Segment and geographic information

12 Months Ended

Mar. 31, 2017

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, 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
Year ended March 31, 2017
Non-interest revenue	¥	369,503	¥	90,025	¥	564,877	¥	243,459		¥	1,267,864
Net interest revenue		4,931		9,402		174,379		(59,995	)		128,717
Net revenue		374,434		99,427		739,256		183,464			1,396,581
Non-interest expenses		299,642		57,094		577,809		145,857			1,080,402
Income before income taxes	¥	74,792	¥	42,333	¥	161,447	¥	37,607		¥	316,179

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, 2015, 2016 and 2017.

	Millions of yen
	Year ended March 31
	2015		2016		2017
Net gain (loss) related to economic hedging transactions	¥	15,120	¥	6,370	¥	(7,279	)
Realized gain on investments in equity securities held for operating purposes		4,725		187		1,092
Equity in earnings of affiliates		42,235		32,727		32,342
Corporate items		(20,119)		(52,314)		(6,439)
Other(1)		3,989		19,177		17,891
Total	¥	45,950	¥	6,147	¥	37,607

(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, 2015, 2016 and 2017.

	Millions of yen
	Year ended March 31
	2015		2016			2017
Net revenue	¥	1,579,491	¥	1,416,372		¥	1,396,581
Unrealized gain (loss) on investments in equity securities held for operating purposes		24,685		(20,691	)		6,616
Consolidated net revenue	¥	1,604,176	¥	1,395,681		¥	1,403,197
Non-interest expenses	¥	1,257,417	¥	1,230,523		¥	1,080,402
Unrealized gain (loss) on investments in equity securities held for operating purposes		—		—			—
Consolidated non-interest expenses	¥	1,257,417	¥	1,230,523		¥	1,080,402
Income before income taxes	¥	322,074	¥	185,849		¥	316,179
Unrealized gain (loss) on investments in equity securities held for operating purposes		24,685		(20,691	)		6,616
Consolidated income before income taxes	¥	346,759	¥	165,158		¥	322,795

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, 2015, 2016 and 2017 and Long-lived assets associated with Nomura’s operations as of March 31, 2015, 2016 and 2017. 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
	2015			2016			2017
Net revenue(1):
Americas	¥	207,859		¥	219,857		¥	263,587
Europe		201,278			145,808			159,474
Asia and Oceania		86,746			78,700			67,278
Subtotal		495,883			444,365			490,339
Japan		1,108,293			951,316			912,858
Consolidated	¥	1,604,176		¥	1,395,681		¥	1,403,197
Income (loss) before income taxes:
Americas	¥	(27,575	)	¥	(32,042	)	¥	49,962
Europe		(23,455	)		(67,384	)		14,401
Asia and Oceania		34,594			19,806			23,746
Subtotal		(16,436	)		(79,620	)		88,109
Japan		363,195			244,778			234,686
Consolidated	¥	346,759		¥	165,158		¥	322,795
	March 31
	2015			2016			2017
Long-lived assets:
Americas	¥	146,758		¥	129,308		¥	125,222
Europe		88,928			76,589			66,167
Asia and Oceania		14,891			13,485			13,043
Subtotal		250,577			219,382			204,432
Japan		274,202			247,425			251,242
Consolidated	¥	524,779		¥	466,807		¥	455,674

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