Form 6-K Amendment
FORM 6-K/A
 
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
 
Commission File Number: 1-15270
 
Supplement for the month of December 2002.
Total number of pages: 21.
The exhibit index is located on page 2.
 
NOMURA HOLDINGS, INC.
(Translation of registrant’s name into English)
 
9-1, Nihonbashi 1-chome
Chuo-ku, Tokyo 103-8645
Japan
(Address of principal executive offices)
 
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
 
Form 20-F   X                                       Form 40-F        
 
Indicate by check mark if the registrant is submitting the Form 6-K/A in paper as permitted by Regulation S-T Rule 101(b)(1):           
 
Indicate by check mark if the registrant is submitting the Form 6-K/A in paper as permitted by Regulation S-T Rule 101(b)(7):          
 
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
 
Yes                                               No   X  
 
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-


Information furnished on this form:
 
EXHIBIT
 
Exhibit Number

         
Page Number

1.
       
4
 
Note
 
On December 13, 2002, Nomura Holdings, Inc. (the “Company”) filed a Report of Foreign Private Issuer on Form 6-K with the Securities Exchange Commission regarding English translation of the 99th Semi-annual Information 2002.4.1-2002.9.30, the Japanese originals of which were distributed to the Company’s shareholders on the same day. The Company is filing this Form 6-K/A in order to amend the Form 6-K to include English translation of the Company’s unconsolidated balance sheet information and unconsolidated income statement information. This Report on Form 6-K/A replaces in its entirety the Report on Form 6-K filed on December 13, 2002.

2


SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
Date: December 18, 2002
 
NOMURA HOLDINGS, INC.
 
By:
 
/s/    MASANORI ITATANI        
 

   
Masanori Itatani
   
Director

3


 
2002.9
To Our Shareholders
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The 99th
Semi-annual Information
2002.4.1~2002.9.30
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NOMURA HOLDINGS, INC.

4


To Our Shareholders
 
It gives me great pleasure to present the 99th Semi-annual Operating Results of Nomura Holdings, Inc.
 
During the period we continued to face harsh business conditions, including stagnation of the Japanese economy and a downturn in global equity markets. Based on accounting principles generally accepted in the United States (US GAAP), consolidated net revenue was 283.4 billion yen, consolidated income before income taxes stood at 40.6 billion yen and consolidated net income was 131.1 billion yen. As a result, ROE was 9.1%.
 
The circumstances surrounding Japan at present involve various domestic and overseas issues, such as worsening deflation, the prolonged issue of non-performing loans and an increasingly tense world political climate. As a result, investors continue to face particularly challenging times with the Japanese stock market dropping to new post-bubble lows and short-term interest rates hovering close to zero. Despite this, however, individual financial assets are reacting sensitively as investors seek more effective means of investment. This is evident from growing demand for foreign currency bonds and the continuous net flow of assets into variable annuity insurance products and equity-type investment trusts. Furthermore, the stream of corporate reforms aimed at enhancing shareholder value is gathering pace, as evidenced by promotion of drastic restructuring in the corporate sector, progress in unwinding cross-shareholdings, and greater volumes of share buy-backs and increased M&A activity.
 
Given such circumstances, Nomura, which identifies its core businesses as the securities and other closely related businesses, aims to provide capital market-based solutions to the asset management, financing and management efficiency needs of its customers. Nomura seeks to further strengthen its domestic operations and build a system for delivering globally competitive services to enhance its international competitiveness.
 
As always, Nomura Group looks forward to your continued support
 
Management Policy
 
Nomura Holdings, Inc. (the “Company”) holds shares of domestic and overseas companies which are engaging in securities business and other closely related business, and control and manage business activities of those companies. The Company and its subsidiaries in Japan and overseas such as Nomura Securities Co., Ltd., under the integrated strategy as a “Nomura Group”, shall make our efforts to maximize shareholder value with sustainable profits acquired in exchange for our highly value added financial services to the customers.
 
Basic Strategy of Nomura Group
 
Nomura Group’s vision is to establish its status firmly as a globally competitive Japanese financial institution. In seeking to realize our vision, we promote our “Japan focused globalization”, that is, strengthen our base in domestic securities businesses, which are expected to grow rapidly and gain its importance, and to enhance our global business execution system by utilizing our domestic base.
 
In regard to benchmark for management, we set a consolidated return on shareholders’ equity (ROE) target of 10-15% in average over the medium- to long-term in order to increase shareholders’ equity.
 
Structure of Business Operations
 
For executing our business strategy, we focus on business lines, which are linked globally, rather than individual legal entities. Our business lines are comprised of Domestic Retail, Global Wholesale and Asset Management. Global Wholesale consists of four business units as Fixed Income, Equity, Investment Banking and Merchant Banking.
 
For the most part, the way of running for Nomura Group’s business is decided by the Strategic Management Committee at the Company. The Strategic Management Committee allocates management resources within the Nomura Group in an efficient and flexible manner upon close examination of the business plans of each business line. Head of each business line operates business activities within the scope of business plans approved and resources given by the Strategic Management Committee. The Committee monitors the operating results of each business line fully using performance evaluation indicators such as Nomura Value Added (NVA), calculated by subtracting capital cost from profit after tax.

5


 
Business Portfolio
 
LOGO
 
 
Strategy for Each Business Line
 
For pursuing our vision that is to survive as globally competitive Japanese financial institution, as stated earlier, we intend to establish more stable business portfolio against market environment.
 
An expanding growth model is a basic strategy for Domestic Retail. Domestic Retail aims to expand outstanding balance of custody assets from our customers by providing a services focused on the most important value for each customer, with expanding variety of products and enhancing infrastructure for both face-to-face and non face-to-face sales activities.
 
Global Wholesale shall aggressively promote problem-solution type business through capital markets such as securitization, M&A advisory, real estate investment banking, and merchant banking, in addition to our traditional trading and underwriting businesses, while whole Japanese economy is involved in its restructuring and recovery activities.
 
Asset Management is promoting some activities including a project for enhancing investment management abilities while environment surrounding asset management is dramatically changing. We shall strengthen our asset management business with the entire Nomura Group’s support and consider establishing this business as one of the Nomura Group’s stable profit centers.
 
Enhancement of Corporate Governance
 
Nomura Group manages its operation with a focus on shareholders’ value and is dealt with an enhancement of its corporate governance and securing transparency of its management.
 
In regards to our management system, two of directors among the Company’s eleven directors are outside directors. Also, we have established the Advisory Board, made up of business managers from prestigious and globally operating Japanese corporations as a consultative body for the Strategic Management Committee, and have established the structure which enables the management of the business from multi-factored perspectives.
 
In addition, we established the Executive Compensation Committee to discuss compensation for the directors of Nomura Group. The members of the committee are composed of the President and two outside directors with the aim of drawing on outside perspectives.
 
Furthermore, we set up the Audit Committee as senior organization of Internal Audit Committee to promote fairness of behavior across the Nomura Group and enhance internal audit functioning. An outside director participates in this committee.

6


 
Management Structure of the Company
 
 
LOGO
 
 
Overview of Nomura Group (as of October 1, 2002)
 
Nomura Group is a financial service group comprised of Nomura Holdings, Inc. as its holding company and its consolidated subsidiaries in Japan and overseas such as Nomura Securities Co., Ltd. and Nomura Asset Management Co., Ltd.
 
LOGO

7


 
Results of Operations
 
Financial Overview
 
The following table provides selected consolidated income statement information for the six months ended September 2001 and 2002 and for the year ended March 31, 2002.
 
    
Millions of yen

    
For the six months ended

  
For the year ended

    
September 30,
2001

  
September 30,
2002

  
March 31,
2002

Non-interest revenue
  
¥
462,040
  
¥
223,340
  
¥
1,324,858
Net interest revenue
  
 
(1,200)
  
 
60,075
  
 
(3,507)
    

  

  

Net revenue
  
 
460,840
  
 
283,415
  
 
1,321,351
Non-interest expenses
  
 
582,908
  
 
242,778
  
 
1,148,379
    

  

  

Income (loss) before income taxes
  
 
(122,068)
  
 
40,637
  
 
172,972
Income tax expense (benefit)
  
 
(44,217)
  
 
19,366
  
 
4,926
Cumulative effect of accounting change1
  
 
—  
  
 
109,799
  
 
—  
    

  

  

Net income (loss)
  
 
(¥77,851)
  
¥
131,070
  
¥
168,046
    

  

  

Annualized return on equity (ROE)
  
 
(11.1%)
  
 
9.1%
  
 
11.1%

(Note 1)  
Cumulative effect of accounting change represents writing off the remaining unamortized negative goodwill associated with  the acquisition of Nomura Asset Management Co., Ltd.
 
Nomura Holdings, Inc. and its consolidated subsidiaries (“Nomura”) reported a net revenue of ¥283 billion for the six months ended September 30, 2002, a decrease of 39% from the six months ended September 30, 2001. Non-interest expenses were ¥243 billion for the six months ended September 30, 2002, a decrease of 58% from the same period in the prior year.
 
The decline in net revenues and non-interest related expenses is due to the fact that the results of operation for the six months ended September, 2001 include the consolidated results of Principal Finance Group (“PFG”) entities, which were contributed to a limited partnership on March 27, 2002 in exchange for a limited partnership interest and, accordingly are not consolidated with our results of operation for the six months ended September 30, 2002. PFG accounted for ¥ 221 billion of net revenues and ¥243 billion of non-interest related expenses for the six months ended September 30, 2001.
 
Income before income taxes and net income were ¥41 billion and ¥131 billion for the six months ended September 30, 2002, respectively. This compares to a loss before income taxes and a net loss of ¥122 billion and ¥78 billion, respectively for the same period in the prior year.
 
Total assets were approximately ¥19.0 trillion at September 30, 2002, an increase of approximately ¥1.2 trillion from March 31, 2002 and total shareholders’ equity increased by ¥128 billion from March 31, 2002 to approximately ¥1.7 trillion at September 30, 2002. Nomura’s return on equity was 9.1% for the six months ended September 30, 2002 on an annualized basis.

8


 
Business Segments
 
Operating Results of Domestic Retail
 
    
Millions of yen

    
For the six months ended

    
For the year ended

    
September 30,
2001

  
September 30,
2002

    
March 31,
2002

Non-interest revenue
  
¥
111,760
  
¥
122,573
    
¥
226,156
Net interest revenue
  
 
1,543
  
 
1,204
    
 
2,949
    

  

    

Net revenue
  
 
113,303
  
 
123,777
    
 
229,105
Non-interest expenses
  
 
107,211
  
 
108,429
    
 
208,621
    

  

    

Income before income taxes
  
¥
6,092
  
¥
15,348
    
¥
20,484
    

  

    

 
Net revenue increased by 9% from the six months ended September 30, 2001 to ¥123,777 million for the six months ended September 30, 2002, mainly due to an increase in selling commissions from medium term notes and foreign currency bonds resulting from personalized investment consultation services we provide. Non-interest expenses increased by 1% from the six months ended September 30, 2001 to ¥108,429 million for the six months ended September 2002. As a result, Income before income taxes increased by 152% from the six months ended September 30, 2001 to ¥15,348 million for the six months ended September 30, 2002.
 
Operating Results of Global Wholesale
 
    
Millions of yen

    
For the six months ended

    
For the year ended

    
September 30,
2001

  
September 30,
2002

    
March 31,
2002

Non-interest revenue
  
¥
128,329
  
¥
97,645
    
¥
385,430
Net interest revenue
  
 
15,550
  
 
47,510
    
 
54,505
    

  

    

Net revenue
  
 
143,879
  
 
145,155
    
 
439,935
Non-interest expenses
  
 
96,978
  
 
99,707
    
 
248,657
    

  

    

Income before income taxes
  
¥
46,901
  
¥
45,448
    
¥
191,278
    

  

    

 
Net revenue increased by 1% from the six months ended September 30, 2001 to ¥145,155 million for the six months ended September 30, 2002, because Global Wholesale has made an effort to diversify its business portfolio under the adverse business circumstances and Fixed Income increased net gain on trading. However, Non-interest expenses increased by 3% from the six months ended September 30, 2001 to ¥99,707 for the six moths ended September 2002. As a result, Income before income taxes decreased by 3% from the six months ended September 30, 2001 to ¥45,448 million for the six months ended September 30, 2002.

9


 
Fixed Income
 
Net revenue increased by 74% from the six months ended September 30, 2001 to ¥76,363 million for the six months ended September 30, 2002, mainly due to an increase in net gain on bond trading relating to medium term notes and foreign currency bonds. Non-interest expenses increased by 9% from the six months ended September 30, 2001 to ¥35,278 million for the six moths ended September 30, 2002. As a result, Income before income taxes increased by 252% from ¥11,684 million for the six months ended September 30, 2001 to ¥41,085 million for the six months ended September 30, 2002.
 
Equity
 
Net revenue decreased by 33% from the six months ended September 30, 2001 to ¥42,770 million for the six months ended September 30, 2002, mainly due to an decrease in net gain on equity trading resulting from the depressed global equity markets. Non-interest expenses increased by 3% from the six months ended September 30, 2001 to ¥32,670 million for the six months ended September 30, 2002. Income before income taxes decreased by 68% from ¥31,990 million for the six months ended September 30, 2001 to ¥10,100 million for the six months ended September 30, 2002.
 
 
Investment banking and Merchant banking
 
Net revenue decreased by 28% from the six months ended September 30, 2001 to ¥26,022 million for the six months ended September 30, 2002. Non-interest expenses decreased by 3% from the six months ended September 30, 2001 to ¥31,759 million for the six months ended September 30, 2002. As a result, Income before income taxes was ¥3,227 million for the six months ended September 30, 2001 and Loss before income taxes was ¥5,737 million for the six months ended September 30, 2002.
 
Net revenue for Investment banking activities decreased by 22% from the six months ended September 30, 2001 to ¥33,283 million for the six months ended September 30, 2002, mainly due to an stagnant IPO and PO volume in capital markets. Non-interest expenses for Investment banking activities decreased by 6% from the six months ended September 30, 2001 to ¥27,487 million for the six months ended September 30, 2002. As a result, Income before income taxes for Investment banking activities decreased by 56% from the six months ended September 30, 2001 to ¥5,796 million for the six months ended September 30, 2002.
 
Net revenue for Merchant banking activities changed by 15% from the six months ended September 30, 2001 to (¥7,261) million for the six months ended September 30, 2002, mainly due to an increase in loss on private equity investments due to sluggish global equity markets. Non-interest expenses for Merchant banking activities increased by 15% from the six months ended September 30, 2001 to ¥4,272 million for the six months ended September 30, 2002. As a result, loss before income taxes for Merchant banking activities increased by 15% from the six months ended September 30, 2001 to ¥11,533 million for the six months ended September 30, 2002.

10


 
Operating Results of Asset Management
 
    
Millions of yen

    
For the six months ended

      
For the year ended

    
September 30,
2001

  
September 30,
2002

      
March 31,
2002

Non-interest revenue
  
¥
23,180
  
¥
20,138
 
    
¥
46,840
Net interest revenue
  
 
603
  
 
(32
)
    
 
367
    

  


    

Net revenue
  
 
23,783
  
 
20,106
 
    
 
47,207
Non-interest expenses
  
 
16,715
  
 
17,677
 
    
 
37,031
    

  


    

Income before income taxes
  
¥
7,068
  
¥
2,429
 
    
¥
10,176
    

  


    

 
Net revenue decreased by 15% from the six months ended September 30, 2001 to ¥20,106 million for the six months ended September 30, 2002, due to a decrease in asset management fees associated with a decrease in the outstanding balance of bond investment trusts caused mainly by the redemption of Medium-term Japanese Government Bond Fund. Non-interest expenses increased by 6% from the six months ended September 30, 2001 to ¥17,677 million for the six months ended September 30, 2002, mainly due to an increase in expenses for pension-related businesses. As a result, Income before income taxes decreased by 66% from the six months ended September 30, 2001 to ¥2,429 million for the six months ended September 30, 2002.
 
Other Operating Results
 
Other operating results include gain (loss) on investment securities, equity in earnings (losses) of affiliates and other financial adjustments. Loss before income taxes in Other decreased from ¥120,777 million for the six months ended September 30, 2001 to ¥1,587 million for the six months ended September 30, 2002. The main reason for the decrease was that impairment loss on investment in an affiliated company was ¥92,441 million for the six month ended September 30, 2001. Please refer to Note 7 to the consolidated financial information for a reconciliation of segment results to income statement information.
 
We introduced certain methodologies to allocate Headquarter’s expenses to our three business segments effective April 1, 2002. We created global Headquarters accounts and allocate its expenses to business segments according to benefits received by each business segment. The improvement was made to better allocate the expenses based on benefits received by each segment, and it also included allocation of headquarter’s expenses which previously were not allocated to segments. Had we not applied the current allocation methodologies for the six months ended September 30, 2002, income before income taxes for Domestic Retail, Global Wholesale and Asset Management would have been ¥19,388 million, ¥49,905 million and ¥2,768 million, respectively.

11


 
NOMURA HOLDINGS, INC.
 
CONSOLIDATED BALANCE SHEET INFORMATION
(UNAUDITED)
 
    
Millions of yen

 
    
September 30, 2001

    
March 31, 2002

    
September 30, 2002

 
ASSETS
                          
Cash and cash deposits:
                          
Cash and cash equivalents
  
¥
418,236
 
  
¥
356,635
 
  
¥
159,694
 
Time deposits
  
 
169,051
 
  
 
381,038
 
  
 
416,930
 
Deposits with stock exchanges and other segregated cash
  
 
112,694
 
  
 
38,061
 
  
 
37,717
 
    


  


  


    
 
699,981
 
  
 
775,734
 
  
 
614,341
 
    


  


  


Loans and receivables:
                          
Loans receivable from customers
  
 
270,020
 
  
 
221,455
 
  
 
234,006
 
Loans receivable from other than customers
  
 
272,860
 
  
 
451,662
 
  
 
275,685
 
Receivables from customers
  
 
117,062
 
  
 
21,191
 
  
 
173,539
 
Receivables from other than customers
  
 
591,181
 
  
 
370,116
 
  
 
273,977
 
Receivables under resale agreements and securities borrowed transactions
  
 
4,540,122
 
  
 
6,680,001
 
  
 
6,916,802
 
Securities pledged as collateral
  
 
3,575,948
 
  
 
2,964,276
 
  
 
3,667,215
 
Allowance for doubtful accounts
  
 
(14,299
)
  
 
(18,410
)
  
 
(18,812
)
    


  


  


    
 
9,352,894
 
  
 
10,690,291
 
  
 
11,522,412
 
    


  


  


Trading assets and private equity investments:
                          
Securities inventory
  
 
3,980,006
 
  
 
4,302,217
 
  
 
4,794,443
 
Derivative contracts
  
 
286,135
 
  
 
293,266
 
  
 
417,724
 
Private equity investments
  
 
—  
 
  
 
281,774
 
  
 
270,679
 
    


  


  


    
 
4,266,141
 
  
 
4,877,257
 
  
 
5,482,846
 
    


  


  


Other:
                          
Office buildings, land, equipment and facilities (net of accumulated depreciation and amortization of ¥208,026 million at September 30, 2001, ¥221,113 million at March 31, 2002, and ¥176,274 million at September 30, 2002, respectively)
  
 
161,064
 
  
 
170,762
 
  
 
181,359
 
PFG entities land, buildings, equipment and furniture and fixtures (net of accumulated depreciation and amortization of ¥88,360 million at September 30, 2001)
  
 
810,385
 
  
 
—  
 
  
 
—  
 
Lease deposits
  
 
83,224
 
  
 
74,591
 
  
 
77,842
 
Non-trading debt securities
  
 
320,846
 
  
 
426,400
 
  
 
402,479
 
Investments in equity securities
  
 
223,195
 
  
 
192,377
 
  
 
170,690
 
Investments in and advances to affiliated companies
  
 
258,355
 
  
 
257,089
 
  
 
263,892
 
Deferred tax assets
  
 
83,827
 
  
 
132,808
 
  
 
112,682
 
Other assets
  
 
423,562
 
  
 
160,964
 
  
 
135,073
 
    


  


  


    
 
2,364,458
 
  
 
1,414,991
 
  
 
1,344,017
 
    


  


  


Total assets
  
¥
16,683,474
 
  
¥
17,758,273
 
  
¥
18,963,616
 
    


  


  


12


NOMURA HOLDINGS, INC.
 
CONSOLIDATED BALANCE SHEET INFORMATION
(UNAUDITED)
 
    
Millions of Yen

    
September 30, 2001

  
March 31,
2002

  
September 30, 2002

LIABILITIES AND SHAREHOLDERS’ EQUITY
                    
Payables, borrowings and deposits:
                    
Payables to customers
  
¥
256,995
  
¥
729,907
  
¥
263,265
Payables to other than customers
  
 
510,486
  
 
182,760
  
 
193,430
Payables under repurchase agreements and securities loaned transactions
  
 
7,589,669
  
 
8,245,492
  
 
9,728,958
Short-term borrowings
  
 
1,550,331
  
 
1,689,504
  
 
1,813,442
Time and other deposits
  
 
292,233
  
 
338,925
  
 
196,611
    

  

  

    
 
10,199,714
  
 
11,186,588
  
 
12,195,706
    

  

  

Trading liabilities:
                    
Securities sold but not yet purchased
  
 
1,829,613
  
 
2,387,847
  
 
2,538,738
Derivative contracts
  
 
380,048
  
 
305,899
  
 
360,001
    

  

  

    
 
2,209,661
  
 
2,693,746
  
 
2,898,739
    

  

  

Other liabilities:
                    
Accrued income taxes
  
 
28,731
  
 
50,920
  
 
19,024
Accrued pension and severance costs
  
 
43,623
  
 
56,109
  
 
57,083
Other
  
 
439,977
  
 
411,127
  
 
236,213
    

  

  

    
 
512,331
  
 
518,156
  
 
312,320
    

  

  

Long-term borrowings
  
 
1,478,472
  
 
1,754,854
  
 
1,824,230
    

  

  

Non-recourse PFG entities loans and bonds
  
 
923,131
  
 
—  
  
 
—  
    

  

  

Total liabilities
  
 
15,323,309
  
 
16,153,344
  
 
17,230,995
    

  

  

Commitments and contingencies (See note 6)
                    
Shareholders’ equity:
                    
Common Stock Issued - 1,962,980,444 shares 1,965,919,860 shares, and 1,965,919,860 shares at September 30, 2001, March 31, 2002, and September 30, 2002, respectively
  
 
182,800
  
 
182,800
  
 
182,800
    

  

  

Additional paid-in capital
  
 
146,136
  
 
150,979
  
 
151,066
    

  

  

Retained earnings
  
 
1,099,808
  
 
1,316,221
  
 
1,447,291
    

  

  

Accumulated other comprehensive income
  
 
(18,426)
  
 
(24,972)
  
 
(23,900)
Minimum pension liability adjustment
  
 
(50,138)
  
 
(19,685)
  
 
(23,766)
    

  

  

Cumulative translation adjustments
  
 
(68,564)
  
 
(44,657)
  
 
(47,666)
    

  

  

    
 
1,360,180
  
 
1,605,343
  
 
1,733,491
                      
Less-Common stock held in treasury, at cost - 7,525 shares, 246,075 shares, 510,599 shares at September 30, 2001, March 31, 2002 and September 30, 2002, respectively
  
 
(15)
  
 
(414)
  
 
(870)
    

  

  

Total shareholders’ equity
  
 
1,360,165
  
 
1,604,929
  
 
1,732,621
    

  

  

Total liabilities and shareholders’ equity
  
¥
16,683,474
  
¥
17,758,273
  
¥
18,963,616
    

  

  

13


 
NOMURA HOLDINGS, INC.
 
CONSOLIDATED INCOME STATEMENT INFORMATION
(UNAUDITED)
 
    
Millions of yen

  
% Change

    
Millions of yen

    
For the six months ended

    
For the year ended

    
September 30, 2001 (A)

  
September 30, 2002 (B)

  
(B) vs. (A)

    
March 31, 2002

Revenue:
                           
Commissions
  
¥
70,568
  
¥
80,776
  
14.5
%
  
¥
140,001
Fees from investment banking
  
 
37,029
  
 
33,913
  
(8.4)
 
  
 
75,255
Assets management and portfolio service fees
  
 
57,404
  
 
46,095
  
(19.7)
 
  
 
109,985
Net gain on trading
  
 
82,904
  
 
66,149
  
(20.2)
 
  
 
162,228
Interest and dividends
  
 
312,345
  
 
206,913
  
(33.8)
 
  
 
500,541
Loss on investments in equity securities
  
 
(43,158)
  
 
(10,419)
  
—  
 
  
 
(55.860)
Gain from changes in equity of an affiliated company
  
 
—  
  
 
—  
  
—  
 
  
 
3,504
PFG entities product sales
  
 
154,093
  
 
—  
  
—  
 
  
 
294,931
PFG entities rental income
  
 
64,853
  
 
—  
  
—  
 
  
 
177,053
Gain on sales of PFG entities
  
 
—  
  
 
—  
  
—  
 
  
 
116,324
Gain (loss) on private equity investments
  
 
—  
  
 
(2,892)
  
—  
 
  
 
232,472
Other
  
 
38,347
  
 
9,718
  
(74.7)
 
  
 
68,965
    

  

  

  

Total revenue
  
 
774,385
  
 
430,253
  
(44.4)
 
  
 
1,825,399
Interest expense
  
 
313,545
  
 
146,838
  
(53.2)
 
  
 
504,048
    

  

  

  

Net revenue
  
 
460,840
  
 
283,415
  
(38.5)
 
  
 
1,321,351
    

  

  

  

Non-interest expenses:
                           
Compensation and benefits
  
 
176,935
  
 
121,283
  
(31.5)
 
  
 
379,540
Commissions and floor brokerage
  
 
10,161
  
 
10,030
  
(1.3)
 
  
 
20,962
Information processing and communications
  
 
40,326
  
 
37,409
  
(7.2)
 
  
 
87,252
Occupancy and related depreciation
  
 
36,530
  
 
29,100
  
(20.3)
 
  
 
73,787
Business development expenses
  
 
13,950
  
 
13,677
  
(2.0)
 
  
 
26,652
PFG entities cost of goods sold
  
 
107,035
  
 
—  
  
—  
 
  
 
200,871
PFG entities expenses associated with rental income
  
 
33,284
  
 
—  
  
—  
 
  
 
111,529
Other
  
 
164,687
  
 
31,279
  
(81.0)
 
  
 
247,786
    

  

  

  

    
 
582,908
  
 
242,778
  
(58.4)
 
  
 
1,148,379
    

  

  

  

Income (loss) before income taxes
  
 
(122,068)
  
 
40,637
  
—  
 
  
 
172,972
    

  

  

  

Income tax expense (benefit):
                           
Current
  
 
25,392
  
 
13,844
  
(45.5)
 
  
 
61,898
Deferred
  
 
(69,609)
  
 
5,522
  
—  
 
  
 
(56,972)
    

  

  

  

    
 
(44,217)
  
 
19,366
  
—  
 
  
 
4,926
    

  

  

  

Income (loss) before cumulative effect of accounting change
  
 
(77,851)
  
 
21,271
  
—  
 
  
 
168,046
Cumulative effect of accounting change
  
 
—  
  
 
109,799
  
—  
 
  
 
—  
    

  

  

  

Net income (loss)
  
 
(¥77,851)
  
¥
131,070
  
—  
 
  
¥
168,046
    

  

  

  

Per share of common stock:
                           
    
Yen

  
% Change

    
Yen

Basic-
                
%
 
      
Income (loss) before cumulative effect of accounting change
  
 
(¥39.66)
  
¥
10.82
  
—  
 
  
¥
85.57
Cumulative effect of accounting change
  
 
—  
  
 
55.86
  
—  
 
  
 
—  
    

  

  

  

Net income (loss)
  
 
(¥39.66)
  
¥
66.68
  
—  
 
  
¥
85.57
    

  

  

  

Diluted-
                           
Income (loss) before cumulative effect of accounting change
  
 
(¥39.66)
  
¥
10.82
  
—  
 
  
¥
85.32
Cumulative effect of accounting change
  
 
—  
  
 
55.86
  
—  
 
  
 
—  
    

  

  

  

Net income (loss)
  
 
(¥39.66)
  
¥
66.68
  
—  
 
  
¥
85.32
    

  

  

  

14


 
NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION
(UNAUDITED)
 
1.    Description of Business:
 
Nomura Holdings, Inc. (the “Company”) and its broker-dealer, banking and other financial services subsidiaries provide investment, financing and related services to individuals, institutional and governmental customers on a global basis. Such services include equity and fixed income brokerage, trading, underwriting, distribution and clearance; trading of foreign exchange and futures contracts and other derivates in a broad range of asset categories, rates and indices; investment banking, real estate, project finance, private equity finance and other corporate finance advisory activities; international merchant banking and other principal investment activities; and asset management, private banking, trust and custody services.
 
2.    Basis of Financial Information:
 
The consolidated financial information includes the accounts of the Company, its majority-owned subsidiaries and other entities in which the Company has a controlling financial interest (collectively, referred to as “Nomura”). All material intercompany transactions have been eliminated in consolidation. The consolidated financial information has been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), which requires management to make estimates regarding certain financial instrument valuation, the outcome of litigation, the recovery of the carrying value of certain assets, the allowance for loan loss reserves, the realization of deferred tax assets and other matters that affect the carrying value of reported assets and liabilities and the related disclosures. Estimates, by their nature are based on judgment and available information. Therefore, actual results may differ from estimates, which could have a material impact on the consolidated financial information and, it is possible that such adjustments could occur in the near term.
 
The financial information as of and for the year ended March 31, 2002 has been derived from the audited March 31, 2002 financial statement included in the Company’s annual report filed with the Securities and Exchange Commission of Form 20-F. The interim consolidated financial information as of September 30, 2002 and 2001 and for the six-month periods then ended is unaudited; however, in the opinion of management, such information includes all adjustments, consisting only of normal and recurring items, necessary for a fair presentation. Certain footnote disclosures, including the Nomura’s significant accounting policy, which are normally required under U.S.GAAP have been omitted, accordingly, the unaudited interim financial information should be read in conjunction with the audited consolidated financial statements included in the Company’s annual report. The nature of Nomura business is such that the results of operation for any interim period are not necessarily indicative of the results for the entire fiscal year.
 
3.    Change in Method of Accounting for Stock Options:
 
Effective April 1, 2002 Nomura changed its method of accounting for stock-based compensation plans. Nomura has adopted the fair-value-based method of accounting for company stock options as outlined in SFAS No. 123, “Accounting for Stock-Based Compensation”. Stock options awarded prior to April 1, 2002 will continue to be accounted for under the intrinsic value method of accounting under Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees”. The effect of this change in accounting was to increase compensation and benefits expense and decrease income before income taxes by ¥87 million ($715 thousand) for the six-months ended September 30, 2002.
 
4.    Cumulative Effect of Accounting Change:
 
In June 2001, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets” (“SFAS No. 142”). SFAS No. 142 no longer permits the amortization of goodwill and intangible assets with indefinite lives. Instead these assets must be reviewed annually, or more frequently in certain circumstance, for impairment. Intangible assets that have determinable lives will continue to be amortized over their useful lives and reviewed for impairment. In addition, negative goodwill that arises in a business combination must be written off immediately. Nomura adopted SFAS No. 142 effective April 1, 2002, which resulted in writing off negative goodwill arising from a previous business combination of ¥109,799 million ($901,914 thousand), net of taxes.

15


NOMURA HOLDINGS, INC.
 
NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION—(Continued)
(UNAUDITED)

 
5.    New Accounting Pronouncements:
 
In June 2002, the FASB issued SFAS No. 146 “Accounting for Costs Associated with Exit or Disposal Activities”. This standard requires companies to recognize costs associated with the exit or disposal of activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. SFAS No. 146 will replace the existing guidance provided in Emerging Issues Task Force Issue No. 94-3 “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)”. SFAS No.146 is to be applied prospectively to exit or disposal activities initiated after December 31, 2002.
 
In October 2002, the FASB issued SFAS No. 147 “Acquisition of Certain Financial Institutions”. This standard required the acquisitions of financial institutions to be accounted for under SFAS No. 141 “Business Combinations” and SFAS 142 “Goodwill and Other Intangible Assets” and removes the acquisition of financial institutions from the scope of SFAS No. 72 “Accounting for Certain Acquisitions of Banking or Thrift Institutions” and FASB Interpretation No. 9 “Applying APB Opinion No.16 and 17 When a Savings and Loan Association or a Similar Institution Is Acquired in a Business Combination Accounted for by the Purchase Method”.
 
The Company does not believe that the adoption of these two new standards will have a material effect on the Company’s consolidated financial information.
 
6.    Credit commitments and contingencies:
 
In the normal course of the companys’ banking and financing activities, we enter into contractual commitments to extend credit, standby letters of credit, underwriting commitments and issuance of financial guarantees, which generally have a fixed expiration date.
 
Contractual amounts of these commitments outstanding at September 30, 2002 and March 31, 2002 were as follows:
 
    
Millions of yen

    
September 30, 2002

  
March 31, 2002

Commitments to extend credit and note issuance facility
  
¥
135,172
  
¥
138,599
Standby letters of credit and financial guarantees
  
 
44,618
  
 
25,721

16


NOMURA HOLDINGS, INC.
 
NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION—(Continued)
(UNAUDITED)

 
7.    Segment Information-Operating segment:
 
Business segments’ results for the six months ended September 30, 2001, 2002, and for the year ended March 31, 2002, are shown in the following table.
 
    
Millions of yen

    
Domestic Retail

  
Global Wholesale

  
Asset Management

  
Other
(Inc. elimination)

  
Total

Six months ended September 30, 2001
                        
Non-interest revenue
  
¥111,760
  
¥128,329
  
¥23,180
  
¥7,145
  
¥270,414
Net interest revenue
  
1,543
  
15,550
  
603
  
12,343
  
30,039
    
  
  
  
  
Net revenue
  
113,303
  
143,879
  
23,783
  
19,488
  
300,453
Non-interest expenses
  
107,211
  
96,978
  
16,715
  
140,265
  
361,169
    
  
  
  
  
Income (loss) before income taxes
  
¥6,092
  
¥46,901
  
¥7,068
  
(¥120,777)
  
(¥60,716)
    
  
  
  
  
Six months ended September 30, 2002
                        
Non-interest revenue
  
¥122,573
  
¥97,645
  
¥20,138
  
¥2,956
  
¥243,312
Net interest revenue
  
1,204
  
47,510
  
(32)
  
11,393
  
60,075
    
  
  
  
  
Net revenue
  
123,777
  
145,155
  
20,106
  
14,349
  
303,387
Non-interest expenses
  
108,429
  
99,707
  
17,677
  
15,936
  
241,749
    
  
  
  
  
Income (loss) before income taxes
  
¥15,348
  
¥45,448
  
¥2,429
  
(¥1,587)
  
¥61,638
    
  
  
  
  
    
Change (%)

Income (loss) before income taxes
Six months ended September, 2002 vs. 2001
  
151.9
  
(3.1)
  
(65.6)
  
—  
  
—  
    
  
  
  
  
    
Millions of yen

For the year ended March 31, 2002
                        
Non-interest revenue
  
¥226,156
  
¥385,430
  
¥46,840
  
¥11,171
  
¥669,597
Net interest revenue
  
2,949
  
54,505
  
367
  
14,422
  
72,243
    
  
  
  
  
Net revenue
  
229,105
  
439,935
  
47,207
  
25,593
  
741,840
Non-interest expenses
  
208,621
  
248,657
  
37,031
  
168,990
  
663,299
    
  
  
  
  
Income (loss) before income taxes
  
¥20,484
  
¥191,278
  
¥10,176
  
(¥143,397)
  
¥78,541
    
  
  
  
  

17


NOMURA HOLDINGS, INC.
 
NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION—(Continued)
(UNAUDITED)

 
Transactions between operating segments are recorded within segment results on commercial terms and conditions and are eliminated in the “Other” column.
 
The following table presents the major components of income/ (loss) before income taxes in “Other”.
 
    
Millions of yen

    
For the six months ended

  
For the year ended

    
September 30, 2001

  
September 30,
2002

  
March 31, 2002

Gain/(loss) on not designated hedging instruments
  
 ¥
3,671
  
 1,753)
  
 ¥
31,435
(Loss)/gain on investment securities
  
 
(1,949)
  
 
10,892
  
 
218
Equity in (losses)/earnings of affiliates
  
 
(8,608)
  
 
353
  
 
(9,551)
Corporate items
  
 
(17,818)
  
 
(678)
  
 
(41,730)
Amortization of goodwill and negative goodwill
  
 
6,487
  
 
—  
  
 
13,316
Impairment loss on investment in an affiliated company
  
 
(92,441)
  
 
—  
  
 
(92,441)
Multi-employer pension plan
  
 
(18,720)
  
 
—  
  
 
(18,720)
Profit from changes in equity of an affiliated company
  
 
—  
  
 
—  
  
 
3,504
Others
  
 
8,601
  
 
(10,401)
  
 
(29,428)
    

  

  

Total
  
 120,777)
  
1,587)
  
 143,397)
    

  

  

 
The table below presents a reconciliation of the combined segment information included in the table on previous page to reported net revenue and income before income taxes in the consolidated income statement information.
 
    
Millions of yen

 
    
For the six months ended

    
For the year ended

 
    
September 30, 2001

    
September 30, 2002

    
March 31, 2002

 
Net revenue
  
 ¥
 300,453
 
  
¥
 303,387
 
  
¥
741,840
 
Unrealized loss on investments in equity securities held for relationship purpose
  
 
(44,968
)
  
 
(21,675
)
  
 
(60,177
)
Effect of consolidation/deconsolidation of the PFG entities and other private equity investee companies
  
 
205,355
 
  
 
1,703
 
  
 
639,688
 
    


  


  


Consolidated net revenue
  
 ¥
460,840
 
  
¥
283,415
 
  
¥
1,321,351
 
    


  


  


Income before income taxes
  
60,716
)
  
¥
61,638
 
  
¥
 78,541
 
Unrealized (loss) on investments in equity securities held for relationship purpose
  
 
(44,968
)
  
 
(21,675
)
  
 
(60,177
)
Effect of consolidation/deconsolidation of the PFG entities and other private equity investee companies
  
 
(16,384
)
  
 
674
 
  
 
154,608
 
    


  


  


Consolidated income (loss) before income taxes
  
 122,068
)
  
¥
40,637
 
  
¥
172,972
 
    


  


  


18


NOMURA HOLDINGS, INC.
 
SUPPLEMENTARY INFORMATION
(UNAUDITED)

 
“Commissions received” and “Net gain on trading” consist of the following.
 
Commissions received
 
    
Millions of yen

  
% Change

    
Millions of yen

    
For the six months ended

    
For the year ended

    
September 30, 2001 (A)

  
September 30, 2002 (B)

  
(B) vs. (A)

    
March 31, 2002

Commissions
  
¥
70,568
  
¥
80,776
  
14.5
 
  
¥
140,001
    

  

  

  

Brokerage Commissions
  
 
49,929
  
 
47,290
  
(5.3
)
  
 
97,505
Commissions for Distribution of Investment Trust
  
 
12,500
  
 
18,004
  
44.0
 
  
 
26,728
Fees from Investment Banking
  
 
37,029
  
 
33,913
  
(8.4
)
  
 
75,255
    

  

  

  

Underwriting and Distribution
  
 
29,482
  
 
25,611
  
(13.1
)
  
 
61,010
M&A/Financial Advisory Fees
  
 
7,134
  
 
7,163
  
0.4
 
  
 
13,383
Asset Management and Portfolio Service Fees
  
 
57,404
  
 
46,095
  
(19.7
)
  
 
109,985
    

  

  

  

Asset Management Fee
  
 
52,320
  
 
41,461
  
(20.8
)
  
 
100,142
Total
  
¥
165,001
  
¥
160,784
  
(2.6
)
  
¥
325,241
    

  

  

  

 
Net gain on trading
 
    
Millions of yen

    
% Change

  
Millions of yen

 
    
For the six months ended

  
For the year ended

 
    
September 30, 2001 (A)

    
September 30, 2002 (B)

    
(B) vs. (A)

  
March 31, 2002

 
Merchant Banking
  
(¥10,071
)
  
(¥  2,246
)
  
—  
  
(¥    6,828
)
Equity Trading
  
59,752
 
  
15,064
 
  
(74.8)
  
113,036
 
Fixed Income and Other Trading
  
33,223
 
  
53,331
 
  
60.5
  
56,020
 
    

  

  
  

Total
  
¥82,904
 
  
¥66,149
 
  
(20.2)
  
¥162,228
 
    

  

  
  

19


 
NOMURA HOLDINGS, INC.
 
UNCONSOLIDATED BALANCE SHEET INFORMATION
(UNAUDITED)
      
(Millions of yen)

 
      
September 30, 2002

 
ASSETS
        
Current Assets
    
508,817
 
      

Cash and time deposits
    
3,336
 
Short-term loans receivable
    
454,990
 
Deferred tax assets
    
19,705
 
Other current assets
    
31,316
 
Allowance for doubtful accounts
    
(531
)
          
Fixed Assets
    
1,538,288
 
      

Tangible fixed assets
    
44,433
 
Intangible assets
    
60,572
 
Investments and others
    
1,433,281
 
Investment securities
    
161,179
 
Investments in subsidiaries and affiliates (at cost)
    
1,025,489
 
Long-term loans receivable
    
120,000
 
Long-term guarantee deposits
    
60,809
 
Deferred tax assets
    
48,483
 
Other investments
    
17,453
 
Allowance for doubtful accounts
    
(133
)
      

TOTAL ASSETS
    
2,047,106
 
      

LIABILITIES
        
Current liabilities
    
204,860
 
      

Bond with maturity of less than one year
    
28,641
 
Payables to customers and others
    
158,294
 
Accrued income taxes
    
1
 
Other current liabilities
    
17,924
 
          
Long-term liabilities
    
432,747
 
      

Bonds payable
    
62,631
 
Long-term borrowings
    
369,500
 
Other long-term liabilities
    
616
 
      

TOTAL LIABILITIES
    
637,607
 
      

SHAREHOLDERS’ EQUITY
        
Common stock
    
182,799
 
Capital reserves
    
112,504
 
Additional paid-in capital
    
112,504
 
Earned surplus
    
1,089,019
 
Earned surplus reserve
    
81,858
 
Voluntary reserve
    
990,041
 
Unappropriated retained earnings
    
17,119
 
Net unrealized gain on investments
    
26,045
 
Treasury stock
    
(870
)
      

TOTAL SHAREHOLDERS’ EQUITY
    
1,409,498
 
      

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
    
2,047,106
 

20


 
NOMURA HOLDINGS, INC.
 
UNCONSOLIDATED INCOME STATEMENT INFORMATION
(UNAUDITED)
      
(Millions of yen)

 
      
Six Months Ended September 30, 2002

 
Operating revenue
    
50,064
 
Property and equipment revenue
    
29,077
 
Rent revenue
    
15,101
 
Royalty on trademark
    
2,821
 
Others
    
2,806
 
Interest income
    
257
 
          
          
          
Operating expenses
    
44,948
 
Compensation and benefits
    
481
 
Rental and maintenance
    
16,558
 
Data processing and office supplies
    
10,791
 
Depreciation and amortization
    
11,479
 
Others
    
3,913
 
Interest expenses
    
1,724
 
      

Operating income
    
5,116
 
      

Non-operating income
    
2,659
 
Non-operating expenses
    
534
 
      

Ordinary income
    
7,240
 
      

Special profits
    
12,210
 
Special losses
    
934
 
      

Profit before income taxes
    
18,517
 
      

Income taxes—current
    
(19,579
)
      

Income taxes—deferred
    
27,832
 
      

Net profit
    
10,264
 
      

Unappropriated retained earnings brought forward
    
6,855
 
      

Unappropriated retained earnings
    
17,119
 
      

21