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
Supplement for the month of
December 2002.
Total number of pages: 19.
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 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):
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 |
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 13, 2002
| NOMURA HOLDINGS, INC. | ||
| By: |
/s/ MASANORI
ITANATANI | |
| Masanori Itatani | ||
| Director | ||
3
2002.9
To Our Shareholders
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
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
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.
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