Current Report Filing (8-k)
16 June 2015 - 9:57PM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
report (Date of earliest event reported): June 16, 2015
LEUCADIA NATIONAL CORPORATION
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(Exact
name of registrant as specified in its charter)
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New York
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1-5721
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13-2615557
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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520 Madison Avenue, New York, New York
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10022
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s telephone number, including
area code: 212-460-1900
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(Former name or former address, if changed since last report)
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Check the
appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions (see General Instruction A.2.
below):
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition
On June 16, 2015, our wholly-owned subsidiary Jefferies Group LLC issued
a press release announcing financial results for its fiscal quarter
ended May 31, 2015. A copy of the press release is attached hereto as
Exhibit 99 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits
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The following exhibit is furnished with this report:
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Number
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Exhibit
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99
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Press Release issued by Jefferies Group LLC on June 16, 2015
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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 hereunto duly authorized.
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LEUCADIA NATIONAL CORPORATION
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Date:
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June 16, 2015
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/s/ Roland T. Kelly
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Roland T. Kelly
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Assistant Secretary and
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Associate General Counsel
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EXHIBIT INDEX
Exhibit No.
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Exhibit
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99
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Press Release issued by Jefferies Group LLC on June 16, 2015
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Exhibit 99
Jefferies
Reports Fiscal Second Quarter 2015 Financial Results
NEW YORK--(BUSINESS WIRE)--June 16, 2015--Jefferies Group LLC today
announced financial results for its fiscal second quarter 2015.
Highlights for the three months ended May 31, 2015, with adjusted
amounts excluding the operating results of our Bache business:
-
Investment banking net revenues of $404 million
-
Total Net revenues of $792 million
-
Total Adjusted Net revenues (excluding Bache net revenues) of $757
million
-
Adjusted Net earnings (excluding Bache net loss) of $86 million
-
Net earnings of $60 million (including Bache exit costs of $20 million
on an after-tax basis)
Highlights for the six months ended May 31, 2015, with adjusted amounts
excluding the operating results of our Bache business:
-
Investment banking net revenues of $676 million
-
Total Net revenues of $1,383 million
-
Total Adjusted Net revenues (excluding Bache net revenues) of $1,299
million
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Adjusted Net earnings (excluding Bache net loss) of $106 million
-
Net earnings of $73 million (including Bache exit costs of $20 million
on an after-tax basis)
Richard B. Handler, Chairman and Chief Executive Officer, and Brian P.
Friedman, Chairman of the Executive Committee, commented: “We are
pleased to report quarterly revenues above those of the first quarter
and the same period last year. Investment banking net revenues were in
excess of $400 million, an increase of 49% compared to this year’s first
quarter and 22% versus the second quarter last year. Our momentum has
continued in investment banking and our current backlog for the third
quarter is comparable to the backlog of three months ago. Our equity net
revenues were strong versus the first quarter and the same quarter last
year. Excluding Bache, Fixed income net revenues increased by 56% versus
the slow first quarter, but declined by 29% compared to the year ago
quarter. Fixed income results improved each month during the quarter. We
continue to unwind the Bache business and to date have transferred about
50% of client accounts to Societe Generale and other brokers. We expect
to have substantially completed the unwind of Bache by the end of the
summer.”
The attached financial tables should be read in connection with our
Quarterly Report on Form 10-Q for the quarter ended February 28, 2015
and our Annual Report on Form 10-K for the year ended November 30, 2014.
Adjusted financial measures referenced above are non-GAAP financial
measures, which management believes provide meaningful information to
enable investors to evaluate the Company's results in the context of
exiting the Bache business. Refer to the Supplemental Schedules on pages
5-7 for a reconciliation of Adjusted measures to the respective direct
U.S. GAAP financial measures.
Jefferies, the global investment banking firm focused on serving clients
for over 50 years, is a leader in providing insight, expertise and
execution to investors, companies and governments. The firm provides a
full range of investment banking, sales, trading, research and strategy
across the spectrum of equities, fixed income and foreign exchange, as
well as wealth management, in the Americas, Europe and Asia. Jefferies
Group LLC is a wholly-owned subsidiary of Leucadia National Corporation
(NYSE: LUK), a diversified holding company.
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JEFFERIES GROUP LLC AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF EARNINGS
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(Amounts in Thousands)
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(Unaudited)
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Quarter Ended
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May 31, 2015
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February 28, 2015
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May 31, 2014
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Revenues:
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Commissions
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$
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173,508
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$
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166,922
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$
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167,378
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Principal transactions
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155,962
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105,477
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183,416
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Investment banking
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404,262
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271,995
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331,149
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Asset management fees and investment income (loss) from managed
funds
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5,650
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(9,837
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)
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(3,101
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)
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Interest income
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240,552
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228,870
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283,540
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Other revenues
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28,576
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19,905
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8,404
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Total revenues
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1,008,510
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783,332
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970,786
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Interest expense
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216,956
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191,660
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247,794
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Net revenues
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791,554
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591,672
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722,992
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Non-interest expenses:
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|
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Compensation and benefits
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480,770
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365,215
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404,876
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Non-compensation expenses:
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|
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Floor brokerage and clearing fees
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58,713
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55,080
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54,020
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Technology and communications
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72,361
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72,387
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70,257
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Occupancy and equipment rental
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24,420
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24,184
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26,673
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Business development
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26,401
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21,937
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24,917
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Professional services
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27,419
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24,256
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25,345
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Other
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16,758
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15,729
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17,767
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Total non-compensation expenses
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226,072
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213,573
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218,979
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Total non-interest expenses
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706,842
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578,788
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623,855
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Earnings before income taxes
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84,712
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12,884
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99,137
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Income tax expense
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24,530
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331
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37,323
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Net earnings
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60,182
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12,553
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61,814
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Net earnings attributable to noncontrolling interests
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349
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871
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488
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Net earnings attributable to Jefferies Group LLC
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$
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59,833
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$
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11,682
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$
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61,326
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Pretax operating margin
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10.7
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%
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2.2
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%
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13.7
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%
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Effective tax rate
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29.0
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%
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2.6
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%
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37.6
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%
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JEFFERIES GROUP LLC AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF EARNINGS
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(Amounts in Thousands)
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(Unaudited)
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Six Months Ended
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May 31, 2015
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May 31, 2014
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Revenues:
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Commissions
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$
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340,430
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$
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329,441
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Principal transactions
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261,439
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421,779
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Investment banking
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676,257
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745,469
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Asset management fees and investment income (loss) from managed
funds
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(4,187
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)
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6,856
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Interest income
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469,422
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532,808
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Other revenues
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48,481
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31,473
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Total revenues
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1,791,842
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2,067,826
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Interest expense
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408,616
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445,806
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Net revenues
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|
|
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1,383,226
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1,622,020
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|
|
|
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|
|
|
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Non-interest expenses:
|
|
|
|
|
|
|
|
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Compensation and benefits
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|
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|
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845,985
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|
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912,775
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|
|
|
|
|
|
|
|
|
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Non-compensation expenses:
|
|
|
|
|
|
|
|
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Floor brokerage and clearing fees
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|
|
|
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113,793
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|
|
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103,533
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Technology and communications
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|
|
|
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144,748
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|
|
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134,563
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Occupancy and equipment rental
|
|
|
|
|
48,604
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|
|
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53,175
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Business development
|
|
|
|
|
48,338
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|
|
|
51,393
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Professional services
|
|
|
|
|
51,675
|
|
|
|
50,164
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Other
|
|
|
|
|
32,487
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|
|
|
35,011
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Total non-compensation expenses
|
|
|
|
|
439,645
|
|
|
|
427,839
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Total non-interest expenses
|
|
|
|
|
1,285,630
|
|
|
|
1,340,614
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Earnings before income taxes
|
|
|
|
|
97,596
|
|
|
|
281,406
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Income tax expense
|
|
|
|
|
24,861
|
|
|
|
104,200
|
|
Net earnings
|
|
|
|
|
72,735
|
|
|
|
177,206
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Net earnings attributable to noncontrolling interests
|
|
|
|
|
1,220
|
|
|
|
3,448
|
|
Net earnings attributable to Jefferies Group LLC
|
|
|
|
$
|
71,515
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|
|
$
|
173,758
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|
|
|
|
|
|
|
|
|
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Pretax operating margin
|
|
|
|
|
7.1
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%
|
|
|
17.3
|
%
|
Effective tax rate
|
|
|
|
|
25.5
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%
|
|
|
37.0
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%
|
|
|
|
|
|
|
|
|
|
|
|
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JEFFERIES GROUP LLC AND SUBSIDIARIES
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CONSOLIDATED ADJUSTED SELECTED FINANCIAL DATA
|
(Amounts in Thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended May 31, 2015
|
|
|
|
|
GAAP
|
|
Adjustments
|
|
|
Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
|
|
$
|
791,554
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|
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$
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34,589
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(1)
|
|
$
|
756,965
|
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Non-interest expenses:
|
|
|
|
|
|
|
|
|
|
|
|
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Compensation and benefits
|
|
|
|
|
480,770
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34,473
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(2)
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|
|
446,297
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Non-compensation expenses
|
|
|
|
|
226,072
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|
|
|
38,536
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(3)
|
|
|
187,536
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Total non-interest expenses
|
|
|
|
|
706,842
|
|
|
|
73,009
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|
(4)
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|
|
633,833
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|
|
|
|
|
|
|
|
|
|
|
|
|
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Operating income (loss)
|
|
|
|
$
|
84,712
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|
|
$
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(38,420
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)
|
|
|
$
|
123,132
|
|
Net earnings (loss)
|
|
|
|
$
|
60,182
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|
|
$
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(25,940
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)
|
|
|
$
|
86,122
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation ratio (a)
|
|
|
|
|
60.7
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%
|
|
|
|
|
|
|
59.0
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%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended February 28, 2015
|
|
|
|
|
GAAP
|
|
Adjustments
|
|
|
Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
|
|
$
|
591,672
|
|
|
$
|
49,933
|
|
(1)
|
|
$
|
541,739
|
|
Non-interest expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits
|
|
|
|
|
365,215
|
|
|
|
23,980
|
|
(2)
|
|
|
341,235
|
|
Non-compensation expenses
|
|
|
|
|
213,573
|
|
|
|
38,597
|
|
(3)
|
|
|
174,976
|
|
Total non-interest expenses
|
|
|
|
|
578,788
|
|
|
|
62,577
|
|
|
|
|
516,211
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
|
$
|
12,884
|
|
|
$
|
(12,644
|
)
|
|
|
$
|
25,528
|
|
Net earnings (loss)
|
|
|
|
$
|
12,553
|
|
|
$
|
(6,961
|
)
|
|
|
$
|
19,514
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation ratio (a)
|
|
|
|
|
61.7
|
%
|
|
|
|
|
|
|
63.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended May 31, 2014
|
|
|
|
|
GAAP
|
|
Adjustments
|
|
|
Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
|
|
$
|
722,992
|
|
|
$
|
50,734
|
|
(1)
|
|
$
|
672,258
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits
|
|
|
|
|
404,876
|
|
|
|
29,756
|
|
(2)
|
|
|
375,120
|
|
Non-compensation expenses
|
|
|
|
|
218,979
|
|
|
|
36,573
|
|
(3)
|
|
|
182,406
|
|
Total non-interest expenses
|
|
|
|
|
623,855
|
|
|
|
66,329
|
|
|
|
|
557,526
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
|
$
|
99,137
|
|
|
$
|
(15,595
|
)
|
|
|
$
|
114,732
|
|
Net earnings (loss)
|
|
|
|
$
|
61,814
|
|
|
$
|
(8,341
|
)
|
|
|
$
|
70,155
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation ratio (a)
|
|
|
|
|
56.0
|
%
|
|
|
|
|
|
|
55.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Reconciliation of the compensation ratio for U.S. GAAP to
Adjusted is a derivation of the reconciliation of the components
above.
|
|
This presentation of Adjusted financial information is an unaudited
non-GAAP financial measure. Adjusted financial information begins
with information prepared in accordance with U.S. GAAP and then
those results are adjusted to exclude the operations of the
Company's Bache business. The Company believes that the disclosed
Adjusted measures and any adjustments thereto, when presented in
conjunction with comparable U.S. GAAP measures are useful to
investors as they enable investors to evaluate the Company's results
in the context of exiting the Bache business. These measures should
not be considered a substitute for, or superior to, measures of
financial performance prepared in accordance with U.S. GAAP.
|
|
|
JEFFERIES GROUP LLC AND SUBSIDIARIES
|
CONSOLIDATED ADJUSTED SELECTED FINANCIAL DATA
|
(Amounts in Thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended May 31, 2015
|
|
|
|
|
GAAP
|
|
Adjustments
|
|
|
Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
|
|
$
|
1,383,226
|
|
|
$
|
84,522
|
|
(1)
|
|
$
|
1,298,704
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits
|
|
|
|
|
845,985
|
|
|
|
58,453
|
|
(2)
|
|
|
787,532
|
|
Non-compensation expenses
|
|
|
|
|
439,645
|
|
|
|
77,133
|
|
(3)
|
|
|
362,512
|
|
Total non-interest expenses
|
|
|
|
|
1,285,630
|
|
|
|
135,586
|
|
(4)
|
|
|
1,150,044
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
|
$
|
97,596
|
|
|
$
|
(51,064
|
)
|
|
|
$
|
148,660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
|
|
|
|
$
|
72,735
|
|
|
$
|
(32,901
|
)
|
|
|
$
|
105,636
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation ratio (a)
|
|
|
|
|
61.2
|
%
|
|
|
|
|
|
|
60.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended May 31, 2014
|
|
|
|
|
GAAP
|
|
Adjustments
|
|
|
Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
|
|
$
|
1,622,020
|
|
|
$
|
99,962
|
|
(1)
|
|
$
|
1,522,058
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits
|
|
|
|
|
912,775
|
|
|
|
54,222
|
|
(2)
|
|
|
858,553
|
|
Non-compensation expenses
|
|
|
|
|
427,839
|
|
|
|
68,443
|
|
(3)
|
|
|
359,396
|
|
Total non-interest expenses
|
|
|
|
|
1,340,614
|
|
|
|
122,665
|
|
|
|
|
1,217,949
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
|
$
|
281,406
|
|
|
$
|
(22,703
|
)
|
|
|
$
|
304,109
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
|
|
|
|
$
|
177,206
|
|
|
$
|
(11,470
|
)
|
|
|
$
|
188,676
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation ratio (a)
|
|
|
|
|
56.3
|
%
|
|
|
|
|
|
|
56.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Reconciliation of the compensation ratio for U.S. GAAP to
Adjusted is a derivation of the reconciliation of the components
above.
|
|
This presentation of Adjusted financial information is an unaudited
non-GAAP financial measure. Adjusted financial information begins
with information prepared in accordance with U.S. GAAP and then
those results are adjusted to exclude the operations of the
Company's Bache business. The Company believes that the disclosed
Adjusted measures and any adjustments thereto, when presented in
conjunction with comparable U.S. GAAP measures are useful to
investors as they enable investors to evaluate the Company's results
in the context of exiting the Bache business. These measures should
not be considered a substitute for, or superior to, measures of
financial performance prepared in accordance with U.S. GAAP.
|
|
JEFFERIES GROUP LLC AND SUBSIDIARIES
CONSOLIDATED ADJUSTED
SELECTED FINANCIAL DATA
FOOTNOTES
(1)
|
|
Revenues generated by the Bache business, including commissions,
principal transaction revenues and net interest revenue, for the
presented period have been classified as a reduction of revenue in
the presentation of Adjusted financial measures.
|
|
(2)
|
|
Compensation expense and benefits recognized during the presented
period for employees whose sole responsibilities pertain to the
activities of the Bache business, including front office personnel
and dedicated support personnel, have been classified as a reduction
of Compensation and benefits expense in the presentation of Adjusted
financial measures.
|
|
(3)
|
|
Expenses directly related to the operations of the Bache business
for the presented periods have been excluded from Adjusted
non-compensation expenses. These expenses include Floor brokerage
and clearing fees, amortization of capitalized software used
directly by the Bache business in conducting its business
activities, technology and occupancy expenses directly related to
conducting Bache business operations and business development and
professional services expenses incurred by the Bache business as
part of its client sales and trading activities, including estimates
of certain support costs dedicated to the Bache business.
|
|
(4)
|
|
Total non-interest expenses for the period include costs of $28.6
million, on a pre-tax basis, related to our exit of the Bache
business. The after-tax effect of these costs is $20.5 million.
These costs consist primarily of severance, retention and benefit
payments for employees, incremental amortization of outstanding
restricted stock and cash awards, contract termination costs and
incremental amortization expense of capitalized software expected to
no longer be used subsequent to the wind-down of the business. We
expect to incur additional costs of $48.6 million and $34.3 million
on a pre-tax and post-tax basis, respectively, over the remainder of
fiscal 2015.
|
|
JEFFERIES GROUP LLC AND SUBSIDIARIES
|
SELECTED STATISTICAL INFORMATION
|
(Amounts in Thousands, Except Other Data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
|
May 31, 2015
|
|
February 28, 2015
|
|
May 31, 2014
|
Revenues by Source
|
|
|
|
|
|
|
|
|
Equities
|
|
|
|
$
|
228,198
|
|
|
$
|
203,479
|
|
|
$
|
177,238
|
|
Fixed income
|
|
|
|
153,444
|
|
|
126,035
|
|
|
217,706
|
|
Total sales and trading
|
|
|
|
381,642
|
|
|
329,514
|
|
|
394,944
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
108,805
|
|
|
79,071
|
|
|
83,726
|
|
Debt
|
|
|
|
154,670
|
|
|
60,876
|
|
|
147,000
|
|
Capital markets
|
|
|
|
263,475
|
|
|
139,947
|
|
|
230,726
|
|
Advisory
|
|
|
|
140,787
|
|
|
132,048
|
|
|
100,423
|
|
Total investment banking
|
|
|
|
404,262
|
|
|
271,995
|
|
|
331,149
|
|
|
|
|
|
|
|
|
|
|
Asset management fees and investment income (loss) from managed
funds:
|
|
|
|
|
|
|
|
|
Asset management fees
|
|
|
|
4,903
|
|
|
13,985
|
|
|
4,927
|
|
Investment (loss) income from managed funds
|
|
|
|
747
|
|
|
(23,822
|
)
|
|
(8,028
|
)
|
Total
|
|
|
|
5,650
|
|
|
(9,837
|
)
|
|
(3,101
|
)
|
Net revenues
|
|
|
|
$
|
791,554
|
|
|
$
|
591,672
|
|
|
$
|
722,992
|
|
|
|
|
|
|
|
|
|
|
Other Data
|
|
|
|
|
|
|
|
|
Number of trading days
|
|
|
|
63
|
|
|
61
|
|
|
63
|
|
Number of trading loss days
|
|
|
|
10
|
|
|
11
|
|
|
11
|
|
Number of trading loss days excluding Knight Capital
|
|
|
|
5
|
|
|
9
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
Average firmwide VaR (in millions) (A)
|
|
|
|
$
|
12.80
|
|
|
$
|
13.27
|
|
|
$
|
14.94
|
|
Average firmwide VaR excluding Knight Capital (in millions) (A)
|
|
|
|
$
|
9.86
|
|
|
$
|
9.29
|
|
|
$
|
8.63
|
|
Average firmwide VaR excluding Knight Capital and HRG Group Inc. (in
millions) (A)
|
|
|
|
$
|
9.86
|
|
|
$
|
9.29
|
|
|
$
|
7.97
|
|
|
|
|
|
|
|
|
|
|
(A)
|
|
VaR estimates the potential loss in value of our trading positions
due to adverse market movements over a one-day time horizon with a
95% confidence level. For a further discussion of the calculation of
VaR, see "Value at risk" in Part II, Item 7 "Management's Discussion
and Analysis" in our Annual Report on Form 10-K for the year ended
November 30, 2014.
|
|
JEFFERIES GROUP LLC AND SUBSIDIARIES
|
SELECTED STATISTICAL INFORMATION
|
(Amounts in Thousands, Except Other Data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
May 31, 2015
|
|
May 31, 2014
|
Revenues by Source
|
|
|
|
|
|
|
Equities
|
|
|
|
$
|
431,677
|
|
|
$
|
366,061
|
|
Fixed income
|
|
|
|
279,479
|
|
|
503,634
|
|
Total sales and trading
|
|
|
|
711,156
|
|
|
869,695
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
187,876
|
|
|
178,464
|
|
Debt
|
|
|
|
215,546
|
|
|
320,038
|
|
Capital markets
|
|
|
|
403,422
|
|
|
498,502
|
|
Advisory
|
|
|
|
272,835
|
|
|
246,967
|
|
Total investment banking
|
|
|
|
676,257
|
|
|
745,469
|
|
|
|
|
|
|
|
|
Asset management fees and investment income (loss) from managed
funds:
|
|
|
|
|
|
|
Asset management fees
|
|
|
|
18,888
|
|
|
14,373
|
|
Investment (loss) income from managed funds
|
|
|
|
(23,075
|
)
|
|
(7,517
|
)
|
Total
|
|
|
|
(4,187
|
)
|
|
6,856
|
|
Net revenues
|
|
|
|
$
|
1,383,226
|
|
|
$
|
1,622,020
|
|
|
|
|
|
|
|
|
Other Data
|
|
|
|
|
|
|
Number of trading days
|
|
|
|
124
|
|
|
124
|
|
Number of trading loss days
|
|
|
|
21
|
|
|
18
|
|
Number of trading loss days excluding Knight Capital
|
|
|
|
14
|
|
|
5
|
|
|
|
|
|
|
|
|
Average firmwide VaR (in millions) (A)
|
|
|
|
$
|
13.03
|
|
|
$
|
15.60
|
|
Average firmwide VaR excluding Knight Capital (in millions) (A)
|
|
|
|
$
|
9.58
|
|
|
$
|
10.60
|
|
Average firmwide VaR excluding Knight Capital and HRG Group Inc. (in
millions) (A)
|
|
|
|
$
|
9.58
|
|
|
$
|
8.59
|
|
|
|
|
|
|
|
|
(A)
|
|
VaR estimates the potential loss in value of our trading positions
due to adverse market movements over a one-day time horizon with a
95% confidence level. For a further discussion of the calculation of
VaR, see "Value at risk" in Part II, Item 7 "Management's Discussion
and Analysis" in our Annual Report on Form 10-K for the year ended
November 30, 2014.
|
|
JEFFERIES GROUP LLC AND SUBSIDIARIES
|
FINANCIAL HIGHLIGHTS
|
(Amounts in Millions, Except Where Noted)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
|
May 31, 2015
|
|
February 28, 2015
|
|
May 31, 2014
|
|
|
|
|
|
|
|
|
|
Financial position:
|
|
|
|
|
|
|
|
|
Total assets (1)
|
|
|
|
$
|
44,142
|
|
|
$
|
43,787
|
|
|
$
|
43,610
|
|
Average total assets for the period (1)
|
|
|
|
$
|
51,013
|
|
|
$
|
49,862
|
|
|
$
|
50,379
|
|
Average total assets less goodwill and intangible assets for the
period (1)
|
|
|
|
$
|
49,118
|
|
|
$
|
47,961
|
|
|
$
|
48,394
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents (1)
|
|
|
|
$
|
3,289
|
|
|
$
|
3,340
|
|
|
$
|
3,958
|
|
Cash and cash equivalents and other sources of liquidity (1) (2)
|
|
|
|
$
|
4,951
|
|
|
$
|
4,647
|
|
|
$
|
5,824
|
|
Cash and cash equivalents and other sources of liquidity - % total
assets (1) (2)
|
|
|
|
11.2
|
%
|
|
10.6
|
%
|
|
13.4
|
%
|
Cash and cash equivalents and other sources of liquidity - % total
assets less goodwill
and intangible assets (1) (2)
|
|
|
|
11.7
|
%
|
|
11.1
|
%
|
|
14.0
|
%
|
|
|
|
|
|
|
|
|
|
Financial instruments owned (1)
|
|
|
|
$
|
18,843
|
|
|
$
|
19,099
|
|
|
$
|
17,144
|
|
Goodwill and intangible assets (1)
|
|
|
|
$
|
1,895
|
|
|
$
|
1,900
|
|
|
$
|
1,984
|
|
|
|
|
|
|
|
|
|
|
Total equity (including noncontrolling interests)
|
|
|
|
$
|
5,520
|
|
|
$
|
5,466
|
|
|
$
|
5,527
|
|
Total member's equity
|
|
|
|
$
|
5,480
|
|
|
$
|
5,427
|
|
|
$
|
5,496
|
|
Tangible member's equity (3)
|
|
|
|
$
|
3,585
|
|
|
$
|
3,527
|
|
|
$
|
3,512
|
|
|
|
|
|
|
|
|
|
|
Bache assets (4)
|
|
|
|
$
|
2,955
|
|
|
$
|
3,926
|
|
|
$
|
3,271
|
|
|
|
|
|
|
|
|
|
|
Level 3 financial instruments:
|
|
|
|
|
|
|
|
|
Level 3 financial instruments owned (1) (5) (6)
|
|
|
|
$
|
540
|
|
|
$
|
540
|
|
|
$
|
453
|
|
Level 3 financial instruments owned - % total assets (1) (6)
|
|
|
|
1.2
|
%
|
|
1.2
|
%
|
|
1.0
|
%
|
Total Level 3 financial instruments owned - % total financial
instruments (1) (6)
|
|
|
|
2.9
|
%
|
|
2.8
|
%
|
|
2.6
|
%
|
Level 3 financial instruments owned - % tangible member's equity (1)
(6)
|
|
|
|
15.1
|
%
|
|
15.3
|
%
|
|
12.9
|
%
|
|
|
|
|
|
|
|
|
|
Other data and financial ratios:
|
|
|
|
|
|
|
|
|
Total capital (1) (7)
|
|
|
|
$
|
10,860
|
|
|
$
|
11,193
|
|
|
$
|
11,941
|
|
Leverage ratio (1) (8)
|
|
|
|
8.0
|
|
|
8.0
|
|
|
7.9
|
|
Adjusted leverage ratio (1) (9)
|
|
|
|
10.3
|
|
|
10.1
|
|
|
10.0
|
|
Tangible gross leverage ratio (1) (10)
|
|
|
|
11.8
|
|
|
11.9
|
|
|
11.9
|
|
Leverage ratio - excluding impacts of the Leucadia transaction (1)
(11)
|
|
|
|
10.1
|
|
|
10.1
|
|
|
10.0
|
|
|
|
|
|
|
|
|
|
|
Number of trading days
|
|
|
|
63
|
|
|
61
|
|
|
63
|
|
Number of trading loss days
|
|
|
|
10
|
|
|
11
|
|
|
11
|
|
Number of trading loss days excluding Knight Capital
|
|
|
|
5
|
|
|
9
|
|
|
4
|
|
Average firmwide VaR (12)
|
|
|
|
$
|
12.80
|
|
|
$
|
13.27
|
|
|
$
|
14.94
|
|
Average firmwide VaR excluding Knight Capital (12)
|
|
|
|
$
|
9.86
|
|
|
$
|
9.29
|
|
|
$
|
8.63
|
|
Average firmwide VaR excluding Knight Capital and HRG Group Inc. (12)
|
|
|
|
$
|
9.86
|
|
|
$
|
9.29
|
|
|
$
|
7.97
|
|
|
|
|
|
|
|
|
|
|
Number of employees, at period end
|
|
|
|
3,830
|
|
|
3,936
|
|
|
3,785
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JEFFERIES GROUP LLC AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
- FOOTNOTES
(1)
|
|
Amounts pertaining to May 31, 2015 represent a preliminary estimate
as of the date of this earnings release and may be revised in our
Quarterly Report on Form 10-Q for the quarterly period ended May 31,
2015.
|
|
|
|
(2)
|
|
At May 31, 2015, other sources of liquidity include high quality
sovereign government securities and reverse repurchase agreements
collateralized by U.S. government securities and other high quality
sovereign government securities of $1,135 million, in aggregate, and
$527 million, being the total of the estimated amount of additional
secured financing that could be reasonably expected to be obtained
from our financial instruments that are currently not pledged at
reasonable financing haircuts and additional funds available under
the committed senior secured revolving credit facility available for
working capital needs of Jefferies Bache. The corresponding amounts
included in other sources of liquidity at February 28, 2015 were
$911 million and $396 million, respectively, and at May 31, 2014,
were $1,202 million and $664 million, respectively.
|
|
|
|
(3)
|
|
Tangible member's equity (a non-GAAP financial measure) represents
total member's equity less goodwill and identifiable intangible
assets. We believe that tangible member's equity is meaningful for
valuation purposes, as financial companies are often measured as a
multiple of tangible member's equity, making these ratios
meaningful for investors.
|
|
|
|
(4)
|
|
Bache assets (a non-GAAP financial measure) includes Cash and cash
equivalents, Cash and securities segregated, Financial instruments
owned, Securities purchased under agreements to resell and
Receivables attributable to our Bache business.
|
|
|
|
(5)
|
|
Level 3 financial instruments represent those financial instruments
classified as such under Accounting Standards Codification 820,
accounted for at fair value and included within Financial
instruments owned.
|
|
|
|
(6)
|
|
In May 2015, the Financial Accounting Standards Board issued
Accounting Standards Update No. 2015-07, “Fair Value Measurement
(Topic 820) - Disclosures for Investments in Certain Entities That
Calculate Net Asset Value per Share (or Its Equivalent).” The
guidance removes the requirement to include investments in the fair
value hierarchy for which the fair value is measured at net asset
value using the practical expedient under “Fair Value Measurements
and Disclosures (Topic 820).” The guidance also removes the
requirement to make certain disclosures for all investments that are
eligible to be measured at fair value using the net asset value
practical expedient. Rather, those disclosures are limited to
investments for which we have elected to measure the fair value
using that practical expedient. The guidance is effective
retrospectively beginning in the first quarter of fiscal 2017. Early
adoption is permitted and we have early adopted this guidance during
the second quarter of fiscal 2015.
|
|
|
|
(7)
|
|
At May 31, 2015, February 28, 2015 and May 31, 2014, total capital
includes our long-term debt of $5,340 million, $5,726 million and
$6,414 million, respectively, and total equity. Long-term debt
included in total capital is reduced by amounts outstanding under
the revolving credit facility and the amount of debt maturing in
less than one year, where applicable.
|
|
|
|
(8)
|
|
Leverage ratio equals total assets divided by total equity.
|
|
|
|
(9)
|
|
Adjusted leverage ratio (a non-GAAP financial measure) equals
adjusted assets divided by tangible total equity, being total equity
less goodwill and identifiable intangible assets. Adjusted assets (a
non-GAAP financial measure) equals total assets less securities
borrowed, securities purchased under agreements to resell, cash and
securities segregated, goodwill and identifiable intangibles plus
financial instruments sold, not yet purchased (net of derivative
liabilities). At May 31, 2015, February 28, 2015 and May 31, 2014,
adjusted assets were $37,172 million, $35,977 million and $35,577
million, respectively. We believe that adjusted assets is a
meaningful measure as it excludes certain assets that are considered
of lower risk as they are generally self-financed by customer
liabilities through our securities lending activities.
|
|
|
|
(10)
|
|
Tangible gross leverage ratio (a non-GAAP financial measure) equals
total assets less goodwill and identifiable intangible assets
divided by tangible member's equity. The tangible gross leverage
ratio is used by rating agencies in assessing our leverage ratio.
|
|
|
|
(11)
|
|
Leverage ratio - excluding impacts of the Leucadia transaction (a
non-GAAP financial measure) is calculated as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
May 31,
|
|
February 28,
|
|
May 31,
|
|
|
|
|
|
|
$ millions
|
|
|
|
2015
|
|
2015
|
|
2014
|
|
|
|
|
|
|
Total assets
|
|
|
|
$
|
44,142
|
|
|
$
|
43,787
|
|
|
$
|
43,610
|
|
|
|
|
|
|
|
Goodwill and acquisition accounting fair value adjustments on the
transaction with Leucadia
|
|
|
|
(1,957
|
)
|
|
(1,957
|
)
|
|
(1,957
|
)
|
|
|
|
|
|
|
Net amortization to date on asset related purchase accounting
adjustments
|
|
|
|
116
|
|
|
112
|
|
|
37
|
|
|
|
|
|
|
|
Total assets excluding transaction impacts
|
|
|
|
$
|
42,301
|
|
|
$
|
41,942
|
|
|
$
|
41,690
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
|
$
|
5,520
|
|
|
$
|
5,466
|
|
|
$
|
5,527
|
|
|
|
|
|
|
|
Equity arising from transaction consideration
|
|
|
|
(1,426
|
)
|
|
(1,426
|
)
|
|
(1,426
|
)
|
|
|
|
|
|
|
Preferred stock assumed by Leucadia
|
|
|
|
125
|
|
|
125
|
|
|
125
|
|
|
|
|
|
|
|
Net amortization to date of purchase accounting adjustments, net
of tax
|
|
|
|
(31
|
)
|
|
(20
|
)
|
|
(48
|
)
|
|
|
|
|
|
|
Total equity excluding transaction impacts
|
|
|
|
$
|
4,188
|
|
|
$
|
4,145
|
|
|
$
|
4,178
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leverage ratio - excluding impacts of the Leucadia transaction
|
|
|
|
10.1
|
|
|
10.1
|
|
|
10.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(12)
|
|
VaR estimates the potential loss in value of our trading positions
due to adverse market movements over a one-day time horizon with a
95% confidence level. For a further discussion of the calculation of
VaR, see "Value at risk" in Part II, Item 7 "Management's Discussion
and Analysis" in our Annual Report on Form 10-K for the year ended
November 30, 2014.
|
CONTACT:
Jefferies Group LLC
Peregrine C. Broadbent, (212) 284-2338
Chief
Financial Officer
Leucadia (NYSE:LUK)
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