,303     25,941,728     37,368,364      29,333,718      26,106,403  
                                      
     (%)     (%)  

Shareholders’ equity as a percentage of total assets

   6.1     7.7     8.6     6.1      7.6      8.6  
                                      
     Yen     Yen  

Shareholders’ equity per share

   1,196.72     1,169.59     1,169.67     1,197.00      1,170.31      1,170.50  
                                      

 

* The quantities of the shares after retrospective application were equal to those before retrospective application respectively.

 

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NOMURA HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(UNAUDITED)

The following table contains “After Retrospective Application” information which are amounts reflecting retrospective application of Statement of Position 07-1, “Clarification of the Scope of the Audit and Accounting Guide—Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies” (“SOP 07-1”) and “Before Retrospective Application” information which were amounts reported previously without application of SOP 07-1.

 

    After Retrospective Application     Before Retrospective Application  
    Millions of yen     Millions of yen  
   

For the three months

ended

    For the six months
ended
    For the nine months
ended
    For the three months
ended
    For the six months
ended
    For the nine months
ended
 
    June 30,
2007
    September 30,
2007
    December 31,
2007
    June 30,
2007
    September 30,
2007
    December 31,
2007
 

Common stock

           

Balance at beginning of year

  182,800     182,800     182,800     182,800     182,800     182,800  
                                   

Balance at end of period

  182,800     182,800     182,800     182,800     182,800     182,800  
                                   

Additional paid-in capital

           

Balance at beginning of year

  165,496     165,496     165,496     165,496     165,496     165,496  

Loss on sales of treasury stock

  (1,458 )   (1,458 )   (1,458 )   (1,458 )   (1,458 )   (1,458 )

Issuance of common stock options

  2,853     6,229     9,790     2,853     6,229     9,790  
                                   

Balance at end of period

  166,891     170,267     173,828     166,891     170,267     173,828  
                                   

Retained earnings

           

Balance at beginning of year

  1,910,978     1,910,978     1,910,978     1,910,978     1,910,978     1,910,978  

Net income

  75,938     64,231     86,006     76,742     66,226     88,872  

Cash dividends

  (16,221 )   (32,418 )   (48,674 )   (16,221 )   (32,418 )   (48,674 )

Adjustments to initially apply FIN 48

  1,266     1,266     1,266     1,266     1,266     1,266  

Adjustments to initially apply EITF 06-2

  (1,119 )   (1,119 )   (1,119 )   —       (1,119 )   (1,119 )

Adjustments to initially apply SOP 07-1

  2,049     2,049     2,049     —       —       —    

Loss on sales of treasury stock

  (37 )   (371 )   (586 )   (37 )   (371 )   (586 )
                                   

Balance at end of period

  1,972,854     1,944,616     1,949,920     1,972,728     1,944,562     1,950,737  
                                   

Accumulated other comprehensive income

           

Cumulative translation adjustments

           

Balance at beginning of year

  36,889     36,889     36,889     36,889     36,889     36,889  

Net change during the year

  32,985     5,472     (3,541 )   33,658     6,898     (2,777 )
                                   

Balance at end of period

  69,874     42,361     33,348     70,547     43,787     34,112  
                                   

Defined benefit pension plans

           

Balance at beginning of year

  (30,276 )   (30,276 )   (30,276 )   (30,276 )   (30,276 )   (30,276 )

Pension liability adjustment

  (153 )   400     659     (153 )   400     659  
                                   

Balance at end of period

  (30,429 )   (29,876 )   (29,617 )   (30,429 )   (29,876 )   (29,617 )
                                   

Balance at end of period

  39,445     12,485     3,731     40,118     13,911     4,495  
                                   

Common stock held in treasury

           

Balance at beginning of year

  (79,968 )   (79,968 )   (79,968 )   (79,968 )   (79,968 )   (79,968 )

Repurchases of common stock

  (56 )   (102 )   (135 )   (56 )   (102 )   (135 )

Sale of common stock

  12     42     52     12     42     52  

Common stock issued to employees

  1,825     2,415     2,770     1,825     2,415     2,770  

Other net change in treasury stock

  0     1     2     0     1     2  
                                   

Balance at end of period

  (78,187 )   (77,612 )   (77,279 )   (78,187 )   (77,612 )   (77,279 )
                                   

Total shareholders’ equity

           

Balance at end of period

  2,283,803     2,232,556     2,233,000     2,284,350     2,233,928     2,234,581  
                                   

 

32


Table of Contents

NOMURA HOLDINGS, INC.

CONSOLIDATED INFORMATION OF CASH FLOWS

(UNAUDITED)

The following table contains “After Retrospective Application” information which are amounts reflecting retrospective application of Statement of Position 07-1, “Clarification of the Scope of the Audit and Accounting Guide—Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies” (“SOP 07-1”) and “Before Retrospective Application” information which were amounts reported previously without application of SOP 07-1.

 

    After Retrospective Application     Before Retrospective Application  
    Millions of yen     Millions of yen  
    For the three months
ended
    For the six months
ended
    For the nine months
ended
    For the three months
ended
    For the six months
ended
    For the nine months
ended
 
    June 30,
2007
    September 30,
2007
    December 31,
2007
    June 30,
2007
    September 30,
2007
    December 31,
2007
 

Cash flows from operating activities:

           

Net income

  75,938     64,231     86,006     76,742     66,226     88,872  

Adjustments to reconcile net income to net cash used in operating activities:

           

Depreciation and amortization

  14,884     30,201     46,236     15,736     31,757     48,646  

Loss on investments in equity securities

  540     24,756     31,733     540     24,756     31,733  

Changes in operating assets and liabilities:

           

Time deposits

  58,970     (411,300 )   (166,450 )   56,896     (413,006 )   (162,758 )

Deposits with stock exchanges and other segregated cash

  (33,962 )   (52,101 )   (25,243 )   (33,833 )   (51,972 )   (25,114 )

Trading assets and private equity investments

  980,250     1,694,369     1,268,649     956,769     1,599,032     1,173,563  

Trading liabilities

  1,986,414     751,368     257,224     1,986,414     751,368     257,224  

Securities purchased under agreements to resell, net of securities sold under agreements to repurchase

  70,803     (1,707,073 )   (2,076,667 )   70,803     (1,707,073 )   (2,076,667 )

Securities borrowed, net of securities loaned

  (2,799,993 )   (1,204,864 )   (143,578 )   (2,799,993 )   (1,204,864 )   (143,578 )

Other secured borrowings

  (286,606 )   951,733     355,862     (286,606 )   951,733     355,862  

Loans and receivables, net of allowance

  (279,993 )   (590,025 )   (290,416 )   (279,154 )   (589,575 )   (290,461 )

Payables

  (93,509 )   (124,305 )   25,627     (93,713 )   (121,164 )   26,142  

Other, net

  (154,991 )   (27,247 )   107,648     (135,951 )   (3,286 )   132,155  
                                   

Net cash used in operating activities

  (461,255 )   (600,257 )   (523,369 )   (465,350 )   (666,068 )   (584,381 )
                                   

Cash flows from investing activities:

           

Payments for purchases of office buildings, land, equipment and facilities

  (20,502 )   (74,855 )   (100,825 )   (22,804 )   (79,933 )   (109,147 )

Proceeds from sales of office buildings, land, equipment and facilities

  1,117     1,171     3,672     1,189     6,420     8,525  

Payments for purchases of investments in equity securities

  (500 )   (641 )   (674 )   (500 )   (641 )   (674 )

Proceeds from sales of investments in equity securities

  3,596     4,565     4,715     3,596     4,565     4,715  

Decrease (increase) in loans receivable at banks, net

  (37,608 )   (54,010 )   7,885     (37,608 )   (54,010 )   7,885  

Increase in non-trading debt securities, net

  (32,602 )   (30,324 )   (5,720 )   (31,428 )   (33,476 )   (8,849 )

Other, net

  (5,093 )   (13,480 )   (11,978 )   8,448     11,637     9,324  
                                   

Net cash used in investing activities

  (91,592 )   (167,574 )   (102,925 )   (79,107 )   (145,438 )   (88,221 )
                                   

Cash flows from financing activities:

           

Increase in long-term borrowings

  801,569     1,564,604     1,963,633     801,569     1,611,754     2,011,083  

Decrease in long-term borrowings

  (494,329 )   (802,663 )   (1,180,687 )   (495,901 )   (805,668 )   (1,184,771 )

Increase in short-term borrowings, net

  253,900     248,642     173,178     250,192     248,861     173,166  

Increase in deposits received at banks, net

  35,451     72,467     9,970     33,901     71,445     8,948  

Proceeds from sales of common stock

  342     628     778     342     628     778  

Payments for repurchases of common stock

  (56 )   (102 )   (135 )   (56 )   (102 )   (135 )

Payments for cash dividends

  (38,164 )   (54,395 )   (70,629 )   (38,164 )   (54,395 )   (70,629 )

Proceeds from issuances of stock by a subsidiary

  —       —       975     —       —       975  
                                   

Net cash financing activities

  558,713     1,029,181     897,083     551,883     1,072,523     939,415  
                                   

Effect of initial adoption of SOP 07-1 on cash and cash equivalents

  (38,427 )   (38,427 )   (38,427 )   —       —       —    

Effect of exchange rate changes on cash and cash equivalents

  12,320     (10,641 )   (14,208 )   12,320     (10,641 )   (14,208 )
                                   

Net increase (decrease) in cash and cash equivalents

  (20,241 )   212,282     218,154     19,746     250,376     252,605  

Cash and cash equivalents at beginning of the period

  410,028     410,028     410,028     410,028     410,028     410,028  
                                   

Cash and cash equivalents at end of the period

  389,787     622,310     628,182     429,774     660,404     662,633  
                                   

 

33


Table of Contents

NOMURA HOLDINGS, INC.

SUPPLEMENTARY INFORMATION

(UNAUDITED)

The following table contains “After Retrospective Application” information which are amounts reflecting retrospective application of Statement of Position 07-1, “Clarification of the Scope of the Audit and Accounting Guide—Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies” (“SOP 07-1”) and “Before Retrospective Application” information which were amounts reported previously without application of SOP 07-1.

Business Segment Information—1Q, 2Q and 3Q Cumulative Results

 

    After Retrospective Application     Before Retrospective Application  
    Millions of yen     Millions of yen  
   

For the three months

ended

   

For the six months

ended

   

For the nine months

ended

   

For the three months

ended

   

For the six months

ended

   

For the nine months

ended

 
    June 30,
2007
    September 30,
2007
    December 31,
2007
    June 30,
2007
    September 30,
2007
    December 31,
2007
 

(1)    Net revenue

           

Business segment information:

           

Domestic Retail

  121,840     225,100     323,508     121,840     225,100     323,508  

Global Markets

  108,909     125,672     228,900     108,909     125,672     228,900  

Global Investment Banking

  36,740     47,552     68,309     36,740     47,552     68,309  

Global Merchant Banking

  43,407     51,865     41,675     43,407     51,865     41,675  

Asset Management

  26,407     50,093     73,308     26,407     50,093     73,308  
                                   

Sub Total

  337,303     500,282     735,700     337,303     500,282     735,700  

Other

  10,146     47,302     63,250     15,429     52,416     68,364  
                                   

Net revenue

  347,449     547,584     798,950     352,732     552,698     804,064  
                                   

Reconciliation items:

           

Unrealized gain (loss) on investments in equity securities held for operating purposes

  (2,647 )   (26,082 )   (33,195 )   (2,647 )   (26,082 )   (33,195 )

Effect of consolidation/deconsolidation of certain private equity investee companies

  —       —       —       30,652     74,321     106,162  
                                   

Net revenue

  344,802     521,502     765,755     380,737     600,937     877,031  
                                   

(2)    Non-interest expenses

           

Business segment information:

           

Domestic Retail

  71,285     142,339     212,246     71,285     142,339     212,246  

Global Markets

  82,866     167,319     246,149     82,866     167,319     246,149  

Global Investment Banking

  16,003     30,736     45,771     16,003     30,736     45,771  

Global Merchant Banking

  3,306     6,337     8,471     3,306     6,337     8,471  

Asset Management

  14,208     30,213     44,806     14,208     30,213     44,806  
                                   

Sub Total

  187,668     376,944     557,443     187,668     376,944     557,443  

Other

  17,194     55,206     74,570     17,194     55,206     74,559  
                                   

Non-interest expenses

  204,862     432,150     632,013     204,862     432,150     632,002  
                                   

Reconciliation items:

           

Unrealized gain (loss) on investments in equity securities held for operating purposes

  —       —       —       —       —       —    

Effect of consolidation/deconsolidation of certain private equity investee companies

  —       —       —       33,041     72,413     102,572  
                                   

Non-interest expenses

  204,862     432,150     632,013     237,903     504,563     734,574  
                                   

(3)    Income before income taxes

           

Business segment information:

           

Domestic Retail

  50,555     82,761     111,262     50,555     82,761     111,262  

Global Markets

  26,043     (41,647 )   (17,249 )   26,043     (41,647 )   (17,249 )

Global Investment Banking

  20,737     16,816     22,538     20,737     16,816     22,538  

Global Merchant Banking

  40,101     45,528     33,204     40,101     45,528     33,204  

Asset Management

  12,199     19,880     28,502     12,199     19,880     28,502  
                                   

Sub Total

  149,635     123,338     178,257     149,635     123,338     178,257  

Other *

  (7,048 )   (7,904 )   (11,320 )   (1,765 )   (2,790 )   (6,195 )
                                   

Income before income taxes

  142,587     115,434     166,937     147,870     120,548     172,062  
                                   

Reconciliation items:

           

Unrealized gain (loss) on investments in equity securities held for operating purposes

  (2,647 )   (26,082 )   (33,195 )   (2,647 )   (26,082 )   (33,195 )

Effect of consolidation/deconsolidation of certain private equity investee companies

  —       —       —       (2,389 )   1,908     3,590  
                                   

Income before income taxes

  139,940     89,352     133,742     142,834     96,374     142,457  
                                   

 

 

* Major components

Transactions between operating segments are recorded within segment results on commercial terms and conditions and are eliminated in “Other.”

The following table presents the major components of income (loss) before income taxes in “Other.”

 

    After Retrospective Application     Before Retrospective Application  
    Millions of yen     Millions of yen  
   

For the three months

ended

    For the six months
ended
   

For the nine months

ended

   

For the three months

ended

    For the six months
ended
   

For the nine months

ended

 
    June 30,
2007
    September 30,
2007
    December 31,
2007
    June 30,
2007
    September 30,
2007
    December 31,
2007
 

Net gain/loss on trading related to economic hedging transactions

  (14,425 )   (11,617 )   (11,253 )   (14,425 )   (11,617 )   (11,253 )

Realized gain on investments in equity securities held for operating purposes

  2,107     1,326     1,461     2,107     1,326     1,461  

Equity in earnings of affiliates

  5,105     7,684     2,437     5,105     7,684     2,437  

Corporate items

  (9,687 )   (21,939 )   (33,689 )   (9,687 )   (21,939 )   (33,689 )

Others

  9,852     16,642     29,724     15,135     21,756     34,849  
                                   

Total

  (7,048 )   (7,904 )   (11,320 )   (1,765 )   (2,790 )   (6,195 )
                                   

 

34


Table of Contents

NOMURA HOLDINGS, INC.

CONSOLIDATED INCOME STATEMENT INFORMATION

(UNAUDITED)

 

     Millions of yen      % Change  
     For the three months ended      (B-A)/(A)  
     June 30,
2006
    September 30,
2006
    December 31,
2006
    March 31,
2007
   June 30,
2007
     September 30,
2007
     December 31,
2007(A)
     March 31,
2008(B)
    

Revenue:

                       

Commissions

   79,579     66,063     84,190     107,626    112,953      106,883      103,434      81,389      (21.3 )

Fees from investment banking

   14,351     26,901     32,317     25,707    29,890      16,176      20,340      18,690      (8.1 )

Asset management and portfolio service fees

   29,732     35,476     36,730     44,039    47,311      50,910      47,636      43,855      (7.9 )

Net gain on trading

   55,770     47,542     89,152     97,544    99,767      8,669      65,090      (111,806 )    —    

Gain on private equity investments

   9,784     27,511     10,224     71    46,159      6,774      (2,987 )    26,559      —    

Interest and dividends

   207,860     232,311     262,928     278,245    294,783      245,912      177,280      78,565      (55.7 )

(Loss) gain on investments in equity securities

   (20,509 )   (44 )   (154 )   604    (540 )    (24,216 )    (6,977 )    (16,962 )    —    

Private equity entities product sales

   20,985     21,720     28,778     28,643    —        —        —        —        —    

Other

   4,178     11,734     45,371     6,142    16,309      9,631      (3,444 )    5,689      —    
                                                         

Total revenue

   401,730     469,214     589,536     588,621    646,632      420,739      400,372      125,979      (68.5 )

Interest expense

   195,796     218,236     266,625     277,343    301,830      244,039      156,119      104,477      (33.1 )
                                                         

Net revenue

   205,934     250,978     322,911     311,278    344,802      176,700      244,253      21,502      (91.2 )
                                                         

Non-interest expenses:

                       

Compensation and benefits

   82,768     79,060     86,679     97,429    100,653      94,370      93,361      78,421      (16.0 )

Commissions and floor brokerage

   10,255     10,335     12,004     18,218    22,684      22,579      20,395      24,534      20.3  

Information processing and communications

   23,167     27,434     27,296     32,090    29,188      34,719      33,869      37,228      9.9  

Occupancy and related depreciation

   14,442     13,743     14,596     18,498    15,917      15,131      14,258      19,535      37.0  

Business development expenses

   7,848     9,810     9,234     11,214    8,811      9,866      9,455      10,003      5.8  

Private equity entities cost of goods sold

   11,365     11,843     17,417     16,559    —        —        —        —        —    

Other

   22,685     25,666     23,577     34,111    27,609      50,623      28,525      50,111      75.7  
                                                         
   172,530     177,891     190,803     228,119    204,862      227,288      199,863      219,832      10.0  
                                                         

Income (loss) before income taxes

   33,404     73,087     132,108     83,159    139,940      (50,588 )    44,390      (198,330 )    —    

Income tax expense

   13,266     29,560     53,031     50,073    64,002      (38,881 )    22,615      (44,477 )    —    
                                                         

Net income (loss)

   20,138     43,527     79,077     33,086    75,938      (11,707 )    21,775      (153,853 )    —    
                                                         
     Yen      % Change  

Per share of common stock:

                       

Basic-

                       

Net income (loss)

   10.52     22.84     41.48     17.35    39.80      (6.13 )    11.41      (80.62 )    —    
                                                         

Diluted-

                       

Net income (loss)

   10.50     22.78     41.38     17.31    39.67      (6.14 )    11.37      (80.68 )    —    
                                                         

Note: Reclassifications -

The above amounts reflect retrospective application of Statement of Position 07-1, “Clarification of the Scope of the Audit and Accounting Guide—Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies” for the year ended March 31, 2008.

 

35


Table of Contents

NOMURA HOLDINGS, INC.

SUPPLEMENTARY INFORMATION

(UNAUDITED)

Business Segment Information - Quarterly Results

The following table shows quarterly business segment information and reconciliation items to the consolidated income statement.

 

     Millions of yen      % Change  
     For the three months ended      (B-A)/(A)  
     June 30,
2006
    September 30,
2006
    December 31,
2006
    March 31,
2007
     June 30,
2007
     September 30,
2007
     December 31,
2007 (A)
     March 31,
2008 (B)
    

(1)    Net revenue

                       

Business segment information:

                       

Domestic Retail

   105,609     94,518     115,882     124,109      121,840      103,260      98,408      78,510      (20.2 )

Global Markets

   68,899     48,475     78,068     94,586      108,909      16,763      103,228      (133,303 )    —    

Global Investment Banking

   18,808     29,688     24,088     26,603      36,740      10,812      20,757      14,800      (28.7 )

Global Merchant Banking

   12,123     44,541     9,249     (944 )    43,407      8,458      (10,190 )    23,118      —    

Asset Management

   17,636     23,854     24,543     24,073      26,407      23,686      23,215      17,333      (25.3 )
                                                           

Sub Total

   223,075     241,076     251,830     268,427      337,303      162,979      235,418      458      (99.8 )

Other

   (13,301 )   14,649     56,830     15,160      10,146      37,156      15,948      38,018      138.4  
                                                           

Net revenue

   209,774     255,725     308,660     283,587      347,449      200,135      251,366      38,476      (84.7 )
                                                           

Reconciliation items:

                       

Unrealized gain (loss) on investments in equity securities held for operating purposes

   (20,649 )   (4,802 )   (13,107 )   326      (2,647 )    (23,435 )    (7,113 )    (16,974 )    —    

Effect of consolidation/deconsolidation of certain private equity investee companies

   16,809     55     27,358     27,365      —        —        —        —        —    
                                                           

Net revenue

   205,934     250,978     322,911     311,278      344,802      176,700      244,253      21,502      (91.2 )
                                                           

(2)    Non-interest expenses

                       

Business segment information:

                       

Domestic Retail

   63,070     66,347     69,012     80,824      71,285      71,054      69,907      67,456      (3.5 )

Global Markets

   54,573     52,075     53,928     70,646      82,866      84,453      78,830      75,645      (4.0 )

Global Investment Banking

   13,237     13,416     13,164     14,966      16,003      14,733      15,035      14,565      (3.1 )

Global Merchant Banking

   2,326     3,058     2,555     4,214      3,306      3,031      2,134      3,002      40.7  

Asset Management

   12,413     12,787     12,382     16,067      14,208      16,005      14,593      14,846      1.7  
                                                           

Sub Total

   145,619     147,683     151,041     186,717      187,668      189,276      180,499      175,514      (2.8 )

Other

   9,706     10,350     13,720     15,621      17,194      38,012      19,364      44,318      128.9  
                                                           

Non-interest expenses

   155,325     158,033     164,761     202,338      204,862      227,288      199,863      219,832      10.0  
                                                           

Reconciliation items:

                       

Unrealized gain (loss) on investments in equity securities held for operating purposes

   —       —       —       —        —        —        —        —        —    

Effect of consolidation/deconsolidation of certain private equity investee companies

   17,205     19,858     26,042     25,781      —        —        —        —        —    
                                                           

Non-interest expenses

   172,530     177,891     190,803     228,119      204,862      227,288      199,863      219,832      10.0  
                                                           

(3)    Income (loss) before income taxes

                       

Business segment information:

                       

Domestic Retail

   42,539     28,171     46,870     43,285      50,555      32,206      28,501      11,054      (61.2 )

Global Markets

   14,326     (3,600 )   24,140     23,940      26,043      (67,690 )    24,398      (208,948 )    —    

Global Investment Banking

   5,571     16,272     10,924     11,637      20,737      (3,921 )    5,722      235      (95.9 )

Global Merchant Banking

   9,797     41,483     6,694     (5,158 )    40,101      5,427      (12,324 )    20,116      —    

Asset Management

   5,223     11,067     12,161     8,006      12,199      7,681      8,622      2,487      (71.2 )
                                                           

Sub Total

   77,456     93,393     100,789     81,710      149,635      (26,297 )    54,919      (175,056 )    —    

Other *

   (23,007 )   4,299     43,110     (461 )    (7,048 )    (856 )    (3,416 )    (6,300 )    —    
                                                           

Income (loss) before income taxes

   54,449     97,692     143,899     81,249      142,587      (27,153 )    51,503      (181,356 )    —    
                                                           

Reconciliation items:

                       

Unrealized gain (loss) on investments in equity securities held for operating purposes

   (20,649 )   (4,802 )   (13,107 )   326      (2,647 )    (23,435 )    (7,113 )    (16,974 )    —    

Effect of consolidation/deconsolidation of certain private equity investee companies

   (396 )   (19,803 )   1,316     1,584      —        —        —        —        —    
                                                           

Income (loss) before income taxes

   33,404     73,087     132,108     83,159      139,940      (50,588 )    44,390      (198,330 )    —    
                                                           

 

 

* Major components

Transactions between operating segments are recorded within segment results on commercial terms and conditions and are eliminated in “Other.”

The following table presents the major components of income (loss) before income taxes in “Other”.

 

     Millions of yen      % Change  
     For the three months ended      (B-A)/(A)  
     June 30,
2006
    September 30,
2006
    December 31,
2006
    March 31,
2007
     June 30,
2007
     September 30,
2007
     December 31,
2007 (A)
     March 31,
2008 (B)
    

Net gain/loss on trading related to economic hedging transactions

   (11,382 )   (14,036 )   (11,865 )   (1,100 )    (14,425 )    2,808      364      1,513      315.7  

Realized gain (loss) on investments in equity securities held for operating purposes

   140     4,758     12,953     278      2,107      (781 )    135      13      (90.4 )

Equity in earnings of affiliates

   3,309     6,136     38,983     4,741      5,105      2,579      (5,247 )    2,306      —    

Corporate items

   (7,163 )   3,707     (5,900 )   (1,755 )    (9,687 )    (12,252 )    (11,750 )    20,265      —    

Others

   (7,911 )   3,734     8,939     (2,625 )    9,852      6,790      13,082      (30,397 )    —    
                                                           

Total

   (23,007 )   4,299     43,110     (461 )    (7,048 )    (856 )    (3,416 )    (6,300 )    —    
                                                           

Note: Reclassifications -

The above amounts reflect retrospective application of Statement of Position 07-1, “Clarification of the Scope of the Audit and Accounting Guide—Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies” for the year ended March 31, 2008.

 

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NOMURA HOLDINGS, INC.

SUPPLEMENTARY INFORMATION

(UNAUDITED)

“Commissions/fees received” and “Net gain on trading” consists of the following:

Commissions/fees received

 

     Millions of yen      % Change      Millions of yen      % Change  
     For the three months ended      (B-A)/(A)      For the year ended      (D-C)/(C)  
     June 30,
2006
    September 30,
2006
   December 31,
2006
   March 31,
2007
     June 30,
2007
   September 30,
2007
     December 31,
2007(A)
     March 31,
2008(B)
        March 31,
2007(C)
     March 31,
2008(D)
    

Commissions

   79,579     66,063    84,190    107,626      112,953    106,883      103,434      81,389      (21.3 )    337,458      404,659      19.9  
                                                                            

Brokerage Commissions

   44,554     32,599    41,951    59,259      64,169    64,655      65,471      56,730      (13.4 )    178,363      251,025      40.7  

Commissions for Distribution of Investment Trust

   25,850     23,122    32,960    38,519      39,172    34,223      30,600      17,247      (43.6 )    120,451      121,242      0.7  

Fees from Investment Banking

   14,351     26,901    32,317    25,707      29,890    16,176      20,340      18,690      (8.1 )    99,276      85,096      (14.3 )
                                                                            

Underwriting and Distribution

   9,151     20,360    26,123    16,254      10,469    10,434      14,219      10,524      (26.0 )    71,888      45,646      (36.5 )

M&A / Financial Advisory Fees

   5,178     6,360    6,084    9,082      18,187    5,691      5,747      8,192      42.5      26,704      37,817      41.6  

Asset Management and Portfolio Service Fees

   29,732     35,476    36,730    44,039      47,311    50,910      47,636      43,855      (7.9 )    145,977      189,712      30.0  
                                                                            

Asset Management Fees

   26,179     31,758    32,842    39,470      42,904    46,150      43,358      39,552      (8.8 )    130,249      171,964      32.0  

Total

   123,662     128,440    153,237    177,372      190,154    173,969      171,410      143,934      (16.0 )    582,711      679,467      16.6  
                                                                            

Net gain on trading

                                  

Merchant Banking

   (2,643 )   445    197    (458 )    255    2,010      (5,149 )    (2,085 )    —        (2,459 )    (4,969 )    —    

Equity Trading

   31,724     12,684    28,919    64,268      51,696    28,189      25,574      31,496      23.2      137,595      136,955      (0.5 )

Fixed Income and Other Trading

   26,689     34,413    60,036    33,734      47,816    (21,530 )    44,665      (141,217 )    —        154,872      (70,266 )    —    
                                                                            

Total

   55,770     47,542    89,152    97,544      99,767    8,669      65,090      (111,806 )    —        290,008      61,720      (78.7 )
                                                                            

Note: Reclassifications -

The above amounts reflect retrospective application of Statement of Position 07-1, “Clarification of the Scope of the Audit and Accounting Guide—Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies” for the year ended March 31, 2008.

 

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Unconsolidated Financial Information of Major Consolidated Entities

(UNAUDITED)

The unconsolidated financial information, prepared under Japanese GAAP, is presented for the following entities;

-Nomura Holdings, Inc. Financial Information (Parent Company Only)

-Nomura Securities Co., Ltd. Financial Information

* The amounts are rounded to the nearest million.

 

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Nomura Holdings, Inc.

Unconsolidated Balance Sheet Information

 

     (Millions of yen)  
     March 31, 2008     March 31, 2007     Increase/(Decrease)  
ASSETS       

Current Assets

   2,272,127     2,249,934     22,193  
                  

Cash and time deposits

   1,416     15,648     (14,233 )

Certificate deposits

   18,800     —       18,800  

Money held in trust

   78,533     55,371     23,162  

Short-term loans receivable

   2,068,347     2,055,790     12,557  

Accounts receivable

   76,783     95,123     (18,340 )

Deferred tax assets

   1,370     1,677     (307 )

Other current assets

   26,883     26,333     551  

Allowance for doubtful accounts

   (6 )   (8 )   2  

Fixed Assets

   2,177,683     2,188,105     (10,422 )
                  

Tangible fixed assets

   52,216     54,163     (1,948 )

Buildings

   16,688     16,264     424  

Furniture & fixtures

   26,688     29,060     (2,372 )

Land

   8,839     8,839     —    

Intangible assets

   142,339     120,035     22,304  

Software

   142,339     120,035     22,304  

Investments and others

   1,983,128     2,013,907     (30,779 )

Investment securities

   156,267     218,367     (62,100 )

Investments in subsidiaries and affiliates (at cost)

   1,286,638     1,325,346     (38,707 )

Other securities of subsidiaries and affiliates

   26,021     16,426     9,595  

Long-term loans receivable from subsidiaries and affiliates

   309,000     317,400     (8,400 )

Long-term guarantee deposits

   49,548     53,650     (4,102 )

Deferred tax assets

   131,793     68,288     63,504  

Other investments

   23,893     14,463     9,430  

Allowance for doubtful accounts

   (32 )   (32 )   0  
                  

TOTAL ASSETS

   4,449,810     4,438,039     11,771  
                  

 

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Table of Contents
     (Millions of yen)  
     March 31, 2008     March 31, 2007     Increase/(Decrease)  
LIABILITIES       

Current liabilities

   1,601,961     1,996,756     (394,794 )
                  

Short-term borrowings

   1,446,500     1,873,500     (427,000 )

Bond due within one year

   50,000     —       50,000  

Collaterals received

   57,035     92,920     (35,886 )

Accrued income taxes

   11,296     171     11,125  

Other current liabilities

   37,131     30,165     6,967  

Long-term liabilities

   1,424,188     965,955     458,233  
                  

Bonds payable

   354,930     279,962     74,968  

Long-term borrowings

   1,067,000     683,000     384,000  

Other long-term liabilities

   2,257     2,993     (736 )
                  

TOTAL LIABILITIES

   3,026,149     2,962,711     63,438  
                  
NET ASSETS       

Shareholders’ equity

   1,372,324     1,407,903     (35,579 )

Common stock

   182,800     182,800     —    

Capital reserves

   112,504     113,962     (1,458 )

Additional paid-in capital

   112,504     112,504     —    

Other capital reserves

   —       1,458     (1,458 )

Earned surplus

   1,155,315     1,188,858     (33,543 )

Earned surplus reserve

   81,858     81,858     —    

Other Earned surplus

   1,073,457     1,107,000     (33,543 )

Reserve for specified fixed assets

   16     19     (3 )

General reserve

   994,000     994,000     —    

Earned surplus carried forward

   79,442     112,981     (33,540 )

Treasury stock

   (78,296 )   (77,717 )   (579 )

Valuation and translation adjustments

   39,936     66,201     (26,265 )

Net unrealized gain on investments

   34,914     67,013     (32,099 )

Deferred gains or loss on hedges

   5,023     (812 )   5,835  

Subscription rights to shares

   11,401     1,224     10,177  
                  

TOTAL NET ASSETS

   1,423,661     1,475,328     (51,667 )
                  

TOTAL LIABILITIES AND NET ASSETS

   4,449,810     4,438,039     11,771  
                  

 

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Nomura Holdings, Inc.

Unconsolidated Income Statement Information

 

     (Millions of yen)  
     For the year ended
March 31, 2008 (A)
    For the year ended
March 31, 2007 (B)
    Comparison
(A-B)/(B)
 

Operating revenue

   419,649     340,886     23.1 %
                  

Property and equipment fee revenue

   103,971     86,963     19.6  

Rent revenue

   37,890     37,005     2.4  

Royalty on trademark

   19,870     21,162     (6.1 )

Dividend from subsidiaries and affiliates

   228,462     178,342     28.1  

Others

   29,457     17,414     69.2  

Operating expenses

   175,269     135,528     29.3  
                  

Compensation and benefits

   15,039     4,656     223.0  

Rental and maintenance

   44,742     44,880     (0.3 )

Data processing and office supplies

   33,850     31,022     9.1  

Depreciation and amortization

   44,002     36,164     21.7  

Others

   8,453     6,722     25.8  

Interest expenses

   29,183     12,083     141.5  
                  

Operating income

   244,380     205,358     19.0  
                  

Non-operating income

   3,369     3,616     (6.8 )

Non-operating expenses

   1,518     1,753     (13.4 )
                  

Ordinary income

   246,231     207,221     18.8  
                  

Special profits

   7,300     16,327     (55.3 )

Gain on sales of investment securities

   7,300     16,327     (55.3 )

Special losses

   231,048     67,436     242.6  

Loss on sales of investment securities

   1,106     83     —    

Loss on devaluation of investment securities

   2,155     1,226     75.8  

Loss on devaluation of investments in affiliates

   224,565     62,805     257.6  

Loss on retirement of fixed assets

   3,221     3,322     (3.0 )
                  

Income before income taxes

   22,483     156,112     (85.6 )
                  

Income taxes - current

   13,445     12,501     7.6  
                  

Income taxes - deferred

   (44,946 )   (14,623 )   —    
                  

Net Income

   53,985     158,235     (65.9 )
                  

 

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Nomura Holdings, Inc.

Unconsolidated Statement of Changes in Net Assets

For the year ended March 31, 2008

 

     (Millions of yen)  
     Shareholders’ equity  
     Common
stock
   Capital reserve      Earned surplus      Treasury
stock
     Total
Shareholders’
equity
 
        Additional
paid-in
capital
   Other
capital
reserve
    Total
capital
reserve
     Earned
surplus
reserve
   Other Earned surplus      Total
Earned
surplus
       
                   Reserve for
specified
fixed assets
     General
reserve
   Earned
surplus
carried
forward
          

Balance at March 31, 2007

   182,800    112,504    1,458     113,962      81,858    19      994,000    112,981      1,188,858      (77,717 )    1,407,903  

Cash dividends

              —            (86,866 )    (86,866 )       (86,866 )

Reversal of reserve for specified fixed assets

                 (3 )       3      —           —    

Net income

                       53,985      53,985         53,985  

Purchases of treasury stock

                             (3,525 )    (3,525 )

Disposal of treasury stock

         (1,458 )   (1,458 )             (661 )    (661 )    2,947      828  

Other-net

                               

Change in the term

   —      —      (1,458 )   (1,458 )    —      (3 )    —      (33,540 )    (33,543 )    (579 )    (35,579 )

Balance at March 31, 2008

   182,800    112,504    —       112,504      81,858    16      994,000    79,442      1,155,315      (78,296 )    1,372,324  

 

     Valuation and translation adjustments     Subscription
rights to
shares
   Total
net assets
 
     Net
unrealized
gain on
investments
    Deferred
gains or loss on
hedges
    Total
Valuation
and
translation
adjustments
      

Balance at March 31, 2007

   67,013     (812 )   66,201     1,224    1,475,328  

Cash dividends

            (86,866 )

Reversal of reserve for specified fixed assets

            —    

Net income

            53,985  

Purchases of treasury stock

            (3,525 )

Disposal of treasury stock

            828  

Other-net

   (32,099 )   5,835     (26,265 )   10,177    (16,088 )

Change in the term

   (32,099 )   5,835     (26,265 )   10,177    (51,667 )

Balance at March 31, 2008

   34,914     5,023     39,936     11,401    1,423,661  

 

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For the year ended March 31, 2007

 

     (Millions of yen)  
    Shareholders’ equity  
    Common
stock
  Capital reserve     Earned surplus     Treasury
stock
    Total
Shareholders’
equity
 
      Additional
paid-in
capital
  Other
capital
reserve
    Total
capital
reserve
    Earned
surplus
reserve
  Other Earned surplus     Total
Earned
surplus
     
              Reserve for
specified
fixed assets
    General
reserve
    Earned
surplus
carried
forward
       
                       

Balance at March 31, 2006

  182,800   112,504   2,014     114,518     81,858   29     1,020,000     43,131     1,145,018     (80,448 )   1,361,888  

Cash dividends (*)

          —         (68,620 )   (68,620 )     (68,620 )

Cash dividends

          —         (45,775 )   (45,775 )     (45,775 )

Reversal of reserve for specified fixed assets (*)

            (4 )     4     —         —    

Reversal of reserve for specified fixed assets

            (7 )     7     —         —    

Reversal of general reserve (*)

              (26,000 )   26,000     —         —    

Net income

                158,235     158,235       158,235  

Purchases of treasury stock

                    (204 )   (204 )

Disposal of treasury stock

      (556 )   (556 )             2,935     2,379  

Other-net

                     

Change in the term

  —     —     (556 )   (556 )   —     (11 )   (26,000 )   69,851     43,840     2,731     46,015  

Balance at March 31, 2007

  182,800   112,504   1,458     113,962     81,858   19     994,000     112,981     1,188,858     (77,717 )   1,407,903  

 

     Valuation and translation adjustments             
     Net
unrealized
gain on
investments
    Deferred
gains or loss on
hedges
    Total
Valuation
and
translation
adjustments
    Subscription
rights to
shares
   Total
net assets
 

Balance at March 31, 2006

   84,761     —       84,761     —      1,446,649  

Cash dividends (*)

            (68,620 )

Cash dividends

            (45,775 )

Reversal of reserve for specified fixed assets (*)

            —    

Reversal of reserve for specified fixed assets

            —    

Reversal of general reserve (*)

            —    

Net income

            158,235  

Purchases of treasury stock

            (204 )

Disposal of treasury stock

            2,379  

Other-net

   (17,748 )   (812 )   (18,560 )   1,224    (17,336 )

Change in the term

   (17,748 )   (812 )   (18,560 )   1,224    28,679  

Balance at March 31, 2007

   67,013     (812 )   66,201     1,224    1,475,328  

 

(*) Items approved in the Board of Directors held on May 2006.

 

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Nomura Securities Co., Ltd.

Unconsolidated Balance Sheet Information

 

     (Millions of yen)  
     March 31, 2008     March 31, 2007     Increase/(Decrease)  

ASSETS

      

Current Assets

   13,094,317     12,570,606     523,712  
                  

Cash and time deposits

   99,821     57,301     42,520  

Deposits with exchanges and other segregated cash

   50,692     693     49,999  

Trading assets:

   6,012,280     5,023,167     989,113  

Trading securities

   4,973,376     4,603,302     370,074  

Derivative contracts

   1,038,904     419,865     619,038  

Margin account assets:

   165,368     359,294     (193,927 )

Loans to customers in margin transactions

   143,666     290,369     (146,703 )

Cash collateral to securities finance companies

   21,701     68,925     (47,223 )

Loans with securities as collateral:

   6,235,494     6,903,525     (668,031 )

Cash collateral for securities borrowed

   5,373,927     5,544,509     (170,582 )

Loans in gensaki transactions

   861,568     1,359,016     (497,449 )

Receivables from customers and others

   1,319     1,231     88  

Short-term guarantee deposits

   339,539     91,028     248,510  

Short-term loans receivable

   37,125     11,026     26,099  

Deferred tax assets

   106,066     77,561     28,506  

Other current assets

   46,646     45,826     820  

Allowance for doubtful accounts

   (32 )   (46 )   14  

Fixed Assets

   77,385     61,787     15,598  
                  

Tangible fixed assets

   58     43     15  

Intangible assets

   1,672     653     1,019  

Investments and others

   75,655     61,091     14,564  

Investment securities

   195     195     —    

Deferred tax assets

   41,262     41,217     45  

Other investments

   34,865     20,575     14,290  

Allowance for doubtful accounts

   (667 )   (896 )   229  
                  

TOTAL ASSETS

   13,171,702     12,632,393     539,310  
                  

 

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Table of Contents
     (Millions of yen)  
     March 31, 2008    March 31, 2007    Increase/(Decrease)  

LIABILITIES

        

Current Liabilities

   11,605,224    11,033,512    571,712  
                

Trading liabilities:

   2,887,090    2,090,611    796,479  

Trading securities

   2,277,593    1,672,676    604,918  

Derivative contracts

   609,497    417,936    191,561  

Net payables arising from pre-settlement date trades

   8,048    57,469    (49,421 )

Margin account liabilities:

   13,144    29,988    (16,844 )

Borrowings from securities finance companies

   2,736    4,385    (1,649 )

Customer margin sale proceeds

   10,408    25,603    (15,195 )

Borrowings with securities as collateral:

   3,977,051    5,497,684    (1,520,634 )

Cash collateral for securities loaned

   2,688,318    3,797,819    (1,109,500 )

Borrowings in gensaki transactions

   1,288,732    1,699,865    (411,133 )

Payables to customers and others

   137,213    187,155    (49,942 )

Guarantee deposits received

   95,581    119,888    (24,307 )

Short-term borrowings

   3,911,100    2,557,500    1,353,600  

Short-term bonds payable

   336,500    266,500    70,000  

Bond due within one year

   100,000    60,000    40,000  

Accrued income taxes

   12,307    7,690    4,617  

Accounts payable

   61,649    81,724    (20,075 )

Accrued bonuses for employees

   15,200    22,700    (7,500 )

Other current liabilities

   50,341    54,603    (4,262 )

Long-term Liabilities

   701,840    633,608    68,232  
                

Bonds payable

   224,285    198,200    26,085  

Long-term borrowings

   404,400    371,900    32,500  

Reserve for retirement benefits

   62,523    58,337    4,187  

Other long-term liabilities

   10,632    5,172    5,460  

Statutory Reserves

   5,626    4,346    1,281  
                

Reserve for securities transactions

   5,626    4,346    1,281  
                

TOTAL LIABILITIES

   12,312,691    11,671,466    641,224  
                

NET ASSETS

        

Shareholder’s equity

   857,535    958,769    (101,233 )

Common stock

   10,000    10,000    —    

Capital reserves

   529,579    529,579    —    

Additional paid-in capital

   529,579    529,579    —    

Earned surplus

   317,957    419,190    (101,233 )

Other Earned surplus

   317,957    419,190    (101,233 )

General reserve

   63,000    63,000    —    

Earned surplus carried forward

   254,957    356,190    (101,233 )

Valuation and translation adjustments

   1,476    2,157    (681 )

Deferred gains or loss on hedges

   1,476    2,157    (681 )
                

TOTAL NET ASSETS

   859,012    960,926    (101,914 )
                

TOTAL LIABILITIES AND NET ASSETS

   13,171,702    12,632,393    539,310  
                

 

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Table of Contents

Nomura Securities Co., Ltd.

Unconsolidated Income Statement Information

 

     (Millions of yen except percentages)  
     For the year ended
March 31, 2008(A)
    For the year ended
March 31, 2007(B)
    Comparison
(A-B)/(B)
 

Operating revenue

   710,537     770,358     (7.8 )%
                  

Commissions

   397,399     423,247     (6.1 )

Net gain on trading

   162,176     214,667     (24.5 )

Net gain on other inventories

   15     12     24.9  

Interest and dividend income

   150,946     132,431     14.0  

Interest expenses

   108,272     85,940     26.0  
                  

Net operating revenue

   602,265     684,418     (12.0 )
                  

Selling, general and administrative expenses

   437,126     417,911     4.6  
                  

Transaction-related expenses

   83,323     85,092     (2.1 )

Compensation and benefits

   167,625     164,302     2.0  

Rental and maintenance

   49,726     48,327     2.9  

Data processing and office supplies

   123,378     107,275     15.0  

Others

   13,074     12,915     1.2  
                  

Operating income

   165,138     266,507     (38.0 )
                  

Non-operating income

   1,608     2,021     (20.4 )

Non-operating expenses

   2,013     1,828     10.1  
                  

Ordinary income

   164,734     266,699     (38.2 )
                  

Special profits

   1,667     643     159.4  

Gains due to the exemption from payments of share-based compensation

   1,667     643     159.4  

Special losses

   1,281     1,241     3.2  

Reserve for securities transactions

   1,281     1,241     3.2  
                  

Income before income taxes

   165,120     266,101     (37.9 )
                  

Income taxes - current

   93,022     115,489     (19.5 )
                  

Income taxes - deferred

   (28,078 )   (90 )   —    
                  

Net income

   100,177     150,702     (33.5 )
                  

 

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Table of Contents

Nomura Securities Co., Ltd.

Quarterly Income Statement Information

 

     (Millions of yen)  
     For the Quarter
from April 1, 2007
to June 30, 2007
   For the Quarter
from July 1, 2007
to September 30, 2007
    For the Quarter
from October 1, 2007
to December 31, 2007
   For the Quarter
from January 1, 2008
to March 31, 2008
     Year Ended
March 31, 2008
 

Operating revenue

   252,044    162,970     191,653    103,871      710,537  
                             

Commissions

   122,458    102,927     97,102    74,912      397,399  

Net gain on trading

   77,896    26,154     56,224    1,902      162,176  

Net gain on other inventories

   2    3     5    5      15  

Interest and dividend income

   51,687    33,886     38,322    27,051      150,946  

Interest expenses

   34,446    23,196     28,537    22,093      108,272  
                             

Net operating revenue

   217,598    139,773     163,116    81,778      602,265  
                             

Selling, general and administrative expenses

   111,461    108,501     106,904    110,261      437,126  
                             

Transaction-related expenses

   22,627    21,820     19,899    18,978      83,323  

Compensation and benefits

   45,227    41,807     41,663    38,928      167,625  

Rental and maintenance

   12,081    12,435     12,562    12,648      49,726  

Data processing and office supplies

   28,040    29,235     29,956    36,147      123,378  

Other

   3,487    3,203     2,824    3,560      13,074  
                             

Operating income (loss)

   106,137    31,273     56,212    (28,483 )    165,138  
                             

Non-operating income

   500    310     306    492      1,608  

Non-operating expenses

   438    523     368    683      2,013  
                             

Ordinary income (loss)

   106,200    31,059     56,149    (28,674 )    164,734  
                             

Special profits

   265    453     478    471      1,667  

Gains due to the exemption from payments of share-based compensation

   265    453     478    471      1,667  

Special losses

   316    326     321    318      1,281  

Reserve for securities transactions

   316    326     321    318      1,281  
                             

Income before income taxes

   106,150    31,186     56,305    (28,520 )    165,120  
                             

Income taxes - current

   36,757    32,481     13,219    10,565      93,022  
                             

Income taxes - deferred

   5,981    (21,105 )   9,317    (22,271 )    (28,078 )
                             

Net income (loss)

   63,412    19,811     33,769    (16,815 )    100,177  
                             

 

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Table of Contents

NOMURA SECURITIES CO., LTD.

SUPPLEMENTARY INFORMATION

 

1. Commission Revenues

 

  (1) Breakdown by Category

 

     (Millions of yen except percentages)  
      Year Ended    Comparison  
     March 31, 2008 (A)    March 31, 2007 (B)    (A-B)/(B) (%)  

Brokerage commissions

   115,401    133,648    (13.7 )%
                

(Stocks)

   109,023    127,751    (14.7 )

Underwriting commissions

   27,941    49,253    (43.3 )
                

(Stocks)

   24,117    41,744    (42.2 )

(Bonds)

   3,824    7,487    (48.9 )

Distribution commissions

   122,744    124,040    (1.0 )
                

(Investment trust certificates)

   121,150    120,333    0.7  

Other commissions

   131,313    116,306    12.9  
                

(Investment trust certificates)

   64,246    52,374    22.7  
                

Total

   397,399    423,247    (6.1 )
                

 

  (2) Breakdown by Product

 

      (Millions of yen except percentages)  
      Year Ended    Comparison  
     March 31, 2008 (A)    March 31, 2007 (B)    (A-B)/(B) (%)  

Stocks

   139,689    177,416    (21.3 )%

Bonds

   9,760    16,130    (39.5 )

Investment trust certificates

   189,737    177,789    6.7  

Others

   58,213    51,912    12.1  
                

Total

   397,399    423,247    (6.1 )
                

 

2. Net Gain on Trading

 

      (Millions of yen except percentages)  
      Year Ended    Comparison  
     March 31, 2008 (A)    March 31, 2007 (B)    (A-B)/(B) (%)  

Stocks

   38,022    75,445    (49.6 )%

Bonds and forex

   124,154    139,222    (10.8 )
                

Total

   162,176    214,667    (24.5 )
                

 

48


Table of Contents

NOMURA SECURITIES CO., LTD.

SUPPLEMENTARY INFORMATION

 

3. Stock Trading (excluding futures transactions)

 

     (Millions of shares or yen except per share data and percentages)  
     Year Ended        
     March 31,
2008(A)
    March 31,
2007 (B)
    Comparison
(A-B)/(B) (%)
 
     Number of
shares
    Amount     Number of
shares
    Amount     Number of
shares
    Amount  

Total

   74,537     106,650,507     71,790     105,345,875     3.8 %   1.2 %
                                    

(Brokerage)

   45,558     63,741,516     44,825     64,332,556     1.6     (0.9 )

(Proprietary Trading)

   28,979     42,908,991     26,966     41,013,320     7.5     4.6  
                                    

Brokerage / Total

   61.1 %   59.8 %   62.4 %   61.1 %    
                            

TSE Share

   6.0 %   6.6 %   6.4 %   7.0 %    
                            

Brokerage Commission per share (yen)

   2.37     2.83      

 

4. Underwriting, Subscription, and Distribution

 

      (Millions of shares or yen except percentages)  
   Year Ended   
     March 31,
2008 (A)
   March 31,
2007 (B)
   Comparison
(A-B)/(B) (%)
 

Underwriting

        

Stocks (number of shares)

   141    466    (69.8 )%

(yen amount)

   710,200    1,119,862    (36.6 )

Bonds (face value)

   6,995,085    6,509,676    7.5  

Investment trust certificates (yen amount)

   —      —      —    

Beneficial interest (face value)

   11,800    132,868    (91.1 )

Subscripition and Distribution*

        

Stocks (number of shares)

   295    1,023    (71.2 )

(yen amount)

   835,801    1,263,720    (33.9 )

Bonds (face value)

   3,750,872    3,894,257    (3.7 )

Investment trust certificates (yen amount)

   20,429,301    21,430,501    (4.7 )

Beneficial interest (face value)

   3,000    52,800    (94.3 )

 

* Includes secondary offering and private placement.

 

5. Capital Adequacy Ratio

 

          

(Millions of yen except percentages)

 
               March 31, 2008     March 31, 2007  

Tier I

      (A)    756,830     757,358  

Tier II

   Valuation and translation adjustments       1,476     2,157  
   Statutory reserves       5,626     4,345  
   Allowance for doubtful accounts       32     46  
   Subordinated debt       516,085     310,000  
                  
  

Total

   (B)    523,220     316,549  
                  

Illiquid Asset

      (C)    145,932     154,421  
                  

Net Capital       (A) + (B) - (C) =

   (D)    1,134,117     919,486  
                  

Risk

   Market risk       108,263     53,129  
   Counterparty risk       259,810     253,360  
   Basic risk       132,823     116,905  
                  
  

Total

   (E)    500,896     423,396  
                  

Capital Adequacy Ratio

   (D)/(E)    226.4 %   217.1 %
                  

 

49