Segment and geographic information

12 Months Ended

Mar. 31, 2016

Segment and geographic information

Segment and geographic information

21. Segment and geographic information:

Operating segments—

Nomura’s operating management and management reporting are prepared based on the Retail, the Asset Management, and the Wholesale segments. Nomura structures its business segments based upon the nature of its main products and services, its client base and its management structure.

The accounting policies for segment information follow U.S. GAAP, except for the impact of unrealized gains/losses on investments in equity securities held for operating purposes, which under U.S. GAAP are included in Income (loss) before income taxes, but excluded from segment information.

Revenues and expenses directly associated with each business segment are included in the operating results of each respective segment. Revenues and expenses that are not directly attributable to a particular segment are allocated to each respective business segment or included in “Other”, based upon Nomura’s allocation methodologies as used by management to assess each segment’s performance.

Business segments’ results are shown in the following tables. Net interest revenue is disclosed because management views interest revenue net of interest expense for its operating decisions. Business segments’ information on total assets is not disclosed because management does not utilize such information for its operating decisions and therefore, it is not reported to management.

	Millions of yen
	Retail		Asset Management		Wholesale		Other (Incl.  elimination)			Total
Year ended March 31, 2014
Non-interest revenue	¥	505,911	¥	77,354	¥	637,987	¥	183,514		¥	1,404,766
Net interest revenue		6,005		3,126		127,110		5,335			141,576
Net revenue		511,916		80,480		765,097		188,849			1,546,342
Non-interest expenses		319,915		53,373		653,299		168,869			1,195,456
Income before income taxes	¥	192,001	¥	27,107	¥	111,798	¥	19,980		¥	350,886
Year ended March 31, 2015
Non-interest revenue	¥	471,565	¥	88,802	¥	626,228	¥	282,542		¥	1,469,137
Net interest revenue		4,940		3,552		163,639		(61,777	)		110,354
Net revenue		476,505		92,354		789,867		220,765			1,579,491
Non-interest expenses		314,675		60,256		707,671		174,815			1,257,417
Income before income taxes	¥	161,830	¥	32,098	¥	82,196	¥	45,950		¥	322,074
Year ended March 31, 2016
Non-interest revenue	¥	429,948	¥	91,014	¥	571,322	¥	211,453		¥	1,303,737
Net interest revenue		5,686		4,395		148,955		(46,401	)		112,635
Net revenue		435,634		95,409		720,277		165,052			1,416,372
Non-interest expenses		308,003		58,743		704,872		158,905			1,230,523
Income before income taxes	¥	127,631	¥	36,666	¥	15,405	¥	6,147		¥	185,849

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

The following table presents the major components of Income (loss) before income taxes in “Other” for the years ended March 31, 2014, 2015 and 2016.

	Millions of yen
	Year ended March 31
	2014			2015			2016
Net gain related to economic hedging transactions	¥	17,403		¥	15,120		¥	6,370
Realized gain on investments in equity securities held for operating purposes		4,428			4,725			187
Equity in earnings of affiliates		28,571			42,235			32,727
Corporate items		(38,772	)		(20,119	)		(52,314	)
Other(1)		8,350			3,989			19,177
Total	¥	19,980		¥	45,950		¥	6,147

(1) Includes the impact of Nomura’s own creditworthiness.

The table below presents reconciliations of the combined business segments’ results included in the preceding table to Nomura’s reported Net revenue, Non-interest expenses and Income before income taxes in the consolidated statements of income for the years ended March 31, 2014, 2015 and 2016.

	Millions of yen
	Year ended March 31
	2014		2015		2016
Net revenue	¥	1,546,342	¥	1,579,491	¥	1,416,372
Unrealized gain (loss) on investments in equity securities held for operating purposes		10,728		24,685		(20,691	)
Consolidated net revenue	¥	1,557,070	¥	1,604,176	¥	1,395,681
Non-interest expenses	¥	1,195,456	¥	1,257,417	¥	1,230,523
Unrealized gain (loss) on investments in equity securities held for operating purposes		—		—		—
Consolidated non-interest expenses	¥	1,195,456	¥	1,257,417	¥	1,230,523
Income before income taxes	¥	350,886	¥	322,074	¥	185,849
Unrealized gain (loss) on investments in equity securities held for operating purposes		10,728		24,685		(20,691	)
Consolidated income before income taxes	¥	361,614	¥	346,759	¥	165,158

Geographic information—

Nomura’s identifiable assets, revenues and expenses are generally allocated based on the country of domicile of the legal entity providing the service. However, because of the integration of the global capital markets and the corresponding global nature of Nomura’s activities and services, it is not always possible to make a precise separation by location. As a result, various assumptions, which are consistent among years, have been made in presenting the following geographic data.

The tables below present a geographic allocation of Net revenue and Income (loss) before income taxes from operations by geographic areas for the years ended March 31, 2014, 2015 and 2016 and Long-lived assets associated with Nomura’s operations as of March 31, 2014, 2015 and 2016. Net revenue in “Americas” and “Europe” substantially represents Nomura’s operations in the U.S. and the U.K., respectively. Net revenue and Long-lived assets have been allocated based on transactions with external customers while Income (loss) before income taxes has been allocated based on the inclusion of intersegment transactions.

	Millions of yen
	Year ended March 31
	2014			2015			2016
Net revenue(1):
Americas	¥	262,684		¥	207,859		¥	219,857
Europe		232,735			201,278			145,808
Asia and Oceania		62,622			86,746			78,700
Subtotal		558,041			495,883			444,365
Japan		999,029			1,108,293			951,316
Consolidated	¥	1,557,070		¥	1,604,176		¥	1,395,681
Income (loss) before income taxes:
Americas	¥	29,472		¥	(27,575	)	¥	(32,042	)
Europe		(48,911	)		(23,455	)		(67,384	)
Asia and Oceania		(5,247	)		34,594			19,806
Subtotal		(24,686	)		(16,436	)		(79,620	)
Japan		386,300			363,195			244,778
Consolidated	¥	361,614		¥	346,759		¥	165,158
	March 31
	2014			2015			2016
Long-lived assets:
Americas	¥	133,147		¥	146,758		¥	129,308
Europe		93,111			88,928			76,589
Asia and Oceania		16,163			14,891			13,485
Subtotal		242,421			250,577			219,382
Japan		281,780			274,202			247,425
Consolidated	¥	524,201		¥	524,779		¥	466,807

(1) There is no revenue derived from transactions with a single major external customer.