Segment and geographic information

6 Months Ended

Sep. 30, 2017

Segment and geographic information

Segment and geographic information

15. 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
Six months ended September 30, 2016
Non-interest revenue	¥	167,657	¥	46,131		¥	300,063	¥	118,224		¥	632,075
Net interest revenue		2,258		1,080			70,732		(17,702	)		56,368
Net revenue		169,915		47,211			370,795		100,522			688,443
Non-interest expenses		146,840		27,539			284,886		81,671			540,936
Income (loss) before income taxes	¥	23,075	¥	19,672		¥	85,909	¥	18,851		¥	147,507
Six months ended September 30, 2017
Non-interest revenue	¥	200,633	¥	64,749		¥	270,461	¥	115,733		¥	651,576
Net interest revenue		2,837		(1,234	)		67,818		(11,416	)		58,005
Net revenue		203,470		63,515			338,279		104,317			709,581
Non-interest expenses		153,031		29,477			295,943		73,383			551,834
Income (loss) before income taxes	¥	50,439	¥	34,038		¥	42,336	¥	30,934		¥	157,747
	Millions of yen
	Retail		Asset Management			Wholesale		Other (Incl. elimination)			Total
Three months ended September 30, 2016
Non-interest revenue	¥	85,235	¥	21,962		¥	150,447	¥	52,022		¥	309,666
Net interest revenue		929		(685	)		29,416		89			29,749
Net revenue		86,164		21,277			179,863		52,111			339,415
Non-interest expenses		71,754		13,844			140,596		39,027			265,221
Income (loss) before income taxes	¥	14,410	¥	7,433		¥	39,267	¥	13,084		¥	74,194
Three months ended September 30, 2017
Non-interest revenue	¥	100,360	¥	36,061		¥	123,126	¥	58,514		¥	318,061
Net interest revenue		1,426		(643	)		35,837		(5,904	)		30,716
Net revenue		101,786		35,418			158,963		52,610			348,777
Non-interest expenses		76,239		14,950			141,980		35,285			268,454
Income (loss) before income taxes	¥	25,547	¥	20,468		¥	16,983	¥	17,325		¥	80,323

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.”

	Millions of yen
	Six months ended September 30
	2016			2017
Net gain (loss) related to economic hedging transactions	¥	7,855		¥	(96	)
Realized gain on investments in equity securities held for operating purposes		656			387
Equity in earnings of affiliates		12,003			15,430
Corporate items		(9,572	)		1,751
Other(1)		7,909			13,462
Total	¥	18,851		¥	30,934
	Millions of yen
	Three months ended September 30
	2016			2017
Net gain related to economic hedging transactions	¥	(4,119	)	¥	558
Realized gain on investments in equity securities held for operating purposes		74			344
Equity in earnings of affiliates		10,945			8,408
Corporate items		(5,266	)		1,597
Other(1)		11,450			6,418
Total	¥	13,084		¥	17,325

(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.

	Millions of yen
	Six months ended September 30
	2016			2017
Net revenue	¥	688,443		¥	709,581
Unrealized gain (loss) on investments in equity securities held for operating purposes		(2,968	)		2,735
Consolidated net revenue	¥	685,475		¥	712,316
Non-interest expenses	¥	540,936		¥	551,834
Unrealized gain on investments in equity securities held for operating purposes		—			—
Consolidated non-interest expenses	¥	540,936		¥	551,834
Income before income taxes	¥	147,507		¥	157,747
Unrealized gain (loss) on investments in equity securities held for operating purposes		(2,968	)		2,735
Consolidated income before income taxes	¥	144,539		¥	160,482
	Millions of yen
	Three months ended September 30
	2016			2017
Net revenue	¥	339,415		¥	348,777
Unrealized gain (loss) on investments in equity securities held for operating purposes		7,580			2,716
Consolidated net revenue	¥	346,995		¥	351,493
Non-interest expenses	¥	265,221		¥	268,454
Unrealized gain on investments in equity securities held for operating purposes		—			—
Consolidated non-interest expenses	¥	265,221		¥	268,454
Income before income taxes	¥	74,194		¥	80,323
Unrealized gain (loss) on investments in equity securities held for operating purposes		7,580			2,716
Consolidated income before income taxes	¥	81,774		¥	83,039

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 table below presents a geographic allocation of Net revenue and Income (loss) before income taxes from operations by geographic areas, and long-lived assets associated with Nomura’s operations. 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 have been allocated based on the inclusion of intersegment transactions.

	Millions of yen
	Six months ended September 30
	2016		2017
Net revenue(1):
Americas	¥	130,577	¥	120,012
Europe		77,408		91,922
Asia and Oceania		35,158		32,344
Subtotal		243,143		244,278
Japan		442,332		468,038
Consolidated	¥	685,475	¥	712,316
Income (loss) before income taxes:
Americas	¥	22,186	¥	6,414
Europe		3,472		891
Asia and Oceania		14,383		9,012
Subtotal		40,041		16,317
Japan		104,498		144,165
Consolidated	¥	144,539	¥	160,482
	Millions of yen
	Three months ended September 30
	2016		2017
Net revenue(1):
Americas	¥	64,186	¥	54,250
Europe		37,582		47,991
Asia and Oceania		19,650		15,262
Subtotal		121,418		117,503
Japan		225,577		233,990
Consolidated	¥	346,995	¥	351,493
Income (loss) before income taxes:
Americas	¥	6,937	¥	(1,460	)
Europe		7,900		(1,354	)
Asia and Oceania		8,322		3,665
Subtotal		23,159		851
Japan		58,615		82,188
Consolidated	¥	81,774	¥	83,039

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

	Millions of yen
	March 31, 2017		September 30, 2017
Long-lived assets:
Americas	¥	125,222	¥	129,274
Europe		66,167		69,027
Asia and Oceania		13,043		12,531
Subtotal		204,432		210,832
Japan		251,242		233,662
Consolidated	¥	455,674	¥	444,494