Edgar Filing: NOMURA HOLDINGS INC

Form 6-K

FORM 6-K

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

For the month of April 2016

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 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 in paper as permitted by Regulation S-T Rule 101(b)(7):

Information furnished on this form:

EXHIBIT


Exhibit Number

1.		Financial Summary – Year ended March 31, 2016

The registrant hereby incorporates Exhibit 1 to this report on Form 6-K by reference in the prospectus that is part of Registration Statement on Form F-3 (Registration No. 333-191250) of the registrant and Nomura America Finance, LLC, filed with the Securities and Exchange Commission on September 19, 2013.

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.


	NOMURA HOLDINGS, INC.

Date: April 27, 2016	By:	/s/ Hajime Ikeda
		Hajime Ikeda
		Senior Managing Director

Financial Summary For the Year Ended March 31, 2016 (U.S. GAAP)


Date:		April 27, 2016
Company name (code number):		Nomura Holdings, Inc. (8604)
Stock exchange listings:		(In Japan) Tokyo, Nagoya
		(Overseas) New York, Singapore
Representative:		Koji Nagai
		Group CEO, Nomura Holdings, Inc.
For inquiries:		Michio Okazaki
		Managing Director, Head of Management Accounting and Investor Relations, Nomura Holdings, Inc.
		Tel: (Country Code 81) 3-5255-1000
		URL: http://www.nomura.com

1. Consolidated Operating Results

(1) Operating Results


	(Rounded to nearest million)

	For the year ended March 31
	2015						2016
	(Millions of yen, except per share data)
				% Change from March 31, 2014						% Change from March 31, 2015
Total revenue		1,930,588			5.4	%		1,723,096			(10.7	%)
Net revenue		1,604,176			3.0	%		1,395,681			(13.0	%)
Income before income taxes		346,759			(4.1	%)		165,158			(52.4	%)
Net income attributable to Nomura Holdings, Inc. (“NHI”) shareholders		224,785			5.2	%		131,550			(41.5	%)
Comprehensive income		358,833			21.0	%		42,137			(88.3	%)
Basic-Net income attributable to NHI shareholders per share (Yen)		61.66						36.53
Diluted-Net income attributable to NHI shareholders per share (Yen)		60.03						35.52
Return on shareholders’ equity		8.6	%					4.9	%
Income before income taxes to total assets		0.8	%					0.4	%
Income before income taxes divided by total revenue		18.0	%					9.6	%
Equity in earnings of affiliates		43,029						33,917

Note: Return on shareholders’ equity is a ratio of Net income attributable to NHI shareholders to Total NHI shareholders’ equity.

(2) Financial Position


	At March 31
	2015			2016
	(Millions of yen, except per share data)
Total assets		41,783,236			41,090,167
Total equity		2,744,946			2,743,015
Total NHI shareholders’ equity		2,707,774			2,700,239
Total NHI shareholders’ equity as a percentage of total assets		6.5	%		6.6	%
Total NHI shareholders’ equity per share (Yen)		752.40			748.32

(3) Cash Flows


	For the year ended March 31
	2015			2016
	(Millions of yen)
Net cash provided by (used in) operating activities		(77,028	)		1,238,372
Net cash provided by (used in) investing activities		12,337			(23,711	)
Net cash provided by (used in) financing activities		(178,206	)		986,387
Cash and cash equivalents at end of the year		1,315,408			3,476,261

2. Cash Dividends


	For the year ended March 31
	2015			2016
	(Yen amounts, except total annual dividends)
Dividends per share
Dividends record dates
At June 30		—			—
At September 30		6.00			10.00
At December 31		—			—
At March 31		13.00			3.00
For the year		19.00			13.00
Total annual dividends (Millions of yen)		68,648			46,812
Consolidated payout ratio		30.8	%		35.6	%
Consolidated dividends as a percentage of shareholders’ equity per share		2.7	%		1.7	%

3. Earnings Forecasts for the year ending March 31, 2017

Nomura provides investment, financing and related services in the capital markets on a global basis. In the global capital markets there exist uncertainties due to, but not limited to, economic and market conditions. Nomura, therefore, does not present earnings and dividends forecasts.

Notes

(1) Changes in significant subsidiaries during the period: None

(Changes in Specified Subsidiaries accompanying changes in scope of consolidation.)

(2) Changes in accounting policies

Changes in accounting policies due to amendments to the accounting standards: None

Changes in accounting policies due to other than a): None

(3) Number of shares issued (common stock)


	At March 31
	2015		2016
Number of shares outstanding (including treasury stock)		3,822,562,601		3,822,562,601
Number of treasury stock		223,697,388		214,170,602

	For the year ended March 31
	2015		2016
Average number of shares outstanding		3,645,514,878		3,600,701,499

Parent Company Only Operating Results (Japanese GAAP)

(1) Operating Results


	For the year ended March 31
	2015					2016
	(Millions of yen, except per share data)
			% Change from March 31, 2014					% Change from March 31, 2015
Operating revenue		461,912		15.7	%		585,394		26.7	%
Operating income		234,838		26.8	%		357,645		52.3	%
Ordinary income		235,519		27.2	%		353,058		49.9	%
Net income		294,816		173.3	%		419,507		42.3	%

Net profit per share (Yen)		80.85					116.47
Fully diluted net profit per share (Yen)		78.72					113.33

(2) Financial Position


	At March 31
	2015			2016
	(Millions of yen, except per share data)
Total assets		6,641,723			7,379,122
Total net assets		2,095,108			2,421,160
Total net assets as a percentage of total assets		30.9	%		32.2	%

Total net assets per share (Yen)		569.56			670.77
Shareholders’ equity		2,050,435			2,373,257

*Audit procedure

The audit on the consolidated financial statements for this fiscal year has not been completed by the external auditors at the point of disclosing this financial summary. As a result of such audit, certain of the information set forth herein could be subject to revision, possibly material, in Nomura’s Form 20-F for the year ended March 31, 2016.

Table of Contents for the Accompanying Materials


1. Consolidated Operating Results			P.2

(1) Analysis of Consolidated Operating Results			P.2
(2) Analysis of Consolidated Financial Position			P.4

2. Corporate Goals and Principles			P.4

(1) Fundamental Management Policy			P.4
(2) Structure of Business Operations			P.4
(3) Management Challenges and Strategies			P.4

3. Considerations in the selection of accounting standards			P.6

4. Consolidated Financial Statements			P.6

(1) Consolidated Balance Sheets			P.7
(2) Consolidated Statements of Income			P.9
(3) Consolidated Statements of Comprehensive Income			P.10
(4) Consolidated Statements of Changes in Equity			P.11
(5) Consolidated Statements of Cash Flows			P.12
(6) Note with respect to the Assumption as a Going Concern			P.13
(7) Notes to the Consolidated Financial Statements			P.14
(8) Other Financial Information			P.16

5. Unconsolidated Financial Statements [Japanese GAAP]			P.18

(1) Unconsolidated Balance Sheets			P.18
(2) Unconsolidated Statements of Income			P.18
(3) Note with respect to the Assumption as a Going Concern			P.18

6. Other Information			P.18

1.	Consolidated Operating Results

(1)

Analysis of Consolidated Operating Results

Operating Results

U.S. GAAP


	Billions of yen						% Change
	For the year ended						(B-A)/(A)
	March 31, 2015 (A)			March 31, 2016 (B)			(B-A)/(A)
Net revenue		1,604.2			1,395.7			(13.0	)
Non-interest expenses		1,257.4			1,230.5			(2.1	)

Income (loss) before income taxes		346.8			165.2			(52.4	)
Income tax expense		120.8			22.6			(81.3	)

Net income (loss)		226.0			142.6			(36.9	)

Less: Net income (loss) attributable to noncontrolling interests		1.2			11.0			822.3

Net income (loss) attributable to NHI shareholders		224.8			131.6			(41.5	)

Return on shareholders’ equity*		8.6	%		4.9	%		—

*	Return on shareholders’ equity is a ratio of Net income (loss) attributable to NHI shareholders to Total NHI shareholders’ equity.

Nomura Holdings, Inc. and its consolidated entities (“Nomura”) reported net revenue of 1,395.7 billion yen for the fiscal year ended March 31, 2016, a decrease of 13.0% from the previous year. Non-interest expenses decreased by 2.1% from the previous year to 1,230.5 billion yen. Income before income taxes was 165.2 billion yen and Net income attributable to NHI shareholders was 131.6 billion yen for the fiscal year ended March 31, 2016.

Segment Information


	Billions of yen				% Change
	For the year ended				(B-A)/(A)
	March 31, 2015 (A)		March 31, 2016 (B)		(B-A)/(A)
Net revenue		1,579.5		1,416.4		(10.3	)
Non-interest expenses		1,257.4		1,230.5		(2.1	)

Income (loss) before income taxes		322.1		185.8		(42.3	)

In business segment totals, which exclude unrealized gain (loss) on investments in equity securities held for operating purposes, net revenue for the fiscal year ended March 31, 2016 was 1,416.4 billion yen, a decrease of 10.3% from the previous year. Non-interest expenses decreased by 2.1% from the previous year to 1,230.5 billion yen. Income before income taxes was 185.8 billion yen for the fiscal year ended March 31, 2016. Please refer to page 14 for further details of the differences between U.S. GAAP and business segment amounts.

<Business Segment Results>

Operating Results of Retail


	Billions of yen				% Change
	For the year ended				(B-A)/(A)
	March 31, 2015 (A)		March 31, 2016 (B)		(B-A)/(A)
Net revenue		476.5		435.6		(8.6	)
Non-interest expenses		314.7		308.0		(2.1	)

Income (loss) before income taxes		161.8		127.6		(21.1	)

Net revenue decreased by 8.6% from the previous year to 435.6 billion yen, primarily due to decreasing commissions from distribution of investment trusts. Non-interest expense decreased by 2.1% to 308.0 billion yen. As a result, income before income taxes decreased by 21.1% to 127.6 billion yen.

Operating Results of Asset Management


	Billions of yen				% Change
	For the year ended				(B-A)/(A)
	March 31, 2015 (A)		March 31, 2016 (B)		(B-A)/(A)
Net revenue		92.4		95.4		3.3
Non-interest expenses		60.3		58.7		(2.5	)

Income (loss) before income taxes		32.1		36.7		14.2

Net revenue increased by 3.3% from the previous year to 95.4 billion yen. Non-interest expense decreased by 2.5% to 58.7 billion yen. As a result, income before income taxes increased by 14.2% to 36.7 billion yen. Assets under management were 40.1 trillion yen as of March 31, 2016.

Operating Results of Wholesale


	Billions of yen				% Change
	For the year ended				(B-A)/(A)
	March 31, 2015 (A)		March 31, 2016 (B)		(B-A)/(A)
Net revenue		789.9		720.3		(8.8	)
Non-interest expenses		707.7		704.9		(0.4	)

Income (loss) before income taxes		82.2		15.4		(81.3	)

Net revenue decreased by 8.8% from the previous year to 720.3 billion yen. Non-interest expense decreased by 0.4% to 704.9 billion yen. As a result, income before income taxes decreased by 81.3% to 15.4 billion yen.

Other Operating Results


	Billions of yen				% Change
	For the year ended				(B-A)/(A)
	March 31, 2015 (A)		March 31, 2016 (B)		(B-A)/(A)
Net revenue		220.8		165.1		(25.2	)
Non-interest expenses		174.8		158.9		(9.1	)

Income (loss) before income taxes		46.0		6.1		(86.6	)

Net revenue was 165.1 billion yen and income before income taxes was 6.1 billion yen.

(2)

Analysis of Consolidated Financial Position

Total assets as of March 31, 2016, were 41,090.2 billion yen, a decrease of 693.1 billion yen compared to March 31, 2015, mainly due to the decrease in Securities borrowed. Total liabilities as of March 31, 2016 were 38,347.2 billion yen, a decrease of 691.1 billion yen compared to March 31, 2015, mainly due to the decrease in Trading liabilities. Total equity as of March 31, 2016 was 2,743.0 billion yen, a decrease of 1.9 billion yen compared to March 31, 2015.

Cash and cash equivalents as of March 31, 2016, increased by 2,160.9 billion yen compared to March 31, 2015. Cash flows from operating activities for the year ended March 31, 2016 were inflows of 1,238.4 billion yen due mainly to the decrease in Securities borrowed. Cash flows from investing activities for the year ended March 31, 2016 were outflows of 23.7 billion yen due mainly to Payments for purchases of office buildings, land, equipment and facilities. Cash flows from financing activities for the year ended March 31, 2016 were inflows of 986.4 billion yen due primarily to the increase in Deposits received at banks.

2.	Corporate Goals and Principles

(1)

Fundamental Management Policy

Nomura Group’s management vision is to enhance its corporate value by deepening society’s trust in the firm and increasing satisfaction of stakeholders, including that of shareholders and clients.

As “Asia’s global investment bank”, Nomura will provide high value-added solutions to clients globally, and recognizing its wider social responsibility, Nomura will continue to contribute to the economic growth and development of society.

To enhance its corporate value, Nomura places significance on earnings per share (“EPS”) and will seek to maintain sustained improvement of the management target.

(2)

Structure of Business Operations

Nomura Group’s business execution is to focus on business divisions and regions, rather than individual legal entities, under unified strategy. Nomura Group’s divisions are comprised of three divisions (Retail Division, Asset Management Division, and Wholesale Division). Nomura Group’s regions are comprised of four regions (Americas; Europe, Middle East and Africa (“EMEA”); Asia ex-Japan (“AEJ”); and Japan). Nomura Group shall delegate its powers to each of these business divisions and regions to an appropriate extent and establish its business execution structure by enhancing the professional skills, while strengthening global linkages among these business divisions and regions, and fully demonstrating Nomura Group’s comprehensive capabilities.

(3)

Management Challenges and Strategies

In order to achieve our management objective, we are placing a top priority on ensuring that profits are recorded by all divisions and regions. We are committed to continuing business model transformation in Japan as well as aiming to improve profitability of our overseas operations under Vision C&C, so that we will be able to build a solid foundation to secure profit even under a severe environment.

As “Asia’s global investment bank”, we will continue to take appropriate measures toward phased implementation of Basel regulations (global standards on capital requirements and liquidity) as well as forthcoming changes in the operating environment. While financial regulatory reforms in the wake of the financial crisis are in their final phase, unintended consequences of the regulatory reforms, adverse impact due to compound effect, and concern about newly emerging risks are being pointed out. We will ensure a flexible response by staying attentive to the impact of the overall regulatory framework on the financial market and the competitive landscape.

The challenges and strategies in each division are as follows:

[Retail Division]

In Retail Division, under our basic philosophy of “placing our clients at the heart of everything we do,” we are aiming to increase client satisfaction further by listening to clients’ voices as well as understanding and meeting their diversified demands and needs. We also focus on providing a broad range of clients with value-added solutions through face-to-face consulting services, seminars, online and call center channels, so that we will win greater trust from account holders as well as new clients, and so that Nomura Group can sustainably be a trusted partner to our clients.

[Asset Management Division]

In our investment trust business, we will provide clients with a diverse range of investment opportunities to meet investors’ various needs. In our investment advisory business, we will provide value-added investment services to our clients on a global basis. We intend to increase assets under management and expand our client base for these two core businesses. As a distinctive investment manager based in Asia with the ability to provide a broad range of products and services, we aim to gain the strong trust of investors worldwide by making continuous efforts to improve investment performance and to meet clients’ various needs.

[Wholesale Division]

Our Wholesale Division comprises Global Markets which offers sales and trading of global securities and structuring, and Investment Banking which offers capital raising and advisory services.

Global Markets has been focusing on delivering differentiated products and solutions to our clients by leveraging Nomura Group’s capabilities in trading, research, and global distribution. Through our integrated Fixed Income and Equities platform, we aim to provide competitive and comprehensive services and solutions to our clients.

In Investment Banking, we continue to enhance our structure to further provide cross-border M&A and financing services in both domestic and overseas markets as well as to provide solution business services associated with the said M&A and financing amid the globalization of our clients’ business activities.

In Wholesale Division, in order to provide quality services to meet the needs of our clients, we redeploy the firm’s resources to areas of competitive advantage, and aim to further enhance the connectivity across Global Markets, Investment Banking, and regions. We will strive to improve our capabilities of proposing products and services, as well as to make use of our geographic competitive advantage in Asia, so that we can meet the changing needs of our clients in accordance with global-scale fluctuations in the macro economy and the market environment.

We will further enhance initiatives aimed at cross-divisional and cross-regional cooperation. We aim to enhance our presence as a global financial services group by enhancing regional integration between Japan and the rest of Asia and enhancing the coordination of business between Asia and Europe, Americas and the rest of the world.

In implementing the initiatives outlined above, while also helping to strengthen the global financial and capital markets, we aim to bring together the collective strengths of our domestic and international operations to realize our management objectives and to maximize corporate value by enhancing profitability across our businesses in group.

[Risk Management and Compliance, etc.]

In order to ensure financial soundness and enhance corporate value, the risk management systems require further developments in response to increasing global business. Nomura Group has the Risk Appetite Statement in which risks that we are willing to accept are articulated. We will continue to make efforts to develop a system where the top management directly engages in proactive risk management for precise decision making.

With regard to compliance, we will continue to focus on improving the management structure to comply with local laws and regulations in the countries where the Nomura Group operates. In addition to complying with laws and regulations, we will continuously review and improve our internal compliance system and rules for the purpose of promoting an environment of high ethical standards among all of our executive management and employees. In this way, we will meet the expectations of society and clients toward the Nomura Group and contribute to the further development of financial and capital markets.

Last year, based on the administrative penalties imposed on our subsidiary, Nomura Securities Co. Ltd. in 2012 in connection with public stock offerings, the Nomura Group established the Nomura Founding Principles and Corporate Ethics Day. Commemorated annually, this day aims to remind all of our executive officers and employees of the lessons learned from the incident and to renew our determination to prevent similar incidents from recurring in the future and further improve public trust through various measures. We will strive to maintain a sound corporate culture through these initiatives. We will also further enhance and reinforce our internal control framework, which includes measures to prevent insider trading and solicitation of unfair dealing, by ensuring that all of our executive officers and employees continually maintain the highest level of business ethics expected from professionals engaged in the capital markets.

3.	Considerations in the selection of accounting standards

Nomura currently adopts U.S. generally accepted accounting principles. Depending on factors such as trends by other companies and the impact of International Financial Reporting Standards (“IFRS”) on Nomura’s businesses, Nomura may consider in adopting IFRS in the future.

4.	Consolidated Financial Statements

The consolidated financial information herein has been prepared in accordance with Nomura’s accounting policies which are disclosed in the notes to the consolidated financial statements of Nomura Holdings, Inc.’s Annual Securities Report (the annual report filed in Japan on June 25, 2015) and Form 20-F (the annual report filed with the U.S. Securities and Exchange Commission on June 25, 2015) for the year ended March 31, 2015.

(1)

Consolidated Balance Sheets (UNAUDITED)


	Millions of yen
	March 31, 2015			March 31, 2016			Increase/ (Decrease)
ASSETS
Cash and cash deposits:
Cash and cash equivalents		1,315,408			3,476,261			2,160,853
Time deposits		328,151			196,632			(131,519	)
Deposits with stock exchanges and other segregated cash		453,037			225,950			(227,087	)

Total cash and cash deposits		2,096,596			3,898,843			1,802,247

Loans and receivables:
Loans receivable		1,461,075			1,605,603			144,528
Receivables from customers		187,026			210,844			23,818
Receivables from other than customers		1,303,576			1,156,608			(146,968	)
Allowance for doubtful accounts		(3,253	)		(3,477	)		(224	)

Total loans and receivables		2,948,424			2,969,578			21,154

Collateralized agreements:
Securities purchased under agreements to resell		8,481,474			9,205,165			723,691
Securities borrowed		8,238,046			5,872,495			(2,365,551	)

Total collateralized agreements		16,719,520			15,077,660			(1,641,860	)

Trading assets and private equity investments:
Trading assets*		17,260,121			16,379,424			(880,697	)
Private equity investments		48,727			30,578			(18,149	)

Total trading assets and private equity investments		17,308,848			16,410,002			(898,846	)

Other assets:
Office buildings, land, equipment and facilities (net of accumulated depreciation and amortization of ¥383,992 million as of March 31, 2015 and ¥402,599 million as of March 31, 2016)		401,069			355,507			(45,562	)
Non-trading debt securities*		948,180			870,812			(77,368	)
Investments in equity securities*		159,755			137,970			(21,785	)
Investments in and advances to affiliated companies*		378,278			395,284			17,006
Other		822,566			974,511			151,945

Total other assets		2,709,848			2,734,084			24,236

Total assets		41,783,236			41,090,167			(693,069	)

*	Including securities pledged as collateral


	Millions of yen
	March 31, 2015			March 31, 2016			Increase/ (Decrease)
LIABILITIES AND EQUITY
Short-term borrowings		662,256			662,902			646
Payables and deposits:
Payables to customers		723,839			688,196			(35,643	)
Payables to other than customers		1,454,361			1,337,931			(116,430	)
Deposits received at banks		1,220,400			2,222,991			1,002,591

Total payables and deposits		3,398,600			4,249,118			850,518

Collateralized financing:
Securities sold under agreements to repurchase		12,217,144			14,192,309			1,975,165
Securities loaned		2,494,036			1,937,009			(557,027	)
Other secured borrowings		668,623			476,273			(192,350	)

Total collateralized financing		15,379,803			16,605,591			1,225,788

Trading liabilities		10,044,236			7,499,335			(2,544,901	)
Other liabilities		1,217,099			1,200,647			(16,452	)
Long-term borrowings		8,336,296			8,129,559			(206,737	)

Total liabilities		39,038,290			38,347,152			(691,138	)


Equity
NHI shareholders’ equity:
Common stock
Authorized - 6,000,000,000 shares
Issued - 3,822,562,601 shares as of March 31, 2015 and 3,822,562,601 shares as of March 31, 2016
Outstanding - 3,598,865,213 shares as of March 31, 2015 and 3,608,391,999 shares as of March 31, 2016		594,493			594,493			—
Additional paid-in capital		683,407			692,706			9,299
Retained earnings		1,437,940			1,516,577			78,637
Accumulated other comprehensive income		143,739			44,980			(98,759	)

Total NHI shareholders’ equity before treasury stock		2,859,579			2,848,756			(10,823	)
Common stock held in treasury, at cost-
223,697,388 shares as of March 31, 2015 and
214,170,602 shares as of March 31, 2016		(151,805	)		(148,517	)		3,288

Total NHI shareholders’ equity		2,707,774			2,700,239			(7,535	)

Noncontrolling interests		37,172			42,776			5,604

Total equity		2,744,946			2,743,015			(1,931	)

Total liabilities and equity		41,783,236			41,090,167			(693,069	)

(2)

Consolidated Statements of Income (UNAUDITED)


	Millions of yen					% Change
	For the year ended
	March 31, 2015 (A)		March 31, 2016 (B)			(B-A)/(A)
Revenue:
Commissions		453,401		431,959			(4.7	)
Fees from investment banking		95,083		118,333			24.5
Asset management and portfolio service fees		203,387		229,006			12.6
Net gain on trading		531,337		354,031			(33.4	)
Gain on private equity investments		5,502		13,761			150.1
Interest and dividends		436,766		440,050			0.8
Gain (loss) on investments in equity securities		29,410		(20,504	)		—
Other		175,702		156,460			(11.0	)

Total revenue		1,930,588		1,723,096			(10.7	)
Interest expense		326,412		327,415			0.3

Net revenue		1,604,176		1,395,681			(13.0	)

Non-interest expenses:
Compensation and benefits		596,593		574,191			(3.8	)
Commissions and floor brokerage		129,977		123,881			(4.7	)
Information processing and communications		192,300		189,910			(1.2	)
Occupancy and related depreciation		76,112		78,411			3.0
Business development expenses		35,230		35,892			1.9
Other		227,205		228,238			0.5

Total non-interest expenses		1,257,417		1,230,523			(2.1	)

Income before income taxes		346,759		165,158			(52.4	)
Income tax expense		120,780		22,596			(81.3	)

Net income		225,979		142,562			(36.9	)

Less: Net income attributable to noncontrolling interests		1,194		11,012			822.3

Net income attributable to NHI shareholders		224,785		131,550			(41.5	)

Per share of common stock:

	Yen					% Change
Basic-
Net income attributable to NHI shareholders per share		61.66		36.53			(40.8	)

Diluted-
Net income attributable to NHI shareholders per share		60.03		35.52			(40.8	)

(3)

Consolidated Statements of Comprehensive Income (UNAUDITED)


	Millions of yen						% Change
	For the year ended						(B-A)/(A)
	March 31, 2015 (A)			March 31, 2016 (B)			(B-A)/(A)
Net income		225,979			142,562			(36.9	)
Other comprehensive income (loss):
Change in cumulative translation adjustments:
Change in cumulative translation adjustments		110,628			(68,237	)		—
Deferred income taxes		(141	)		(12,856	)		—

Total		110,487			(81,093	)		—

Defined benefit pension plans:
Pension liability adjustment		5,259			(26,074	)		—
Deferred income taxes		(1,854	)		8,153			—

Total		3,405			(17,921	)		—

Non-trading securities:
Net unrealized gain (loss) on non-trading securities		27,643			(1,492	)		—
Deferred income taxes		(8,681	)		81			—

Total		18,962			(1,411	)		—

Total other comprehensive income (loss)		132,854			(100,425	)		—

Comprehensive income		358,833			42,137			(88.3	)
Less: Comprehensive income attributable to noncontrolling interests		10,945			9,346			(14.6	)

Comprehensive income attributable to NHI shareholders		347,888			32,791			(90.6	)

(4)

Consolidated Statements of Changes in Equity (UNAUDITED)


	Millions of yen
	For the year ended
	March 31, 2015			March 31, 2016
Common stock
Balance at beginning of year		594,493			594,493

Balance at end of year		594,493			594,493

Additional paid-in capital
Balance at beginning of year		683,638			683,407
Gain (loss) on sales of treasury stock		(2,417	)		—
Issuance and exercise of common stock options		2,186			4,127
Changes in an affiliated company’s interests in its subsidiary		—			5,172

Balance at end of year		683,407			692,706

Retained earnings
Balance at beginning of year		1,287,003			1,437,940
Net income attributable to NHI shareholders		224,785			131,550
Cash dividends		(68,627	)		(46,797	)
Gain (loss) on sales of treasury stock		(5,221	)		(6,116	)

Balance at end of year		1,437,940			1,516,577

Accumulated other comprehensive income
Cumulative translation adjustments
Balance at beginning of year		27,704			133,371
Net change during the year		105,667			(79,953	)

Balance at end of year		133,371			53,418

Defined benefit pension plans
Balance at beginning of year		(18,809	)		(15,404	)
Pension liability adjustment		3,405			(17,921	)

Balance at end of year		(15,404	)		(33,325	)

Non-trading securities
Balance at beginning of year		11,741			25,772
Net unrealized gain on non-trading securities		14,031			(885	)

Balance at end of year		25,772			24,887

Balance at end of year		143,739			44,980

Common stock held in treasury
Balance at beginning of year		(72,090	)		(151,805	)
Repurchases of common stock		(104,047	)		(20,002	)
Sale of common stock		3			1
Common stock issued to employees		24,226			23,296
Other net change in treasury stock		103			(7	)

Balance at end of year		(151,805	)		(148,517	)

Total NHI shareholders’ equity

Balance at end of year		2,707,774			2,700,239

Noncontrolling interests
Balance at beginning of year		39,533			37,172
Net change during the year		(2,361	)		5,604

Balance at end of year		37,172			42,776

Total equity

Balance at end of year		2,744,946			2,743,015

(5)

Consolidated Statements of Cash Flows (UNAUDITED)


	Millions of yen
	For the year ended
	March 31, 2015			March 31, 2016
Cash flows from operating activities:
Net income		225,979			142,562
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		78,882			79,394
(Gain) loss on investments in equity securities		(29,410	)		20,504
Changes in operating assets and liabilities:
Time deposits		38,341			124,922
Deposits with stock exchanges and other segregated cash		(66,122	)		213,288
Trading assets and private equity investments		2,917,895			248,495
Trading liabilities		(1,731,133	)		(2,279,966	)
Securities purchased under agreements to resell, net of securities sold under agreements to repurchase		(1,251,323	)		1,605,658
Securities borrowed, net of securities loaned		(221,295	)		1,762,173
Other secured borrowings		(145,877	)		(192,350	)
Loans and receivables, net of allowance for doubtful accounts		(92,713	)		(136,694	)
Payables		236,029			(41,838	)
Bonus accrual		(3,659	)		(41,281	)
Other, net		(32,622	)		(266,495	)

Net cash provided by (used in) operating activities		(77,028	)		1,238,372


Cash flows from investing activities:
Payments for purchases of office buildings, land, equipment and facilities		(209,468	)		(324,722	)
Proceeds from sales of office buildings, land, equipment and facilities		159,480			282,473
Payments for purchases of investments in equity securities		(354	)		—
Proceeds from sales of investments in equity securities		6,977			899
Increase in loans receivable at banks, net		(49,192	)		(40,767	)
Decrease in non-trading debt securities, net		109,761			56,814
Other, net		(4,867	)		1,592

Net cash provided by (used in) investing activities		12,337			(23,711	)


Cash flows from financing activities:
Increase in long-term borrowings		2,974,115			3,018,453
Decrease in long-term borrowings		(3,167,956	)		(2,922,558	)
Increase (decrease) in short-term borrowings, net		34,041			(17,395	)
Increase in deposits received at banks, net		140,571			1,010,101
Proceeds from sales of common stock held in treasury		387			571
Payments for repurchases of common stock in treasury		(104,047	)		(20,002	)
Payments for cash dividends		(55,317	)		(82,783	)

Net cash provided by (used in) financing activities		(178,206	)		986,387

Effect of exchange rate changes on cash and cash equivalents		68,513			(40,195	)

Net increase (decrease) in cash and cash equivalents		(174,384	)		2,160,853
Cash and cash equivalents at beginning of the year		1,489,792			1,315,408

Cash and cash equivalents at end of the year		1,315,408			3,476,261

(6)

Note with respect to the Assumption as a Going Concern (UNAUDITED)

Not applicable.

(7)

Notes to the Consolidated Financial Statements (UNAUDITED)

Segment Information – Operating Segment

The following table shows business segment information and reconciliation items to the consolidated statements of income.


	Millions of yen					% Change
	For the year ended
	March 31, 2015 (A)		March 31, 2016 (B)			(B-A)/(A)
Net revenue

Business segment information:
Retail		476,505		435,634			(8.6	)
Asset Management		92,354		95,409			3.3
Wholesale		789,867		720,277			(8.8	)

Subtotal		1,358,726		1,251,320			(7.9	)
Other		220,765		165,052			(25.2	)

Net revenue		1,579,491		1,416,372			(10.3	)

Reconciliation items:
Unrealized gain (loss) on investments in equity securities held for operating purposes		24,685		(20,691	)		—

Net revenue		1,604,176		1,395,681			(13.0	)


Non-interest expenses

Business segment information:
Retail		314,675		308,003			(2.1	)
Asset Management		60,256		58,743			(2.5	)
Wholesale		707,671		704,872			(0.4	)

Subtotal		1,082,602		1,071,618			(1.0	)
Other		174,815		158,905			(9.1	)

Non-interest expenses		1,257,417		1,230,523			(2.1	)

Reconciliation items:
Unrealized gain (loss) on investments in equity securities held for operating purposes		—		—			—

Non-interest expenses		1,257,417		1,230,523			(2.1	)


Income (loss) before income taxes

Business segment information:
Retail		161,830		127,631			(21.1	)
Asset Management		32,098		36,666			14.2
Wholesale		82,196		15,405			(81.3	)

Subtotal		276,124		179,702			(34.9	)
Other*		45,950		6,147			(86.6	)

Income (loss) before income taxes		322,074		185,849			(42.3	)

Reconciliation items:
Unrealized gain (loss) on investments in equity securities held for operating purposes		24,685		(20,691	)		—

Income (loss) before income taxes		346,759		165,158			(52.4	)

*	Major components

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						% Change
	For the year ended						(B-A)/(A)
	March 31, 2015 (A)			March 31, 2016 (B)			(B-A)/(A)
Net gain (loss) related to economic hedging transactions		15,120			6,370			(57.9	)
Realized gain (loss) on investments in equity securities held for operating purposes		4,725			187			(96.0	)
Equity in earnings of affiliates		42,235			32,727			(22.5	)
Corporate items		(20,119	)		(52,314	)		—
Other		3,989			19,177			380.7

Total		45,950			6,147			(86.6	)

Per share data

Shareholders’ equity per share is calculated based on the following number of shares.


Number of shares outstanding as of March 31, 2016			3,608,391,999

Net income attributable to NHI shareholders per share calculated based on the following number of shares.


Average number of shares outstanding for the year ended March 31, 2016			3,600,701,499

Changes in Tax Laws

On March 29, 2016, the “Act to partially revise the Income Tax Act and Others” (Act No.15 of 2016) (“Act 15”) and “Act to partially revise the Local Tax Act and Others” (Act No.13 of 2016) (“Act 13”) were enacted. Under Act 13 and Act 15, effective from the fiscal year beginning on or after April 1, 2016, corporate tax rate has been reduced from 32% to 31% for the temporary differences expected to be reversed in the fiscal year beginning on or after April 1, 2016.

Use of operating loss carryforwards for the tax purposes will be limited to 60% of the current year taxable income before deducting operating loss carryforwards for tax purpose after the fiscal years beginning on or after April 1, 2016, and 55% after the fiscal years beginning on or after April 1, 2017. The fiscal years beginning on or after April 1, 2018, use of operating loss carryforwards for the tax purposes will continue to be limited to 50%.

Due to these revisions, net deferred tax liabilities decreased by 1,525 million yen and income tax expenses decreased by the same amount.

Significant Subsequent Events

Not applicable.

(8)

Other Financial Information

Consolidated Statements of Income – Quarterly Comparatives (UNAUDITED)


	Millions of yen																				% Change
	For the three months ended
	June 30, 2014			September 30, 2014		December 31, 2014			March 31, 2015		June 30, 2015		September 30, 2015			December 31, 2015 (A)		March 31, 2016 (B)			(B-A)/(A)
Revenue:
Commissions		95,633			110,838		123,198			123,732		130,343		111,501			102,323		87,792			(14.2	)
Fees from investment banking		19,822			20,620		28,820			25,821		24,497		44,867			20,016		28,953			44.6
Asset management and portfolio service fees		46,092			49,689		53,308			54,298		59,940		58,177			57,808		53,081			(8.2	)
Net gain on trading		158,562			129,011		109,468			134,296		124,748		62,551			105,191		61,541			(41.5	)
Gain (loss) on private equity investments		(287	)		489		(172	)		5,472		1,154		602			8,691		3,314			(61.9	)
Interest and dividends		104,917			108,775		115,572			107,502		113,649		111,540			107,932		106,929			(0.9	)
Gain (loss) on investments in equity securities		6,350			2,884		11,797			8,379		9,186		(10,882	)		4,690		(23,498	)		—
Other		31,065			28,514		65,618			50,505		44,931		39,551			27,875		44,103			58.2

Total revenue		462,154			450,820		507,609			510,005		508,448		417,907			434,526		362,215			(16.6	)
Interest expense		91,316			76,987		82,613			75,496		84,416		81,303			79,627		82,069			3.1

Net revenue		370,838			373,833		424,996			434,509		424,032		336,604			354,899		280,146			(21.1	)

Non-interest expenses:
Compensation and benefits		168,767			140,823		142,804			144,199		155,896		149,723			141,807		126,765			(10.6	)
Commissions and floor brokerage		27,590			33,599		34,088			34,700		34,243		32,621			31,126		25,891			(16.8	)
Information processing and communications		44,896			45,961		48,712			52,731		47,934		48,219			46,831		46,926			0.2
Occupancy and related depreciation		18,553			18,224		19,220			20,115		18,729		19,173			19,596		20,913			6.7
Business development expenses		7,927			9,071		9,027			9,205		8,330		8,454			9,330		9,778			4.8
Other		51,431			52,150		55,021			68,603		52,888		58,537			54,602		62,211			13.9

Total non-interest expenses		319,164			299,828		308,872			329,553		318,020		316,727			303,292		292,484			(3.6	)

Income (loss) before income taxes		51,674			74,005		116,124			104,956		106,012		19,877			51,607		(12,338	)		—
Income tax expense		30,397			20,894		46,843			22,646		36,368		(28,377	)		16,048		(1,443	)		—

Net income (loss)		21,277			53,111		69,281			82,310		69,644		48,254			35,559		(10,895	)		—

Less: Net income (loss) attributable to noncontrolling interests		1,417			239		(758	)		296		902		1,695			157		8,258			—

Net income (loss) attributable to NHI shareholders		19,860			52,872		70,039			82,014		68,742		46,559			35,402		(19,153	)		—


	Yen																				% Change
Per share of common stock:
Basic-
Net income (loss) attributable to NHI shareholders per share		5.40			14.53		19.22			22.65		19.11		12.95			9.83		(5.31	)		—

Diluted-
Net income (loss) attributable to NHI shareholders per share		5.26			14.15		18.72			22.08		18.65		12.63			9.61		(5.33	)		—

Business Segment Information – Quarterly Comparatives (UNAUDITED)

The following table shows quarterly business segment information and reconciliation items to the consolidated statements of income.


	Millions of yen																				% Change
	For the three months ended
	June 30, 2014		September 30, 2014		December 31, 2014		March 31, 2015			June 30, 2015		September 30, 2015			December 31, 2015 (A)			March 31, 2016 (B)			(B-A)/(A)

Net revenue

Business segment information:
Retail		106,865		117,938		128,788		122,914			130,689		115,658			104,280			85,007			(18.5	)
Asset Management		23,338		21,691		23,439		23,886			26,917		22,854			25,327			20,311			(19.8	)
Wholesale		188,886		190,570		178,943		231,468			205,184		192,911			185,977			136,205			(26.8	)

Subtotal		319,089		330,199		331,170		378,268			362,790		331,423			315,584			241,523			(23.5	)
Other		48,252		41,042		82,787		48,684			52,244		16,080			34,589			62,139			79.6

Net revenue		367,341		371,241		413,957		426,952			415,034		347,503			350,173			303,662			(13.3	)

Reconciliation items:
Unrealized gain (loss) on investments in equity securities held for operating purposes		3,497		2,592		11,039		7,557			8,998		(10,899	)		4,726			(23,516	)		—

Net revenue		370,838		373,833		424,996		434,509			424,032		336,604			354,899			280,146			(21.1	)


Non-interest expenses

Business segment information:
Retail		75,257		79,075		78,319		82,024			79,790		78,913			76,450			72,850			(4.7	)
Asset Management		15,064		13,882		14,091		17,219			15,171		14,442			14,597			14,533			(0.4	)
Wholesale		183,145		168,363		178,492		177,671			185,513		184,282			176,038			159,039			(9.7	)

Subtotal		273,466		261,320		270,902		276,914			280,474		277,637			267,085			246,422			(7.7	)
Other		45,698		38,508		37,970		52,639			37,546		39,090			36,207			46,062			27.2

Non-interest expenses		319,164		299,828		308,872		329,553			318,020		316,727			303,292			292,484			(3.6	)

Reconciliation items:
Unrealized gain (loss) on investments in equity securities held for operating purposes		—		—		—		—			—		—			—			—			—

Non-interest expenses		319,164		299,828		308,872		329,553			318,020		316,727			303,292			292,484			(3.6	)


Income (loss) before income taxes

Business segment information:
Retail		31,608		38,863		50,469		40,890			50,899		36,745			27,830			12,157			(56.3	)
Asset Management		8,274		7,809		9,348		6,667			11,746		8,412			10,730			5,778			(46.2	)
Wholesale		5,741		22,207		451		53,797			19,671		8,629			9,939			(22,834	)		—

Subtotal		45,623		68,879		60,268		101,354			82,316		53,786			48,499			(4,899	)		—
Other*		2,554		2,534		44,817		(3,955	)		14,698		(23,010	)		(1,618	)		16,077			—

Income (loss) before income taxes		48,177		71,413		105,085		97,399			97,014		30,776			46,881			11,178			(76.2	)

Reconciliation items:
Unrealized gain (loss) on investments in equity securities held for operating purposes		3,497		2,592		11,039		7,557			8,998		(10,899	)		4,726			(23,516	)		—

Income (loss) before income taxes		51,674		74,005		116,124		104,956			106,012		19,877			51,607			(12,338	)		—

*	Major components

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																								% Change
	For the three months ended
	June 30, 2014			September 30, 2014			December 31, 2014			March 31, 2015			June 30, 2015			September 30, 2015			December 31, 2015 (A)			March 31, 2016 (B)			(B-A)/(A)
Net gain (loss) related to economic hedging transactions		6,919			2,169			6,375			(343	)		(2,553	)		1,052			(627	)		8,498			—
Realized gain (loss) on investments in equity securities held for operating purposes		2,853			292			758			822			188			17			(36	)		18			—
Equity in earnings of affiliates		3,499			7,963			18,213			12,560			13,831			9,054			4,784			5,058			5.7
Corporate items		(3,093	)		(8,389	)		(3,160	)		(5,477	)		(3,940	)		(39,985	)		(3,171	)		(5,218	)		—
Other		(7,624	)		499			22,631			(11,517	)		7,172			6,852			(2,568	)		7,721			—

Total		2,554			2,534			44,817			(3,955	)		14,698			(23,010	)		(1,618	)		16,077			—

5.	Unconsolidated Financial Statements [Japanese GAAP]

(1)

Unconsolidated Balance Sheets (UNAUDITED)


	Millions of yen
	March 31, 2015		March 31, 2016
Assets
Current Assets		3,776,082		4,058,321
Fixed Assets		2,865,640		3,320,801

Total Assets		6,641,723		7,379,122

Liabilities
Current Liabilities		1,159,166		1,599,923
Long-term Liabilities		3,387,449		3,358,039

Total Liabilities		4,546,615		4,957,962

Net Assets
Shareholders’ equity		1,971,421		2,305,324
Valuation and translation adjustments		79,014		67,933
Stock acquisition rights		44,673		47,904

Total Net Assets		2,095,108		2,421,160

Total Liabilities and Net Assets		6,641,723		7,379,122

(2)

Unconsolidated Statements of Income (UNAUDITED)


	Millions of yen
	For the year ended
	March 31, 2015			March 31, 2016
Operating revenue		461,912			585,394
Operating expenses		227,074			227,749

Operating income		234,838			357,645

Non-operating income		4,394			5,533
Non-operating expenses		3,713			10,120

Ordinary income		235,519			353,058

Special profits		88,755			1,525
Special losses		5,979			2,477

Income before income taxes		318,295			352,105

Income taxes - current		(26,699	)		6,690
Income taxes - deferred		50,178			(74,092	)

Net income		294,816			419,507

(3)

Note with respect to the Assumption as a Going Concern (UNAUDITED)

Not applicable.

6.	Other Information

Financial information for Nomura Securities Co., Ltd. can be found on the following URL.

http://www.nomuraholdings.com/company/group/nsc/pdf/2016_4q.pdf