1 | Adjusted return on tangible equity (a non-GAAP financial measure) is defined as Jefferies Financial Group's three months ended August 31, 2021 annualized adjusted net income divided by our adjusted tangible shareholders' equity at May 31, 2021. Refer to schedule on page 15 for reconciliation to U.S. GAAP amounts. |
2 | Adjusted return on tangible equity (a non-GAAP financial measure) is defined as Jefferies Financial Group's nine months ended August 31, 2021 annualized adjusted net income divided by our adjusted tangible shareholders' equity at November 30, 2020. Refer to schedule on page 15 for reconciliation to U.S. GAAP amounts. |
3 |
Return on tangible equity (a non-GAAP financial measure) equals our three months ended August 31, 2021 annualized net earnings attributable to Jefferies Group LLC divided by our tangible Jefferies Group LLC member's equity (a non-GAAP financial measure) of $4.88 billion at May 31, 2021. Tangible Jefferies Group LLC member's equity at May 31, 2021 equals Jefferies Group LLC member's equity of $6.68 billion less goodwill and identifiable intangibles assets of $1.80 billion.
|
4 |
Return on tangible equity (a non-GAAP financial measure) equals our three months ended August 31, 2020 annualized net earnings attributable to Jefferies Group LLC divided by our tangible Jefferies Group LLC member's equity (a non-GAAP financial measure) of $4.61 billion at May 31, 2020. Tangible Jefferies Group LLC member's equity at May 31, 2020 equals Jefferies Group LLC member's equity of $6.41 billion less goodwill and identifiable intangibles assets of $1.80 billion.
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5 |
Allocated net interest represents the allocation of a ratable portion of Jefferies Group LLC's long-term debt interest expense to Jefferies Group LLC's Asset Management reportable segment, net of interest income on Jefferies Group LLC's Cash and cash equivalents and other sources of liquidity, which allocation is consistent with Jefferies Group LLC's policy of allocating such items to all its business lines. Refer to Jefferies Group LLC's summary of Net Revenues by Source on page 11 and 12.
|
6 | SMBC Group is defined as Sumitomo Mitsui Financial Group, Inc., Sumitomo Mitsui Banking Corporation and SMBC Nikko Securities Inc. |
7 |
Return on tangible equity (a non-GAAP financial measure) equals our first nine months ended August 31, 2021 annualized net earnings attributable to Jefferies Group LLC divided by our tangible Jefferies Group LLC member's equity (a non-GAAP financial measure) of $4.54 billion at November 30, 2020. Tangible Jefferies Group LLC member's equity at November 30, 2020 equals Jefferies Group LLC member's equity of $6.35 billion less goodwill and identifiable intangibles assets of $1.81 billion.
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8 |
Return on tangible equity (a non-GAAP financial measure) equals our first nine months ended August 31, 2020 annualized net earnings attributable to Jefferies Group LLC divided by our tangible Jefferies Group LLC member's equity (a non-GAAP financial measure) of $4.31 billion at November 30, 2019. Tangible Jefferies Group LLC member's equity at November 30, 2019 equals Jefferies Group LLC member's equity of $6.12 billion less goodwill and identifiable intangibles assets of $1.81 billion.
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9 |
Shares outstanding on a fully diluted basis (a non-GAAP financial measure) is defined as Jefferies Financial Group's common shares outstanding plus restricted stock units, stock options, conversion of redeemable convertible preferred shares and other shares. Refer to schedule on page 16 for reconciliation to U.S. GAAP amounts.
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10 |
Tangible book value per fully diluted share (a non-GAAP financial measure) is defined as adjusted tangible book value divided by shares outstanding on a fully diluted basis. Refer to schedule on page 16 for reconciliation to U.S. GAAP amounts.
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11 | Tangible shareholders' equity (a non-GAAP financial measure) is defined as Jefferies Financial Group shareholders' equity less Intangible assets, net and goodwill. Refer to schedule on page 16 for reconciliation to U.S. GAAP amounts. |
12 | Backlog represents an estimate of our net revenues from expected future transactions. As an indicator of net revenues in a given future period, it is subject to limitations. The time frame for the realization of revenues from these expected transactions varies and is influenced by factors we do not control. Transactions not included in the estimate may occur, and expected transactions may also be modified or cancelled. |
Three Months Ended August 31, |
Nine Months Ended August 31, | |||||||
2021 | 2020 | 2021 | 2020 | |||||
Net revenues | $ | 1,938,984 | $ | 1,616,170 | $ | 6,376,433 | $ | 4,150,087 |
Income before income taxes and income (loss) related to associated companies | $ | 580,792 | $ | 407,189 | $ | 1,889,810 | $ | 715,066 |
Income (loss) related to associated companies | (27,176) | 5,053 | (61,270) | (69,523) | ||||
Income before income taxes
| 553,616 | 412,242 | 1,828,540 | 645,543 | ||||
Income tax provision | 145,700 | 107,403 | 484,756 | 185,138 | ||||
Net income | 407,916 | 304,839 | 1,343,784 | 460,405 | ||||
Net loss attributable to the noncontrolling interests | 1,324 | 324 | 2,736 | 5,033 | ||||
Net loss attributable to the redeemable noncontrolling interests | 68 | 650 | 1,071 | 1,130 | ||||
Preferred stock dividends | (1,849) | (1,404) | (5,101) | (4,230) | ||||
Net income attributable to Jefferies Financial Group Inc. common shareholders
| $ | 407,459 | $ | 304,409 | $ | 1,342,490 | $ | 462,338 |
Basic earnings per common share attributable to Jefferies Financial Group Inc. common shareholders:
| ||||||||
Net income
| $ | 1.54 | $ | 1.08 | $ | 5.05 | $ | 1.58 |
Number of shares in calculation
| 263,087 | 280,695 | 264,248 | 289,959 | ||||
Diluted earnings per common share attributable to Jefferies Financial Group Inc. common shareholders:
| ||||||||
Net income
| $ | 1.50 | $ | 1.07 | $ | 4.93 | $ | 1.57 |
Number of shares in calculation
| 271,405 | 285,136 | 271,746 | 294,875 |
Investment Banking and Capital Markets | Asset Management | Merchant Banking | Corporate | Parent Company Interest | Consolidation Adjustments | Total | ||||||||
Net revenues
| $ | 1,650,796 | $ | 12,604 | $ | 271,608 | $ | 955 | $ | - | $ | 3,021 | $ | 1,938,984 |
Expenses: | ||||||||||||||
Compensation and benefits
| 758,546 | 15,468 | 21,763 | 6,466 | - | - | 802,243 | |||||||
Cost of sales (1) | 64,441 | 4,541 | 151,510 | - | - | - | 220,492 | |||||||
Interest expense | - | - | 5,744 | - | 13,774 | - | 19,518 | |||||||
Depreciation and amortization
| 21,035 | 494 | 16,584 | 564 | - | - | 38,677 | |||||||
Selling, general and other expenses
| 216,782 | 10,716 | 45,475 | 4,375 | - | (86) | 277,262 | |||||||
Total expenses
| 1,060,804 | 31,219 | 241,076 | 11,405 | 13,774 | (86) | 1,358,192 | |||||||
Income (loss) before income taxes and loss related to associated companies | 589,992 | (18,615) | 30,532 | (10,450) | (13,774) | 3,107 | 580,792 | |||||||
Loss related to associated companies | - | - | (27,176) | - | - | - | (27,176) | |||||||
Income (loss) before income taxes
| $ | 589,992 | $ | (18,615) | $ | 3,356 | $ | (10,450) | $ | (13,774) | $ | 3,107 | 553,616 | |
Income tax provision
| 145,700 | |||||||||||||
Net income
| $ | 407,916 |
Investment Banking and Capital Markets | Asset Management | Merchant Banking | Corporate | Parent Company Interest | Consolidation Adjustments | Total | ||||||||
Net revenues
| $ | 1,274,115 | $ | 118,558 | $ | 220,887 | $ | 591 | $ | - | $ | 2,019 | $ | 1,616,170 |
Expenses: | ||||||||||||||
Compensation and benefits
| 719,822 | 10,652 | 20,573 | 9,790 | - | - | 760,837 | |||||||
Cost of sales (1) | 60,640 | 6,103 | 82,657 | - | - | - | 149,400 | |||||||
Interest expense | - | - | 7,398 | - | 14,114 | - | 21,512 | |||||||
Depreciation and amortization
| 22,225 | 2,018 | 14,408 | 869 | - | - | 39,520 | |||||||
Selling, general and
other expenses
| 190,105 | 12,181 | 30,157 | 5,550 | - | (281) | 237,712 | |||||||
Total expenses
| 992,792 | 30,954 | 155,193 | 16,209 | 14,114 | (281) | 1,208,981 | |||||||
Income (loss) before income taxes and income related to associated companies | 281,323 | 87,604 | 65,694 | (15,618) | (14,114) | 2,300 | 407,189 | |||||||
Income related to associated companies | - | - | 5,053 | - | - | - | 5,053 | |||||||
Income (loss) before income taxes
| $ | 281,323 | $ | 87,604 | $ | 70,747 | $ | (15,618) | $ | (14,114) | $ | 2,300 | 412,242 | |
Income tax provision | 107,403 | |||||||||||||
Net income
| $ | 304,839 |
Investment Banking and Capital Markets | Asset Management | Merchant Banking | Corporate | Parent Company Interest | Consolidation Adjustments | Total | ||||||||
Net revenues
| $ | 5,183,269 | $ | 293,892 | $ | 887,939 | $ | 2,269 | $ | - | $ | 9,064 | $ | 6,376,433 |
Expenses: | ||||||||||||||
Compensation and benefits
| 2,639,307 | 59,924 | 77,762 | 29,035 | - | - | 2,806,028 | |||||||
Cost of sales (1) | 197,226 | 24,982 | 390,916 | - | - | - | 613,124 | |||||||
Interest expense | - | - | 18,323 | - | 41,505 | - | 59,828 | |||||||
Depreciation and amortization
| 62,497 | 1,462 | 50,619 | 2,306 | - | - | 116,884 | |||||||
Selling, general and other expenses
| 724,406 | 33,619 | 119,078 | 13,954 | - | (298) | 890,759 | |||||||
Total expenses
| 3,623,436 | 119,987 | 656,698 | 45,295 | 41,505 | (298) | 4,486,623 | |||||||
Income (loss) before income taxes and loss related to associated companies | 1,559,833 | 173,905 | 231,241 | (43,026) | (41,505) | 9,362 | 1,889,810 | |||||||
Loss related to associated companies | - | - | (61,270) | - | - | - | (61,270) | |||||||
Income (loss) before income taxes
| $ | 1,559,833 | $ | 173,905 | $ | 169,971 | $ | (43,026) | $ | (41,505) | $ | 9,362 | 1,828,540 | |
Income tax provision
| 484,756 | |||||||||||||
Net income
| $ | 1,343,784 |
Investment Banking and Capital Markets | Asset Management | Merchant Banking | Corporate | Parent Company Interest | Consolidation Adjustments | Total | ||||||||
Net revenues
| $ | 3,451,776 | $ | 146,278 | $ | 532,608 | $ | 11,908 | $ | - | $ | 7,517 | $ | 4,150,087 |
Expenses: | ||||||||||||||
Compensation and benefits
| 1,892,567 | 59,375 | 51,736 | 25,819 | - | - | 2,029,497 | |||||||
Cost of sales (1) | 181,115 | 20,288 | 235,871 | - | - | - | 437,274 | |||||||
Interest expense | - | - | 24,453 | - | 39,773 | - | 64,226 | |||||||
Depreciation and amortization
| 61,322 | 4,776 | 50,627 | 2,631 | - | - | 119,356 | |||||||
Selling, general and
other expenses
| 570,958 | 36,717 | 157,990 | 19,684 | - | (681) | 784,668 | |||||||
Total expenses
| 2,705,962 | 121,156 | 520,677 | 48,134 | 39,773 | (681) | 3,435,021 | |||||||
Income (loss) before income taxes and loss related to associated companies | 745,814 | 25,122 | 11,931 | (36,226) | (39,773) | 8,198 | 715,066 | |||||||
Loss related to associated companies | - | - | (69,523) | - | - | - | (69,523) | |||||||
Income (loss) before income taxes
| $ | 745,814 | $ | 25,122 | $ | (57,592) | $ | (36,226) | $ | (39,773) | $ | 8,198 | 645,543 | |
Income tax provision | 185,138 | |||||||||||||
Net income
| $ | 460,405 |
Jefferies Group LLC and Subsidiaries | ||||||
Consolidated Statements of Earnings | ||||||
(Amounts in Thousands) | ||||||
(Unaudited) | ||||||
Quarter Ended | ||||||
August 31, 2021 | May 31, 2021 | August 31, 2020 | ||||
Revenues: | ||||||
Commissions and other fees
| $ | 214,393 | $ | 222,643 | $ | 204,313 |
Principal transactions | 225,797 | 325,059 | 560,665 | |||
Investment banking
| 1,180,676 | 1,000,700 | 615,837 | |||
Asset management fees and revenues | 10,309 | 14,567 | 6,772 | |||
Interest
| 194,670 | 206,958 | 195,960 | |||
Other | 28,902 | 66,769 | 11,526 | |||
Total revenues
| 1,854,747 | 1,836,696 | 1,595,073 | |||
Interest expense | 204,717 | 219,278 | 211,629 | |||
Net revenues | 1,650,030 | 1,617,418 | 1,383,444 | |||
Non-interest expenses: | ||||||
Compensation and benefits
| 767,564 | 789,836 | 725,555 | |||
Non-compensation expenses:
| ||||||
Floor brokerage and clearing fees
| 69,129 | 76,617 | 66,744 | |||
Technology and communications
| 106,793 | 107,962 | 102,635 | |||
Occupancy and equipment rental
| 28,590 | 32,839 | 27,053 | |||
Business development
| 24,276 | 27,023 | 7,637 | |||
Professional services
| 55,011 | 59,780 | 41,173 | |||
Underwriting costs
| 21,474 | 33,031 | 29,071 | |||
Other
| 17,472 | 61,031 | 20,175 | |||
Total non-compensation expenses
| 322,745 | 398,283 | 294,488 | |||
Total non-interest expenses | 1,090,309 | 1,188,119 | 1,020,043 | |||
Earnings before income taxes | 559,721 | 429,299 | 363,401 | |||
Income tax expense | 140,567 | 110,846 | 95,870 | |||
Net earnings | 419,154 | 318,453 | 267,531 | |||
Net losses attributable to noncontrolling interests | (597) | (363) | (531) | |||
Net earnings attributable to Jefferies Group LLC | $ | 419,751 | $ | 318,816 | $ | 268,062 |
Pre-tax operating margin | 33.9 | % | 26.5 | % | 26.3 | % |
Effective tax rate | 25.1 | % | 25.8 | % | 26.4 | % |
Jefferies Group LLC and Subsidiaries | ||||
Consolidated Statements of Earnings | ||||
(Amounts in Thousands) | ||||
(Unaudited) | ||||
Nine Months Ended | ||||
August 31, 2021 | August 31, 2020 | |||
Revenues: | ||||
Commissions and other fees
| $ | 673,974 | $ | 627,115 |
Principal transactions | 1,342,075 | 1,399,850 | ||
Investment banking
| 3,185,038 | 1,595,330 | ||
Asset management fees and revenues | 62,259 | 23,068 | ||
Interest
| 620,649 | 702,569 | ||
Other | 156,259 | (6,020) | ||
Total revenues
| 6,040,254 | 4,341,912 | ||
Interest expense | 643,440 | 753,405 | ||
Net revenues | 5,396,814 | 3,588,507 | ||
Non-interest expenses: | ||||
Compensation and benefits
| 2,677,294 | 1,932,332 | ||
Non-compensation expenses:
| ||||
Floor brokerage and clearing fees
| 222,326 | 204,943 | ||
Technology and communications
| 319,096 | 287,413 | ||
Occupancy and equipment rental
| 89,419 | 78,951 | ||
Business development
| 69,280 | 45,953 | ||
Professional services
| 159,079 | 127,832 | ||
Underwriting costs
| 90,641 | 59,085 | ||
Other
| 109,489 | 80,351 | ||
Total non-compensation expenses
| 1,059,330 | 884,528 | ||
Total non-interest expenses | 3,736,624 | 2,816,860 | ||
Earnings before income taxes | 1,660,190 | 771,647 | ||
Income tax expense | 428,718 | 203,855 | ||
Net earnings | 1,231,472 | 567,792 | ||
Net losses attributable to noncontrolling interests | (1,163) | (4,397) | ||
Net earnings attributable to Jefferies Group LLC | $ | 1,232,635 | $ | 572,189 |
Pre-tax operating margin | 30.8 | % | 21.5 | % |
Effective tax rate | 25.8 | % | 26.4 | % |
Jefferies Group LLC and Subsidiaries | ||||||
Selected Statistical Information | ||||||
(Amounts in Thousands, Except Other Data) | ||||||
(Unaudited) | ||||||
Quarter Ended | ||||||
August 31, 2021 | May 31, 2021 | August 31, 2020 | ||||
Net Revenues by Source: | ||||||
Advisory | $ | 583,887 | $ | 390,508 | $ | 171,438 |
Equity underwriting | 367,460 | 324,462 | 305,380 | |||
Debt underwriting | 229,329 | 285,730 | 139,019 | |||
Total underwriting | 596,789 | 610,192 | 444,399 | |||
Other investment banking
| (360) | 32,971 | (27,013) | |||
Total investment banking
| 1,180,316 | 1,033,671 | 588,824 | |||
Equities | 236,532 | 242,949 | 318,824 | |||
Fixed income | 205,795 | 257,197 | 336,347 | |||
Total capital markets
| 442,327 | 500,146 | 655,171 | |||
Other
| 28,153 | 39,147 | 30,120 | |||
Total Investment Banking and Capital Markets (1) (2)
| 1,650,796 | 1,572,964 | 1,274,115 | |||
Asset management fees and revenues | 10,309 | 14,567 | 6,772 | |||
Investment return (3) (4) | 80 | 41,326 | 115,556 | |||
Allocated net interest (3) (5) | (11,155) | (11,439) | (12,999) | |||
Total Asset Management
| (766) | 44,454 | 109,329 | |||
Net Revenues | $ | 1,650,030 | $ | 1,617,418 | $ | 1,383,444 |
Other Data: | ||||||
Number of trading days | 65 | 64 | 65 | |||
Number of trading loss days | 20 | 20 | 8 | |||
Average firmwide VaR (in millions) (6) | $ | 12.69 | $ | 15.77 | $ | 10.46 |
(1) |
Includes net interest revenues of $5.2 million, $3.7 million and $3.3 million for the quarters ended August 31, 2021, May 31, 2021 and August 31, 2020, respectively.
| |||||
(2) | Allocated net interest is not separately disaggregated for Investment Banking and Capital Markets. This presentation is aligned to our Investment Banking and Capital Markets internal performance measurement. | |||||
(3) | Net revenues attributed to the Investment return in Jefferies Group LLC Asset Management have been disaggregated to separately present Investment return and Allocated net interest (see footnote 5 below). This disaggregation is intended to increase transparency and to make clearer actual Investment return. We believe that aggregating Investment return and Allocated net interest would obscure the Investment return by including an amount that is unique to Jefferies Group LLC's credit spreads, debt maturity profile, capital structure, liquidity risks and allocation methods. | |||||
(4) |
Includes direct net interest expenses of $4.1 million, $4.5 million and $6.0 million for the quarters ended August 31, 2021, May 31, 2021 and August 31, 2020, respectively.
| |||||
(5) | Allocated net interest represents the allocation of Jefferies Group LLC's long-term debt interest expense to Jefferies Group LLC's Asset Management, net of interest income on Jefferies Group LLC's Cash and cash equivalents and other sources of liquidity (refer to page 13). | |||||
(6) | VaR estimates the potential loss in value of Jefferies Group LLC's 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 Jefferies Group LLC's Annual Report on Form 10-K for the year ended November 30, 2020. |
Jefferies Group LLC and Subsidiaries | ||||
Selected Statistical Information | ||||
(Amounts in Thousands, Except Other Data) | ||||
(Unaudited) | ||||
Nine Months Ended | ||||
August 31, 2021 | August 31, 2020 | |||
Net Revenues by Source: | ||||
Advisory | $ | 1,285,834 | $ | 696,677 |
Equity underwriting | 1,186,728 | 561,455 | ||
Debt underwriting | 712,476 | 337,198 | ||
Total underwriting | 1,899,204 | 898,653 | ||
Other investment banking
| 62,436 | (112,776) | ||
Total investment banking
| 3,247,474 | 1,482,554 | ||
Equities | 1,010,497 | 801,596 | ||
Fixed income | 826,351 | 1,077,673 | ||
Total capital markets
| 1,836,848 | 1,879,269 | ||
Other
| 98,947 | 89,953 | ||
Total Investment Banking and Capital Markets (1) (2)
| 5,183,269 | 3,451,776 | ||
Asset management fees and revenues | 62,259 | 23,068 | ||
Investment return (3) (4) | 184,279 | 150,339 | ||
Allocated net interest (3) (5) | (32,993) | (36,676) | ||
Total Asset Management
| 213,545 | 136,731 | ||
Net Revenues | $ | 5,396,814 | $ | 3,588,507 |
Other Data: | ||||
Number of trading days | 189 | 189 | ||
Number of trading loss days | 49 | 23 | ||
Average firmwide VaR (in millions) (6) | $ | 14.79 | $ | 9.04 |
(1) |
Includes net interest revenues of $21.1 million and $5.4 million for the nine months ended August 31, 2021 and 2020, respectively.
| |||
(2) | Allocated net interest is not separately disaggregated for Investment Banking and Capital Markets. This presentation is aligned to our Investment Banking and Capital Markets internal performance measurement. | |||
(3) | Net revenues attributed to the Investment return in Jefferies Group LLC Asset Management have been disaggregated to separately present Investment return and Allocated net interest (see footnote 5 below). This disaggregation is intended to increase transparency and to make clearer actual Investment return. We believe that aggregating Investment return and Allocated net interest would obscure the Investment return by including an amount that is unique to Jefferies Group LLC's credit spreads, debt maturity profile, capital structure, liquidity risks and allocation methods. | |||
(4) |
Includes direct net interest expenses of $10.9 million and $19.6 million for the nine months ended August 31, 2021 and 2020, respectively.
| |||
(5) | Allocated net interest represents the allocation of Jefferies Group LLC's long-term debt interest expense to Jefferies Group LLC's Asset Management, net of interest income on Jefferies Group LLC's Cash and cash equivalents and other sources of liquidity (refer to page 13). | |||
(6) | VaR estimates the potential loss in value of Jefferies Group LLC's 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 Jefferies Group LLC's Annual Report on Form 10-K for the year ended November 30, 2020. |
Jefferies Group LLC and Subsidiaries | ||||||
Financial Highlights | ||||||
(Amounts in Millions, Except Where Noted) | ||||||
(Unaudited) | ||||||
Quarter Ended | ||||||
August 31, 2021 |
May 31, 2021 |
August 31, 2020 | ||||
Financial position: | ||||||
Total assets (1) | $ | 52,047 | $ | 52,171 | $ | 46,660 |
Average total assets for the period (1) | $ | 58,757 | $ | 59,841 | $ | 54,654 |
Average total assets less goodwill and intangible assets for the period (1)
| $ | 56,955 | $ | 58,038 | $ | 52,965 |
Cash and cash equivalents (1)
| $ | 7,186 | $ | 6,221 | $ | 6,750 |
Cash and cash equivalents and other sources of liquidity (1) (2)
| $ | 9,201 | $ | 8,259 | $ | 8,089 |
Cash and cash equivalents and other sources of liquidity - % total assets (1) (2) | 17.7 | % | 15.8 | % | 17.3 | % |
Cash and cash equivalents and other sources of liquidity - % total assets less goodwill and intangible assets (1) (2)
| 18.3 | % | 16.4 | % | 18.0 | % |
Financial instruments owned (1) | $ | 19,184 | $ | 19,412 | $ | 17,556 |
Goodwill and intangible assets (1) | $ | 1,799 | $ | 1,805 | $ | 1,806 |
Total equity (including noncontrolling interests) (1) | $ | 6,901 | $ | 6,687 | $ | 6,504 |
Total Jefferies Group LLC member's equity (1) | $ | 6,897 | $ | 6,681 | $ | 6,488 |
Tangible Jefferies Group LLC member's equity (1) (3) | $ | 5,098 | $ | 4,876 | $ | 4,682 |
Level 3 financial instruments: | ||||||
Level 3 financial instruments owned (1) (4) | $ | 380 | $ | 399 | $ | 433 |
Level 3 financial instruments owned - % total assets (1) (4) | 0.7 | % | 0.8 | % | 0.9 | % |
Level 3 financial instruments owned - % total financial instruments (1) (4) | 2.0 | % | 2.1 | % | 2.5 | % |
Level 3 financial instruments owned - % tangible Jefferies Group LLC member's equity (1) (4) | 7.5 | % | 8.2 | % | 9.2 | % |
Other data and financial ratios: | ||||||
Total long-term capital (1) (5) | $ | 13,569 | $ | 13,406 | $ | 12,492 |
Leverage ratio (1) (6) | 7.5 | 7.8 | 7.2 | |||
Tangible gross leverage ratio (1) (7) | 9.9 | 10.3 | 9.6 | |||
Number of trading days | 65 | 64 | 65 | |||
Number of trading loss days | 20 | 20 | 8 | |||
Average firmwide VaR (8) | $ | 12.69 | $ | 15.77 | $ | 10.46 |
Number of employees, at period end | 4,444 | 4,121 | 3,893 |
Jefferies Group LLC and Subsidiaries | |
Financial Highlights - Footnotes | |
(1) |
Amounts pertaining to August 31, 2021 represent a preliminary estimate as of the date of this earnings release and may be revised in Jefferies Group LLC's Quarterly Report on Form 10-Q for the quarter ended August 31, 2021.
|
(2) |
At August 31, 2021, 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 $1,647 million, in aggregate, and $368 million, being the estimated amount of additional secured financing that could be reasonably expected to be obtained from Jefferies Group LLC's financial instruments that are currently not pledged after considering reasonable financing haircuts. The corresponding amounts included in other sources of liquidity at May 31, 2021 were $1,651 million and $387 million, respectively, and at August 31, 2020, were $1,123 million and $216 million, respectively.
|
(3) | Tangible Jefferies Group LLC member's equity (a non-GAAP financial measure) represents total Jefferies Group LLC member's equity less goodwill and identifiable intangible assets. We believe that tangible Jefferies Group LLC member's equity is meaningful for valuation purposes, as financial companies are often measured as a multiple of tangible 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) |
At August 31, 2021, May 31, 2021 and August 31, 2020, total long-term capital includes Jefferies Group LLC's long-term debt of $6,668 million, $6,719 million and $5,987 million, respectively, and total equity. Long-term debt included in total long-term capital is reduced by amounts outstanding under secured credit facilities, amounts from secured term loans and the amount of debt maturing in less than one year, as applicable.
|
(6) | Leverage ratio equals total assets divided by total equity. |
(7) | Tangible gross leverage ratio (a non-GAAP financial measure) equals total assets less goodwill and identifiable intangible assets divided by tangible Jefferies Group LLC member's equity. The tangible gross leverage ratio is used by rating agencies in assessing Jefferies Group LLC's leverage ratio. |
(8) | VaR estimates the potential loss in value of Jefferies Group LLC's 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 Jefferies Group LLC's Annual Report on Form 10-K for the year ended November 30, 2020. |
Three Months Ended August 31, 2021 |
Nine Months Ended August 31, 2021 | |||
Net income attributable to Jefferies Financial Group common shareholders (GAAP) | $ | 407,459 | $ | 1,342,490 |
Intangible amortization expense, net of tax | 2,618 | 7,869 | ||
Adjusted net income (non-GAAP) | $ | 410,077 | $ | 1,350,359 |
Annualized adjusted net income (non-GAAP) | $ | 1,640,308 | $ | 1,800,479 |
May 31, 2021 | November 30, 2020 | |||
Shareholders' equity (GAAP) | $ | 10,072,634 | $ | 9,403,893 |
Less: Intangible assets, net and goodwill | (1,912,480) | (1,913,467) | ||
Less: Deferred tax asset | (452,467) | (393,687) | ||
Less: Weighted average quarter-to-date or year-to-date impact of 2021 cash dividends and share repurchases | (56,862) | (189,771) | ||
Adjusted tangible shareholders' equity (non-GAAP) | $ | 7,650,825 | $ | 6,906,968 |
Adjusted return on tangible equity | 21.4 | % | 26.1 | % |
August 31, 2021 | March 31, 2018 | |||
Book value (GAAP) | $ | 10,381,883 | $ | 10,259,080 |
Redeemable convertible preferred shares converted to common shares (1) | 125,000 | - | ||
Stock options (2) | 121,568 | - | ||
Intangible assets, net and goodwill | (1,905,163) | (2,450,957) | ||
Adjusted tangible book value (non-GAAP) | $ | 8,723,288 | $ | 7,808,123 |
Common shares outstanding (GAAP) | 245,557 | 357,216 | ||
Restricted stock units ("RSUs") | 19,976 | 19,693 | ||
Redeemable convertible preferred shares converted to common shares (1) | 4,441 | - | ||
Stock options (2) | 5,132 | - | ||
Other | 1,119 | 854 | ||
Fully diluted shares outstanding (non-GAAP) (3) | 276,225 | 377,763 | ||
Book value per share outstanding | $ | 42.28 | $ | 28.72 |
Tangible book value per fully diluted share outstanding | $ | 31.58 | $ | 20.67 |
(1) Redeemable convertible preferred shares added to book value and fully diluted shares assume that the redeemable convertible preferred shares are converted to common shares. As of March 31, 2018, the redeemable convertible preferred shares were anti-dilutive and not included in adjusted tangible book value or fully diluted shares outstanding. | ||||
(2) Stock options added to book value are equal to the total number of stock options outstanding as of August 31, 2021 of 5,132,000 multiplied by the weighted average exercise price of $23.69 on August 31, 2021. Stock options added to fully diluted shares are equal to the total stock options outstanding on August 31, 2021. | ||||
(3) Fully diluted shares outstanding include vested and unvested RSUs as well as the target number of RSUs issuable under the senior executive compensation plans. Fully diluted shares outstanding also include all stock options and the additional common shares if our redeemable convertible preferred shares were converted to common shares. |
August 31, 2021 |
March 31, 2018 | |||
Shareholders' equity (GAAP) | $ | 10,381,883 | $ | 10,259,080 |
Intangible assets, net and goodwill | (1,905,163) | (2,450,957) | ||
Tangible shareholders' equity (non-GAAP) | $ | 8,476,720 | $ | 7,808,123 |
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Jefferies Financial Group Inc. published this content on 30 September 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 September 2021 20:31:03 UTC.