April 27, 2017

Consolidated Financial Results
For the Fiscal Year Ended March 31, 2017
<under Japanese GAAP>
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.

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 :Eiji Kutsukake, President, Group CEO

Inquiries:

Naoko Usami,
General Manager, Corporate Communications Dept.

Email:

info@nomura-re-hd.com

Date of Ordinary General Meeting of shareholders :June 29, 2017

Scheduled starting date for dividend payments:

June 8, 2017

Scheduled submitting date of annual securities report:

June 29, 2017

Preparation of explanatory materials for financial results :YesInformation meetings arranged related to financial results :Yes (for institutional investors and analysts, in Japanese)(Values of less than one million yen rounded down)

I.

Consolidated operating results for the fiscal year from April 1, 2016 to March 31, 2017
(1) Consolidated business results(% indicates the rate of changes from previous fiscal year)

Operating revenue

Operating profit

Profit attributable toOrdinary profit

owners of parent

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

FY2016569,680

0.0

77,271（4.5）

68,952（5.1）

47,005(0.4)

FY2015569,545

0.4

80,912

12.5

72,67914.1

47,18222.7(Note) Comprehensive income:

FY201648,175 million yen(up 4.5%)

Basic earnings per

Diluted earnings per

share

share

FY2015 46,084 million yen (down 7.1%)
Ordinary profit

Return on equity

Operating profit

margin on total

marginassets

yen

yen

%

%

%

FY2016245.10244.06

10.1

4.5

13.6

FY2015246.42245.40

11.2

5.1

14.2

(Reference)Share of profit (loss) of entities accounted for using equity method :0

FY2016 83 million yen

FY2015 16 million yen

(2) Consolidated financial position
Total assets

Net assets

Shareholders' equity ratio

Net assets per share

As ofMillions of yen

Millions of yen%

yenMar. 31, 2017

1,593,093

493,81330.2

2,508.73

Mar. 31, 2016

1,485,449

456,408

29.9

2,320.84(Reference) Shareholders’ equity:

As of March 31, 2017 481,364 million yen As of March 31, 2016 444,854 million yen(3) Consolidated cash flows
Cash flows from

Cash flows from (used(used in) operating activitiesin ) investing activities

Cash flows from

Cash and cash equivalents(used in) financing

at end of period

activities

Millions of yen

Millions of yen

Millions of yen

Millions of yen

FY2016(31,889)(54,558)

76,57547,699FY2015

13,258(59,714)53,63757,591

II. Dividends
Dividend per share
1st quarter2nd quarter3rd quarter

Total amountof dividends

Fiscal year
Total

end

end

end

(Annual)end

Payout ratio(Consolidated)

Dividend on
equity(Consolidated)

yen

yen

yen

yen

yen

Millions of yen%%

FY2015

-

27.50

-

30.00

57.50

11,01923.3

2.6

FY2016

-

30.00

-

35.00

65.00

12,470

26.5

2.7

-

35.00

-

35.00

70.00

FY2017(Forecast)

30.5(Note) Revision of dividend forecasts during this quarter: Yes

III. Forecasts of consolidated operating results for the fiscal year from April 1, 2017 to March 31, 2018(% indicates the rate of changes from previous fiscal year or term)

Operating revenue

FY2017

Operating profit

Ordinary profit

Profit attributable to

Basic earningsper

owners of parent

shareMillions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

yen

646,000

13.4

76,000(1.6)

67,000(2.8)

44,000(6.4)

229.31* 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.

: None2)

Changes in accounting policies other than the above: None3)

Changes in accounting estimates: None4)

Restatements: None1(3) Number of shares issued (common stock)1)

Number of shares issued at end of period (including
treasury shares)

2)

3)

As of March 31

As ofMarch 31

2017

2016

191,877,801

191,679,601

1,709

1,508

Treasury shares at end of period

Average number of shares outstanding during the period

Fiscal year ended

Fiscal year ended

March 31,2017

March 31,2016

2017

2016

191,781,378

191,472,373* Consolidated financial results are not required to be audited.
* Proper use of forecasts of financial results, and other special matters
Forward-looking statements in this document, including the forecasts of financial results, etc., are based on the information currently
available to the Company and certain assumptions deemed to be reasonable. These statements do not purport that the Company pledges torealize such statements. Actual performance and other results may differ materially from these forecasts due to various factors. For mattersrelated to the forecasts of financial results, please refer to “1. Business Results and Financial Position (4) Forecasts” on page 7 of the
Attachments.
(How to obtain fact sheets)
The fact sheets will be disclosed on TDnet on April 27, 2017 and will be uploaded on the Company's website.

2

Attachments- Contents
1. Business Results and Financial Position ....................................................................................................................................................

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

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

6(3) Cash Flows. ......................................................................................................................................................................... .............

6(4) Forecasts ......................................................................................................................................................................... ............. ....

7(5) Basic Policy regarding Profit Distribution and Dividends for the Current and Next Fiscal Year............ ............ ........... ....

7

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

8

3. Basic Policies for Selecting Accounting Standards....................................................................................................................................

10

4. Consolidated Financial Statements .............................................................................................................................................................

11(1) Consolidated Balance Sheets .........................................................................................................................................................

11(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ..........................................

13

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

13

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

14(3) Consolidated Statements of Changes in Net Assets ....................................................................................................................

15(4) Consolidated Statement of Cash Flows ........................................................................................................................................

17(5) Notes to Consolidated Financial Statements ................................................................................................................................

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

19(Significant Matters for the Basis for the Preparation of Consolidated Financial Statements) ..........................................

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

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

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

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

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

28(Real Estate for Rent) .....................................................................................................................................................................

28(Segment Information) ..................................................................................................................................................................

30(Per Share Information) .................................................................................................................................................................

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

35

1

1. Business Results and Financial Position(1) Business Results
During the fiscal year under review, the Japanese economy showed a tone of gradual recovery overall with an increase in exports,
underpinned by a shift toward recovery in the global economy and a trend of yen depreciation in the latter half of the fiscal year, andcontinuing improvement in corporate production activities, despite continuing weakness in consumer spending. In regard to the economic
outlook, the gradual recovery is expected to continue into the future with further pickups in consumer spending expected as a result of
improvements in the employment and personal income environments, although it is necessary to pay careful attention to the economic
trends of the advanced countries of Europe and North America.
In the house sales market, the housing sales market was characterized by impressions that sales prices were expensive due to persistently
high construction costs and intensified demand for the purchase of land, which led to a buyer shift to the used-housing market, a drop in therate of contracts and adjustments in the number of supplied housing units in the Tokyo metropolitan area. In the office market, vacancy
rates remain at a low level against the backdrop of improvements in the employment environment and corporate earnings despite the rise inlarge properties in the Tokyo metropolitan area. In addition, the rent level continues to rise gradually, particularly in the central area ofTokyo.
In the real estate investment market, there is a continuing environment of investment fund inflow backed by low interest rates. In
J-REIT, there were a series of new listings on the market and capital increases through public offerings, and assets under management havesolidly expanded as a result of an increase in property acquisitions mainly comprising logistics facilities and hotels.
In this business environment, the Nomura Real Estate Group (the “Group”) posted the following consolidated performance for the
fiscal year under review: Operating revenue of 569,680 million yen, which represents an increase of 135 million yen, or 0.0% year on
year; operating profit of 77,271 million yen, a decrease of 3,641 million yen, or 4.5%; ordinary profit of 68,952 million yen, a decrease of
3,727 million yen, or 5.1%; and profit attributable to owners of parent of 47,005 million yen, a decrease of 176 million yen, or 0.4%.
An overview of unit achievements is given below:
Operating revenue for each unit includes internal sales and transfer amount among units. Due to the rounding of fractions, total figures
may not match.
From the first quarter of the fiscal year under review, Nomura Real Estate Heating and Cooling Supply Co., Ltd., which had beenclassified under the Leasing Unit, was transferred to the Property & Facility Management Unit to promote business in conjunction with
the Property & Facility Management Business.
In addition, First Living Assistance Co., Ltd., established in March 2017, has been classified under the Residential Development Unit
to promote business in conjunction with the Residential Development Business.
The results of the previous fiscal year are calculated in line with the newly adopted unit classification.
<Residential Development Unit>
Operating revenue in this unit totaled 329,787 million yen, which represents a decrease of 4,727 million yen, or 1.4% year on year, andoperating profit totaled 27,787 million yen, a decrease of 4,122 million yen, or 12.9% , resulting in decreases in both revenue andoperating profit compared with the previous fiscal year.
This was mainly due to a decrease in the number of housing unit sales recorded in the housing sales business.
In regard to housing sales, we posted the sale of 5,567 units (a decrease of 439 units year on year), including PROUD TOWER
Tachikawa (Tachikawa-shi, Tokyo), PROUD CITY Shiki-honcho (Shiki-shi, Saitama), OHANA Fuchinobe Gardenia (Chuo-ku,
Sagamihara-shi, Kanagawa), PROUD CITY Tsukaguchi Mark Forest (Amagasaki-shi, Hyogo), for condominiums, and PROUDSEASON Sengawa Ryokukei no Machi (Chofu-shi, Tokyo) for detached housing.
The number of contracted but not recorded housing units totaled 2,779 units as of the end of the fiscal year under review (a decrease of
714 units compared with the end of the previous fiscal year). The contract progress rate for the planned 6,000 units of the next fiscal year
was 43.0% at the start of the fiscal year.
The number of housing units, operating revenue, and outstanding contract amount for the joint-venture projects are calculated based on
the business share.
From the third quarter of the fiscal year under review, the classification of the “period-end completed housing inventories” has changed.
In accordance with this change, the figures as of the end of the previous fiscal year have been calculated under the new classification.

2

Breakdown of operating revenue
FY2015
Operating revenue

Housing units sold
Housing sales Tokyo metropolitan area

FY2016(Millions of yen)

Housing units soldOperating revenue(Millions of yen)

4,721 units

260,494

4,291 units

250,475

Kansai area

857 units

38,223807 units

35,890Other

427 units

20,078468 units

22,594

Subtotal

6,006 units

318,795

5,567 units

308,960(Detached housing)(643 units)(39,514)(682 units)(38,735)

Other
Total

15,71920,827

334,514

329,787

Housing sales Period-end completed housing inventories (released for sale)
As of March 31, 2016

As of March 31, 2017

Tokyo metropolitan area

84units

187 units

Kansai area

29 units

38 units

Other

20 units

25 units

Total

134 units

252 units(Detached housing)(46 units)(13 units)

Housing sales Period-end completed housing inventories (unreleased)
As of March 31, 2016

As of March 31, 2017

Total

215 units

402 units(Detached housing)(94 units)(33 units)

Housing sales Sold but not recorded housing units
As of March 31, 2016

As of March 31, 2017

Outstanding
Housing units

contract amount

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

Tokyo metropolitan area

2,569 units

162,146

2,140 units

140,183

Kansai area

535 units

26,577219 units

13,859Other

389 units

21,235420 units

21,851

Total

3,493 units

209,959

2,779 units

175,895(Detached housing)(74 units)(4,613)(111 units)(6,489)<Leasing Unit >Operating revenue in this unit totaled 115,009 million yen, which represents an increase of 4,782 million yen, or 4.3% year on year,
and operating profit totaled 32,567 million yen, an increase of 847 million yen, or 2.7%, resulting in increases in both revenue andoperating profit compared with the previous fiscal year.
This was mainly due to an increase in leasing revenue in the Leasing Business due to an improvement in the vacancy rate, as well as anincrease in revenues from the sale of properties in the property development business.
From the first quarter of the fiscal year under review, Nomura Real Estate Heating and Cooling Supply Co., Ltd., which had beenclassified under the Leasing Unit, was transferred to the Property & Facility Management Unit. In accordance with this change, thefigures for the previous fiscal year have been calculated under the new classification.

3

Breakdown of operating revenue
FY2015 (Millions of yen)

FY2016 (Millions of yen)

Leasing (offices)

49,594

51,981

Leasing (retail facilities)

10,873

11,649

Leasing (other)

5,882

5,954

Property development (sale)

33,26035,350Property development (leasing)

3,320

4,054

Other

7,295

6,018

110,226

115,009

Total
Rentable area

As of March 31, 2016
Offices
Retail facilities
Total

As of March 31, 2017829,312 ㎡

831,177 ㎡

144,815 ㎡

144,797 ㎡

974,127 ㎡

975,974 ㎡

Vacancy rate (offices and retail facilities)
As of March 31, 2016

As of March 31, 2017
2.2%

0.8%

<Investment Management Unit>
Operating revenue in this unit totaled 9,662 million yen, which represents a decrease of 1,310 million yen, or 11.9% year on year, andoperating profit totaled 6,016 million yen, a decrease of 1,360 million yen, or 18.4%, resulting in decreases in both revenue and operating
profit compared with the previous fiscal year.
This was mainly due to the posting of asset acquisition fees associated with the merger of three listed REITs in the previous fiscal year.
Assets under management increased compared with the previous fiscal year due to the merger between Nomura Real Estate Master
Fund, Inc. and TOP REIT, Inc. in September 2016.
FY2015 (Millions of yen)
Operating revenue

FY2016 (Millions of yen)

10,973

9,662

Assets under management

REITs

As of March 31, 2016

As of March 31, 2017

(Millions of yen)

(Millions of yen)

1,012,630

Private funds, etc.
Total

1,210,535

61,851

49,529

1,074,481

1,260,064

4

<Property Brokerage & CRE Unit>
Operating revenue in this unit totaled 34,820 million yen, which represents a decrease of 553 million yen, or 1.6% year on year,
operating profit totaled 9,124 million yen, a decrease of 776 million yen, or 7.8%, resulting in decreases in both revenue and operating
profit compared with the previous fiscal year.
This was mainly due to the booking of revenues from the sale of properties in the previous fiscal year, which outweighed increases in
the number of transactions and total transaction value in property brokerage.
In the wholesale business, operations had been conducted by both the Corporate Real Estate Service Division of Nomura Real Estate
Development Co., Ltd. and the Asset Sales Division of Nomura Real Estate Urban Net Co., Ltd. However, a reorganization was
implemented on October 1, 2016, integrating offices, employees and functions into the Corporate Real Estate Service Division of
Nomura Real Estate Development Co., Ltd.
In the retail business, we opened the following new branch stores: Iidabashi Center (Chiyoda-ku, Tokyo) and Toyonaka Center(Toyonaka-shi, Osaka) in April 2016, Oizumi-gakuen Center (Nerima-ku, Tokyo) in October 2016, and Ueno Center (Taito-ku, Tokyo) in
November 2016.
Breakdown of operating revenue
FY2015 (Millions of yen)

FY2016 (Millions of yen)

Property brokerage

28,02830,283

Other

7,345

4,536

35,37334,820

Total

Number of transactions and total transaction value of property brokerage
FY2015FY2016

Number of transactions
Total transaction value (Millions of yen)

7,710

8,272

713,574

745,147<Property & Facility Management Unit>
Operating revenue in this unit totaled 95,764 million yen, which represents an increase of 4,212 million yen, or 4.6% year on year, andoperating profit totaled 6,939 million yen, an increase of 1,245 million yen, or 21.9%, resulting in increases in both revenue and operating
profit compared with the previous fiscal year.
This was mainly due to an increase in construction ordered for large-scale repair work for condominiums and an increase inmembership fees in the fitness club business.
From the first quarter of the fiscal year under review, Nomura Real Estate Heating and Cooling Supply Co., Ltd., which had beenclassified under the Leasing Unit, was transferred to the Property & Facility Management Unit. In accordance with this change,classifications for the breakdown of operating revenue have been changed and the figures for the previous fiscal year have been
calculated under the new classification.
In fitness club business, we opened MEGALOS_0+ Ebisu (Shibuya-ku, Tokyo) in April 2016, MEGALOS_Reflet Ebisu (Shibuya-ku,
Tokyo) in June 2016, MEGALOS_24 Hamadayama (Suginami-ku, Tokyo) in January 2017, and MEGALOS_24 Sakurashinmachi(Setagaya-ku, Tokyo) in February 2017.
Breakdown of operating revenue
FY2015 (Millions of yen)

FY2016 (Millions of yen)

Property & facility management

47,952

48,301

Construction ordered

24,636

26,857

Fitness club & elderly care

14,995

15,523

Other

3,967

5,081

91,552

95,764Total

5

Number of properties under management
As of March 31, 2016
Buildings under management
Condominiums under management (unit)

As of March 31, 2017

705

702

163,036

168,999<Other Unit>
Operating revenue in this unit totaled 106 million yen, which represents a decrease of 1,247 million yen, or 92.2% year on year, andoperating loss totaled 30 million yen (the previous fiscal year was operating loss of 152 million yen).

(2) Financial Position(Assets, Liabilities and Net Assets)
As of March 31, 2016

As of March 31, 2017

Changes

Changes(Millions of yen)

(Millions of yen)

(Millions of yen)(%)

Total assets

1,485,449

1,593,093

107,643

Total liabilities

1,029,041

1,099,280

70,2386.8

Of which, Interest-bearing debt

721,900

810,100

88,200

12.2

Net assets

456,408

493,81337,404

8.2

Shareholders' equity ratio

29.9%

30.2%

-

-

1.6

1.7

-

-

Debt/equity ratio

7.2(Note) Debt/equity ratio = Interest-bearing debt /Shareholder’s equity
Total assets were 1,593,093 million yen, which represents an increase of 107,643 million yen compared to the end of the previous fiscal
year. This was mainly due to an increase in inventories (an increase of 73,977 million yen) and land (an increase of 25,974 million yen).
Total liabilities totaled 1,099,280 million yen, an increase of 70,238 million yen from the end of the previous fiscal year. This was
mainly due to an increase in a long-term loans payable (an increase of 99,200 million yen) and bonds payable (an increase of 10,000 millionyen),while notes and accounts payable-trade (decresed by 15,549 million yen) decreased.
Net assets totaled 493,813 million yen, an increase of 37,404 million yen compared to the end of the previous fiscal year. This was
mainly due to an increase in retained earnings (increased by 35,500 million yen).
The shareholders' equity ratio was 30.2%, an increase of 0.3 percentage points from the end of the previous fiscal year.

(3) Cash Flows
Cash and cash equivalents as of the end of the fiscal year under review totaled 47,699 million yen, which represents a decrease of 9,892
million yen compared to the end of the previous fiscal 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 decreased by 31,889 million yen (a year-on-year decrease of 45,148 million yen). Thiswas mainly due to outflows resulted by the purchase of inventories and the payment of income taxes, despite recording of profit before
income taxes of 69,307 million yen.
(Cash Flows from Investing Activities)
Net cash provided by (used in ) investment activities decreased by 54,558 million yen ( a year-on-year increase of 5,156 million yen).
This mainly reflected the purchase of tangible and intangible assets.
(Cash Flows from Financing Activities)
Net cash provided by (used in) financing activities increased by 76,575 million yen (a year-on-year increase of 22,937 million yen).
The reason for this was that long-term debt financing and issuance of bonds counteracted the impact of cash dividend paid.

6(4) Forecasts<Consolidated>
We expect to post operating revenue of 646,000 million yen, operating profit of 76,000 million yen, ordinary profit of 67,000 million yen,and profit attributable to owners of parent of 44,000 million yen for the fiscal year ending March 31, 2018.
FY2017 Forecasts

FY2016

Changes(Millions of yen)

(Millions of yen)

(Millions of yen)

Operating revenue

646,000

569,680

76,319Operating profit

76,00077,271(1,271)

Ordinary profit

67,00068,952(1,952)

Profit attributable to owners of parent

44,00047,005(3,005)<Forecasts by units>
The forecasts of operating results for the fiscal year ending March 31, 2018 by units are as follows.

Operating revenue
FY2017 Forecasts

FY2016

Changes(Millions of yen)

(Millions of yen)

(Millions of yen)

Residential Development

365,000

329,787

35,212

Leasing

143,000

115,009

27,990

9,500

9,662

(162)

Property Brokerage & CRE

38,00034,8203,179

Property & Facility Management

104,000

95,764

8,235

0

106

(106)

Adjustments(13,500)(15,470)

1,970

Total

646,000

569,680

76,319Investment Management

Other

Operating profit
FY2017 Forecasts

FY2016

Changes(Millions of yen)

(Millions of yen)

(Millions of yen)

Residential Development

25,00027,787(2,787)

Leasing

32,00032,567(567)

Investment Management

5,500

6,016

(516)

Property Brokerage & CRE

10,500

9,124

1,375

Property & Facility Management

7,000

6,939

60

Other

0

(30)

30

Adjustments(4,000)(5,132)

1,132

Total

76,00077,271(1,271)(5) 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 Company is planning an increase in the year-end dividend for the fiscal year ended March 31, 2017 of 5 yen per share from theprevious forecast to 35 yen per share. Combined with the second quarter-end dividend, the annual dividend per share will be 65 yen. In
regard to the dividend for the next fiscal year, the second quarter-end and year-end dividends will be 35 yen per share, and the annual
dividend will be 70 yen per share.

7

2. Group Companies
Major business contents of the Nomura Real Estate Group and 31 affiliated companies (24 consolidated subsidiaries, and 7 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.
<Residential Development Unit>･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.
･First Living Assistance Co., Ltd. provides services aimed at providing assistance to customers concerning their homes and living
arrangements.
<Leasing Unit >･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.
･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 Unit >･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 Unit >･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 Unit >･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 Real Estate Life & Sports Co., Ltd. manages fitness club business.
･Nomura Real Estate Heating and Cooling Supply Co., Ltd. operates a local cooling and heat supply business in Yokohama Business
Park (Hodogaya-ku, Yokohama, Kanagawa).
･Nomura Real Estate Wellness Co., Ltd. is engaged in the development, planning, and operation of housing services for the elderly.
Nomura Real Estate Development Co., Ltd. promotes the elderly services business conducted by Nomura Real Estate Wellness Co.,
Ltd., and carries out the acquisition and management of real estate for that business.
･Nomura Real Estate Amenity Service Co., Ltd. is engaged in the entrusted cleaning of office buildings, mainly from Nomura Real
Estate Partners Co., Ltd.
･NF Power Service Co., Ltd. is engaged in the sale, intermediation, and supply of electric energy.
<Other Unit >･Nomura Real Estate Development Co., Ltd. is engaged in the sale and lease of land and buildings.
The matters described above are shown in the following systematic business diagram.

8

Nomura Real Estate Holdings, Inc.
Nomura Real EstateGroup
M anagement Guidance

Residential
Development
Unit

Leasing Unit

Investment
Management
Unit

Proprety
Brokerage &CRE Unit

Property &Facility
Management
Unit

Nomura Real Estate Development

Nomura Real
Estate Reform

NREG TOSHIBABUILDING

Nomura Real
Estate AssetManagement

Nomura Real
Estate Urban Net

Nomura Real
Estate Partners
Nomura Real Estate
Life & Sports

PRIME X.

Geo Akamatsu
Nomura Real Estate
Heating & Cooling
SupplyFirst Living
Assistance

NREG TOSHIBABUILDING
FACILITIES

Nomura Real
Estate Wellness
Nomura Real Estate
Amenity Service

NF Power Service

9

Other Unit

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

10

4. Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of yen)
As of March 31, 2016

As of March 31, 2017

AssetsCurrent assets
Cash and deposits

57,59347,701

Notes and accounts receivable - trade

15,371

16,535

Real estate for sale78,132

120,385

Real estate for sale in process

269,546

249,663

Land held for development

148,729

199,812

819

2,567

Equity investments
Deferred tax assets

5,285

5,555

Other

33,33842,123(38)(37)

608,779

684,306

Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures

374,378

394,607

Accumulated depreciation(139,309)(152,718)

Buildings and structures, net※２ 235,068※２ 241,888※４ 523,696※４ 549,671

Land
Other

28,164

26,053

Accumulated depreciation(7,838)(8,787)

Other, net

20,325

17,265779,091

808,825

10,681

10,985※１,※２ 45,511※１,※２ 46,252

Lease and guarantee deposits

21,37921,738Deferred tax assets

14,84014,992

Other

Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities

5,167

5,992

Allowance for doubtful accounts

(0)

(0)

Total investments and other assets

86,897

88,975876,670

908,786

1,485,449

1,593,093

Total non-current assets
Total assets

11

(Millions of yen)
As of March 31, 2016

As of March 31, 2017

Liabilities
Current liabilities
Notes and accounts payable - trade51,16235,612

Short-term loans payable

137,300

106,300

Current portion of bonds－

10,000

Income taxes payable

13,232

16,052

Deposits received

29,61729,459Deferred tax liabilities

17

20

Provision for bonuses

7,073

7,516

Provision for directors' bonuses

738

639

Provision for loss on business liquidation

61

47

Other

49,90350,149Total current liabilities

289,107

255,799

60,00070,000Non-current liabilities
Bonds payable
Long-term loans payable

524,600

623,800※２ 63,766※２ 57,597

64,07063,592※４ 3,900※４ 3,900

313

257

Net defined benefit liability

18,01818,931

Other

5,264

5,402

739,933

843,481

1,029,041

1,099,280

Capital stock

116,598

116,779

Capital surplus

109,842

110,023

Retained earnings

207,203242,704(3)(3)

433,642

469,503

Valuation difference on available-for-sale securities

6,664

7,947

Deferred gains or losses on hedges

155

119

Lease and guarantee deposits received
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Provision for loss on subleasing businessTotal non-current liabilities
Total liabilities
Net assets
Shareholders' equity

Treasury shares
Total shareholders' equity
Accumulated other comprehensive income

Revaluation reserve for land

※４ 7,861※４ 7,860

Foreign currency translation adjustment

43

62

Remeasurements of defined benefit plans(3,513)(4,129)Total accumulated other comprehensive income

11,212

11,860

Subscription rights to shares

1,685

1,986

Non-controlling interests

9,868

10,462456,408

493,813

1,485,449

1,593,093

Total net assets
Total liabilities and net assets

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

Operating revenue
Operating cost
Operating gross profit
Selling, general and administrative expenses
Operating profit

Fiscal year ended

Fiscal year ended

March 31, 2016

March 31, 2017569,545569,680※１,※３ 391,571※１,※３ 392,438

177,973

177,241※２,※３ 97,061※２,※３ 99,970

80,912

77,271Non-operating income
Interest income

71

52

Dividend income

1,007

252

16

83

Other

459

310

Total non-operating income

1,555

698

Interest expenses

7,817

7,539

Other

1,970

1,477

Total non-operating expenses

9,787

9,017

72,67968,952Gain on sales of non-current assets－※４ 946

Total extraordinary income－

946※５ 1,426※５ 254－

337

Share of profit of entities accounted for using equity
methodNon-operating expenses

Ordinary profit
Extraordinary income

Extraordinary losses
Impairment loss
Loss on building reconstruction
Loss on valuation of investment securities

278－

Total extraordinary losses

1,705

591

Profit before income taxes

70,97469,307

Income taxes - current

20,992

22,957

Income taxes - deferred824(1,177)

Total income taxes

21,817

21,780

Profit49,15747,527

Profit attributable to non-controlling interests

1,975

521

Profit attributable to owners of parent

47,18247,00513

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

ProfitFiscal year ended

Fiscal year ended

March 31, 2016

March 31, 201749,15747,527

1,595

1,282

77

(36)

Revaluation reserve for land

216

(0)

Foreign currency translation adjustment

(10)

19

(4,944)

(616)

(7)

(0)

※１ (3,073)※１ 64846,084

48,175Comprehensive income attributable to owners of parent

44,10947,654Comprehensive income attributable to non-controlling interests

1,975

521

Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities accounted forusing equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to14

(3) Consolidated Statements of Changes in Net Assets
FY2015 (From April 1, 2015 to March 31, 2016)(Millions of yen)
Shareholders' equity
Total shareholders'Capital stock

Capital surplus

Retained earnings

Treasury shares
equityBalance at beginning of current
116,188

93,518410

410

170,069(2)

379,774

periodChanges of items during period
Issuance of new shares

820

Dividends of surplus(10,047)(10,047)

47,182

47,182

Profit attributable to owners ofparentPurchase of treasury shares(0)

Increase by share exchanges

(0)

374

374

15,53915,539Change in ownership interest ofparent due to transactions with
non-controlling interests
Net changes of items other thanshareholders' equity
Total changes of items during410

16,324

37,134(0)53,867

116,598

109,842

207,203(3)

433,642

periodBalance at end of current period

Accumulated other comprehensive income
Total
Valuation

Deferred
Revaluationdifference on

gains orlosses on

accumulatedof defined benefit

other

plans

comprehensive

translation
landsale securitis

Remeasurements

currency
reserve foravailable-for-

Subscription

ForeignhedgesNon-rights tocontrollingsharesinterests

1,563

65,408

Total net assets

adjustment
incomeBalance at beginning of current
5,069

78

7,644

61

1,431

14,285461,031

periodChanges of items during period
Issuance of new shares

820

Dividends of surplus(10,047)

Profit attributable to owners of
47,182parentPurchase of treasury shares(0)

Increase by share exchanges

374

Change in ownership interest ofparent due to transactions with

15,539non-controlling interests
Net changes of items other than
1,595

77

216

(18)

(4,944)(3,072)

121(55,539)(58,490)

1,595

77

216

(18)

(4,944)(3,072)

121(55,539)(4,622)

6,664

155

7,861

43

(3,513)

11,212

1,685

9,868

456,408

shareholders' equity
Total changes of items during
periodBalance at end of current period15

FY2016 (From April 1, 2016 to March 31, 2017)(Millions of yen)
Shareholders' equity
Total shareholders'Capital stock

Capital surplus

Retained earnings

Treasury shares
equityBalance at beginning of current
116,598

109,842180

180207,203(3)

433,642

periodChanges of items during period
Issuance of new shares

361

Dividends of surplus(11,504)(11,504)

47,00547,005

Profit attributable to owners ofparentPurchase of treasury shares

(0)

(0)

Reversal of revaluation reserve00

for landNet changes of items other thanshareholders' equity
Total changes of items during
180

180

35,500(0)35,861

116,779

110,023

242,704(3)

469,503

periodBalance at end of current period

Accumulated other comprehensive income
Valuation
Total
difference

Deferred
Revaluationon

Remeasurements

gains orlosses onor-saleof defined benefit

other

plans

comprehensive

translation
landhedgesNon-contr

accumulated

currency
reserve foravailable-f

Subscription

Foreignrights toollingTotal net assets

sharesinterests

adjustment
incomesecurities

Balance at beginning of current
6,664

155

7,861

43

(3,513)

11,212

1,685

9,868

456,408

periodChanges of items during period
Issuance of new shares

361

Dividends of surplus(11,504)

Profit attributable to owners of
47,005parentPurchase of treasury shares(0)

Reversal of revaluation reserve0
for landNet changes of items other than
1,282

(36)

(0)

19

(616)

648

301

593

1,543

1,282

(36)

(0)

19

(616)

648

301

593

37,404

7,947

119

7,860

62

(4,129)11,860

1,986

10,462493,813

shareholders' equity
Total changes of items during
periodBalance at end of current period16(4) Consolidated Statements of Cash Flows(Millions of yen)
Fiscal year ended

Fiscal year ended

March 31, 2016

March 31, 2017

Cash flows from operating activities
Profit before income taxes

70,97469,307

Depreciation

16,026

16,877

Impairment loss

1,426

254

Loss (gain) on valuation of investment securities

278－

Loss (gain) on sales of non-current assets

－

(946)

(16)

(83)

(13)

(1)

(21)

(13)

(152)

(55)

Share of (profit) loss of entities accounted for using equity
methodIncrease (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for loss on businessliquidation
Increase (decrease) in provision for loss on subleasing
business
Increase (decrease) in net defined benefit liability

(282)

912

Interest and dividend income(1,079)(304)

Interest expenses

7,817

7,539

(623)

(1,157)

Decrease (increase) in notes and accounts receivable trade
Decrease (increase) in inventories(67,146)(73,977)

Decrease (increase) in equity investments

5,497(1,748)

Increase (decrease) in notes and accounts payable - trade

2,497(15,546)

Increase (decrease) in deposits received

4,522

(158)

Other, net

1,953(2,244)

Subtotal

41,658(1,346)

Interest and dividend income received

1,064

285

Interest expenses paid

(7,970)(9,332)

Income taxes paid

(21,494)(21,495)

Net cash provided by (used in) operating activities

13,258(31,889)(3,989)(1,499)

2,907

1,410

(9,692)－(50,367)(61,300)

308

12,066(757)(1,018)Cash flows from investing activities
Purchase of investment securities
Proceeds from sales and liquidation of investment
securities
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Purchase of property, plant and equipment and intangible
assetsProceeds from sales of property, plant and equipment andintangible assets
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee deposits

1,502

964

Repayments of lease and guarantee deposits received(2,558)(12,448)

Proceeds from lease and guarantee deposits received

4,520

6,124

Other, net(1,586)

1,142

Net cash provided by (used in) investing activities(59,714)(54,558)

17

(Millions of yen)
FY2015FY2016(From April 1, 2015 to(From April 1, 2016 to

March 31, 2016)

March 31, 2017)

Cash flows from financing activities
Net increase (decrease) in short-term loans payable(3,300)(500)

Repayments of finance lease obligations

(148)

(148)

Proceeds from long-term loans payable

184,000

160,000

Repayments of long-term loans payable(102,500)(91,300)

Proceeds from issuance of bonds

29,82019,869

Redemption of bonds(3,000)－

Proceeds from issuance of common shares

426

88

Proceeds from share issuance to non-controlling shareholders

105

98

Purchase of treasury shares

(0)

(0)

Cash dividends paid

(10,047)(11,504)

Dividends paid to non-controlling interests(1,465)(26)(40,253)－

53,63776,575(8)(25)

Net increase (decrease) in cash and cash equivalents

7,173(9,897)

Cash and cash equivalents at beginning of period

50,41857,591－4※１ 57,591※１ 47,699

Payments from changes in ownership interests in subsidiaries that
do not result in change in scope of consolidation
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

Increase (decrease) in cash and cash equivalents resulting from changeof scope of consolidation
Cash and cash equivalents at end of period18

(5) Notes to Consolidated Financial Statements(Notes to Going Concern Assumptions)Not applicable.
(Significant Matters for the Basis for the Preparation of Consolidated Financial Statements)
1. Scope of Consolidation(1) Number of consolidated subsidiaries: 24
The names of principal consolidated subsidiaries are omitted because they are listed in “2. Group Companies.”
First Living Assistance Co,. Ltd., NOMURA REAL ESTATE HONG KONG LIMITED and HCMC office investment Limited areincluded in the scope of consolidation because they were newly established in the fiscal year under review. NREAM Investors America,
LLC is included in the scope of consolidation due to an increase in materiality in the fiscal year under review.
TJ Properties Special Purpose Company and Falcon Investment Special Purpose Company are excluded from the scope of
consolidation due to the completion of liquidation.
(2) Name of principal unconsolidated subsidiary
Principal unconsolidated subsidiary: Nomura Real Estate UK Limited(Reason for the exclusion from the scope of consolidation)
Unconsolidated subsidiaries are excluded from the scope of consolidation because they are all small companies and the Company’s
interests in their respective total assets, operating revenue and profit 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 using the equity method: 2Name of principal unconsolidated subsidiary: Nomura Real Estate UK Limited(2) Number of affiliated companies accounted for using the equity method: 5Name of principal affiliated company: Ginza Parking Center Co., Ltd.
NREAM Investors America, LLC is excluded from the scope of application of the equity method because it was included in thescope of consolidation from the fiscal year under review.
Phu Hung Thai Development Joint Stock Company and Japan Life Design Inc. are included under affiliated company accounted forusing the equity method because the Company newly acquired their shares in the fiscal year under review.
3. Fiscal Year, etc. of the Consolidated Subsidiaries
Among consolidated subsidiaries, the account closing date of Toranomon Real Estate Co., Ltd. and UNJ Properties, LLC is
December 31.
Provisional financial statements for these companies as of the consolidated account closing date are used in the preparation of
consolidated financial statements.
Among consolidated subsidiaries, the account closing date of Nomura Real Estate Consulting (Beijing) Co., Ltd., NOMURA REALESTATE ASIA PTE. LTD., NOMURA REAL ESTATE HONG KONG LIMITED, NREAM Investors America, LLC and HCMC
office investment Limited is December 31. The account closing date of Midosuji Mirai Development, LLC and Shinjuku Mirai
Development, LLC is February 28.
Financial statements for these companies as of that date are used in the preparation of consolidated financial statements. In the case ofsignificant transactions that took place between the account closing date of the consolidated subsidiaries and the consolidated accountclosing date, necessary adjustments are made for consolidation purposes.

19

4. Accounting Standards and Methods(1) Valuation standards and methods for principal assets
1) Securities
Held-to-maturity debt securities:
Held-to-maturity debt securities are stated at amortized cost (by the straight-line method).
Available-for-sale securities:
Available-for-sale securities with market value
Available-for-sale securities with market value are stated at fair market value based on market price, etc. at the account closing date.
(Unrealized gains and losses are reported, net of the applicable taxes, as a separate component of Net Assets. Cost of securities sold isdetermined by the moving-average method.)
Available-for-sale securities without market value
Available-for-sale securities without market value are stated at cost by the moving-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 the
Balance Sheet are determined by the write-down method reflecting decreased profitability).
(2) Depreciation and amortization method for significant depreciable assets
1) Property, plant and equipment (except for leased assets)
Property, plant and equipment are depreciated mainly by the straight-line method.
Useful lives are generally as follows:
Buildings and structures

2 to 65 years

2) Intangible assets (except for leased assets)
Intangible assets are amortized by the straight-line method.
Costs of software for internal use are amortized based on the useable period within the Company (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.
Of finance lease transactions not involving transfer of ownership, lease transactions which started on or before March 31, 2008 are
accounted for in accordance with the method applicable to ordinary lease transactions.
(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 - trade, loans and others, allowance for doubtful
accounts is provided at an amount calculated on the basis of a historical bad debt ratio for normal claims, and at an estimateduncollectible amount determined on the basis of individual assessments of collectibility for specific claims with potential losses.
2) Provision for bonuses
To prepare for the payment of employee bonuses, an estimated amount corresponding to the portion of the bonus payments in thefiscal year under review is reserved.
3) Provision for directors’ bonuses
To prepare for the payment of directors’ bonuses, an estimated amount corresponding to the portion of the bonus payments in thefiscal year under review is reserved.
4) Provision for loss on business liquidation
An estimated amount of losses arising in connection with the withdrawal from businesses is reserved.
5) Provision for loss on subleasing businessFor properties for which subleasing losses are highly likely to continue arising in the subleasing business, an estimated amount oflosses for the next fiscal year and after is reserved.
(4) Method of accounting for retirement benefits
1) Method for attributing estimated retirement benefits to periods
To calculate retirement benefit liabilities, the estimated amount of retirement benefits is attributed to the period up to the end of the
fiscal year under review based on a benefit formula basis.
2) Method for amortization of actuarial gains and losses and prior service costs
Prior service costs are amortized by the straight-line method over a certain number of years (10 years) within the average numberof remaining service years of the eligible employees at the time of accrual.
20

Actuarial gains and losses are amortized by the straight-line method over a certain number of years (mostly 10 years) within the
average number of remaining service years of the eligible employees at the time of accrual in each fiscal year, and allocatedproportionately from the fiscal year following the respective fiscal year of accrual.
(5) Standards for the provision of significant revenues and expenses
Basis for the recording of revenue and cost of completed work
A. Construction activities of which the cost outcomes through until the end of the fiscal year under review can be measured withcertainty
Percentage-of-completion method (percentage of completion is estimated based on cost method)
B. Other construction activities
Completed-contract method(6) Standards for the translation of important foreign currency-based assets or liabilities into Japanese yen
All foreign currency-based monetary receivables and payables are translated into Japanese yen at the spot exchange rates in effectat the consolidated account closing date. Differences arising from such translation are recognized as gain or loss. The asset andliability accounts of the overseas subsidiaries and others are translated into Japanese yen at the spot exchange rates prevailing at therespective account closing dates of the subsidiaries and others 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
adjustment” in Net Assets.
(7) Significant hedge accounting method
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 and for currency swaps that meet certain hedging criteria, thetransactions are accounted for by the furiate (allocation) method.
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 fluctuation and foreign exchange fluctuation risks are hedged.
4) Method for assessing the effectiveness of hedges
The Group evaluates hedge effectiveness based on the ratio of changes determined by comparing the cumulative changes in cash
flows or cumulative market fluctuations of the hedged items to the cumulative changes in cash flows or cumulative market
fluctuations of the hedging instrument.
However, the Group omits the assessment of hedge effectiveness in the case of interest rate swaps for which the Group applies the
exceptional treatment.
(8) Amortization method and period 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 significant matters for the preparation of consolidated financial statements
Accounting for consumption taxes
The tax-exclusion method is used to account for national and local consumption taxes. However, non-deductible consumption
taxes on fixed assets and others are included in “Other” under Investments and other assets and amortized over 5 years,
non-deductible consumption taxes on land as inventories are included in the acquisition costs, and other non-deductible consumption
taxes are expensed as incurred.

21

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

(Millions of yen)
FY2015FY2016(As of March 31, 2016)(As of March 31, 2017)

Investment securities

2,177(shares, etc.)

1,406*2 Pledged Assets and Secured Liabilities(1) Pledged assets are as follows.

(Millions of yen)
FY2015FY2016(As of March 31, 2016)
Buildings and structures(As of March 31, 2017)
200

190

Secured liabilities are as follows.

(Millions of yen)
FY2015FY2016(As of March 31, 2016)(As of March 31, 2017)

Lease and guarantee deposits received

4437(2) Investment securities in the amount of 10 million yen are pledged as collateral for a portion of liabilities of investee companies.
3 Guaranteed Obligations
The following are customers for which bank loans, etc. have been guaranteed.

(Millions of yen)

FY2015FY2016(As of March 31, 2016)(As of March 31, 2017)

Customers using housing loans
Joint operators of EBS buildings
Total

58,400

Customers using housing loans

608

Joint operators of EBS buildings

59,008

Total

64,277537
64,815*4 Under the “Act on Revaluation of Land” (Act No. 34 of March 31, 1998), the Company revalued its land held for business use. The tax
amount for the valuation difference is accounted for as “Deferred tax liabilities for land revaluation” in Liabilities and the difference net ofsuch 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 fixed assets as stipulated in Item 3, Article 2of the “Order for Enforcement of the Act on Revaluation of Land” (Cabinet order No. 119 of March 31, 1998).
・Date of revaluation: March 31, 2002

22

(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 loss on
valuation of inventories is included in the cost of goods sold.
(Millions of yen)
FY2015FY2016(From April 1, 2015

(From April 1, 2016

to March 31, 2016)

to March 31, 2017)3*2 The following are the major items and amounts of selling expenses and general and administrative expenses.

166(Millions of yen)

FY2015FY2016(From April 1, 2015

(From April 1, 2016

to March 31, 2016)

to March 31, 2017)

Advertising expenses

22,607

21,475

Employees’ salaries and allowances

29,44431,014

Provision for bonuses

5,943

6,286

Provision for directors’ bonuses

738

639

Retirement benefit expenses

1,728

2,575

26

6

Provision of allowance for doubtful accounts23

*3 “Research and development expenses” included in “selling, general and administrative expenses” and in “operating cost” are shown
below.
(Millions of yen)
FY2015FY2016(From April 1, 2015

(From April 1, 2016

to March 31, 2016)

to March 31, 2017)

84

31*4 “Gain on sales of non-current assets” are shown below.
(Millions of yen)
FY2015FY2016(From April 1, 2015

(From April 1, 2016

to March 31, 2016)

to March 31, 2017)

Land

-

(263)

Buildings and others

-

1,209

-

946

Total
*5 Impairment Loss

The Group recognized impairment loss on the following groups of assets.
FY2015 (From April 1, 2015 to March 31, 2016)
Primary use

Type

Location

Stores, leased assets

Buildings

Shibuya-ku, Tokyo and other locations

OthersLand(5 locations in total)

Property, plant and equipment–others

Assets of the Group are grouped into the smallest unit that generates cash flows that are largely independent of cash flows from otherassets or groups of assets. The headquarters building and certain other assets are considered to be shared assets.
As a result, with respect to five groups of assets etc., comprising those whose profitability has dropped significantly due mainly to thechanges of usage, decline in rent level or the deterioration of the market conditions or those that the Group plans to sell, the carrying amount
has been reduced to the recoverable amount and the amount of reduction has been recognized in extraordinary losses as impairment loss of
1,426 million yen for the fiscal year under review. The impairment loss consists of 561 million yen of buildings and 864 million yen of land,etc.
The recoverable amount of these groups of assets is measured at the net realizable value or the value in use and the net realizable value isdetermined based on the expected sales price and the appraisal value provided by real estate appraisers. The value in use was assessed by
setting the recoverable value at zero on the assumption of an expected negative future cash flow.
FY2016 (From April 1, 2016 to March 31, 2017)
Primary use

Type

Location

Leased assets

Buildings

Chuo-ku, Tokyo and other locations( 2 locations in total)

Property, plant and equipment–others

Assets of the Group are grouped into the smallest unit that generates cash flows that are largely independent of cash flows from otherassets or groups of assets. The headquarters building and certain other assets are considered to be shared assets.
As a result, with respect to two groups of assets etc., comprising those the Group plans to dispose of, the carrying amount has been
reduced to the recoverable amount and the amount of reduction has been recognized in extraordinary losses as impairment loss of 254
million yen for the fiscal year under review. The impairment loss consists of 238 million yen of buildings and 15 million yen of other.
The recoverable amount of these groups of assets is measured at the value in use and the value in use was assessed by setting therecoverable value at zero based on an expected negative future cash flow.

24

(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)
FY2015FY2016(From April 1, 2015

(From April 1, 2016

to March 31, 2016)

to March 31, 2017)

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

2,877

1,712

Amount of recycling

(771)

135

Before income tax effect

2,106

1,847

Income tax effect

(511)

(565)

Valuation difference on available-for-sale securities

1,595

1,282

Amount recognized during the year

148

80

Amount of recycling

(39)

(133)

Before income tax effect

109

(52)

Income tax effect

(31)

16

Deferred gains or losses on hedges

77

(36)

216

(0)

(10)

19

-

-

(10)

19

-

-

(10)

19

(6,850)(1,387)

Deferred Gains or Losses on Hedges:

Revaluation Reserve for Land:
Income tax effectForeign Currency Translation Adjustment:
Amount recognized during the year
Amount of recycling
Before income tax effect
Income tax effectForeign currency translation adjustment
Remeasurements of Defined Benefit Plans:
Amount recognized during the year
Amount of recycling

(351)

500

Before income tax effect(7,201)(887)

Income tax effect

2,257

271

Remeasurements of defined benefit plans(4,944)

(616)

(12)

0

-

-

(12)

0

5

(0)

(7)

(0)

(3,073)648

Share of Other Comprehensive Income of Affiliates Accounted for
Using the Equity Method:Amount recognized during the year
Amount of recycling
Before income tax effect
Income tax effect
Share of other comprehensive income of affiliates
accounted for using the equity method
Total Other Comprehensive Income25

(Notes to Consolidated Statements of Changes in Net Assets)
FY2015(From April 1, 2015 to March 31, 2016)
1. Type and number of shares issued and treasury shares
Number of shares
as of April 1, 2015

Number of shares

Increase

Decrease(Thousand shares)(Thousand shares)

as of March 31, 2016

(Thousand shares)(Thousand shares)

Shares issued
Common stock (Note) 1
Total

191,119559-

191,679

191,119559-

191,679

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 559 thousand shares as a result of the exercise of stock
options (383 thousand shares) and share exchange (176 thousand shares).
2. The total number of treasury shares among common shares increased by 0 thousand shares as the result of the purchase oftreasury 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
rights1, 2015--

Balance atIncrease

Decrease--

As of March
31, 2016

March 31, 2016
(Millions of yen)Company submitting
consolidated

Stock acquisition rights

financial statements

used as stock options

-

1,685

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

Type of shares

dividends

Dividends per

Record date

Effective date

March 31, 2015

June 29, 2015

share (Yen)(Millions of yen)

June 26, 2015
Ordinary General

Common stock

4,777

25

Common stock

5,269

27.50

meeting of shareholders
October 29, 2015
Meetings of the Board ofSeptember 30,
2015

Directors

December 1, 2015

(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)

April 28, 2016
Meetings of the Boardof Directors

Common stock

5,750

Dividend

Dividends per

resource

share (Yen)

Retainedearnings

26

30

Record date

March 31,2016

Effective dateJune 8, 2016

FY2016 (From April 1, 2016 to March 31, 2017)
1. Type and total number of shares issued and treasury shares
Number of shares

Number of shares

as of April 1, 2016

Increase

Decrease

as of March 31, 2017

(Thousand shares)(Thousand shares)(Thousand shares)(Thousand shares)

Shares issued
Common stock (Note) 1
Total

191,679

198-

191,877

191,679

198-

191,877

1

0

-

1

1

0

-

1

Treasury shares
Common stock (Note) 2
Total(Notes) 1. The increase in the number of issued shares among common stocks of 198 thousand shares consists of an increase due to theexercise of stock options.
2. The number of treasury shares among common stocks increased by 0 thousand shares as the result of the purchase of shares lessthan 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

rights1, 2016--

Increase

Decrease--

Balance at March

As of March
31, 2017

31, 2017(Millions of yen)Company submitting
consolidated

Stock acquisition rights

financial statements

used as stock options

-

1,986

(Parent company)
3. Dividends(1) Dividends paid
(Resolution)

Total amount of

Dividends per

dividends

share(Millions of yen)

(Yen)

Common stock

5,750

30

Common stock

5,754

30

Type of shares

Record date

Effective date

March 31, 2016

June 8, 2016

April 28, 2016
Meetings of the Board of
Directors
October 27, 2016
Meetings of the Board ofSeptember 30,
2016

Directors

December 1, 2016

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

Type of sharesof dividends(Millions of yen)

April 27, 2017
Meetings of the Boardof Directors

Common stock

6,715

Dividend

Dividends per

resource

share (Yen)

Retainedearnings

27

35

Record date

March 31,2017

Effective dateJune 8, 2017

(Notes to Consolidated Statements of Cash Flows)*1. Reconciliation of balance at the end of the period of cash and cash equivalents and items in the Consolidated Balance Sheets.
(Millions of yen)
FY2015FY2016(From April 1, 2015

(From April 1, 2016

to March 31, 2016)

to March 31, 2017)

Cash and deposits

57,593Time deposits with maturities of more than three months
Cash and cash equivalents

47,701(2)(2)

57,59147,699(Real Estate for Rent)
Some of the Company’s consolidated subsidiaries own rental office buildings and rental retail facilities (including land) in Tokyo and otherregions. Some rental office buildings are regarded as properties including the portion used as rental properties since they are used by theCompany and certain consolidated subsidiaries.
The book values in the Consolidated Balance Sheet, changes during the fiscal year, and fair values of these rental properties and properties
including the portion used as rental properties are as follows.
(Millions of yen)
FY2015FY2016(From April 1, 2015

(From April 1, 2016

to March 31, 2016)

to March 31, 2017)

Real estate for rentBook value in the consolidated balance sheets
Balance at the beginning of the fiscal year

689,655

738,003

Changes during the fiscal year

48,34728,969Balance at the end of the fiscal year

738,003766,973824,257

892,524

25,33625,999662

123

25,99926,12250,74054,500Fair value at the end of the fiscal year
Properties including the portion used as real estate for rentBook value in the consolidated balance sheets
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 from theacquisition cost.
2. Fair values as of March 31, 2016 and 2017 are determined based primarily on values according to Real Estate Appraisal
Standards (including adjustments based on certain indexes). However, if no significant fluctuations in certain appraisal values orindexes considered to appropriately reflect market values have occurred since the time of acquisition from third party or the timeof the most recent appraisal, the Group bases the fair value on an amount that has been adjusted using the aforesaid values orindexes.

28

Income and loss on rental properties and other properties used as rental properties are as follows.
(Millions of yen)
FY2015FY2016(From April 1, 2015

(From April 1, 2016

to March 31, 2016)

to March 31, 2017)

Rental properties
Operating profit

26,08927,787

Others (gains (losses) on sale of property, etc.)

(186)

354

996

902

-

-

Other properties used as rental properties
Operating profit
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 profit for this type of realestate is not recorded.

2. Others include impairment loss (186 million yen) in the fiscal year ended March 31, 2016, and gain on sales of non-current
assets (946 million yen) and loss on building reconstruction (337 million yen) in the fiscal year ended March 31, 2017.

29

(Segment Information)【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, 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 bybusiness divisions within Nomura Real Estate Development).
From the fiscal year under review, Nomura Real Estate Heating and Cooling Supply Co., Ltd., which had been classified under the
Leasing Unit, was transferred to the Property & Facility Management Unit to promote business in conjunction with the Property &Facility Management Business.
The results of the previous consolidated fiscal year are calculated in line with the newly adopted segment classification.
2. Methods for calculating operating revenue, operating profit (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 profit is presented based on operating profit. Intersegment sales and transfer amounts are presented based onmarket prices.

30

3. Information regarding sales, gains or losses, assets, liabilities, and other amounts by reportable segment
FY2015 (From April 1, 2015 to March 31, 2016)(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

333,874

107,591

10,97333,23882,512

568,191

1,353

569,545-569,545

639

2,635

0

2,134

9,040

14,4490

14,449(14,449)-

334,514110,226

10,97335,37391,552582,641

1,353

583,994(14,449)

569,545

31,90931,719

7,376

9,900

5,693

86,600(152)

86,448(5,535)80,912414,812918,710

36,692

32,04755,695

1,457,958

1,565 1,459,523

25,926

1,485,449

Depreciation

161

13,587

56

336

1,467

15,6105

15,616410

16,026

Amortization of
goodwill

-

235

-

-

29

264

-

264

-

264

Investment in affiliates
accounted for using
equity method

67

1,056

0

-

-

1,124

-

1,124

-

1,124

Increase in property,
plant and equipment
and intangible assets

685

47,885

45

633

1,335

50,585

6

50,591

1,213

51,805Inter-segment
Subtotal
Segment profit orlossesSegment assets
Other items(Notes) 1. The “Other” category represents operating segments that are not included in reportable segments.
2. (1) The deduction of 5,535 million yen shown in the adjustments column for segment profit or losses includes an increase inelimination of intersegment transactions of 1,204 million yen and a deduction of 6,739 million yen for corporate expenses notallocated to each reportable segment. These corporate expenses mainly consist of general and administrative expenses not
attributable to reportable segments.
(2) The addition of 25,926 million yen shown in the adjustments column for segment assets includes a deduction of 57,016
million yen for the elimination of inter-segment transactions and an addition of 82,942 million yen for corporate assets notallocated to each reportable segment.
3. The segment profit or losses is reconciled to the operating profit stated in the consolidated financial statements.

31

FY2016 (From April 1, 2016 to March 31, 2017)(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

329,303

112,477

9,662

32,29985,831

569,574106

569,680-

569,680

484

2,532

-

2,520

9,933

15,470015,470(15,470)-

329,787

115,009

9,662

34,82095,764

585,044106

585,151(15,470)569,680

27,78732,567

6,016

9,124

6,939

82,434(30)

82,404(5,132)

77,271450,698

993,985

35,64922,87356,5291,559,736

929 1,560,666

32,427

1,593,093

Depreciation

264

14,139

27

378

1,481

16,2905

16,296580

16,877

Amortization of
goodwill

-

235

-

-

29

264

-

264

-

264

Investment in affiliates
accounted for using
equity method

2,525

930

-

-

518

3,974

-

3,974

-

3,974

Increase in property,
plant and equipment
and intangible assets

427

56,224

22

649

1,754

59,079-59,0791,295

60,374

Inter-segment
Subtotal
Segment income orlossesSegment assets
Other items(Notes) 1. The “Other” category represents operating segments that are not included in reportable segments.
2. (1) The deduction of 5,132 million yen shown in the adjustments column for segment profit or losses includes an increase inelimination of intersegment transactions of 1,388 million yen and a deduction of 6,521 million yen for corporate expenses notallocated to each reportable segment. These corporate expenses mainly consist of general and administrative expenses not
attributable to reportable segments.
(2) The addition of 32,427 million yen shown in the adjustments column for segment assets includes a deduction of 48,080
million yen for the elimination of inter-segment transactions and an addition of 80,507 million yen for corporate assets notallocated to each reportable segment.
3. The segment profit or losses is reconciled to the operating profit stated in the consolidated financial statements.

32

【Related information】
FY2015 (From April 1, 2015 to March 31, 2016)
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“3. 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.
FY2016 (From April 1, 2016 to March 31, 2017)
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“3. 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.
【Impairment loss on noncurrent assets by reportable segment】
FY2015 (From April 1, 2015 to March 31, 2016)(Millions of yen)
Residential

Leasing

Development

Impairment loss-

Property &Investment

Property

Management

Brokerage & CRE

186-

Facility-

Total

Management

1,239

1,426

FY2016 (From April 1, 2016 to March 31, 2017)(Millions of yen)
Property &Residential

Leasing

Development

Investment

Property

Management

Brokerage & CRE

Facility

Total

Management

Impairment loss

-

254

-

33

-

-

254

【Amortization and unamortized balance of goodwill by reportable segment】
FY2015 (From April 1, 2015 to March 31, 2016)(Millions of yen)
Residential

Property

Investment
Leasing

Development

Management

Property &Brokerage &Facility

CRE

Management

Total

Amortization

-

235

-

-

29

264

Balance at March 31, 2016

-

3,003

-

-

205

3,208

FY2016 (From April 1, 2016 to March 31, 2017)(Millions of yen)
Residential

Investment
Leasing

Development

Management

Property

Property &Brokerage &Facility

CRE

Management

Total

Amortization

-

235

-

-

29

264

Balance at March 31, 2017

-

2,768

-

-

175

2,943

【Gain on negative goodwill by reportable segment】
Not applicable.

34

(Per Share Information)
FY2015FY2016(From April 1, 2015

(From April 1, 2016

to March 31, 2016)

to March 31, 2017)

Net assets per share

2,320.84 yen

2,508.73 yen

Basic earnings per share

246.42 yen

245.10 yen

Diluted earnings per share

245.40 yen

244.06 yen(Note) The basis for the calculation of basic earnings per share and diluted earnings per share is as follows.
FY2015FY2016(From April 1, 2015

(From April 1, 2016

to March 31, 2016)

to March 31, 2017)

Basic earnings per share
Profit attributable to owners of parent (Millions of47,18247,005--47,18247,005

191,472

191,781

-

-

795

815

795

815

Description of potentially dilutive common shares not

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

3rd Stock Acquisition Rights in

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

FY2015 (Number of rights: 3,809)

FY2013 (Number of rights: 2,790)

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

5th Stock Acquisition Rights in

3rd Stock Acquisition Rights in

FY2015 (Number of rights: 240)

FY2014 (Number of rights: 3,432)

yen)Profit not attributed to common shareholders(Millions of yen)
Profit attributable to owners of parent available tocommon stock (Millions of yen)
Average number of common stock during the period(Thousand shares)
Diluted earnings per share
Adjustment for profit attributable to owners of parent(Millions of yen)
Increase in number of shares of common stock(Thousand shares)
Of which, stock acquisition rights(Thousand shares)

Nomura Real Estate Holdings, Inc. the
3rd Stock Acquisition Rights in
FY2015 (Number of rights: 3,783)
Nomura Real Estate Holdings, Inc. the
5th Stock Acquisition Rights in
FY2015 (Number of rights: 230)
Nomura Real Estate Holdings, Inc. the
3rd Stock Acquisition Rights in
FY2016 (Number of rights: 4,198)(Significant Subsequent Events)
Not applicable.

35