April 30, 2015

Outline of Consolidated Financial Statements
For the Fiscal Year Ended March 31, 2015
Name of company listed :Nomura Real Estate Holdings, Inc.

Shares traded :TSE (First section)

Code number :

3231

URL :

http://www.nomura-re-hd.co.jp/english/

Representative :Kamezo Nakai, President

IR contact :Naoko Usami, General Manager of Corporate Communications& Investor Relations Dept.
info@nomura-re-hd.com

Date of general meeting of shareholders :June 26, 2015

Scheduled starting date for dividend payments:

June 29, 2015

Scheduled submitting date of annual securities report:

June 26, 2015

Preparation of explanatory materials for financial results :YesInformation meetings arranged related to financial results :Yes (for institutional investors and analysts, in Japanese)

Note: The accompanying consolidated financial statements were not audited since they have been prepared only for reference purpose. All statements were basedon Tanshin report prepared in accordance with the provisions set forth in accounting regulations and principals generally accepted in Japan.
(Values of less than one million yen rounded off.)I.

Consolidated operating results for the fiscal year from April 1, 2014 to March 31, 2015
(1) Consolidated business results(% indicates the rate of changes from previous fiscal year)

Operating revenue

Operating income

Ordinary income

Net income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

FY2014567,159

6.6

71,894(3.2)

63,681(0.6)

38,441

43.2

FY2013532,016

2.8

74,30727.4

64,05839.8

26,844

38.7(Note) Comprehensive income:

FY2014 ¥49,603 million (up 95.8%)

FY2013 ¥25,337 million (down 4.7%)

Net income per

Net income

Ordinary income

share after adjusting

per share

Return on equity

margin on total

for dilution

Operating income
marginassets

yen

yen

%

%

%

FY2014201.28200.55

10.3

4.7

12.7

FY2013140.70140.23

7.8

4.8

14.0

(Reference) Equity in net income of affiliated companies:

FY2014 ¥17 million

FY2013 ¥9 million(2) Consolidated financial status
Total assets

Net assets

Shareholders' equity ratio

Net assets per share

Millions of yen

Millions of yen%

yenMar. 31, 2015

1,369,226

461,03128.8

2,061.86

Mar. 31, 2014

1,313,887

418,69727.1

1,863.12(Reference) Shareholders’ equity:

At March 31, 2015 ¥394,059 million

1

At March 31, 2014 ¥355,680 million

(3) Consolidated cash flows
Net cash provided by(used in) operating activities

Net cash provided by

Net cash provided by(used in) investment(used in) financing

activities

activities

Cash and cash equivalents
at end of period

Millions of yen

Millions of yen

Millions of yen

Millions of yen

FY2014

23,837(32,476)(8,983)50,418FY201383,535(20,191)(57,858)

67,982

II. Dividends
Dividend per share
1st quarter2nd quarter3rd quarter

Total amountof dividends

Fiscal year
Total

end

end

end

equity(Consolidated)(Annual)end

Dividend on

Payout ratio(Consolidated)

yen

yen

yen

yen

yen

Millions of yen%%

FY2013

―

15.00

―

20.00

35.00

6,680

24.9

1.9

FY2014

―

20.00

―

25.00

45.00

8,597

22.4

2.3

―

25.00

―

25.00

50.00

FY2015(Forecast)

25.1

III. Forecasts of consolidated operating results for the fiscal year from April 1, 2015 to March 31, 2016(% indicates the rate of changes from previous fiscal year or term)

Operating revenue

FY2015

Operating income

Ordinary income

Profit attributable to

Net income perowners of parent

shareMillions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

yen

585,000

3.1

73,0001.5

64,0000.5

38,000(1.1)

198.83* Notes(1) Significant changes to subsidiaries during the period (Changes in scope of consolidation of specified subsidiaries): None
(2) Changes in accounting policies, changes in accounting estimates and restatements
1)

Changes in accounting policies due to revision of accounting standards, etc.

: Yes

2)

Changes in accounting policies other than the above: None3)

Changes in accounting estimates: None4)

Restatements: None(Note) Please refer to the Appendix P.23 “5. Consolidated Financial Statements (5) Notes to Consolidated Financial Statements(Changes in Accounting Policies)” for more details.
(3) Number of shares issued (common stock)1)

Number of shares outstanding (including treasury shares)

2)

Treasury shares

3)

Average number of shares during the term

At March 31

At March 31

2015

2014

191,119,700

190,906,800

1,206

1,206

From April 1 toFrom April 1 toMarch 31

March 31

2015

2014

190,982,951

2

190,792,328

* Implementation status of auditing procedure
The financial summary and the accompanying materials including the consolidated financial statements are not subject to the review
procedure by external auditors that are based on Financial Instruments and Exchange Act.
The review procedure has not yet finished at the point of releasing this financial summary.
* Forward-looking statements
Certain statements other than historical facts in this document are forward-looking statements that reflect the company’s plans andestimates based on currently available information. Therefore, the Company has no intention to promise the accomplishment of theforecasts. These statements include known and unknown risks, uncertainties, and other factors that may cause the company’s actual future
performance to differ from the forward-looking statements contained herewith. For more details of the forecast, please refer to the Appendix
P.6 “1. Business Results and Financial Position (1) Business Results 2) Forecasts of financial results for the fiscal year ending March 31,
2016.”(How to obtain fact sheets)
The fact sheets will be disclosed on TDnet on April 30, 2015 and will be uploaded on the Company's website.

3Appendix - Contents
1. Business Results and Financial Position ....................................................................................................................................................

2(1) Business Results ...............................................................................................................................................................................

2(2) Financial Position .............................................................................................................................................................................

7(3) Basic Policy regarding Profit Distribution and Dividends for the Current and Next Fiscal Year .........................................

7

2. Group Companies ..........................................................................................................................................................................................

8

3. Management Policy ......................................................................................................................................................................................

10(1) Basic Management Policy ..............................................................................................................................................................

10(2) Medium-to Long-term Management Strategy, Target Indicators and Issues to be Addressed ..............................................

10

4. Basic Policies for Selecting Accounting Standards....................................................................................................................................

12

5. Consolidated Financial Statements .............................................................................................................................................................

13(1) Consolidated Balance Sheets .........................................................................................................................................................

13(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ..........................................

15

Consolidated Statements of Income ............................................................................................................................................

15

Consolidated Statements of Comprehensive Income ...............................................................................................................

16(3) Consolidated Statements of Changes in Net Assets ....................................................................................................................

17(4) Consolidated Statement of Cash Flows ........................................................................................................................................

19(5) Notes to Consolidated Financial Statements ................................................................................................................................

21(Notes to Going Concern Assumptions) .....................................................................................................................................

21(Basis for Presenting Consolidated Financial Statements) .......................................................................................................

21(Changes in Accounting Policies).................................................................................................................................................

23(Notes to Consolidated Balance Sheets) .....................................................................................................................................

24(Notes to Consolidated Statements of Income) ..........................................................................................................................

25(Notes to Consolidated Statements of Comprehensive Income) .............................................................................................

27(Notes to Consolidated Statements of Changes in Net Assets) ...............................................................................................

28(Notes to Consolidated Statement of Cash Flows) ....................................................................................................................

30(Real Estate for Rent) .....................................................................................................................................................................

30(Segment Information) ..................................................................................................................................................................

31(Per Share Information) .................................................................................................................................................................

35(Significant Subsequent Events) ...................................................................................................................................................

361

1. Business Results and Financial Position(1) Business Results1) Outline of consolidated financial results for the fiscal year under review
Although the Japanese economy during the fiscal year under review showed weakness in personal consumption associated with theraise of consumption tax, company performance improved and capital investment is in an increasing trend with the weak yen and low
crude oil prices, which are supporting a gradual recovery of the Japanese economy. The economy will continue on track for recovery
based on the expectation of the promotion of personal consumption through the steady improvement of the employment and income
environment despite concerns about the downward trend of economies in emerging countries, including China, and the increase of
consumer prices due to the weak yen.
In the housing sales market, although the supply of houses decreased in the overall market due to a hike in sales prices along with anincrease in construction costs and the slowing of rush demand following the increase in the consumption tax, contract rates remained highon the foundation of continuing support measures for home purchases and low interest rates, revealing steady growth. In the office market,
vacancy rates showed a clear downward trend supported by the need for business expansion through the improvement of company
performance, and rent levels in the Tokyo metropolitan area partially increased, indicating signs of continuing recovery. In the real estate
investment market, rising J-REIT stock prices and low interest rates supported a strong fund procurement environment, and real estatetransactions remained high, revealing stable growth in the business environment.
In this market, the Nomura Real Estate Group posted the following consolidated performance for the fiscal year under review:Operating revenue of 567,159 million yen, which represents an increase of 35,142 million yen, or 6.6% year on year; operating income of
71,894 million yen, a decrease of 2,413 million yen, or 3.2%; ordinary income of 63,681 million yen, a decrease of 376 million yen, or0.6%; and net income of 38,441 million yen, an increase of 11,597 million yen, or 43.2%.
Net income increased by 3,198 million yen due to the reversal of deferred tax assets and liabilities caused by a reduction of corporate
tax rates.
An overview of segment achievements is given below:
Operating revenue for each segment includes internal sales and transfer amount among segments. Due to the rounding of fractions,
total figures may not match.
From the second quarter, a partial revision in the method of allocating costs to each segment of the Company has been incorporated toenhance the management of each segment. The residential leasing business has also been transferred from the Residential Development
Business Segment to the Leasing Business Segment to facilitate comprehensive strategic judgment regarding the Company’s leasing
asset portfolio. The results of the previous fiscal year are calculated in line with the newly adopted method of cost allocation and segmentclassification.
<Residential Development Business Segment>
Operating revenue in this segment totaled 359,397 million yen, which represents an increase of 51,771 million yen, or 16.8% year on
year, and operating income was 33,811 million yen, an increase of 2,634 million yen, or 8.4%. This was mainly due to an increase in thenumber of housing units sold.
Housing sales have remained strong, and we posted the sale of 7,021 units (an increase of 812 units year on year), including PROUDTOWER Musashi-Kosugi (Nakahara-ku, Kawasaki-shi, Kanagawa), PROUD Fuchu Marks (Fuchu-shi, Tokyo), OHANA
Fujimino-Uenodai Blossom (Fujimino-shi, Saitama), PROUD CITY Shin-Osaka (Yodogawa-ku, Osaka-shi, Osaka) for condominiums,
and PROUD SEASON Funabashi-Komuro (Funabashi-shi, Chiba) and PROUD SEASON Setagaya-Sakuragaoka (Setagaya-ku,
Tokyo) for detached houses.
The number of sold but not recorded housing units totaled 4,767 units as of the end of the current fiscal year (a decrease of 1,422 units
over the end of the previous fiscal year).
Number of units, sales, and outstanding contract amount sold for the joint-venture projects are calculated based on the Group’s share.

2

Breakdown of operating revenue
FY2013Operating revenue

Housing units sold
Housing sales

FY2014(Millions of yen)

Housing units soldOperating revenue(Millions of yen)

Tokyo metropolitan area

4,723 units

236,853

5,426 units

270,397

Kansai area

930 units

35,143

1,009 units

37,542Other

555 units

23,925585 units

25,059Subtotal

6,209 units

295,923

7,021 units

332,999(Detached houses)(718 units)(37,748)(859 units)(50,573)

Other
Total

11,702

26,397

307,625

359,397

Housing sales Period-end completed housing inventories
As of March 31, 2014
Tokyo metropolitan area

As of March 31, 2015

31 units

76 units

Kansai area-

13 units

Other

-

-

Total

31 units

89 units(Detached houses)(5 units)(64 units)

Housing sales Sold but not recorded housing units
As of March 31, 2014

As of March 31, 2015

Outstanding
Housing units

contract amount

Outstanding
Housing units(Millions of yen)contract amount(Millions of yen)

Tokyo metropolitan area

4,995 units

270,318

3,924 units

221,375

Kansai area

697 units

25,429497 units

22,746Other

495 units

20,896345 units

15,773

Total

6,189 units

316,643

4,767 units

259,895(Detached houses)(185 units)(9,431)(51 units)(4,438)<Leasing Business Segment >Operating revenue in this segment totaled 92,878 million yen, which represents a decrease of 6,987 million yen, or 7.0% year on year,
and operating income totaled 24,447 million yen, a decrease of 2,371 million yen, or 8.8%. This was mainly due to a decrease in property
sales and a partial moving-out of a tenant from the Hamamatsucho Building (Minato-ku, Tokyo).
In leasing business sector, NREG Kawasaki Logistics Center (Kawasaki-ku, Kawasaki-shi, Kanagawa) which completed in theprevious fiscal year contributed to income. In property development sector, we recorded the sale of PMO Nihonbashi-Kayabacho(Chuo-ku, Tokyo) and PMO Kanda-Tsukasamachi (Chiyoda-ku, Tokyo).

3

Breakdown of operating revenue
FY2013 (Millions of yen)

FY2014 (Millions of yen)

Leasing (offices)

48,131

46,563

Leasing (retail facilities)

10,544

10,323

Leasing (other)

5,151

5,552

Property development

25,60816,026

Other

10,42914,41399,86692,878

Total(Note) Operating revenue of the residential leasing business which was transferred from the Residential Development Business Segment isallocated to “Property development.”
Rentable area
As of March 31, 2014

As of March 31, 2015

Offices

748,596 ㎡

822,049 ㎡

Retail facilities

106,601 ㎡

106,580 ㎡

855,197 ㎡

928,628 ㎡

Total
Vacancy rate (offices and retail facilities)
As of March 31, 2014

As of March 31, 2015
2.9%

4.5%

<Investment Management Business Segment>
Operating revenue in this segment totaled 9,166 million yen, which represents a decrease of 9,159 million yen, or 50.0% year on year,
and operating income totaled 4,813 million yen, a decrease of 3,089 million yen, or 39.1%. This was mainly due to the recording of asset
acquisition fee paid by Nomura Real Estate Master Fund, Inc. and income through the sale of SPC’s property in the previous fiscal year.
FY2013 (Millions of yen)
Operating revenue

FY2014 (Millions of yen)

18,326

9,166

Assets under management
As of March 31, 2014

As of March 31, 2015

(Millions of yen)

(Millions of yen)

REITs

941,385

1,011,029

Private funds, etc.

190,861

112,159

1,132,246

1,123,188

Total

4

<Property Brokerage & CRE Business Segment>
Operating revenue in this segment totaled 30,232 million yen, which represents an increase of 1,064 million yen, or 3.6% year on year,
operating income totaled 8,477 million yen, an increase of 376 million yen, or 4.6%.
In wholesale operations, we established a representative office in Hong Kong in October 2014. In retail operations, we opened thefollowing six branch stores: Kitasenju Center, Nishi-Kasai Center, Musashi-Urawa Center, Toyosu Center, Sangenjaya Center, andKawasaki Center.
Breakdown of operating revenue
FY2013 (Millions of yen)
Property brokerage

FY2014 (Millions of yen)

24,520

Other
Total

25,833

4,647

4,399

29,16830,232

Number of transactions and total transaction value of property brokerage
FY2013

FY2014

Number of transactions
Total transaction value (Millions of yen)

7,437

7,174

672,774

710,980<Property & Facility Management Business Segment>
Operating revenue in this segment totaled 71,635 million yen, which represents a decrease of 514 million yen, or 0.7% year on year,
and operating income totaled 5,477 million yen, an increase of 370 million yen, or 7.2%.
Also, due to the merger of Nomura Building Management Co., Ltd. and Nomura Living Support Co., Ltd. on April 1, 2014, thebreakdown of operating revenue for this segment has been changed from "Building management" and "Housing management" to"Property & facility management" and "Construction ordered." In line with this change, the figures for the previous fiscal year areclassified under the new classification.
Breakdown of operating revenue
FY2013 (Millions of yen)

FY2014 (Millions of yen)

Property & facility management

48,74349,794

Construction ordered

23,406

21,841

Total

72,15071,635

Number of properties under management
As of March 31, 2014
Buildings under management
Condominiums under management (unit)

As of March 31, 2015

703

729

147,516

155,706<Other Business Segment>
Operating revenue in this segment totaled 17,753 million yen, which represents a decrease of 887 million yen, or 4.8% year on year,
and operating income totaled 167 million yen, a decrease of 341 million yen, or 67.1%. This was mainly due to a decrease in the sale ofassets owned by a sector other than the fitness club business. In the fitness club business sector, we newly opened Dayos24
Unoki-Ekimae (Ota-ku, Tokyo) in June 2014 and Dayos24 Idogaya (Minami-ku, Yokohama-shi, Kanagawa) in October 2014.
We resolved at the meeting of its Board of Directors held on April 30, 2015 to conduct the tender offer as part of the transactions for the
purpose of acquiring all of the share certificates, etc. of MEGALOS Co., Ltd. which is our consolidated subsidiary. Please refer to the
Appendix P.36 “5. Consolidated Financial Statements (5) Notes to Consolidated Financial Statements (Significant subsequent events)”
for more details.
FY 2013 (Millions of yen)
Operating revenue

FY 2014 (Millions of yen)

18,6405

17,753

2) Forecasts of financial results for the fiscal year ending March 31, 2016
<Consolidated>
We expects to post operating revenue of 585,000 million yen, operating income of 73,000 million yen, ordinary income of 64,000 million
yen, and profit attributable to owners of parent of 38,000 million yen for the fiscal year ending March 31, 2016.
FY2015 Forecasts

FY2014

Changes(Millions of yen)

(Millions of yen)

(Millions of yen)

Operating revenue

585,000

567,159

17,840Operating income

73,00071,894

1,105

Ordinary income

64,00063,681

318

Profit attributable to owners of parent

38,00038,441(441)<Forecasts by business segment>
The forecasts of operating results for the fiscal year ending March 31, 2016 by business segment are as follows.
Operating revenue
FY2015 Forecasts

FY2014

Changes(Millions of yen)

(Millions of yen)

(Millions of yen)

Residential Development

357,000

359,397

Leasing(2,397)108,000

92,87815,121

Investment Management

8,000

9,166

(1,166)

Property Brokerage & CRE

32,00030,232

1,767

Property & Facility Management

91,00085,837

5,162

Other

1,000

3,008

(2,008)Adjustments(12,000)(13,362)

1,362

Total

585,000

567,159

17,840Operating income
FY2015 Forecasts

FY2014

Changes(Millions of yen)

(Millions of yen)

(Millions of yen)

Residential Development

31,00033,811(2,811)

Leasing

29,00024,447

4,552

Investment Management

4,500

4,813

(313)

Property Brokerage & CRE

8,000

8,477

(477)

Property & Facility Management

4,500

5,758

(1,258)

Other

0

(113)

113

Adjustments(4,000)(5,300)

1,300

Total

73,00071,894

1,105

MEGALOS Co., Ltd. which used to be classified in the “Other Business Segment” was transferred to the “Property & Facility Management
Business Segment” from April 2015 in order to facilitate comprehensive strategic judgment regarding property management business. In linewith this change, the figures for FY2014 and FY2015 on P.5 “1. Business Results and Financial Position (1) Business Results 2) Forecasts offinancial results for the fiscal year ending March 31, 2016” are classified under the new classification.

6

(2) Financial Position
1) Assets, Liabilities and Net Assets
As of March 31, 2014

As of March 31, 2015

Changes

Changes(Millions of yen)

(Millions of yen)

(Millions of yen)(%)

Total assets

1,313,887

1,369,226

55,339

4.2

Total liabilities

895,190908,195

13,005

1.5

Of which, Interest-bearing debt

617,583

616,700

(883)

(0.1)

Net assets

418,697

461,031

42,333

10.1

Shareholders' equity ratio

27.1%

28.8%

-

-

1.7

1.6

-

-

Debt/equity ratio(Note) Debt/equity ratio = Interest-bearing debt /Shareholder’s equity
Total assets totaled 1,369,226 million yen, increased by 55,339 million yen from the end of the previous fiscal year. This was mainly due
to a decrease in short-term investment securities (a decrease of 19,500 million yen), while inventories including real estate for sale increased(an increase of 80,596 million yen).
Total liabilities totaled 908,195 million yen, increased by 13,005 million yen from the end of the previous fiscal year. This was due
mainly to a decrease in deferred tax liabilities (a decrease of 7,230 million yen), while deposits received increased (an increase of 15,920
million yen).
Net assets totaled 461,031 million yen, increased by 42,333 million yen from the end of the previous fiscal year. This was due mainly to
an increase in retained earnings (an increase of 31,097 million yen).
The shareholders' equity ratio was 28.8%, an increase of 1.7 percentage points from the end of the previous fiscal year.
2) Cash Flows
Cash and cash equivalents as of the end of the fiscal year under review totaled 50,418 million yen, which represents a decrease of 17,563
million yen year on year.
The state of and factors associated with each cash flow of the fiscal year under review are shown below.
(Cash Flows from Operating Activities)
Net cash provided by (used in) operating activities increased by 23,837 million yen (a decrease of 59,698 million yen year on year). This
mainly reflects the purchase of inventories and the recording of income before income taxes and minority interests of 58,058 million yen,while notes and accounts payable – trade and deposits received increased.
(Cash Flows from Investing Activities)
Net cash provided by (used in) investment activities decreased by 32,476 million yen (a decrease of 12,284 million yen year on year).
This mainly reflected the purchase of property, plant and equipment and intangible assets.
(Cash Flows from Financing Activities)
Net cash provided by (used in) financing activities decreased by 8,983 million yen (an increase of 48,874 million yen year on year).
This was due mainly to an increase in cash dividends paid.

(3) Basic Policy regarding Profit Distribution and Dividends for the Current and Next Fiscal Year
The Company’s basic policy regarding the distribution of profits to shareholders is to aim at a payout ratio of approximately 30% over the
medium to long term, in accordance with annual business performance, comprehensively considering the operating environment, capital
investment plans, retained earnings, and other relevant factors.
The year-end dividend for the fiscal year ended March 31, 2015 is planned to increase by 5 yen from the initial forecast, to 25 yen per
share in light of growth in business performance as announced in “Notice of Revision of Financial Result and Dividend Forecasts of
FY2014” released on April 15, 2015. Combined with the second quarter-end dividend, the annual dividend per share will be 45 yen. In
regard to the dividend for the next fiscal year, the second quarter-end and year-end dividends will be 25 yen per share, and the annual
dividend will be 50 yen per share.

7

2. Group Companies
Major business contents of the Nomura Real Estate Group and 25 affiliated companies (21 consolidated subsidiaries, and 4 affiliates andunconsolidated subsidiaries accounted for using the equity method), and consolidated subsidiaries involved in the relevant businesses, aswell as the role of said consolidated subsidiaries are given below.
Business contents stated below are the same as the business classifications by segment.
<Residential Development Business Segment>･Nomura Real Estate Development Co., Ltd. is engaged in the development and sale of condominiums and detached housing.
･Nomura Real Estate Reform Co., Ltd. is engaged in the remodeling and repair of condominiums and detached housing.
･Prime X. Co., Ltd. is engaged in Internet advertising for the real estate and housing industries.
<Leasing Business Segment>･Nomura Real Estate Development Co., Ltd. develops, builds and leases office buildings and retail facilities, and engages in the entrusted
management of office buildings. The company is also engaged in the development and sale of profitable properties for the real-estate
investment market, and the planning and management of construction work.
･NREG TOSHIBA BUILDING Co., Ltd. offers service that spans the development, construction, leasing, and management of officebuildings, housing, and retail facilities, etc., as well as consultation on corporate real estate (CRE) utilization, and the development andsale of condominiums.
･Yokohama Business Park Heating and Cooling Supply Co., Ltd. services Yokohama Business Park (Hodogaya-ku Yokohama,
Kanagawa).
･Geo Akamatsu Co., Ltd. is engaged in the design and entrusted management of retail facilities.
･NREG TOSHIBA BUILDING FACILITIES Co., Ltd. offers maintenance and cleaning services for office buildings entrusted by
NREG TOSHIBA BUILDING Co., Ltd.
<Investment Management Business Segment>･Nomura Real Estate Asset Management Co., Ltd. provides investment management services including privately placed real estate funds,
real estate investment trusts (REITs), and real estate securitization products. Nomura Real Estate Development Co., Ltd. also has equity
interest in the funds managed by Nomura Real Estate Asset Management Co., Ltd.
<Property Brokerage & CRE Business Segment>･Nomura Real Estate Development Co., Ltd. and Nomura Real Estate Urban Net Co., Ltd. are engaged in real estate brokerage andconsulting. Nomura Real Estate Urban Net Co., Ltd. also handles consignment sales for condominium units and detached housing.
<Property & Facility Management Business Segment>･Nomura Real Estate Partners Co., Ltd. is engaged in the entrusted management of condominiums, office buildings, and educational
facilities as well as tenant construction and repair associated with management.
･Nomura Amenity Service Co., Ltd. is engaged in the entrusted cleaning of office buildings, mainly from Nomura Real Estate Partners
Co., Ltd.
<Other Business Segment>･MEGALOS Co., Ltd. manages fitness clubs. MEGALOS is listed on the Japan Association of Securities Dealers Automated Quotations(JASDAQ) Standard Section at the Tokyo Securities Exchange. However, MEGALOS Co., Ltd. is planned to be wholly owned by
Nomura Real Estate Holdings, Inc. as mentioned in P.6 “1. Business Results and Financial Position (1) Business Results <Other Business
Segment >,” and be delisted through prescribed procedures.

The matters described above are shown in the following systematic business diagram.

8

Nomura Real Estate Holdings, Inc.
Nomura Real
Estate Group

Segment

Residential
Development
Business

Management Guidance

Leasing
Business

Investment
Management
Business

Proprety
Brokerage &CRE Business

Property &Facility
Management
Business

Nomura Real
EstateDevelopment

Nomura Real Estate Development

Nomura Real
Estate Reform

NREG
TOSHIBA
BUILDING

PRIME X.

Yokohama
Business Park
Heating &Nomura Real
Estate AssetManagement

Other Business

Nomura Real
Estate Urban
Net

Nomura Real
Estate Partners

MEGALOS

NomuraAmenity
Service

Geo Akamatsu

NREG TOSHIBABUILDING
FACILITIES(Note) Nomura Real Estate Wellness Co., Ltd. was established as of April 1, 2015 and newly incorporated in the “Property & Facility
Management Business Segment”. In addition, MEGALOS Co., Ltd. which used to be classified in the “Other Business Segment” wastransferred to the “Property & Facility Management Business Segment” from April 1, 2015 in order to facilitate comprehensive strategic
judgment regarding property management business.

93. Management Policy(1) Basic Management Policy
The Nomura Real Estate Group believes that our mission is to continue growing and flourishing with our customers and the society weserve through the development of high-quality social capital essential to quality of life, and the provision of wide ranging real estate services.
To achieve this goal, we place a priority on the realization of high proficiency and growth throughout the entire group and increasing
corporate value by taking more prominent positions in the markets where group companies are active to achieve synergetic effects.
In line with the Nomura Real Estate Group Principle of Bringing Tomorrow Today and the Group Mission of Delivering the highest
quality products and services while giving back to our customers and society, we treasure each and every encounter, grateful for theopportunity to interact and grow with highly creative people and highly conscious of the dynamism it brings to our group.

(2) Medium-to Long-term Management Strategy, Target Indicators and Issues to be Addressed
The environment surrounding the Group is expected to remain uncertain and unstable into the foreseeable future due to, among otherfactors, a maturing domestic and a more borderless world economy.
The declining birthrate, aging population, changes in the composition of households, diversification of customer needs, an increase inresidential and building properties, and advancing globalization are expected to have a long-term impact on the situation facing the Group.
In view of these circumstances, we have introduced a new mid- to long-term business plan, “Nomura Real Estate Group Mid- toLong-term Business Plan (through 2022/3) - Creating Value through Change -“, one which reflects the Group’s long-term vision and aims
to realize sustainable growth throughout the entire organization.
◇ Long-term vision“To be an enterprise group that continues to create high value through sustainable change”
We will pursue change toward the future by constantly accepting new challenges
and continuing to create high value that can meet the increasingly diverse needs of society and our customers.
This plan was established as a mid- to long-term business plan covering a period of 10 years starting in the fiscal year ended March 31,
2013. The plan is divided into 3 phases, and Phase I is also regarded as a “3-year mid-term Plan (through 2016/3)”.
Under the 3-year Plan (through 2016/3) set as a period in which we will build a foundation toward the realization of progressive growth
in and after Phase II, basic strategies, quantitative goals and business strategies are outlined as follows.
◇ Outline of the 3-year Plan (through 2016/3)
I.

Basic strategies”Securing earnings growth in the existing businesses””Securing a financial foundation for further growth””Aggressive efforts toward the realization of growth from the long-term perspective”

II. Quantitative goals○ Operating income for the fiscal year ending March 31, 2016: 65.0 billion yen○ Shareholder equity ratio at the end of the fiscal year ending March 31, 2016: 30%
III. Business strategies
In consideration of the growth potential of each business and the competitiveness of the Group, the following business strategies
serve as the four pillars of the 3-year Plan (through 2016/3).
1) Sustainable and stable growth in the residential development business, our core business・Increase in business volume toward the realization of annual residential sales of 7,000 units
・Provision of a broad product line-up meeting diverse customer needs and effective use of the Group’s extensive businessknow-how (redevelopment, rebuilding, land readjustment, and complex development)
・Deepening of the brand value through the provision of services appropriate to the housing life cycle2) Aggressive pursuit of investment opportunities in the real estate leasing business・More diverse development options (office, residential, retail, and logistics)
・Provision of operation services that effectively satisfy the needs of tenants and facility users
3) Aggressive expansion in service and management
10・Strengthening responses to cross-border investment needs in the investment management business・Property brokerage and CRE business- Retail division: Workforce and branch network expansion and strengthening of the Internet strategy, and improvement of brandrecognition- Wholesale division: Strengthening our ability to provide CRE solutions leveraging functions within the Group・Expansion and effective use of asset stocks for management and service enhancements in the property & facility managementbusiness4) New initiatives to accelerate the growth of each business from the long-term perspective
・Strengthening development in the retail and logistics sectors, and cooperation and mutual growth with existing business
Promotion of global business expansion leveraging inbound funds
・Strengthening R&D efforts aiming at the creation of highly competitive value
・Improvement of productivity through the innovation of business processes across group companies

114. Basic Policies for Selecting Accounting Standards
Nomura Real Estate Group creates consolidated financial statements in accordance with the Japanese standards taking account ofcomparability of the consolidated financial statements over different accounting periods and between companies. The Group will adopt
International Accounting Standards, as appropriate, considering shareholder composition and the movement of other domestic companies in
the industry.

12

5. Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of yen)
FY2013

FY2014

Assets

資産の部

Current Assets:

流動資産合計496,978

549,300

Cash and deposits

現金及び預金*2, *3 45,484*2, *3 47,420

Notes and accounts receivable-trade

受取手形及び売掛金

14,77015,029

Short-term investment securities

有価証券

22,5003,000

Real estate for sale

販売用不動産45,047

61,583

Real estate for sale in process

仕掛販売用不動産

217,838

237,500

Land held for development

開発用不動産85,974130,221Equity investments

営業エクイティ投資

7,128

6,316

Deferred tax assets

繰延税金資産

7,384

5,688

Other

その他

51,02542,586

Allowance for doubtful accounts

貸倒引当金

(177)

(47)

固定資産合計816,909819,926

Property, plant and equipment

有形固定資産合計

716,093730,076

Buildings and structures

建物及び構築物

360,251

364,363

Accumulated depreciation

減価償却累計額(118,075)(127,576)

Buildings and structures, net

建物及び構築物(純額)*2, *3 242,176*2, *3 236,787*2, *3, *5 467,610*3, *5 486,436

Noncurrent Assets:

Land

土地

Other

(As of March 31, 2014) (As of March 31, 2015)

その他

12,626

13,821

Accumulated depreciation

減価償却累計額(6,320)(6,968)Other, net

その他(純額)*2, *3 6,306

6,852

Intangible assets

無形固定資産9,382

10,277

Investments and other assets

投資その他の資産合計

91,433

79,572

Investment securities

投資有価証券*1, *2 47,630*1, *2 40,853

Lease and guarantee deposits

敷金及び保証金

19,223

20,487

Deferred tax assets

繰延税金資産21,86014,979

Other

その他

2,720

3,252

Allowance for doubtful accounts

貸倒引当金

(1)

－

1,313,887

1,369,226

Total Assets

資産合計

13

(Millions of yen)
FY2013

FY2014

Liabilities

負債の部

Current Liabilities :流動負債合計288,094

305,188

Notes and accounts payable-trade

支払手形及び買掛金

37,62948,662

Short-term loans payable

短期借入金*2, *3 152,683

151,800

Current portion of bonds

1年内償還予定の社債

10,000*3 3,000

Income taxes payable

未払法人税等8,091

13,097

Deposits received

預り金

9,175

25,095

Deferred tax liabilities

繰延税金負債148

124

Provision for bonuses

賞与引当金

6,087

6,218

Provision for directors' bonuses

役員賞与引当金

586

606

Provision for loss on business liquidation

事業整理損失引当金

112

83

Other

その他

63,58056,498

固定負債合計607,095

603,007

Bonds payable

社債*3 23,000

30,000Long-term loans payable

長期借入金

431,900

431,900

Lease and guarantee deposits received

受入敷金保証金*2 57,124*2 60,749

Deferred tax liabilities

繰延税金負債

67,42160,214

Deferred tax liabilities for land revaluation

再評価に係る繰延税金負債*5 4,537*5 4,116

Provision for loss on subleasing business

転貸事業損失引当金

473

465

Net defined benefit liability

退職給付に係る負債

14,901

11,078

Other

その他

7,737

4,483

Total Liabilities

負債合計

895,190908,195

Net Assets

純資産の部

S hareholders' Equity:

株主資本合計348,347

379,774

Capital stock

資本金116,024

116,188

Capital surplus

資本剰余金93,35393,518Retained earnings

利益剰余金

138,971

170,069

Treasury shares

自己株式

(2)

(2)

その他の包括利益累計額合計

7,333

14,285

Valuation difference on available-for-sale securities

その他有価証券評価差額金

(689)

5,069

Deferred gains or losses on hedges

繰延ヘッジ損益

25

78

Revaluation reserve for land

土地再評価差額金*5 7,224*5 7,644

Foreign currency translation adjustment

為替換算調整勘定

32

61

Remeasurements of defined benefit plans

退職給付に係る調整累計額

742

1,431

Noncurrent Liabilities :Other Comprehensive Income:(As of March 31, 2014) (As of March 31, 2015)

S ubscription Rights to S hares:

新株予約権

1,273

1,563

Minority Interests:

少数株主持分

61,74265,408

Total Net Assets

純資産合計

418,697

461,031

Total Liabilities and Net Assets

負債純資産合計

1,313,887

1,369,226

14

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)(Millions of yen)
FY2013

FY2014(From April 1, 2013
to March 31, 2014)(From April 1, 2014
to March 31, 2015)

Operating Revenue

営業収益532,016

567,159

Operating Cost

営業原価

*1 372,680*1 405,107

Operating Gross Profit

営業総利益159,335

162,051

Selling, General and Administrative Expenses

販売費及び一般管理費*2 85,027*2 90,157

Operating Income

営業利益74,307

71,894Non-operating Income

営業外収益合計

1,442

1,699

Interest income

受取利息

76

50

Dividends income

受取配当金

887

1,123

Equity in earnings of affiliates

持分法による投資利益

9

17

Other

その他

469

507

営業外費用合計

11,692

9,912

Interest expenses

支払利息

10,026

8,851

Other

その他

1,666

1,060

Ordinary Income

経常利益64,05863,681

Extraordinary Income

特別利益合計961

2,547

Gain on sales of noncurrent assets

固定資産売却益*3 544*3 206

Reversal of provision for loss on disaster

災害損失引当金戻入額

295－

Dividends distribution from silent partnershipassociated with impairment loss

減損損失に伴う匿名組合損益分配額

－

2,203

Compensation Income

受取補償金

122

－

Other

その他

－

137

Non-Operating Expenses

Extraordinary Losses

特別損失

16,572

8,170

Impairment loss

減損損失

*4 16,572*4 8,170

Income before Income Taxes and Minority Interests 税金等調整前当期純利益

48,44758,058

Income taxes-current

法人税,住民税及び事業税

13,82818,069

Income taxes-deferred

法人税等調整額

6,283(2,664)

Total income taxes

法人税等合計20,112

15,405

Income before minority interests

少数株主損益調整前当期純利益

28,33542,653

Minority interests in income

少数株主利益

1,491

4,211

Net Income

当期純利益26,84438,44115

(Consolidated Statements of Comprehensive Income)(Millions of yen)

Net income before Minority Interests

少数株主損益調整前当期純利益

Other Comprehensive Income

その他の包括利益合計

FY2013

FY2014(From April 1, 2013
to March 31, 2014)(From April 1, 2014
to March 31, 2015)

28,33542,653*1 (2,997)*1 6,950

Valuation difference on available-for-sale securities

その他有価証券評価差額金(2,808)

5,764

Deferred gains or losses on hedges

繰延ヘッジ損益(212)

53

Revaluation reserve for land

土地再評価差額金(0)420

Foreign currency translation adjustment

為替換算調整勘定－

6

Remeasurements of defined benefit plans, net of tax

退職給付に係る調整額－

689

Share of other comprehensive income of associates
accounted for using equity method

持分法適用会社に対する持分相当額

231525,33749,603Comprehensive Income

包括利益(Breakdown)（内訳）

Comprehensive income attributable to owners of parent

親会社株主に係る包括利益

23,84945,386Comprehensive income attributable to minority interests

少数株主に係る包括利益

1,488

4,216

16

(3) Consolidated Statements of Changes in Net Assets
FY2013 (From April 1, 2013 to March 31, 2014)(Millions of yen)
Shareholders' Equity
Additional paidin capital

115,728

93,057

117,848(2)

326,632

115,728

93,057

117,848(2)

326,632296

296

Balance at April 1, 2013

Retainedearnings

Total
shareholders'equityCapital stock

TreasurysharesCumulative effects of changes in accounting policies

Restated balance at April 1, 2013
Changes of Items during Period
Issuance of new shares

592

Dividends of surplus(5,721)

Net income

26,844(5,721)
26,844Purchases of treasury shares

(0)

(0)

Increase due to the increase of consolidated subsidiaries
Decrease due to the increase of consolidated subsidiaries
Net changes of items other than shareholders' equity

Total Changes of Items during Period
Balance at March 31, 2014

296

296

21,123(0)

21,714116,024

93,353

138,971(2)

348,347

Other Comprehensive Income

Balance at April 1, 2013

Total
Subscription
Remeasurements accumulated
rights toof defined
othersharesbenefit plans comprehensive
incomeValuationdifference on
available-forsale securities

Deferred
gains/losses
on hedges

Revaluation
reserve forland

Foreigncurrencytranslation
adjustments

2,115

237

7,224

8

－

9,586

2,115

237

7,224

8

－

9,586

Minority
interests

Total
net
assets951

61,106398,276951

61,106398,276

Cumulative effects of changes inaccounting policies
Restated balance at April 1, 2013
Changes of Items during Period
Issuance of new shares

592

Dividends of surplus(5,721)

Net income

26,844Purchases of treasury shares(0)

Increase due to the increase of
consolidated subsidiaries
Decrease due to the increase of
consolidated subsidiaries

Net changes of items other thanshareholders' equity(2,805)(212)

Total Changes of Items during Period(2,805)(689)

Balance at March 31, 2014

(0)

23

742

(2,253)

(212)

(0)

23

742

(2,253)322

636

20,420

25

7,224

32

742

7,333

1,273

61,742

418,697

17

322

636

(1,294)

FY2014 (From April 1, 2014 to March 31, 2015)(Millions of yen)
Shareholders' Equity
Capital stock

Additional paidin capital

116,024

93,353

138,971

116,024

93,353

140,543

164

164

Balance at April 1, 2014

Retainedearnings

Total
shareholders'equityTreasuryshares(2)348,347(2)

349,918

1,571

Cumulative effects of changes in accounting policies

Restated balance at April 1, 2014

1,571

Changes of Items during Period
Issuance of new shares

329

Dividends of surplus(7,637)(7,637)

Net income

38,441

38,441

Purchases of treasury shares
Increase due to the increase of consolidated subsidiaries

16

16

Decrease due to the increase of consolidated subsidiaries(1,293)(1,293)29,855

Net changes of items other than shareholders' equity

Total Changes of Items during Period
Balance at March 31, 2015

164

164

29,526116,188

93,518170,069(2)

379,774

Other Comprehensive Income

Balance at April 1, 2014

Total
Subscription
Remeasurements accumulated
rights toof defined
othersharesbenefit plans comprehensive
incomeValuationdifference on
available-forsale securities

Deferred
gains/losses
on hedges

Revaluation
reserve forland

Foreigncurrencytranslation
adjustments

(689)

25

7,224

32

742

7,333

(689)

25

7,224

32

742

7,333

Minority
interests

Total
net
assets

1,273

61,742

418,697

1,273

61,742420,268

Cumulative effects of changes inaccounting policies
Restated balance at April 1, 2014

1,571

Changes of Items during Period
Issuance of new shares

329

Dividends of surplus(7,637)

Net income

38,441

Purchases of treasury shares
Increase due to the increase of
consolidated subsidiaries
Decrease due to the increase of
consolidated subsidiaries

16(1,293)

Net changes of items other thanshareholders' equity

5,759

53

420

29

689

6,951

290

3,665

10,907

Total Changes of Items during Period

5,759

53

420

29

689

6,951

290

3,665

40,762

Balance at March 31, 2015

5,069

78

7,644

61

1,431

14,285

1,563

65,408461,03118

(4) Consolidated Statements of Cash Flows(Millions of yen)
FY2013

FY2014(From April 1, 2013
to March 31, 2014)(From April 1, 2014
to March 31, 2015)

Cash Flows from Operating Activities
Income before income taxes and minority interests

税金等調整前当期純利益

48,44758,058Depreciation and amortization

減価償却費

14,333

15,258

Impairment loss

減損損失

16,572

8,170

Loss (gain) on sales of property, plant and equipment

固定資産売却損益

(544)

(206)

Equity in (earnings) losses of affiliates

持分法による投資損益

(9)

(17)

Increase (decrease) in allowance for doubtful accounts

貸倒引当金の増減額

(24)

(131)

Increase (decrease) in provision for retirement benefits

退職給付引当金の増減額

Increase (decrease) in provision for loss on business liquidation(15,291)－

事業整理損失引当金の増減額

(36)

(29)

Increase (decrease) in provision for loss on subleasing business

転貸事業損失引当金の増減額

(641)

(7)

Increase (decrease) in provision for loss on disaster

災害損失引当金の増減額

(303)

－

Increase (decrease) in net defined benefit liability

退職給付に係る負債の増減額

14,901(391)

Interest and dividends income

受取利息及び受取配当金(964)(1,173)

Interest expenses

支払利息

10,026

8,851

Decrease (increase) in notes and accounts receivable-trade

売上債権の増減額(1,511)(231)

Decrease (increase) in inventories

たな卸資産の増減額

20,500(77,796)

Decrease (increase) in equity investments

営業エクイティ投資の増減額

22,450812

Increase (decrease) in notes and accounts payable-trade

仕入債務の増減額(11,718)

11,033

Increase (decrease) in deposits received

預り金の増減額(12,076)

15,920

Other, net

その他

(77)

6,309

Subtotal

小計

104,031

44,429Interest and dividends income received

利息及び配当金の受取額Interest expenses paid

1,811

1,642

利息の支払額(10,431)(9,254)

Income taxes paid

法人税等の支払額(11,876)(12,980)

Net Cash Provided by (Used in) Operating Activities

営業活動によるキャッシュ・フロー

83,53523,837Purchase of investment securities

投資有価証券の取得による支出(9,252)(1,066)

Proceeds from sales and liquidation of investment securities

投資有価証券の売却及び清算による収入

2,590

1,095

Purchase of property, plant and equipment and intangible assets

有形及び無形固定資産の取得による支出(21,938)(38,871)

Proceeds from sales of property, plant and equipment and intangible assets

有形及び無形固定資産の売却による収入

6,952

3,205

Collection of loans receivable

貸付金の回収による収入

Payments for lease and guarantee deposits

敷金及び保証金の差入による支出

Proceeds from collection of lease and guarantee deposits

敷金及び保証金の回収による収入

1,690

1,324

Repayments of lease and guarantee deposits received

受入敷金保証金の返還による支出(2,555)(3,231)

Proceeds from lease and guarantee deposits received

受入敷金保証金の受入による収入

2,166

5,365

Other, net

その他

Net Cash Provided by (Used in) Investment Activities

投資活動によるキャッシュ・フローCash Flows from Investing Activities

19

17

－

(574)

(632)

711

334

(20,191)(32,476)(Millions of yen)
FY2013

FY2014(From April 1, 2013
to March 31, 2014)(From April 1, 2014
to March 31, 2015)(8,200)16,000

(185)

(154)

Cash Flows from Financing Activities
Net increase (decrease) in short-term loans payable

短期借入金の純増減額

Repayments of finance lease obligations

ファイナンス・リース債務の返済による支出

Proceeds from long-term loans payable

長期借入れによる収入

Repayment of long-term loans Payable

長期借入金の返済による支出

Proceeds from issuance of bonds

社債の発行による収入

－

9,936

Redemption of bonds

社債の償還による支出－(10,000)

Proceeds from issuance of common stock

株式の発行による収入

428

131

Proceeds from stock issuance to minority shareholders

少数株主からの払込みによる収入

33

3

Purchase of treasury shares

自己株式の取得による支出(0)－

Cash dividends paid

配当金の支払額(5,721)(7,637)

Cash dividends paid to minority shareholders

少数株主への配当金の支払額

Net Cash Provided by (Used in) Financing Activities

財務活動によるキャッシュ・フロー

82,600102,500(126,085)(119,383)

(727)

(379)

(57,858)(8,983)－

4

Effect of Exchange Rate Change on Cash and Cash Equivalents

現金及び現金同等物に係る換算差額

Net Increase (Decrease) in Cash and Cash Equivalents

現金及び現金同等物の増減額

5,485(17,618)

Cash and Cash Equivalents at Beginning of Period

現金及び現金同等物の期首残高

62,496

67,982

Increase (Decrease) in Cash and Cash Equivalents Resulting from Change of
Scope of Consolidation

連結の範囲の変更に伴う現金及び現金同等物の増減額－

54

Cash and Cash Equivalents at End of Period

現金及び現金同等物の期末残高*1 67,982*1 50,41820

(5) Notes to Consolidated Financial Statements(Notes to Going Concern Assumptions)Not applicable.
(Basis for Presenting Consolidated Financial Statements)
1. Scope of Consolidation(1) Number of consolidated subsidiaries: 21
The names of principal consolidated subsidiaries are listed in “2. Group Companies.”
NOMURA REAL ESTATE ASIA PTE. LTD. is included in the scope of consolidation due to the establishment in the fiscal year
under review. Yokohama Mirai 46 Special Purpose Company and Nomura Real Estate Consulting (Beijing) Co., Ltd. are included in
the scope of consolidation due to their increased significance.
Smile Retail Eight Co., Ltd., Retail Investors 2007 Co., Ltd., and NPS Development Co., Ltd. are excluded from the scope of
consolidation due to the completion of liquidation, and Nomura Living Support Co., Ltd. is also excluded from the scope of
consolidation due to the merger with Nomura Building Management Co., Ltd., which is a consolidated subsidiary of the Company.
Nomura Building Management Co., Ltd. has changed its name to Nomura Real Estate Partners Co., Ltd.
(2) Major unconsolidated subsidiaries
Principal unconsolidated subsidiaries: Nomura Real Estate UK Limited(Reason for the exclusion of unconsolidated subsidiaries from the scope of consolidation)
Nonconsolidated subsidiaries are all small companies and the Company’s interests in their respective total assets, operating revenue
and net income and loss (the amount equivalent to equity shareholdings) as well as retained earnings (the amount equivalent to equity
shareholdings) do not significantly affect the Group’s consolidated financial statements.
2. Application of Equity Method(1) Number of unconsolidated subsidiaries accounted for by the equity method: 3
Principal unconsolidated subsidiaries: Nomura Real Estate UK Limited
NREAM Investors America, LLC was newly established in the fiscal year under review and included in unconsolidated subsidiaries.
(2) Number of affiliates accounted for by the equity method: 1
Principal affiliates: Ginza Parking Center Co., Ltd.
(3) Nonconsolidated subsidiaries (Dolphin Ichigou, LLC) and an affiliate (Cube Kawasaki Investment Co., Ltd.) are excluded from thescope application of the equity method as they have no material effect on consolidated income and loss (the amount equivalent toequity shareholdings), and retained earnings (the amount equivalent to equity shareholdings), and they are not important as a whole interms of material influence on consolidated financial statements.
3. Accounting Period, etc. of the Consolidated Subsidiaries
Among consolidated subsidiaries, the date for the closing of accounts of UNJ Properties, LLC and Yokohama Mirai 46 Special
Purpose Company is December 31. Provisional consolidated financial statements for these companies as of the consolidated closing
date (March 31) are used in the preparation of consolidated financial statements.
Among consolidated subsidiaries, the date for the closing of accounts of Nomura Real Estate Consulting (Beijing) Co., Ltd. andNOMURA REAL ESTATE ASIA PTE. LTD. is December 31. The date for the closing of accounts of Midosuji Mirai Development,
LLC, Shinjuku Mirai Development, LLC, Flagship Building Co., Ltd., and TJ Properties Special Purpose Company, Ltd. is February
28.
Consolidated financial statements for these companies as of that date are used in the preparation of consolidated financial statements.
In the case of significant transactions that take place between the date of the closing of accounts of the consolidated subsidiaries and theconsolidated account closing date, necessary adjustments are made for consolidation purposes.

21

4. Accounting Standards and Methods(1) Valuation standards and methods for principal assets
1) Short-term investments and investment securities
Held-to-maturity debt securities are stated at amortized cost by the straight-line method.
Available-for-sale securities with market value are stated at fair market value based on market quotations at the balance sheet date.
Unrealized gains and losses are reported, net of the applicable taxes, as a separate component of Net Assets. Cost of securities soldis determined by the moving-average method. Available-for-sale securities without market value are stated at cost by themoving-average method.
2) Derivatives
Derivatives are stated using the market value method.
3) Inventories
Inventories are mainly stated at cost, determined by the specific identification cost method (the amounts of inventories in theaccompanying Consolidated Balance Sheet are computed based on the write-down method reflecting decreased profitability).
(2) Depreciation and amortization method for significant depreciable assets
1) Property and equipment (except for leased assets)
Depreciation of property and equipment is computed mainly by the straight-line method.
Estimated useful lives used in the computation of depreciation are generally as follows:
Buildings and structures

2 to 65 years

2) Noncurrent assets (except for leased assets)
Depreciation of noncurrent assets is computed by the straight-line method.
Costs of software for internal use are amortized using the straight-line method over an estimated useful life of 5 years.
3) Leased assets
Leased assets are depreciated using the straight-line method, assuming the lease period to be the useful life and the residual value
to be zero. Finance leases, other than those that transfer ownership, which started on or before March 31, 2008, are accounted for as
operating leases.
(3) Standards for the provision of significant allowances
1) Allowance for doubtful accounts
In order to prepare for possible bad debt losses on notes and accounts receivable and loans, allowance for doubtful accounts isprovided at an amount calculated on the basis of a historical bad debt ratio for a certain reference period for normal claims, plus anestimated uncollectible amount determined on the basis of individual assessments for specific claims with potential losses.
2) Provision for employee bonuses
To prepare for the payment of employee bonuses, an amount corresponding to the portion of the bonus payments in the fiscal year
under review is reserved.
3) Provision for director bonuses
To prepare for the payment of director bonuses, an amount corresponding to the portion of the bonus payments in the fiscal year
under review is reserved.
4) Provision for loss on business liquidation
To prepare for losses in connection with the withdrawal from businesses, an estimated amount of the expenses for losses isreserved.
5) Provision for loss on subleasing business
To prepare for losses on properties that are highly likely to continue arising in the subleasing business, an estimated amount of thelosses and an estimated amount for the next fiscal year and after is reserved.
(4) Method of accounting regarding retirement benefits
1) Attribution of estimated retirement benefits
To calculate benefit liabilities, the estimated amount of retirement benefits is attributed to the fiscal year under review based on abenefit formula.
2) Amortization of actuarial gains and losses and prior service costs
Prior service costs are amortized by the straight-line method over 10 years within the average number of remaining service yearsof the eligible employees at the time of accrual.
Actuarial gains and losses are amortized by the straight-line method over 10 years within the average number of remaining service
years of the eligible employees at the time of accrual in each fiscal year, and allocated proportionately from the fiscal year following
the respective fiscal year of accrual.
22

(5) Standards for the provision of significant revenues and expenses
Basis for the recording of revenue and cost of completed work
The percentage-of-completion method is applied when the outcome of the construction activity during the fiscal year is deemedcertain in the course of the activity (percentage of completion is calculated by dividing the related cost incurred by the estimated totalcost); otherwise the completed-contract method is applied.
(6) Standards for the translation of important foreign currency-based assets or liabilities into Japanese yen
All current and non-current accounts denominated in foreign currencies are translated into Japanese yen at the spot exchange rates
in effect at the consolidated balance sheet date. Differences arising from such translation are recognized as gain or loss. The asset andliability accounts of the overseas subsidiaries and affiliates are translated into Japanese yen at the exchange rates prevailing at therespective balance sheet dates of the subsidiaries and affiliates and the revenue and expense accounts are translated into Japanese yenat the average rates of exchange for the year. Differences arising from such translation are presented as “Foreign currency translation
adjustments” in Net Assets.
(7) Significant hedge accounting
1) Hedge accounting method
Hedging transactions are accounted for using deferral hedge accounting, which requires the unrealized gains or losses to bedeferred as assets or liabilities until the losses or gains on the underlying hedged items are recognized. For interest rate swaps thatmeet certain hedging criteria, the Group applies exceptional treatment.
2) Hedging instruments and hedged items<Hedging instruments><Hedged items>

Interest rate swap contracts

Borrowings

Currency swaps and foreign exchange forward contracts

Securities denominated in foreign currencies

3) Hedge policy
In accordance with internal rules, interest rate swap transactions are conducted to avoid interest rate fluctuation and foreignexchange fluctuation risks.
4) Method for assessing the effectiveness of hedges
The Group evaluates hedge effectiveness by comparing the cumulative changes in market fluctuations or in cash flows of theHedged items to the corresponding changes in the hedging derivative instruments. However, the Group does not evaluate hedge
effectiveness of interest rate swaps for which the Group applies the exceptional treatment.
(8) Amortization of Goodwill
Goodwill is amortized using the straight-line method over a period of 14 to 20 years.
(9) Scope of cash in consolidated cash flow statements
Cash and cash equivalents in the consolidated statements of cash flows consist of cash on hand, readily-available deposits, andshort-term investments with a maturity not exceeding three months at the time of purchase that are readily convertible to cash and not
exposed to significant risk in value fluctuations.
(10) Other important matters for the preparation of consolidated financial statements
The tax-exclusion method is used to account for national and local consumption taxes. However, non-deductible consumption
taxes on fixed assets are included in “Other” under investments and other assets and amortized over 5 years, non-deductible
consumption taxes on land (inventory assets) are included in the acquisition costs, and other non-deductible consumption taxes are
expensed as incurred.
(Changes in Accounting Policies)(Application of Accounting Standards for Retirement Benefits)
The Group has applied the “Accounting Standards for Retirement Benefits” (Accounting Standards Board of Japan (ASBJ) Statement
No.26 issued May, 17 2012; hereinafter “Retirement Benefits Accounting Standards”) and “Guidance on Accounting Standards for
Retirement Benefits” (ASBJ Guidance No.25 issued March, 26 2015; hereinafter “Guidance”) from the fiscal year under review. In
accordance with the provisions stipulated in the main clause of Article 35 of the Retirement Benefits Accounting Standards and in themain clause of Article 67 of the Guidance, the Group reviewed the method of calculation for retirement benefit liabilities and service costs,
and changed the method of attributing expected amount of retirement benefits to accounting periods from a straight-line attribution
standard to a benefit formula, and changed the method of calculating discount rate from the use of the expected average remaining service
years for employees to use of a single weighted average discount rate .
The adoption of the accounting standards for retirement benefits and Guidance is subject to the transitional treatment stipulated by
Article 37 of the Retirement Benefits Accounting Standards, and the amount of financial impact at the beginning of the fiscal year under23

review as a result of the adoption of the new calculation method for retirement benefit liabilities and service costs is added to/ removed
from retained earnings.
As a result, the retirement benefits liabilities at the beginning of the fiscal year under review decreased by 2,445 million yen andretained earnings increased by 1,571 million yen. Consequently, operating income, ordinary income, and income before income taxes andminority interest of the fiscal year under review each increased by 129 million yen.
The impact on net assets per share, net income per share, and net income per share after adjusting of the fiscal year under review isminor.

(Notes to Consolidated Balance Sheets)*1 The following items are related to unconsolidated subsidiaries and affiliates.

(Millions of yen)
FY2013

FY2014(As of March 31, 2014)(As of March 31, 2015)

Investment securities

17,089(Investment in anonymous associations, etc.)

2,169*2 Pledged Assets and Secured Liabilities(1) Pledged assets are as follows.

(Millions of yen)
FY2013

FY2014(As of March 31, 2014)(As of March 31, 2015)

Buildings and structures

1,277

210

Land

1,263

-

9

-

2,550

210

Other property and equipment
Total
Secured liabilities are as follows.

(Millions of yen)
FY2013

FY2014(As of March 31, 2014)(As of March 31, 2015)

Short-term loans payable

57-

Lease and guarantee deposits received

59

52

116

52

Total
(2) Cash and deposits in the amount of ¥2 million are pledged as collateral for trade payables.

Investment securities in the amount of ¥10 million are pledged as a portion of liabilities of investee companies.
*3 Non-recourse debt is as follows.

(Millions of yen)
FY2013

FY2014(As of March 31, 2014)(As of March 31, 2015)

Non-recourse short-term loans payable

13,371-

Non-recourse current portion of bonds
Non-recourse bonds payable
Total

-

3,000

3,000

-

16,371

3,000

Pledged assets for non-recourse loans are as follows.

(Millions of yen)
FY2013

FY2014(As of March 31, 2014)(As of March 31, 2015)

Cash and cash equivalents

3,889

2,526

Buildings and structures

5,025

187

Land

25,472

7,804

Other property and equipment
Total

24

45

-

34,432

10,518

4 Guaranteed obligations
The following are customers for which bank loans, etc. have been guaranteed.

(Millions of yen)

FY2013

FY2014(As of March 31, 2014)(As of March 31, 2015)

Customers using housing loans

26,733Customers using housing loans

56,902

Joint operators of EBS buildings

744

Joint operators of EBS buildings

676

Total

27,477

Total

57,579*5 Under the “Law Concerning Revaluation Reserve for Land” (Act No. 34 promulgated on March 31, 1998), the Company revalued its
land held for business use. The tax amount for the difference between the appraisal value and the carrying amount is accounted for as“Deferred tax liabilities for land revaluation” in Noncurrent Liabilities and the difference net of such tax amount is recorded as“Revaluation reserve for land” in Net Assets.
Method of revaluation:
The value of land is determined based on a reasonable adjustment to the assessed value of the fixed assets as stipulated in Item 3,
Article 2 of the “Enforcement Ordinance Concerning Land Revaluation” (Ordinance No. 119 enacted on March 31, 1998).
Date of revaluation: March 31, 2002

(Notes to Consolidated Statements of Income)*1 Closing inventory is the amount after devaluation of the book value in connection with decline in profitability, and the following valuation
loss is included in the cost of goods sold.

(Millions of yen)
FY2013

FY2014(From April 1, 2013

(From April 1, 2014

to March 31, 2014)

to March 31, 2015)

1*2 The following are the major items and amounts of selling expenses and general and administrative expenses.

171(Millions of yen)

FY2013

FY2014(From April 1, 2013

(From April 1, 2014

to March 31, 2014)

to March 31, 2015)

Advertising expenses

20,19622,456

Employees’ salaries and allowances

26,19327,494

Provision for bonuses

5,383

5,245

Provision for directors’ bonuses

586

590

Retirement benefit expenses

1,768

1,716

Research and development expenses-

194

Provision of allowance for doubtful accounts

9

5*3 The breakdown of gain on sales of property and equipment is as follows:(Millions of yen)
FY2013

FY2014(From April 1, 2013

(From April 1, 2014

to March 31, 2014)

to March 31, 2015)

Land

481

17

Buildings and others

62

188

544

206

Total

25

*4 Impairment Loss
The Group recognized impairment loss on the following groups of assets.
FY2013 (From April 1, 2013 to March 31, 2014)
Primary use

Type

Location

Leased assets

Buildings

Minato-ku, Tokyo and other locations

OthersLand(9 locations in total)

Tangible fixed assets–others

Assets of the Group are grouped into the smallest unit that generates identifiable cash flows that are largely independent of cash flows
from other assets or groups of assets. The headquarters building and certain other assets are considered to be shared assets.
As a result, with respect to nine groups of assets the profitability of which has dropped significantly due to the deterioration of the market
conditions and the decline in rent level or that the Group plans to sell, the carrying amount has been reduced to the recoverable amount andthe amount of reduction has been recognized as an extraordinary loss of ¥16,572 million for the fiscal year ended March 31, 2014.
The impairment loss is broken down into an impairment loss of ¥11,821 million on land and an impairment loss of ¥4,751 million onbuildings and others.
The recoverable amount of these groups of assets is measured at the net realizable value and the net realizable value is determined basedon the expected sales price and the appraisal value provided by real estate appraisers.
FY2014 (From April 1, 2014 to March 31, 2015)
Primary use

Type

Location

Leased assets

Buildings

Shinagawa-ku, Tokyo and other locations

OthersLand(4 locations in total)

Tangible fixed assets–others

Assets of the Group are grouped into the smallest unit that generates identifiable cash flows that are largely independent of cash flows
from other assets or groups of assets. The headquarters building and certain other assets are considered to be shared assets.
As a result, with respect to four groups of assets the profitability of which has dropped significantly due to the deterioration of the market
conditions and the decline in rent level or that the Group plans to sell, the carrying amount has been reduced to the recoverable amount andthe amount of reduction has been recognized as an extraordinary loss of ¥8,170 million for the fiscal year ended March 31, 2015.
The impairment loss is broken down into an impairment loss of ¥7,591 million on land and an impairment loss of ¥578 million onbuildings and others.
The recoverable amount of these groups of assets is measured at the net realizable value and the net realizable value is determined basedon the expected sales price and the appraisal value provided by real estate appraisers.

26

(Notes to Consolidated Statements of Comprehensive Income)*1 The amount of recycling and amount of income tax effects associated with other comprehensive income(Millions of yen)
FY2013

FY2014(From April 1, 2013

(From April 1, 2014

to March 31, 2014)

to March 31, 2015)

Valuation Difference on Available-for-Sale Securities:
Amount recognized during the year

(3,749)9,587

Amount of recycling

(620)

(998)

Before income tax effect(4,369)8,588

Income tax effect1,561(2,824)

Valuation difference on available-for-sale securities(2,808)

5,764

Deferred Gains or Losses on Hedges:
Amount recognized during the year

(282)

87

Amount of recycling

(48)

(10)

Before income tax effect

(330)

76

Income tax effect

117

(23)

Deferred gains or losses on hedges

(212)

53

(0)

420

Amount recognized during the year-

6

Amount of recycling--

Before income tax effect-6

Income tax effect--Foreign currency translation adjustment-

6

Amount recognized during the year-

972

Amount of recycling-

14

Before income tax effect-987

Income tax effect

-

(297)

Remeasurements of defined benefit plans

-

689

41

21

Revaluation Reserve for Land:
Income tax effectForeign Currency Translation Adjustment:

Remeasurements of Defined Benefit Plans:

Share of Other Comprehensive Income of Affiliates Accounted for
Using the Equity Method:Amount recognized during the year
Amount of recycling--

Before income tax effect41

21

Income tax effect

(17)

(5)

23

15

(2,997)

6,950

Share of other comprehensive income of affiliates
accounted for using the equity method
Total Other Comprehensive Income27

(Notes to Consolidated Statements of Changes in Net Assets)
FY2013 (From April 1, 2013 to March 31, 2014)
1. Type and number of shares issued and treasury shares
Number of shares
as of April 1, 2013

Number of shares

Increase

Decrease(Thousand shares)(Thousand shares)

as of March 31, 2014

(Thousand shares)(Thousand shares)

Shares issued
Common stock (Note) 1
Total

190,595

311-

190,906

190,595

311-

190,906

1

0

-

1

1

0

-

1

Treasury shares
Common stock (Note) 2
Total(Notes) 1. The total number of issued shares among common shares increased by 311 thousand shares as the result of the exercise of stock
options.
2. The total number of treasury shares among common shares increased by 0 thousand shares as the result of the purchase of treasury
shares in an amount less than one unit.
2. Matters concerning stock acquisition rights including treasury stock acquisition rights

Classification

Class of shares

Total number of shares subject to the stock

Breakdown of stock

subject to theacquisition rights

acquisition rights

stock acquisition As of April

Balance at

As of March

March 31, 2014

Increase

Decrease

-

-

-

-

1,246

-

-

-

-

-

27

-

-

-

-

-

1,273

rights1, 2013-31, 2014(Millions of yen)Company submitting
consolidated

Stock acquisition rights

financial statements

used as stock options(Parent company)
Consolidated-

subsidiaries
Total

3. Dividends(1) Dividends paid
Total amount of(Resolution)

Type of shares

dividends

Dividends per

Record date

Effective date

March 31, 2013

June 28, 2013

share (Yen)(Millions of yen)

June 27, 2013
General meeting ofCommon stock

2,858

15

Common stock

2,862

15

shareholders
October 29, 2013
Meetings of the Board ofSeptember 30,
2013

Directors

December 2, 2013

(2) Dividends whose record date is in the fiscal year under review but whose record date is thereafter
Total amount(Resolution)

Type of sharesof dividends(Millions of yen)

June 27, 2014
General meeting ofshareholders

Common stock

3,818

Dividend

Dividends per

resource

share (Yen)

Retainedearnings

28

20

Record date

March 31,2014

Effective dateJune 30, 2014

FY2014 (From April 1, 2014 to March 31, 2015)
1. Class and number of shares issued and treasury shares
Number of shares
as of April 1, 2014

Number of shares

Increase

Decrease(Thousand shares)(Thousand shares)

as of March 31, 2015

(Thousand shares)(Thousand shares)

Shares issued
Common stock (Note) 1
Total

190,906

212-

191,119

190,906

212-

191,119

1

-

-

1

1

-

-

1

Treasury shares
Common stock
Total(Note) 1. The total number of issued shares among common shares increased by 212 thousand shares as the result of the exercise of stock
options.
2. Matters concerning stock acquisition rights including treasury stock acquisition rights

Classification

Class of shares

Total number of shares subject to the stock

Breakdown of stock

subject to theacquisition rights

acquisition rights

stock acquisition

As of April

rights1, 2014-

Balance at March

As of March

31, 2015

Increase

Decrease

-

-

-

-

1,533

-

-

-

-

-

30

-

-

-

-

-

1,563

31, 2015(Millions of yen)Company submitting
consolidated

Stock acquisition rights

financial statements

used as stock options(Parent company)
Consolidated
subsidiaries
Total

3. Dividends(1) Dividends paid
Total amount of(Resolution)

Type of shares

dividends

Dividends per

Record date

Effective date

March 31, 2014

June 30, 2014

share (Yen)(Millions of yen)

June 27, 2014
General meeting ofCommon stock

3,818

20

Common stock

3,819

20

shareholders
October 30, 2014
Meetings of the Board ofSeptember 30,
2014

Directors

December 1, 2014

(2) Dividends whose record date is in the fiscal year under review but whose record date is thereafter
Following proposals are planned to be made.
Total amountType of sharesof dividends(Millions of yen)

June 26, 2015
General meeting ofshareholders

Common stock

4,777

Dividend

Dividends per

resource

share (Yen)

Retainedearnings

29

25

Record date

March 31,2015

Effective dateJune 29, 2015

(Notes to Consolidated Statement of Cash Flows)*1 A reconciliation of balance at the end of the period of cash and cash equivalents and items in the Consolidated Balance Sheets.
(Millions of yen)
FY2013

FY2014(From April 1, 2013

(From April 1, 2014

to March 31, 2014)

to March 31, 2015)

Cash and deposits

45,48447,420

Short-term investment securities

22,500

3,000

(2)

(2)

67,98250,418Time deposits with maturities of more than three months
Cash and cash equivalents(Real Estate for Rent)
Some of the Company’s subsidiaries own rental office buildings and rental retail facilities (including land) in Tokyo and other regions.
Other properties used as rental properties includes portions used by the Company and certain consolidated subsidiaries.
The book values in the Consolidated Balance Sheet, changes during the fiscal year, and fair values of real estate, of which some portions areused as rental property, are as follows.
(Millions of yen)
FY2013

FY2014(From April 1, 2013

(From April 1, 2014

to March 31, 2014)

to March 31, 2015)

Rental properties
Book value
Balance at the beginning of the fiscal year

698,632

Changes during the fiscal year

(22,156)

13,180

Balance at the end of the fiscal year

676,475

689,655

695,175

735,723

24,86825,590721(253)

25,59025,336

48,13049,530Fair value at the end of the fiscal year

676,475

Other properties used as rental properties
Book value
Balance at the beginning of the fiscal year
Changes during the fiscal year
Balance at the end of the fiscal year
Fair value at the end of the fiscal year

(Notes) 1. Book values in the Consolidated Balance Sheet are the amounts determined by deducting accumulated depreciation andaccumulated impairment losses from the acquisition cost.
2. Fair values as of March 31, 2014 and 2015 are determined based primarily on values according to real estate appraisal standards(including adjustments based on certain indexes). However, if there have been no fluctuations in appraisal values or indexes
considered to appropriately reflect market values, the Group uses the appraisal values or amounts derived from the indexes of therecent appraisal or acquisition from third parties as the fair values at March 31, 2014 and 2015.

30

Income and loss on rental properties and other properties used as rental properties are as follows.
(Millions of yen)
FY2013

FY2014(From April 1, 2013

(From April 1, 2014

to March 31, 2014)

to March 31, 2015)

Rental properties
Operating income

26,911

23,230

Others (gains (losses) on sale of property, etc.)(15,958)(5,760)

791

968

-

-

Other properties used as rental properties
Operating income
Others (gains (losses) on sale of property, etc.)(Notes) 1.

As real estate of which some portions are used as rental property includes portions used by the Company and certain
consolidated subsidiaries for providing services as well as management and administration, operating income for this type of realestate is not recorded.

2. Others include gain on sales of noncurrent assets (544 million yen) and impairment loss (16,502 million yen) in the fiscal year
ended March 31, 2014, and dividends distribution from silent partnership (2,203 million yen) and impairment loss (8,170 million
yen) in the fiscal year ended March 31, 2015.

(Segment Information)a. Segment information
1. Segment summary
The reportable segments of the Group comprise those business units for which separate financial information is available, and which
are subject to a regular review conducted by the Company’s Board of Directors in order to determine the allocation of management
resources and evaluate their performance.
With the Company, as a pure holding company the Group consists of business companies and divisions, such as Nomura Real Estate
Development Co., Ltd. The business companies (or business divisions within Nomura Real Estate Development) formulatecomprehensive strategies on respective products and services handled by them and conduct business activities based on such strategies.
Therefore, business segments of the Group are distinguished by products and services, primarily by business companies (or by businessdivisions within Nomura Real Estate Development).
2. Changes in reportable segments
From the second quarter of the fiscal year under review, a partial revision in the method of allocating costs to each segment of theCompany has been incorporated to enhance the management of each segment.
In addition, the residential leasing business has also been transferred from the Residential Development Business Segment to the
Leasing Business Segment to facilitate comprehensive strategic judgment regarding the Company’s leasing asset portfolio.
In line with these changes, segment income of the fiscal year under review decreased by 3,033 million yen in the Residential
Development Business Segment, 801 million yen in the Leasing Business Segment, 174 million yen in the Investment Management
Business Segment, and 347 million yen in the Property Brokerage & CRE Business Segment, and increased by 4,356 million yen in
Adjustments.
The results of the previous fiscal year are calculated in line with the newly adopted method of cost allocation and segmentclassification.
3. Methods for calculating operating revenue, operating income (loss), assets, liabilities and other items by reportable segment
The accounting method for reportable segments is almost equivalent to that specified in “Significant Accounting Policies”.
Reportable segment income is presented based on operating income. Intersegment sales and transfer amounts are presented based onmarket prices.

31

4. Information regarding sales, gains or losses, assets, liabilities, and other amounts by reportable segment
FY2013 (From April 1, 2013 to March 31, 2014)(Millions of yen)AmountReportable segments

recorded in
Property
Residential

Other

Property &Adjustments
Total

Investment
Leasing

Development

Brokerage

Facility

Subtotal(Note) 1

Management& CRE

Management

consolidated
financial(Note) 2

statements(Note) 3

Operating revenue
Externalcustomers
Inter-segment
Subtotal

306,783

97,75818,323

26,63663,877513,379

18,636532,016-532,016

841

2,108

3

2,531

8,272

13,757

4

13,761(13,761)-

307,625

99,86618,32629,16872,150527,137

18,640545,778(13,761)

532,016508

79,615(5,307)74,307

34,133 1,263,390

50,496

1,313,887

Segment income

31,177

26,818

7,902

8,101

5,107

79,107

Segment assets

331,779

776,097

67,34621,14232,891

1,229,256

Depreciation

103

12,297

211

251

257

13,122

1,052

14,175

158

14,333

Amortization of
goodwill

-

235

-

-

29

264

-

264

-

264

Investment in affiliates
accounted for using
equity method

27

1,029

-

-

-

1,057

-

1,057

-

1,057

Increase in property,
plant and equipment
and intangible assets

293

14,175

125

492

244

15,331570

15,902272

16,174

Other items(Notes)1. The “Other” category, which represents operating segments that are not included in reportable segments, includes fitness cluband other businesses.
2. (1) The deduction of 5,307 million yen shown in the adjustments column for segment income includes an addition of
667 million yen for the elimination of inter-segment transactions and a deduction of 5,974 million yen for corporate
expenses not allocated to reportable segments. These corporate expenses mainly consist of general and administrative
expenses not attributable to reportable segments.
(2) The addition of 50,496 million yen shown in the adjustments column for segment assets includes a deduction of 40,514
million yen for the elimination of inter-segment transactions and an addition of 91,011 million yen for corporate assets notallocated to reportable segments.
3. The segment income is reconciled to the operating income stated in the consolidated financial statements.

32

FY2014 (From April 1, 2014 to March 31, 2015)(Millions of yen)AmountReportable segments

recorded in
Residential

Property

Property &Brokerage

Facility

Other

Adjustments
Total

Investment
Leasing

Development

Subtotal(Note) 1

Management& CRE

consolidated
financial(Note) 2

statements

Management(Note) 3

Operating revenue
Externalcustomers

358,490

90,642

9,163

27,934

63,180549,411

17,747567,159-

567,159

907

2,235

2

2,298

8,455

13,9005

13,905(13,905)-

Subtotal

359,397

92,878

9,166

30,232

71,635563,31117,753581,064(13,905)

567,159

Segment income

33,811

24,447

4,813

8,477

5,477

77,028167

77,195(5,300)71,894

Segment assets

382,585

849,885

40,55522,60632,375

1,328,009

19,833 1,347,843

21,383

1,369,226

Depreciation

121

13,221

130

303

249

14,025

1,032

15,058200

15,258

Amortization of
goodwill

-

235

-

-

29

264

-

264

-

264

Investment in affiliates
accounted for using
equity method

31

1,064

275

-

-

1,372

-

1,372

-

1,372

Increase in property,
plant and equipment
and intangible assets

216

47,039

109

548

154

48,068850

48,919(15,023)

33,896

Inter-segment

Other items(Notes) 1. The “Other” category, which represents operating segments that are not included in reportable segments, includes fitness cluband other businesses.
2. (1) The deduction of 5,300 million yen shown in the adjustments column for segment income includes a deduction of
123 million yen for the elimination of inter-segment transactions and a deduction of 5,177 million yen for corporate
expenses not allocated to reportable segments. These corporate expenses mainly consist of general and administrative
expenses not attributable to reportable segments.
(2) The addition of 21,383 million yen shown in the adjustments column for segment assets includes a deduction of 39,994
million yen for the elimination of inter-segment transactions and an addition of 61,377 million yen for corporate assets notallocated to reportable segments.
3. The segment income is reconciled to the operating income stated in the consolidated financial statements.

b. Related information
FY2013 (From April 1, 2013 to March 31, 2014)
1. Information by product and service
Information by product and service is omitted as categories or products and services are identical to “a. Segment information,” and“4. Information regarding sales, gains or losses, assets, liabilities, and other amounts by reportable segment.”
2. Information by geographical area
Information by geographical area is omitted because the operating revenue to unaffiliated customers in Japan and tangible fixed
assets located in Japan accounted for more than 90% of operating revenue in the consolidated profit-and-loss statement and tangible
fixed assets in the consolidated balance sheet, respectively.
3. Information by major customer
Information on each unaffiliated major customer is omitted because sales for each major customer accounted for less than 10% ofconsolidated operating revenue.

33

FY2014 (From April 1, 2014 to March 31, 2015)
1. Information by product and service
Information by product and service is omitted as categories or products and services are identical to “a. Segment information,” and“4. Information regarding sales, gains or losses, assets, liabilities, and other amounts by reportable segment.”
2. Information by geographical area
Information by geographical area is omitted because the operating revenue to unaffiliated customers in Japan and tangible fixed
assets located in Japan accounted for more than 90% of operating revenue in the consolidated profit-and-loss statement and tangible
fixed assets in the consolidated balance sheet, respectively.
3. Information by major customer
Information on each unaffiliated major customer is omitted because sales for each major customer accounted for less than 10% ofconsolidated operating revenue.
c. Impairment loss on noncurrent assets by reportable segment
FY2013 (From April 1, 2013 to March 31, 2014)(Millions of yen)
Residential

Investment
Leasing

Development

Impairment loss-

Management

16,565

Property

Property &Brokerage &Facility

CRE

Management

-

Other
Total

(Note)--

6

16,572(Note) The amount shown in the “Other” column relates to fitness club business.
FY2014 (From April 1, 2014 to March 31, 2015)(Millions of yen)
Residential

Leasing

Development

Impairment loss

Investment

Property

Property &Brokerage &Facility

Management

-

1,645

CRE

6,099

Other

Management

425

Total

(Note)

-

-

8,170

d. Amortization and unamortized balance of goodwill by reportable segment
FY2013 (From April 1, 2013 to March 31, 2014)(Millions of yen)
Residential

Investment
Leasing

Development

Management

Property

Property &Brokerage &Facility

CRE

Management

Total

Amortization

-

235

-

-

29

264

Balance at March 31, 2014

-

3,474

-

-

263

3,738

FY2014 (From April 1, 2014 to March 31, 2015)(Millions of yen)
Property
Residential

Investment

Leasing

Development

Management

Property &Brokerage &Facility

CRE

Management

Total

Amortization

-

235

-

-

29

264

Balance at March 31, 2015

-

3,239

-

-

234

3,473

e. Gain on negative goodwill by reportable segment
Not applicable.

34

(Per Share Information)
FY2013

FY2014(From April 1, 2013

(From April 1, 2014

to March 31, 2014)

to March 31, 2015)

Net assets per share

1,863.12 yen

2,061.86 yen

Net income per share

140.70 yen

201.28 yen

Diluted net income per share

140.23 yen

200.55 yen(Note) The basis for the calculation of net income per share and diluted net income per share is as follows.
FY2013

FY2014(From April 1, 2013

(From April 1, 2014

to March 31, 2014)

to March 31, 2015)

Net income per share
Net income (Millions of yen)

26,84438,441--

26,84438,441

190,792

190,982

0

0

0

0

644

699

644

699

Description of potentially dilutive common shares not

Nomura Real Estate Holdings, Inc. theNomura Real Estate Holdings, Inc. theincluded in the computation of diluted net income per

3rd Stock Acquisition Rights in

3rd Stock Acquisition Rights inshare because of their anti-dilutive effect

FY2007 (Total number of rights:

FY2008 (Total number of rights:

1,369)

1,390)

Nomura Real Estate Holdings, Inc. theNomura Real Estate Holdings, Inc. the

3rd Stock Acquisition Rights in

3rd Stock Acquisition Rights in

FY2013 (Total number of rights:

FY2013 (Total number of rights:

3,321)

3,311)MEGALOS Co., Ltd. the 2nd Stock

Nomura Real Estate Holdings, Inc. theAcquisition Rights in FY2013 (Total

3rd Stock Acquisition Rights innumber of rights: 300)

FY2014 (Total number of rights:

Net income not attributable to common shareholders
Net income attributable to common stock
Average number of common stock during the period(Thousand shares)
Diluted net income per share
Adjustment for net income (Millions of yen)
Of which, difference in changes in equity
associated with the stock acquisition rights issuedby consolidated subsidiaries (Millions of yen)
Increase in number of shares of common stock(Thousand shares)
Of which, stock acquisition rights(Thousand shares)

3,523)MEGALOS Co., Ltd. the 2nd Stock
Acquisition Rights in FY2014 (Total
number of rights: 350)35

(Significant Subsequent Events)
Tender Offer for Share Certificates, etc. of MEGALOS Co., Ltd.
Nomura Real Estate Holdings, Inc. (the “Company” hereinafter) resolved at the meeting of its Board of Directors held on April 30, 2015 to
conduct the tender offer as part of the transactions for the purpose of acquiring all of the shares and the stock acquisition rights of MEGALOS
Co., Ltd. (listed the JASDAQ Market, the “Target Company” hereinafter) (excluding the shares held by the Company and the treasury shares
held by the Target Company), and the Target Company is a consolidated subsidiary of the Company.
Board of Directors of the Target Company has resolved, at the Board of Directors meeting of the Target Company, to express an opinion infavor of the Tender Offer and to recommend that the Target Company’s shareholders and the holders of the Stock Acquisition Rights of theTarget Company tender their share certificates, etc. in the Tender Offer.

1. Purpose of the Tender Offer
The Target Company listed its shares on the Jasdaq Securities Exchange operated by Jasdaq Co., Ltd. (currently, the JASDAQ Market) in
November 2007 for purposes such as securing financing and corporate creditworthiness, increasing corporate recognition, and securing
human resources. Since being listed, the Target Company has sought to increase profits in the existing fitness clubs, and has aimed to increase
its corporate value by aggressively expanding business areas and opening new clubs.
In recent years, however, the Target Company has faced tasks such as intensifying competition due to the increased number of competitor
fitness clubs in the fitness market, and changing and diversifying customer needs for equipment and services.
Under those circumstances, the Company considers that as measures to be taken from the mid-to long-term perspective of the Target
Company, it is essential to review the fee system of the existing fitness clubs, and to otherwise roll out new clubs as a new model of fitness
clubs in response to diversifying customer needs. However, given that such measures would involve temporary decreases in the membershiprevenue, as well as investment in the opening of new model fitness clubs and upfront costs related to such openings, there is a risk of a
resulting short-term fall in the operating results of the Target Company and uncertainty regarding subsequent profit recovery. Therefore,
because it is possible that these measures would not necessarily receive an adequate evaluation in the capital market as measures taken by alisted company, it is also assumed that the share price of the Target Company Shares may be adversely affected. The Company also
recognizes that in maintaining the listing of the Target Company, there is a problem that it may be unable to make quick decisions because it
would be necessary to fully verify the validity and effectiveness of those measures.
Given those conditions above, the Company and the Target Company determined that it would be possible for the Target Company toimplement bold measures that may entail a risk of a short-term fall in operating results or uncertainty based on quick decision-making byachieving integrated management of the Company and the Target Company under the relationship between a wholly-owning company and awholly-owned company, and that it would be possible to achieve acceleration of the Target Company’s growth based on mid-to long-term
perspectives. The Company and the Target Company also determined that because they could expect to be able to leverage not only theTarget Company’s strengths but also the collective strengths of the integrated group, such integrated management will lead to an increase in
the corporate value of the Company Group.

2. Outline of the Target Company(1) Name

MEGALOS Co., Ltd.

(2) Address

2-4-4, Ebisu-minami, Shibuya-ku, Tokyo(3) Name and title of representative Mitsuru Ohashi, President and Representative Director(4) Description of business

Operation of sports clubs and sale of sports products and other items(5) Stated capital

1,475 million yen (as of March 31, 2015)(6) Date of incorporation

March 1, 198936

3. Outline of the Tender Offer
As of April 30, 2015, the Company holds 2,103,600 shares (ownership percentage (Note): 53.87%, rounded to two decimal places) ofcommon stock of the Target Company (the “Target Company Shares”) listed on the JASDAQ Standard Market (the “JASDAQ Market”),
and the Target Company is a consolidated subsidiary of the Company.
The Target Company Shares is listed on the JASDAQ Standard Market as of April 30, 2015. However, because the Company has not set a
maximum number of shares to be purchased in the Tender Offer, depending on the result of the Tender Offer, the Target Company Shares
might be delisted through prescribed procedures pursuant to TSE’s delisting standards.
Also, even if the relevant standards do not apply at the time of completion of the Tender Offer, because, when the Tender Offer iscompleted, the procedures are to be taken for the purpose of acquiring all of the Target Company Shares (excluding the shares held by theCompany and the treasury shares held by the Target Company), the Target Company Shares will be delisted through prescribed procedures
pursuant to TSE’s delisting standards. After the delisting, the Target Company Shares may not be traded on the JASDAQ Market.

(1) Number of shares to be purchased

1,929,192 shares(Note) Because the Offeror has not set a maximum number or minimum number of shares to be purchased in the Tender Offer, theOfferor will purchase all of the Tendered Share Certificates, etc. The “Number of shares to be purchased” indicates the maximum
number of share certificates, etc. to be acquired by the Offeror in the Tender Offer. Such maximum number is the total number ofshares (i.e., 1,929,192 shares) obtained by deducting the number of treasury shares held by the Target Company as of March 31, 2015
(208 shares) as set forth in the Summary of Target Company Financial Results and the number of the Target Company Shares held by
the Company as of today (2,103,600 shares), from the total number of issued shares of the Target Company as of March 31, 2015
(3,905,100 shares) as set forth in the Summary of Target Company Financial Results, and adding thereto the number of the Target
Company Shares (127,900 shares) which are the object of the Stock Acquisition Rights as of March 31, 2015 (1,279 options) as set
forth in the Summary of Target Company Financial Results.
(2) Tender offer period

From May 1, 2015 through June 16, 2015 (30 business days)(3) Tender offer priceCommon stock

2,000 yen per share

FY2008 Series No. 2 Stock acquisition rights (the “Series No. 1 Stock Acquisition Rights”)

126,000 yen per stock acquisition right

FY2009 Series No. 2 Stock acquisition rights (the “Series No. 2 Stock Acquisition Rights”)

99,000 yen per stock acquisition right

FY2010 Series No. 2 Stock acquisition rights (the “Series No. 3 Stock Acquisition Rights”)

90,700 yen per stock acquisition right

FY2011Series No. 2 Stock acquisition rights (the “Series No. 4 Stock Acquisition Rights”)

89,500 yen per stock acquisition right

FY2012 Series No. 2 Stock acquisition rights (the “Series No. 5 Stock Acquisition Rights”)

80,400 yen per stock acquisition right

FY2013 Series No. 2 Stock acquisition rights (the “Series No. 6 Stock Acquisition Rights”)

51,200 yen per stock acquisition right

FY2014 Series No. 1 Stock acquisition rights (the “Series No. 7 Stock Acquisition Rights”)

199,900 yen per stock acquisition right

FY2014 Series No. 2 Stock acquisition rights (the “Series No. 8 Stock Acquisition Rights”)

41,000 yen per stock acquisition right(4) Purchase price

3,767 million yen(Note) The purchase price is the total amount of the amount calculated by multiplying the number of shares (1,863,292 shares) equal to
the number of shares to be purchased (1,929,192 shares) less the number of the Target Company Shares (65,900 shares) which are theobject of the Stock Acquisition Rights (659 options) that is the total number of the Series No. 6 Stock Acquisition Rights (240 options),
the Series No. 7 Stock Acquisition Rights (69 options) and the Series No. 8 Stock Acquisition Rights (350 options), out of the numberof the Stock Acquisition Rights as of March 31, 2015 (1,279 options) as set forth in the Summary of Target Company Financial
Results, of which the exercise periods will not begin during the tender offer period of the Tender Offer thus which will not able to be
exercised during such period, by the Tender Offer Price (2,000 yen), and the amount calculated by multiplying the number of the Series
No. 6 Stock Acquisition Rights (240 options) by the purchase price per such stock acquisition right (51,200 yen), the amount calculated
by multiplying the number of the Series No. 7 Stock Acquisition Rights (69 options) by the purchase price per such stock acquisitionright (199,900 yen) and the amount calculated by multiplying the number of the Series No. 8 Stock Acquisition Rights (350 options) by
the purchase price per such stock acquisition right (41,000 yen).
(5) Commencement date of settlement

June 23, 2015

(6) Fundraising method

Equity capital

37