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): March 15, 2016
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)
|
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 March 15, 2016, our wholly-owned subsidiary Jefferies Group LLC
issued a press release announcing financial results for its fiscal
quarter ended February 29, 2016. 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 March 15, 2016
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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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March 15, 2016
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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 March 15, 2016
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Exhibit 99
Jefferies
Reports Fiscal First Quarter 2016 Financial Results
NEW YORK--(BUSINESS WIRE)--March 15, 2016--Jefferies Group LLC today
announced financial results for its fiscal first quarter 2016 and a
summary of developments in its fiscal second quarter to date.
Highlights for the three months ended February 29, 2016:
-
Investment Banking Net Revenues of $231 million
-
Total Sales and Trading Net Revenues of $59 million
-
Total Net Revenues of $299 million
-
Net Loss of $167 million (tax rate 33.3%), primarily attributable to
an approximately $90 million after-tax difference in results this year
related to two listed equity block positions, including KCG, and our
share of the results of our Jefferies Finance joint venture, as
compared to our results from the same items for last year's fiscal
first quarter
Early indications for the three months ended May 31, 2016:
-
Business conditions improved in late February and in the first half of
March
-
Total Sales and Trading Net Revenues for the first ten trading days
are averaging above our recent periods' mean results
-
Investment Banking backlog is above recent levels
-
We have recorded $18 million in markups so far this quarter in the two
listed equity block positions, including KCG, mentioned above
Rich Handler, Chairman and Chief Executive Officer, and Brian Friedman,
Chairman of the Executive Committee, commented: "Our overall first
quarter results reflect an exceptionally volatile and turbulent market
environment during our first fiscal quarter, although our core
businesses performed reasonably, considering the environment. A quiet
December was followed by an extremely challenging January and first few
weeks of February. Almost every asset class, including equities and
fixed income, suffered significantly amid concerns about the pace of
global economic growth, outflows from the high yield market, forced
selling from hedge funds, uncertainty over China, a potential Brexit,
and an overall void in liquidity. New issue equity and leveraged finance
capital markets were virtually closed throughout January and February,
which resulted in many of our potential Investment Banking capital
markets transactions being postponed until some stability returns to the
markets. As we have done through many other turbulent periods in our
history, we reduced our already smaller balance sheet to continue to
reduce risk during this difficult period. We are humbled by Jefferies'
quarterly loss and will strive to deliver the better results that our
shareholders deserve and Jefferies is more than capable of achieving.
While we are early in the second quarter and one can never predict the
future, it appears markets have not only stabilized, but aggressively
snapped back. Bank holding company stocks in the U.S. and globally have
halted their sell-off, high yield inflows have been at record levels,
hedge funds appear to have stabilized, equity markets have rebounded,
and energy/commodity prices have improved significantly. We are
experiencing mark-ups in our block equity positions and believe there
may be potential upside in the value of the loans held for sale in
Jefferies Finance should the current market tone continue. Our core
businesses are performing well, with total sales and trading net
revenues for the first ten trading days of our second quarter averaging
above our recent periods' mean results, and our investment banking
backlog is stronger.
With our strong financial condition and solid operating franchise, as
well as continuing developments among our competitors that favor our
model, we are optimistic about Jefferies' future. The recent challenges,
together with other issues that are unique to them, have been causing
many of our primary competitors to adapt their business strategy, shrink
aggressively, and focus on their other core operating businesses, such
as retail and commercial banking. We believe there is a significant long
term-opportunity for Jefferies to be even more relevant and gain further
market share in serving our clients.
Our core equity business performed reasonably well during the quarter,
despite the challenging environment. Although our Equities revenues
declined to $2 million for the quarter from $203 million for the first
quarter of 2015, this was primarily attributable to a $145 million
difference in net revenues related to two listed equity block positions,
including KCG, and our share of the results of our Jefferies Finance
joint venture. The two equity block positions generated pre-tax, mark to
market losses during the quarter that totaled $82 million, $67 million
of which is unrealized, including KCG, which was written down by $37
million. This compares to the combined net revenues of the same
positions of positive $30 million during the first quarter of 2015, a
year-on-year decline of $112 million. In the first ten trading days of
March, the same two positions have increased in value by $18 million,
22% of the first quarter's markdowns. Inception to date net revenues in
respect of KCG is $259 million and a loss of $10 million for the other
block position. That position was reduced in size by 38% during the
first quarter.
Our share of the results generated by our 50% corporate lending joint
venture with Mass Mutual, Jefferies Finance, which is recorded in our
Equity net revenues line, was a loss of $22 million for the first
quarter of 2016, compared to positive net earnings of $11 million for
the first quarter of 2015, a year-on-year decline of $33 million.
Leverage lending activity and related liquidity was very muted during
the quarter, and two loans Jefferies Finance closed during the quarter
and held for sale as of the end of the quarter were marked down by a
total of $38 million. That is reflected in our share of Jefferies
Finance's results. The two loans held for sale in Jefferies Finance as
of the end of February 2016 were marked at prices believed to be
required to clear their sale, with the potential for gains should
markets improve prior to sell-down. Jefferies Finance's equity is $949
million. Jefferies Finance is highly liquid and positioned well to serve
our clients in this important business as the market recovers. We
recently strengthened our Leveraged Finance origination team and expect
to grow further our presence in this segment.
Fixed Income net revenues for the first quarter were $57 million, an
improvement over the $9 million recorded for last year’s fourth quarter,
despite markdowns in less liquid positions. We expect continued
improvement in our fixed income results in coming quarters.
Investment banking net revenues for the first quarter were $231 million,
compared to $272 million for the first quarter of 2015, a decline of $41
million. This is substantially a result of Equity Capital Markets net
revenues for the first quarter being $44 million versus $79 million for
the comparable quarter in 2015, a reduction of $35 million. As equity
prices fell during the quarter, a significant portion of equity capital
markets activity was postponed to future periods. Our second quarter
backlog is solid.
Consistent with our strategy, our balance sheet, liquidity and key risk
metrics ended the quarter at even more conservative levels than after we
took aggressive actions in fourth quarter 2015. Our balance sheet at
February 29, 2016 was $35.2 billion, down $3.4 billion from 2015
year-end and $8.6 billion from the year ago period. We estimate
period-end tangible leverage to be 9.8 times. We continue to have ample
excess liquidity. At the end of the first quarter our liquidity buffer
was about $4.3 billion and represented 12.9% of gross tangible assets.
We repaid our $350 million March debt maturity today from cash on hand
and have retired a net $784 million of debt in the last six months.
Our Level 3 assets decreased 10% to $489 million, from the year end
level of $542 million and represents 3.6% of inventory. Average VaR for
the quarter of $8.4 million was lower by 13%, compared to $9.7 million
for the fourth quarter."
The attached financial tables should be read in conjunction with our
Annual Report on Form 10-K for the year ended November 30, 2015. Amounts
herein pertaining to February 29, 2016 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 February
29, 2016.
This release contains "forward-looking statements" within the meaning of
the safe harbor provisions of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934. Forward-looking
statements include statements about our future results and performance,
including our future market share and expected financial results. It is
possible that the actual results may differ materially from the
anticipated results indicated in these forward-looking statements.
Please refer to our most recent Annual Report on Form 10-K for a
discussion of important factors that could cause actual results to
differ materially from those projected in these forward-looking
statements.
Jefferies, the world's only independent full-service 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. Our 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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|
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February 29, 2016
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|
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November 30, 2015
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|
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February 28, 2015
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|
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Revenues:
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|
|
|
|
|
|
|
|
|
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|
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|
Commissions and other fees
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|
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$
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155,824
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$
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146,288
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$
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166,922
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Principal transactions
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|
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(103,373
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)
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(38,534
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)
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105,477
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Investment banking
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230,930
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372,930
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271,995
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Asset management fees and investment income (loss) from managed
funds
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9,530
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8,020
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(9,837
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)
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Interest income
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|
|
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221,945
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|
|
|
|
221,962
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|
|
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228,870
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Other revenues
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|
|
|
|
(21,751
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)
|
|
|
|
(8,736
|
)
|
|
|
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19,905
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|
Total revenues
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|
|
|
|
493,105
|
|
|
|
|
701,930
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|
|
|
|
783,332
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|
Interest expense
|
|
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|
194,118
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|
|
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188,843
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|
|
|
|
191,660
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|
Net revenues
|
|
|
|
|
298,987
|
|
|
|
|
513,087
|
|
|
|
|
591,672
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest expenses:
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|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits
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|
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349,743
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|
|
|
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284,647
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|
|
|
|
365,215
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|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Non-compensation expenses:
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|
|
|
|
|
|
|
|
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|
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Floor brokerage and clearing fees
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|
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40,479
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|
|
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40,680
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|
|
|
|
55,080
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Technology and communications
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|
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64,989
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|
|
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78,918
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|
|
|
|
72,387
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|
Occupancy and equipment rental
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|
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24,585
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|
|
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26,567
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|
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|
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24,184
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Business development
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|
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24,854
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|
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27,098
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|
|
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|
21,937
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|
Professional services
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|
|
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|
23,512
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|
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27,613
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|
|
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|
24,256
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|
Other
|
|
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20,701
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|
|
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18,026
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|
|
|
|
15,729
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|
Total non-compensation expenses
|
|
|
|
|
199,120
|
|
|
|
|
218,902
|
|
|
|
|
213,573
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|
Total non-interest expenses
|
|
|
|
|
548,863
|
|
|
|
|
503,549
|
|
|
|
|
578,788
|
|
Earnings (loss) before income taxes
|
|
|
|
|
(249,876
|
)
|
|
|
|
9,538
|
|
|
|
|
12,884
|
|
Income tax expense (benefit)
|
|
|
|
|
(83,107
|
)
|
|
|
|
(10,572
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)
|
|
|
|
331
|
|
Net earnings (loss)
|
|
|
|
|
(166,769
|
)
|
|
|
|
20,110
|
|
|
|
|
12,553
|
|
Net earnings attributable to noncontrolling interests
|
|
|
|
|
44
|
|
|
|
|
148
|
|
|
|
|
871
|
|
Net earnings (loss) attributable to Jefferies Group LLC
|
|
|
|
|
$
|
(166,813
|
)
|
|
|
|
$
|
19,962
|
|
|
|
|
$
|
11,682
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pretax operating margin
|
|
|
|
|
(83.6
|
)%
|
|
|
|
1.9
|
%
|
|
|
|
2.2
|
%
|
Effective tax rate
|
|
|
|
|
33.3
|
%
|
|
|
|
(110.8
|
)%
|
|
|
|
2.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JEFFERIES GROUP LLC AND SUBSIDIARIES
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SELECTED STATISTICAL INFORMATION
|
(Amounts in Thousands, Except Other Data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
|
February 29, 2016
|
|
|
November 30, 2015
|
|
|
February 28, 2015
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Revenues by Source
|
|
|
|
|
|
|
|
|
|
|
Equities
|
|
|
|
$
|
1,745
|
|
|
|
$
|
122,693
|
|
|
|
$
|
203,479
|
|
Fixed income
|
|
|
|
56,782
|
|
|
|
9,444
|
|
|
|
126,035
|
|
Total sales and trading
|
|
|
|
58,527
|
|
|
|
132,137
|
|
|
|
329,514
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
43,999
|
|
|
|
93,547
|
|
|
|
79,071
|
|
Debt
|
|
|
|
57,273
|
|
|
|
68,705
|
|
|
|
60,876
|
|
Capital markets
|
|
|
|
101,272
|
|
|
|
162,252
|
|
|
|
139,947
|
|
Advisory
|
|
|
|
129,658
|
|
|
|
210,678
|
|
|
|
132,048
|
|
Total investment banking
|
|
|
|
230,930
|
|
|
|
372,930
|
|
|
|
271,995
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset management fees and investment income (loss) from managed
funds:
|
|
|
|
|
|
|
|
|
|
|
Asset management fees
|
|
|
|
11,205
|
|
|
|
5,864
|
|
|
|
13,985
|
|
Investment (loss) income from managed funds
|
|
|
|
(1,675
|
)
|
|
|
2,156
|
|
|
|
(23,822
|
)
|
Total
|
|
|
|
9,530
|
|
|
|
8,020
|
|
|
|
(9,837
|
)
|
Net revenues
|
|
|
|
$
|
298,987
|
|
|
|
$
|
513,087
|
|
|
|
$
|
591,672
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Data
|
|
|
|
|
|
|
|
|
|
|
Number of trading days
|
|
|
|
61
|
|
|
|
63
|
|
|
|
61
|
|
Number of trading loss days
|
|
|
|
17
|
|
|
|
22
|
|
|
|
11
|
|
Number of trading loss days excluding KCG
|
|
|
|
12
|
|
|
|
23
|
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
Average firmwide VaR (in millions) (A)
|
|
|
|
$
|
8.37
|
|
|
|
$
|
9.72
|
|
|
|
$
|
13.27
|
|
Average firmwide VaR excluding KCG (in millions) (A)
|
|
|
|
$
|
6.69
|
|
|
|
$
|
8.46
|
|
|
|
$
|
9.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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, 2015.
|
|
|
|
|
JEFFERIES GROUP LLC AND SUBSIDIARIES
|
FINANCIAL HIGHLIGHTS
|
(Amounts in Millions, Except Where Noted)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
February 29, 2016
|
|
November 30, 2015
|
|
February 28, 2015
|
|
|
|
|
|
|
|
|
Financial position:
|
|
|
|
|
|
|
|
Total assets (1)
|
|
|
$
|
35,193
|
|
|
$
|
38,564
|
|
|
$
|
43,785
|
|
Average total assets for the period (1)
|
|
|
$
|
44,669
|
|
|
$
|
48,722
|
|
|
$
|
49,862
|
|
Average total assets less goodwill and intangible assets for the
period (1)
|
|
|
$
|
42,796
|
|
|
$
|
46,835
|
|
|
$
|
47,961
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents (1)
|
|
|
$
|
2,600
|
|
|
$
|
3,510
|
|
|
$
|
3,340
|
|
Cash and cash equivalents and other sources of liquidity (1) (2)
|
|
|
$
|
4,290
|
|
|
$
|
5,081
|
|
|
$
|
4,647
|
|
Cash and cash equivalents and other sources of liquidity - % total
assets (1) (2)
|
|
|
12.2
|
%
|
|
13.2
|
%
|
|
10.6
|
%
|
Cash and cash equivalents and other sources of liquidity - % total
assets less goodwill and intangible assets (1) (2)
|
|
|
12.9
|
%
|
|
13.9
|
%
|
|
11.1
|
%
|
|
|
|
|
|
|
|
|
Financial instruments owned (1)
|
|
|
$
|
13,630
|
|
|
$
|
16,559
|
|
|
$
|
19,099
|
|
Goodwill and intangible assets (1)
|
|
|
$
|
1,869
|
|
|
$
|
1,882
|
|
|
$
|
1,900
|
|
|
|
|
|
|
|
|
|
Total equity (including noncontrolling interests)
|
|
|
$
|
5,262
|
|
|
$
|
5,509
|
|
|
$
|
5,466
|
|
Total member's equity
|
|
|
$
|
5,261
|
|
|
$
|
5,482
|
|
|
$
|
5,427
|
|
Tangible member's equity (3)
|
|
|
$
|
3,392
|
|
|
$
|
3,600
|
|
|
$
|
3,527
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 3 financial instruments:
|
|
|
|
|
|
|
|
Level 3 financial instruments owned (1) (4) (5)
|
|
|
$
|
489
|
|
|
$
|
542
|
|
|
$
|
540
|
|
Level 3 financial instruments owned - % total assets (1) (5)
|
|
|
1.4
|
%
|
|
1.4
|
%
|
|
1.2
|
%
|
Total Level 3 financial instruments owned - % total financial
instruments (1) (5)
|
|
|
3.6
|
%
|
|
3.3
|
%
|
|
2.8
|
%
|
Level 3 financial instruments owned - % tangible member's equity (1)
(5)
|
|
|
14.4
|
%
|
|
15.1
|
%
|
|
15.3
|
%
|
|
|
|
|
|
|
|
|
Other data and financial ratios:
|
|
|
|
|
|
|
|
Total capital (1) (6)
|
|
|
$
|
10,588
|
|
|
$
|
10,797
|
|
|
$
|
11,191
|
|
Leverage ratio (1) (7)
|
|
|
6.7
|
|
|
7.0
|
|
|
8.0
|
|
Adjusted leverage ratio (1) (8)
|
|
|
8.5
|
|
|
8.7
|
|
|
10.1
|
|
Tangible gross leverage ratio (1) (9)
|
|
|
9.8
|
|
|
10.2
|
|
|
11.9
|
|
Leverage ratio - excluding impacts of the Leucadia transaction (1)
(10)
|
|
|
8.6
|
|
|
8.8
|
|
|
10.1
|
|
|
|
|
|
|
|
|
|
Number of trading days
|
|
|
61
|
|
|
63
|
|
|
61
|
|
Number of trading loss days
|
|
|
17
|
|
|
22
|
|
|
11
|
|
Number of trading loss days excluding KCG
|
|
|
12
|
|
|
23
|
|
|
9
|
|
Average firmwide VaR (11)
|
|
|
$
|
8.37
|
|
|
$
|
9.72
|
|
|
$
|
13.27
|
|
Average firmwide VaR excluding KCG (11)
|
|
|
$
|
6.69
|
|
|
$
|
8.46
|
|
|
$
|
9.29
|
|
|
|
|
|
|
|
|
|
Number of employees, at period end
|
|
|
3,439
|
|
|
3,557
|
|
|
3,936
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JEFFERIES GROUP LLC AND SUBSIDIARIES
|
FINANCIAL HIGHLIGHTS - FOOTNOTES
|
|
|
|
(1)
|
|
Amounts pertaining to February 29, 2016 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
February 29, 2016.
|
|
|
|
(2)
|
|
At February 29, 2016, 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 $1,061 million, in
aggregate, and $629 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. At February 28, 2015
amounts also included additional funds that were 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 November 30, 2015 were
$1,266 million and $305 million, respectively, and at February 28,
2015, were $911 million and $396 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)
|
|
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.
|
|
|
|
(5)
|
|
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 and we have early adopted this guidance during the
second quarter of fiscal 2015.
|
|
|
|
(6)
|
|
At February 29, 2016, November 30, 2015 and February 28, 2015, total
capital includes our long-term debt of $5,326 million, $5,288
million and $5,725 million, respectively, and total equity.
Long-term debt included in total capital is reduced by amounts
outstanding under the revolving credit facility, amounts that are
non-recourse to Jefferies Group LLC and the amount of debt maturing
in less than one year, where applicable.
|
|
|
|
(7)
|
|
Leverage ratio equals total assets divided by total equity.
|
|
|
|
(8)
|
|
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 February 29, 2016, November 30, 2015 and February
28, 2015, adjusted assets were $28,920 million, $31,675 million and
$35,976 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.
|
|
|
|
(9)
|
|
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.
|
|
|
|
(10)
|
|
Leverage ratio - excluding impacts of the Leucadia transaction (a
non-GAAP financial measure) is calculated as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February 29,
|
|
November 30,
|
|
February 28,
|
$ millions
|
|
|
2016
|
|
2015
|
|
2015
|
Total assets
|
|
|
$
|
35,193
|
|
|
$
|
38,564
|
|
|
$
|
43,785
|
|
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
|
|
|
128
|
|
|
124
|
|
|
112
|
|
Total assets excluding transaction impacts
|
|
|
$
|
33,364
|
|
|
$
|
36,731
|
|
|
$
|
41,940
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
$
|
5,262
|
|
|
$
|
5,509
|
|
|
$
|
5,466
|
|
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
|
|
|
(63
|
)
|
|
(52
|
)
|
|
(20
|
)
|
Total equity excluding transaction impacts
|
|
|
$
|
3,898
|
|
|
$
|
4,156
|
|
|
$
|
4,145
|
|
|
|
|
|
|
|
|
|
Leverage ratio - excluding impacts of the Leucadia transaction
|
|
|
8.6
|
|
|
8.8
|
|
|
10.1
|
|
|
|
|
|
|
|
|
|
|
|
|
(11)
|
|
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, 2015.
|
|
|
|
CONTACT:
Jefferies Group LLC
Peregrine C. Broadbent, 212-284-2338
Chief
Financial Officer
Leucadia (NYSE:LUK)
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