|
¨
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended ________________
|
x
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
New York
|
13-2615557
|
(State or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S. Employer Identification No.)
|
Title of Each Class
|
|
Name of Each Exchange on Which Registered
|
Common Shares, par value $1 per share
|
|
New York Stock Exchange
|
Item 1
.
|
Business
.
|
•
|
Code of Business Practice;
|
•
|
Reportable waivers, if any, from our Code of Business Practice by our executive officers;
|
•
|
Board of Directors Corporate Governance Guidelines;
|
•
|
Charter of the Audit Committee of the Board of Directors;
|
•
|
Charter of the Nominating and Corporate Governance Committee of the Board of Directors;
|
•
|
Charter of the Compensation Committee of the Board of Directors;
|
•
|
Annual reports on Form 10-K;
|
•
|
Quarterly reports on Form 10-Q;
|
•
|
Current reports on Form 8-K;
|
•
|
Beneficial ownership reports on Forms 3, 4 and 5; and
|
•
|
Any amendments to the above-mentioned documents and reports.
|
Item 1A
.
|
Risk Factors
.
|
•
|
A market downturn could lead to a decline in client and customer activity levels, and therefore a decline in services provided, causing reduced revenues from fees, commissions, spreads and other forms of revenue.
|
•
|
Adverse changes in the market could lead to decreases in the value of our holdings, both realized and unrealized.
|
•
|
Adverse changes in the market could also lead to a reduction in revenues from asset management fees and investment income from managed funds. The build out of our asset management business could also be impacted as adverse conditions could lead to a decrease in new capital raised and may cause investors to withdraw their investments and commitments. Even in the absence of a market downturn, below-market investment performance by funds and portfolio managers could reduce asset management revenues and assets under management and result in reputational damage that might make it more difficult to attract new investors.
|
•
|
Limitations on the availability of credit, such as occurred during 2008, can affect the ability of our businesses and investments to borrow on a secured or unsecured basis, which may adversely affect liquidity and results of operations. Global market and economic conditions have been particularly disrupted and volatile in the last several years and may be in the future. Cost and availability of funding could be affected by illiquid credit markets and wider credit spreads.
|
•
|
Certain of our current and future businesses and investments may require additional third-party funding to succeed, such as venture capital funding, joint venture funding or other third-party capital. Failure to obtain such third-party funding may cause such business, investment or prospective investment to fail or progress slower than expected which could adversely affect its and our funding, liquidity, operations and profitability. In addition, such failure could also adversely affect our reputation which could adversely affect our business and future business prospects.
|
•
|
Additional changes in tax law could impact our ability to utilize our deferred tax assets, decrease current and anticipated cash flows, or prompt revisions to compensation arrangements.
|
•
|
Should one or more of the competitors of our businesses or investments fail, business prospects and revenue could be negatively impacted due to negative market sentiment causing customers to cease doing business with, and lenders to cease extending credit to, our businesses and investments, which could adversely affect our operations, funding and liquidity.
|
•
|
Unfavorable economic conditions could have an adverse effect on the demand for new loans and the servicing of loans originated by third parties, which would have an adverse impact on the operations and profitability of some of our financial services businesses and investments.
|
•
|
Unfavorable conditions or changes in general political, economic or market conditions could adversely impact our business and prospects. In particular, the increasing trend toward sovereign protectionism and deglobalization resulting from the current populist political movement has resulted or could result in decreases in free trade, erosion of traditional international coalitions, the imposition of sanctions and tariffs, governmental closures and no-confidence votes, domestic and international strife, and general market upheaval in response to such results, all of which could negatively impact our business and prospects.
|
•
|
These estimates are forward-looking statements and should be read in connection with our Cautionary Statement for Forward-Looking Information.
|
•
|
Although we believe these estimates to be fair and reasonable, these semi-annual estimates may differ materially from realized values or future estimates.
|
•
|
Our semi-annual fair values are, indeed, estimates only and are subject to change.
|
•
|
We may determine to change the timing of providing these semi-annual estimates or stop providing such estimates at any time and for any reason.
|
•
|
Management does not necessarily use these estimates in making business decisions regarding the operation of our business or any decision relating to these investments.
|
•
|
These estimates may constitute non-GAAP financial measures and should be read in connection with disclosures relating to our use of non-GAAP financial measures.
|
Item 1B
.
|
Unresolved Staff Comments
.
|
Item 2
.
|
Properties
.
|
Item 3
.
|
Legal Proceedings
.
|
Item 4
.
|
Mine Safety Disclosures
.
|
Item 5
.
|
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
.
|
|
Total
Number of
Shares
Purchased (1)
|
|
Average
Price Paid
per Share
|
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans
or Programs
|
|
Maximum Number
of Shares that May Yet
Be Purchased Under the
Plans or Programs
|
|||||
|
|
|
|
|
|
|
|
|||||
October 1, 2018 - October 31, 2018
|
11,759,622
|
|
|
$
|
21.31
|
|
|
11,733,767
|
|
|
12,146,750
|
|
November 1, 2018 - November 30, 2018 (2)
|
12,146,750
|
|
|
$
|
21.57
|
|
|
12,146,750
|
|
|
—
|
|
Total
|
23,906,372
|
|
|
|
|
|
23,880,517
|
|
|
|
|
(1)
|
Includes an aggregate 25,855 shares repurchased other than as part of our publicly announced Board authorized repurchase program. We repurchased these securities in connection with our share compensation plans which allow participants to use shares to satisfy certain tax liabilities arising from the vesting of restricted shares and the distribution of restricted share units. The total number of shares purchased does not include unvested shares forfeited back to us pursuant to the terms of our share compensation plans.
|
(2)
|
Includes 801,654 shares that settled in December 2018.
|
Item 6
.
|
Selected Financial Data
.
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31,
|
||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||
|
(In thousands, except per share amounts)
|
||||||||||||||||||
Selected Statements of Operations Data (a)
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenues
|
$
|
3,764,034
|
|
|
$
|
4,077,445
|
|
|
$
|
3,035,374
|
|
|
$
|
3,484,039
|
|
|
$
|
3,654,061
|
|
Total expenses
|
3,524,957
|
|
|
3,396,042
|
|
|
3,202,564
|
|
|
3,113,869
|
|
|
3,371,063
|
|
|||||
Income (loss) related to associated companies
|
57,023
|
|
|
(74,901
|
)
|
|
154,598
|
|
|
110,281
|
|
|
138,527
|
|
|||||
Income (loss) from continuing operations before income taxes
|
296,100
|
|
|
606,502
|
|
|
(12,592
|
)
|
|
480,451
|
|
|
421,525
|
|
|||||
Income tax provision
|
19,008
|
|
|
642,286
|
|
|
25,773
|
|
|
142,744
|
|
|
177,636
|
|
|||||
Income (loss) from continuing operations
|
277,092
|
|
|
(35,784
|
)
|
|
(38,365
|
)
|
|
337,707
|
|
|
243,889
|
|
|||||
Income (loss) from discontinued operations, including gain (loss) on disposal, net of taxes
|
773,984
|
|
|
288,631
|
|
|
232,686
|
|
|
(85,596
|
)
|
|
(44,864
|
)
|
|||||
Net (income) loss attributable to the redeemable noncontrolling interests
|
(37,263
|
)
|
|
(84,576
|
)
|
|
(65,746
|
)
|
|
26,543
|
|
|
8,616
|
|
|||||
Net income attributable to Jefferies Financial Group common shareholders
|
1,022,318
|
|
|
167,351
|
|
|
125,938
|
|
|
279,587
|
|
|
204,306
|
|
|||||
Per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic earnings (loss) per common share attributable to Jefferies Financial Group common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Income (loss) from continuing operations
|
$
|
0.82
|
|
|
$
|
(0.10
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
0.90
|
|
|
$
|
0.63
|
|
Income (loss) from discontinued operations, including gain (loss) on disposal
|
2.11
|
|
|
0.55
|
|
|
0.44
|
|
|
(0.16
|
)
|
|
(0.09
|
)
|
|||||
Net income
|
$
|
2.93
|
|
|
$
|
0.45
|
|
|
$
|
0.34
|
|
|
$
|
0.74
|
|
|
$
|
0.54
|
|
Diluted earnings (loss) per common share attributable to Jefferies Financial Group common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Income (loss) from continuing operations
|
$
|
0.81
|
|
|
$
|
(0.10
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
0.90
|
|
|
$
|
0.63
|
|
Income (loss) from discontinued operations, including gain (loss) on disposal
|
2.09
|
|
|
0.55
|
|
|
0.44
|
|
|
(0.16
|
)
|
|
(0.09
|
)
|
|||||
Net income
|
$
|
2.90
|
|
|
$
|
0.45
|
|
|
$
|
0.34
|
|
|
$
|
0.74
|
|
|
$
|
0.54
|
|
(a)
|
Prior to the fourth quarter of 2018, because our fiscal year end was December 31, we reflected Jefferies Group in our consolidated financial statements utilizing a one month lag. In connection with our change in fiscal year end to November 30, we eliminated the one month lag utilized to reflect Jefferies Group results beginning with the fourth quarter of 2018. Therefore, our results for the eleven months ended November 30, 2018, include twelve month results for Jefferies Group and eleven months for the remainder of our results.
|
|
At November 30, 2018
|
|
At December 31,
|
||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||
|
(In thousands, except per share amounts)
|
||||||||||||||||||
Selected Statements of Financial Condition Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
47,131,095
|
|
|
$
|
47,169,108
|
|
|
$
|
45,071,307
|
|
|
$
|
46,331,184
|
|
|
$
|
52,614,324
|
|
Long-term debt
|
7,617,563
|
|
|
7,885,783
|
|
|
7,380,443
|
|
|
7,400,582
|
|
|
8,519,584
|
|
|||||
Mezzanine equity
|
144,779
|
|
|
551,593
|
|
|
461,809
|
|
|
316,633
|
|
|
311,686
|
|
|||||
Shareholders' equity
|
10,060,866
|
|
|
10,105,957
|
|
|
10,128,100
|
|
|
10,401,211
|
|
|
10,302,158
|
|
|||||
Book value per common share
|
$
|
32.72
|
|
|
$
|
28.37
|
|
|
$
|
28.18
|
|
|
$
|
28.68
|
|
|
$
|
28.03
|
|
Cash dividends per common share
|
$
|
0.45
|
|
|
$
|
0.325
|
|
|
$
|
0.25
|
|
|
$
|
0.25
|
|
|
$
|
0.25
|
|
Item 7
.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
.
|
|
Jefferies Group
|
|
Merchant Banking
|
|
Corporate
|
|
Parent Company Interest
|
|
Consolidation Adjustments
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net revenues
|
$
|
3,183,376
|
|
|
$
|
571,831
|
|
|
$
|
22,300
|
|
|
$
|
—
|
|
|
$
|
(13,473
|
)
|
|
$
|
3,764,034
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Compensation and benefits
|
1,736,264
|
|
|
77,169
|
|
|
50,222
|
|
|
—
|
|
|
(873
|
)
|
|
1,862,782
|
|
||||||
Cost of sales
|
—
|
|
|
307,071
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
307,071
|
|
||||||
Floor brokerage and clearing fees
|
189,068
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,858
|
)
|
|
184,210
|
|
||||||
Interest
|
—
|
|
|
35,159
|
|
|
—
|
|
|
54,090
|
|
|
—
|
|
|
89,249
|
|
||||||
Depreciation and amortization
|
68,296
|
|
|
48,852
|
|
|
3,169
|
|
|
—
|
|
|
—
|
|
|
120,317
|
|
||||||
Selling, general and other expenses
|
780,081
|
|
|
150,115
|
|
|
35,049
|
|
|
—
|
|
|
(3,917
|
)
|
|
961,328
|
|
||||||
Total expenses
|
2,773,709
|
|
|
618,366
|
|
|
88,440
|
|
|
54,090
|
|
|
(9,648
|
)
|
|
3,524,957
|
|
||||||
Income (loss) from continuing operations before income taxes and income related to associated companies
|
409,667
|
|
|
(46,535
|
)
|
|
(66,140
|
)
|
|
(54,090
|
)
|
|
(3,825
|
)
|
|
239,077
|
|
||||||
Income related to associated companies
|
—
|
|
|
57,023
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57,023
|
|
||||||
Income (loss) from continuing operations before income taxes
|
$
|
409,667
|
|
|
$
|
10,488
|
|
|
$
|
(66,140
|
)
|
|
$
|
(54,090
|
)
|
|
$
|
(3,825
|
)
|
|
296,100
|
|
|
Income tax provision from continuing operations
|
|
|
|
|
|
|
|
|
|
|
19,008
|
|
|||||||||||
Income from discontinued operations, net of income tax provision
|
|
|
|
|
|
|
|
|
|
|
130,063
|
|
|||||||||||
Gain on disposal of discontinued operations, net of income tax provision
|
|
|
|
|
|
|
|
|
|
|
643,921
|
|
|||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
$
|
1,051,076
|
|
|
Jefferies Group
|
|
Merchant Banking
|
|
Corporate
|
|
Parent Company Interest
|
|
Consolidation Adjustments
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net revenues
|
$
|
3,198,109
|
|
|
$
|
876,180
|
|
|
$
|
6,306
|
|
|
$
|
—
|
|
|
$
|
(3,150
|
)
|
|
$
|
4,077,445
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Compensation and benefits
|
1,829,096
|
|
|
73,811
|
|
|
46,655
|
|
|
—
|
|
|
1,373
|
|
|
1,950,935
|
|
||||||
Cost of sales
|
—
|
|
|
280,952
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
280,952
|
|
||||||
Floor brokerage and clearing fees
|
179,478
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,972
|
)
|
|
174,506
|
|
||||||
Interest
|
—
|
|
|
42,259
|
|
|
—
|
|
|
58,943
|
|
|
—
|
|
|
101,202
|
|
||||||
Depreciation and amortization
|
62,668
|
|
|
44,257
|
|
|
3,470
|
|
|
—
|
|
|
—
|
|
|
110,395
|
|
||||||
Selling, general and other expenses
|
621,943
|
|
|
131,627
|
|
|
34,983
|
|
|
—
|
|
|
(10,501
|
)
|
|
778,052
|
|
||||||
Total expenses
|
2,693,185
|
|
|
572,906
|
|
|
85,108
|
|
|
58,943
|
|
|
(14,100
|
)
|
|
3,396,042
|
|
||||||
Income (loss) from continuing operations before income taxes and loss related to associated companies
|
504,924
|
|
|
303,274
|
|
|
(78,802
|
)
|
|
(58,943
|
)
|
|
10,950
|
|
|
681,403
|
|
||||||
Loss related to associated companies
|
—
|
|
|
(74,901
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(74,901
|
)
|
||||||
Income (loss) from continuing operations before income taxes
|
$
|
504,924
|
|
|
$
|
228,373
|
|
|
$
|
(78,802
|
)
|
|
$
|
(58,943
|
)
|
|
$
|
10,950
|
|
|
606,502
|
|
|
Income tax provision from continuing operations
|
|
|
|
|
|
|
|
|
|
|
642,286
|
|
|||||||||||
Income from discontinued operations, net of income tax provision
|
|
|
|
|
|
|
|
|
|
|
288,631
|
|
|||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
$
|
252,847
|
|
|
Jefferies Group
|
|
Merchant Banking
|
|
Corporate
|
|
Parent Company Interest
|
|
Consolidation Adjustments
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net revenues
|
$
|
2,414,614
|
|
|
$
|
621,804
|
|
|
$
|
2,689
|
|
|
$
|
—
|
|
|
$
|
(3,733
|
)
|
|
$
|
3,035,374
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Compensation and benefits
|
1,568,948
|
|
|
84,486
|
|
|
35,015
|
|
|
—
|
|
|
(124
|
)
|
|
1,688,325
|
|
||||||
Cost of sales
|
—
|
|
|
337,039
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
337,039
|
|
||||||
Floor brokerage and clearing fees
|
167,205
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
167,205
|
|
||||||
Interest
|
—
|
|
|
36,876
|
|
|
—
|
|
|
58,881
|
|
|
—
|
|
|
95,757
|
|
||||||
Depreciation and amortization
|
60,206
|
|
|
53,286
|
|
|
3,619
|
|
|
—
|
|
|
—
|
|
|
117,111
|
|
||||||
Selling, general and other expenses
|
588,283
|
|
|
179,527
|
|
|
36,399
|
|
|
—
|
|
|
(7,082
|
)
|
|
797,127
|
|
||||||
Total expenses
|
2,384,642
|
|
|
691,214
|
|
|
75,033
|
|
|
58,881
|
|
|
(7,206
|
)
|
|
3,202,564
|
|
||||||
Income (loss) from continuing operations before income taxes and income related to associated companies
|
29,972
|
|
|
(69,410
|
)
|
|
(72,344
|
)
|
|
(58,881
|
)
|
|
3,473
|
|
|
(167,190
|
)
|
||||||
Income related to associated companies
|
—
|
|
|
154,598
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
154,598
|
|
||||||
Income (loss) from continuing operations before income taxes
|
$
|
29,972
|
|
|
$
|
85,188
|
|
|
$
|
(72,344
|
)
|
|
$
|
(58,881
|
)
|
|
$
|
3,473
|
|
|
(12,592
|
)
|
|
Income tax provision from continuing operations
|
|
|
|
|
|
|
|
|
|
|
25,773
|
|
|||||||||||
Income from discontinued operations, net of income tax provision
|
|
|
|
|
|
|
|
|
|
|
232,686
|
|
|||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
$
|
194,321
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
||||||
Net revenues
|
$
|
3,183,376
|
|
|
$
|
3,198,109
|
|
|
$
|
2,414,614
|
|
|
|
|
|
|
|
||||||
Expenses:
|
|
|
|
|
|
|
|
|
|||
Compensation and benefits
|
1,736,264
|
|
|
1,829,096
|
|
|
1,568,948
|
|
|||
Floor brokerage and clearing fees
|
189,068
|
|
|
179,478
|
|
|
167,205
|
|
|||
Depreciation and amortization
|
68,296
|
|
|
62,668
|
|
|
60,206
|
|
|||
Selling, general and other expenses
|
780,081
|
|
|
621,943
|
|
|
588,283
|
|
|||
Total expenses
|
2,773,709
|
|
|
2,693,185
|
|
|
2,384,642
|
|
|||
Income from continuing operations before income taxes
|
$
|
409,667
|
|
|
$
|
504,924
|
|
|
$
|
29,972
|
|
•
|
Equities revenues now represent the activities of Jefferies Group's core equities sales and trading, securities finance, prime brokerage and wealth management businesses. Revenues from other activities previously presented within the Equities business have been disaggregated as follows:
|
◦
|
Jefferies Group's share of net earnings from its Jefferies Finance joint venture, as well as any revenues from securities and loans received or acquired in connection with its investment banking efforts, are now presented as part of Jefferies Group's investment banking business.
|
◦
|
Jefferies Group's share of net earnings from its historic Jefferies LoanCore LLC ("Jefferies LoanCore") joint venture is presented as part of its fixed income business through its sale in October 2017.
|
◦
|
Revenues related to Jefferies Group's principal investments in certain private equity funds and hedge funds managed by third parties or related parties, investments in strategic ventures (including KCG Holdings, Inc. ("KCG") through its sale in July 2017), certain other securities owned, and investments held as part of obligations under employee benefit plans, including deferred compensation arrangements, are now presented as part of its other business.
|
◦
|
Revenue related to Jefferies Group's capital invested in asset management funds that are managed by Jefferies Group is now presented within Jefferies Group's asset management business.
|
•
|
Revenues from Jefferies Group's legacy futures business and revenues associated with structured notes issued by Jefferies Group are now presented as part of its other business. Additionally, revenues derived from securities or loans received or
|
•
|
Revenues from principal investments in certain private equity and asset management funds managed by related parties, which were previously presented within Jefferies Group's asset management revenue, are now presented as part of its other business.
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
||||||
Equities
|
$
|
665,557
|
|
|
$
|
674,424
|
|
|
$
|
597,445
|
|
Fixed income
|
559,712
|
|
|
618,388
|
|
|
654,337
|
|
|||
Total sales and trading
|
1,225,269
|
|
|
1,292,812
|
|
|
1,251,782
|
|
|||
|
|
|
|
|
|
|
|
|
|||
Equity
|
454,555
|
|
|
344,973
|
|
|
235,207
|
|
|||
Debt
|
635,606
|
|
|
649,220
|
|
|
304,576
|
|
|||
Capital markets
|
1,090,161
|
|
|
994,193
|
|
|
539,783
|
|
|||
Advisory
|
820,042
|
|
|
770,092
|
|
|
654,190
|
|
|||
Other investment banking
|
3,638
|
|
|
19,776
|
|
|
(108,487
|
)
|
|||
Total investment banking
|
1,913,841
|
|
|
1,784,061
|
|
|
1,085,486
|
|
|||
Other
|
45,316
|
|
|
92,987
|
|
|
999
|
|
|||
Total capital markets
|
3,184,426
|
|
|
3,169,860
|
|
|
2,338,267
|
|
|||
|
|
|
|
|
|
||||||
Asset management fees
|
21,214
|
|
|
19,224
|
|
|
23,711
|
|
|||
Investment return
|
(22,264
|
)
|
|
9,025
|
|
|
52,636
|
|
|||
Total asset management
|
(1,050
|
)
|
|
28,249
|
|
|
76,347
|
|
|||
|
|
|
|
|
|
||||||
Total net revenues
|
$
|
3,183,376
|
|
|
$
|
3,198,109
|
|
|
$
|
2,414,614
|
|
•
|
services provided to Jefferies Group's clients from which it earns commissions or spread revenue by executing, settling and clearing transactions for clients;
|
•
|
advisory services offered to clients;
|
•
|
financing, securities lending and other prime brokerage services offered to clients; and
|
•
|
wealth management services, which includes providing clients access to all of its institutional execution capabilities.
|
•
|
executing transactions for clients and making markets in securitized products, investment grade, high-yield, emerging markets, municipal and sovereign securities and bank loans;
|
•
|
foreign exchange execution on behalf of clients; and
|
•
|
interest rate derivatives and credit derivatives (used primarily for hedging activities).
|
•
|
capital markets services, which include underwriting and placement services related to corporate debt, municipal bonds, mortgage- and asset-backed securities and equity and equity-linked securities and loan syndication;
|
•
|
advisory services with respect to mergers and acquisitions and restructurings and recapitalizations;
|
•
|
Jefferies Group's share of net earnings from its corporate lending joint venture Jefferies Finance; and
|
•
|
securities and loans received or acquired in connection with Jefferies Group's investment banking activities.
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
|
|
|
|
|
|
||||||
Net revenues
|
$
|
571,831
|
|
|
$
|
876,180
|
|
|
$
|
621,804
|
|
|
|
|
|
|
|
||||||
Expenses:
|
|
|
|
|
|
|
|
||||
Compensation and benefits
|
77,169
|
|
|
73,811
|
|
|
84,486
|
|
|||
Cost of sales
|
307,071
|
|
|
280,952
|
|
|
337,039
|
|
|||
Interest
|
35,159
|
|
|
42,259
|
|
|
36,876
|
|
|||
Depreciation and amortization
|
48,852
|
|
|
44,257
|
|
|
53,286
|
|
|||
Selling, general and other expenses
|
150,115
|
|
|
131,627
|
|
|
179,527
|
|
|||
Total expenses
|
618,366
|
|
|
572,906
|
|
|
691,214
|
|
|||
Income (loss) before income taxes and income (loss) related to associated companies
|
(46,535
|
)
|
|
303,274
|
|
|
(69,410
|
)
|
|||
Income (loss) related to associated companies
|
57,023
|
|
|
(74,901
|
)
|
|
154,598
|
|
|||
Income from continuing operations before income taxes
|
$
|
10,488
|
|
|
$
|
228,373
|
|
|
$
|
85,188
|
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
|
|
|
|
|
|
||||||
Vitesse Energy Finance and JETX Energy
|
$
|
169,667
|
|
|
$
|
45,225
|
|
|
$
|
53,549
|
|
Manufacturing
|
357,513
|
|
|
504,508
|
|
|
415,752
|
|
|||
LAM
|
(5,447
|
)
|
|
74,990
|
|
|
(75,508
|
)
|
|||
FXCM
|
18,616
|
|
|
23,160
|
|
|
(54,634
|
)
|
|||
Vehicle Finance
|
64,969
|
|
|
60,187
|
|
|
50,152
|
|
|||
Spectrum Brands/HRG
|
(412,493
|
)
|
|
64,774
|
|
|
93,200
|
|
|||
Other
|
379,006
|
|
|
103,336
|
|
|
139,293
|
|
|||
Total net revenues
|
$
|
571,831
|
|
|
$
|
876,180
|
|
|
$
|
621,804
|
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
|
|
|
|
|
|
||||||
Vitesse Energy Finance and JETX Energy
|
$
|
116,017
|
|
|
$
|
71,258
|
|
|
$
|
144,429
|
|
Manufacturing
|
321,851
|
|
|
296,491
|
|
|
375,990
|
|
|||
LAM
|
74,029
|
|
|
44,844
|
|
|
32,318
|
|
|||
Vehicle Finance
|
65,461
|
|
|
68,444
|
|
|
69,074
|
|
|||
Other
|
41,008
|
|
|
91,869
|
|
|
69,403
|
|
|||
Total expenses
|
$
|
618,366
|
|
|
$
|
572,906
|
|
|
$
|
691,214
|
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
|
|
|
|
|
|
||||||
National Beef
|
$
|
110,049
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Berkadia
|
80,092
|
|
|
93,801
|
|
|
94,201
|
|
|||
FXCM
|
(83,174
|
)
|
|
(177,644
|
)
|
|
1,919
|
|
|||
Garcadia Companies
|
21,646
|
|
|
48,198
|
|
|
52,266
|
|
|||
Linkem
|
(20,534
|
)
|
|
(32,561
|
)
|
|
(22,867
|
)
|
|||
HomeFed
|
(4,332
|
)
|
|
7,725
|
|
|
23,893
|
|
|||
Golden Queen
|
(51,990
|
)
|
|
(7,733
|
)
|
|
(3,021
|
)
|
|||
Other
|
5,266
|
|
|
(6,687
|
)
|
|
8,207
|
|
|||
Total income (loss) related to associated companies
|
$
|
57,023
|
|
|
$
|
(74,901
|
)
|
|
$
|
154,598
|
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
|
|
|
|
|
|
||||||
Vitesse Energy Finance and JETX Energy
|
$
|
53,650
|
|
|
$
|
(26,033
|
)
|
|
$
|
(90,880
|
)
|
Manufacturing
|
35,662
|
|
|
208,017
|
|
|
39,762
|
|
|||
LAM
|
(79,476
|
)
|
|
30,146
|
|
|
(107,826
|
)
|
|||
FXCM
|
18,616
|
|
|
23,160
|
|
|
(54,634
|
)
|
|||
Vehicle Finance
|
(492
|
)
|
|
(8,257
|
)
|
|
(18,922
|
)
|
|||
Spectrum Brands/HRG
|
(412,493
|
)
|
|
64,774
|
|
|
93,200
|
|
|||
Other
|
337,998
|
|
|
11,467
|
|
|
69,890
|
|
|||
Income (loss) before income taxes and income (loss) related to associated companies
|
(46,535
|
)
|
|
303,274
|
|
|
(69,410
|
)
|
|||
Income (loss) related to associated companies
|
57,023
|
|
|
(74,901
|
)
|
|
154,598
|
|
|||
Income from continuing operations before income taxes
|
$
|
10,488
|
|
|
$
|
228,373
|
|
|
$
|
85,188
|
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
|
|
|
|
|
|
||||||
Net revenues
|
$
|
22,300
|
|
|
$
|
6,306
|
|
|
$
|
2,689
|
|
|
|
|
|
|
|
||||||
Expenses:
|
|
|
|
|
|
|
|
||||
Compensation and benefits
|
50,222
|
|
|
46,655
|
|
|
35,015
|
|
|||
Depreciation and amortization
|
3,169
|
|
|
3,470
|
|
|
3,619
|
|
|||
Selling, general and other expenses
|
35,049
|
|
|
34,983
|
|
|
36,399
|
|
|||
Total expenses
|
88,440
|
|
|
85,108
|
|
|
75,033
|
|
|||
Loss from continuing operations before income taxes
|
$
|
(66,140
|
)
|
|
$
|
(78,802
|
)
|
|
$
|
(72,344
|
)
|
|
|
Period Ended June 4, 2018 (1)
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
Revenues:
|
|
|
|
|
|
|
||||||
Beef processing services
|
|
$
|
3,137,611
|
|
|
$
|
7,353,663
|
|
|
$
|
7,021,902
|
|
Interest income
|
|
131
|
|
|
339
|
|
|
166
|
|
|||
Other
|
|
4,329
|
|
|
4,946
|
|
|
5,175
|
|
|||
Total revenues
|
|
3,142,071
|
|
|
7,358,948
|
|
|
7,027,243
|
|
|||
|
|
|
|
|
|
|
||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|||
Compensation and benefits
|
|
17,414
|
|
|
39,884
|
|
|
39,271
|
|
|||
Cost of sales
|
|
2,884,983
|
|
|
6,764,055
|
|
|
6,513,768
|
|
|||
Interest expense
|
|
4,316
|
|
|
6,657
|
|
|
12,946
|
|
|||
Depreciation and amortization
|
|
43,959
|
|
|
98,515
|
|
|
94,482
|
|
|||
Selling, general and other expenses
|
|
14,291
|
|
|
42,525
|
|
|
37,754
|
|
|||
Total expenses
|
|
2,964,963
|
|
|
6,951,636
|
|
|
6,698,221
|
|
|||
|
|
|
|
|
|
|
||||||
Income from discontinued operations before income taxes
|
|
177,108
|
|
|
407,312
|
|
|
329,022
|
|
|||
Income tax provision
|
|
47,045
|
|
|
118,681
|
|
|
96,336
|
|
|||
Income from discontinued operations, net of income tax provision
|
|
$
|
130,063
|
|
|
$
|
288,631
|
|
|
$
|
232,686
|
|
|
November 30, 2018
|
||||||||||||||||||
|
Jefferies Group
|
|
Merchant Banking
|
|
Corporate
|
|
Consolidation Adjustments
|
|
Total
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
5,145,886
|
|
|
$
|
56,810
|
|
|
$
|
56,113
|
|
|
$
|
—
|
|
|
$
|
5,258,809
|
|
Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations
|
707,960
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
707,960
|
|
|||||
Financial instruments owned
|
16,399,526
|
|
|
1,063,730
|
|
|
1,409,886
|
|
|
—
|
|
|
18,873,142
|
|
|||||
Loans to and investments in associated companies
|
997,524
|
|
|
1,419,808
|
|
|
—
|
|
|
—
|
|
|
2,417,332
|
|
|||||
Securities borrowed
|
6,538,212
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,538,212
|
|
|||||
Securities purchased under agreements to resell
|
2,785,758
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,785,758
|
|
|||||
Receivables
|
5,563,157
|
|
|
721,405
|
|
|
2,839
|
|
|
—
|
|
|
6,287,401
|
|
|||||
Intangible assets, net and goodwill
|
1,880,849
|
|
|
9,282
|
|
|
—
|
|
|
—
|
|
|
1,890,131
|
|
|||||
Deferred tax asset, net
|
243,240
|
|
|
—
|
|
|
269,549
|
|
|
—
|
|
|
512,789
|
|
|||||
Other assets
|
962,872
|
|
|
919,449
|
|
|
99,650
|
|
|
(122,410
|
)
|
|
1,859,561
|
|
|||||
Total Assets
|
41,224,984
|
|
|
4,190,484
|
|
|
1,838,037
|
|
|
(122,410
|
)
|
|
47,131,095
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt (1)
|
6,546,283
|
|
|
81,164
|
|
|
990,116
|
|
|
—
|
|
|
7,617,563
|
|
|||||
Other liabilities
|
28,440,086
|
|
|
747,990
|
|
|
223,830
|
|
|
(122,410
|
)
|
|
29,289,496
|
|
|||||
Total liabilities
|
34,986,369
|
|
|
829,154
|
|
|
1,213,946
|
|
|
(122,410
|
)
|
|
36,907,059
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Redeemable noncontrolling interests
|
—
|
|
|
19,779
|
|
|
—
|
|
|
—
|
|
|
19,779
|
|
|||||
Mandatorily redeemable convertible preferred shares
|
—
|
|
|
—
|
|
|
125,000
|
|
|
—
|
|
|
125,000
|
|
|||||
Noncontrolling interests
|
1,911
|
|
|
16,480
|
|
|
—
|
|
|
—
|
|
|
18,391
|
|
|||||
Total Jefferies Financial Group Inc. shareholders' equity
|
$
|
6,236,704
|
|
|
$
|
3,325,071
|
|
|
$
|
499,091
|
|
|
$
|
—
|
|
|
$
|
10,060,866
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reconciliation to Tangible Capital
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Jefferies Financial Group Inc. shareholders' equity
|
$
|
6,236,704
|
|
|
$
|
3,325,071
|
|
|
$
|
499,091
|
|
|
$
|
—
|
|
|
$
|
10,060,866
|
|
Less: Intangible assets, net and goodwill
|
(1,880,849
|
)
|
|
(9,282
|
)
|
|
—
|
|
|
—
|
|
|
(1,890,131
|
)
|
|||||
Tangible Capital, a non-GAAP measure
|
$
|
4,355,855
|
|
|
$
|
3,315,789
|
|
|
$
|
499,091
|
|
|
$
|
—
|
|
|
$
|
8,170,735
|
|
|
December 31, 2017
|
||||||||||||||||||||||
|
Jefferies Group
|
|
National Beef
|
|
Merchant Banking
|
|
Corporate
|
|
Consolidation Adjustments
|
|
Total
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
5,164,492
|
|
|
$
|
18,516
|
|
|
$
|
55,815
|
|
|
$
|
36,657
|
|
|
$
|
—
|
|
|
$
|
5,275,480
|
|
Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations
|
578,014
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
578,014
|
|
||||||
Financial instruments owned
|
14,193,352
|
|
|
2,880
|
|
|
1,974,930
|
|
|
628,075
|
|
|
—
|
|
|
16,799,237
|
|
||||||
Loans to and investments in associated companies
|
682,790
|
|
|
—
|
|
|
1,384,039
|
|
|
—
|
|
|
—
|
|
|
2,066,829
|
|
||||||
Securities borrowed
|
7,721,803
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,721,803
|
|
||||||
Securities purchased under agreements to resell
|
3,689,559
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,689,559
|
|
||||||
Receivables
|
4,459,827
|
|
|
201,675
|
|
|
754,470
|
|
|
3,043
|
|
|
—
|
|
|
5,419,015
|
|
||||||
Intangible assets, net and goodwill
|
1,899,093
|
|
|
554,541
|
|
|
9,546
|
|
|
—
|
|
|
—
|
|
|
2,463,180
|
|
||||||
Deferred tax asset, net
|
212,954
|
|
|
—
|
|
|
—
|
|
|
530,857
|
|
|
—
|
|
|
743,811
|
|
||||||
Other assets
|
973,848
|
|
|
682,927
|
|
|
724,730
|
|
|
100,996
|
|
|
(70,321
|
)
|
|
2,412,180
|
|
||||||
Total Assets
|
39,575,732
|
|
|
1,460,539
|
|
|
4,903,530
|
|
|
1,299,628
|
|
|
(70,321
|
)
|
|
47,169,108
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt (1)
|
6,416,844
|
|
|
199,221
|
|
|
280,697
|
|
|
989,021
|
|
|
—
|
|
|
7,885,783
|
|
||||||
Other liabilities
|
27,514,235
|
|
|
332,111
|
|
|
706,430
|
|
|
110,298
|
|
|
(70,321
|
)
|
|
28,592,753
|
|
||||||
Total liabilities
|
33,931,079
|
|
|
531,332
|
|
|
987,127
|
|
|
1,099,319
|
|
|
(70,321
|
)
|
|
36,478,536
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Redeemable noncontrolling interests
|
—
|
|
|
412,128
|
|
|
14,465
|
|
|
—
|
|
|
—
|
|
|
426,593
|
|
||||||
Mandatorily redeemable convertible preferred shares
|
—
|
|
|
—
|
|
|
—
|
|
|
125,000
|
|
|
—
|
|
|
125,000
|
|
||||||
Noncontrolling interests
|
737
|
|
|
—
|
|
|
32,285
|
|
|
—
|
|
|
—
|
|
|
33,022
|
|
||||||
Total Jefferies Financial Group Inc. shareholders' equity
|
$
|
5,643,916
|
|
|
$
|
517,079
|
|
|
$
|
3,869,653
|
|
|
$
|
75,309
|
|
|
$
|
—
|
|
|
$
|
10,105,957
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reconciliation to Tangible Capital
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total Jefferies Financial Group Inc. shareholders' equity
|
$
|
5,643,916
|
|
|
$
|
517,079
|
|
|
$
|
3,869,653
|
|
|
$
|
75,309
|
|
|
$
|
—
|
|
|
$
|
10,105,957
|
|
Less: Intangible assets, net and goodwill
|
(1,899,093
|
)
|
|
(554,541
|
)
|
|
(9,546
|
)
|
|
—
|
|
|
—
|
|
|
(2,463,180
|
)
|
||||||
Tangible Capital, a non-GAAP measure
|
$
|
3,744,823
|
|
|
$
|
(37,462
|
)
|
|
$
|
3,860,107
|
|
|
$
|
75,309
|
|
|
$
|
—
|
|
|
$
|
7,642,777
|
|
|
Tangible Capital as of
|
||||||
|
November 30, 2018
|
|
December 31, 2017
|
||||
|
|
|
|
||||
Jefferies Group (1)
|
$
|
4,355,855
|
|
|
$
|
3,744,823
|
|
|
|
|
|
||||
Merchant Banking:
|
|
|
|
||||
National Beef
|
653,630
|
|
|
(37,462
|
)
|
||
Oil and gas
|
640,773
|
|
|
416,621
|
|
||
Spectrum Brands
|
374,221
|
|
|
789,870
|
|
||
HomeFed
|
337,542
|
|
|
310,264
|
|
||
WeWork
|
254,400
|
|
|
183,495
|
|
||
Linkem
|
165,157
|
|
|
192,136
|
|
||
FXCM
|
148,181
|
|
|
231,656
|
|
||
Idaho Timber
|
78,190
|
|
|
81,542
|
|
||
LAM (1)
|
—
|
|
|
571,264
|
|
||
Berkadia (1)
|
—
|
|
|
210,594
|
|
||
Garcadia
|
—
|
|
|
199,541
|
|
||
Other
|
663,695
|
|
|
673,124
|
|
||
Total Merchant Banking
|
3,315,789
|
|
|
3,822,645
|
|
||
|
|
|
|
||||
Corporate liquidity and other assets, net of Corporate liabilities including long-term debt
|
499,091
|
|
|
75,309
|
|
||
|
|
|
|
||||
Total Tangible Capital (2)
|
$
|
8,170,735
|
|
|
$
|
7,642,777
|
|
(1)
|
In the fourth quarter of 2018, we amalgamated all our primary financial services operating businesses into one platform by transferring our 50% membership interest in Berkadia and our LAM seed investments into Jefferies Group.
|
(2)
|
Tangible Capital, a non-GAAP measure, is defined as Jefferies Financial Group Inc. shareholders' equity less Intangible assets, net and goodwill. See reconciliation of Tangible Capital to Jefferies Financial Group Inc. shareholders' equity in the tables above.
|
|
Rating
|
|
Outlook
|
|
|
|
|
Moody's Investors Service
|
Ba1
|
|
Positive
|
Standard and Poor's
|
BBB-
|
|
Stable
|
Fitch Ratings
|
BBB
|
|
Stable
|
|
November 30, 2018
|
||
Liquidity reserve
(in thousands):
|
|
||
Minimum reserve under liquidity target
|
$
|
577,090
|
|
Actual liquidity
|
$
|
1,630,977
|
|
|
November 30, 2018
|
||
Leverage target
(dollars in thousands):
|
|
||
Total Jefferies Financial Group Inc. shareholders' equity
|
$
|
10,060,866
|
|
Less, investment in Jefferies Group
|
(6,236,704
|
)
|
|
Equity excluding Jefferies Group
|
3,824,162
|
|
|
Less, our two largest investments:
|
|
|
|
National Beef
|
(653,630
|
)
|
|
Vitesse Energy Finance
|
(532,824
|
)
|
|
Equity in a stressed scenario
|
2,637,708
|
|
|
Less, net deferred tax asset excluding Jefferies Group's amount
|
(269,549
|
)
|
|
Equity in a stressed scenario less net deferred tax asset
|
$
|
2,368,159
|
|
|
|
|
|
Parent company debt (see Note 15 to our consolidated financial statements)
|
$
|
990,116
|
|
Ratio of parent company debt to stressed equity:
|
|
|
|
Maximum
|
0.50
|
|
|
Actual, equity in a stressed scenario
|
0.38
|
|
|
Actual, equity in a stressed scenario excluding net deferred tax asset
|
0.42
|
|
•
|
Jefferies Group generated funds of $429.7 million and $481.9 million during 2018 and 2017, respectively, and used funds of $124.3 million during 2016. Included in these amounts are distributions received from associated companies of $66.1 million, $21.0 million and $38.2 million during 2018, 2017 and 2016, respectively.
|
•
|
Within Merchant Banking, cash of $41.5 million was generated during 2018 and cash of $124.6 million and $50.0 million was used during 2017 and 2016, respectively, related to investments in the LAM platform. Additionally, during 2016, cash of $427.0 million was generated from our trading portfolio related to our LAM platform. Cash of $23.4 million and $97.6 million was used to make additional investments in our trading portfolio during 2018 and 2017, respectively. Manufacturing generated funds of $40.6 million, $15.7 million and $35.4 million in 2018, 2017 and 2016, respectively. Distributions from associated companies include $41.0 million (through its transfer to Jefferies Group on October 1, 2018), $66.7 million and $99.9 million during 2018, 2017 and 2016, respectively, from Berkadia; $24.4 million during 2018 from National Beef; and $28.3 million, $46.9 million and $51.4 million during 2018, 2017 and 2016, respectively, from Garcadia. Net losses related to real estate, property and equipment, and other assets include impairment charges of $65.7 million in 2016, primarily related to JETX Energy, and the write down of a note receivable of $20.0 million in 2017 related to the sale of a subsidiary in 2012.
|
•
|
Net cash provided by operating activities of discontinued operations reflects funds generated by National Beef of $164.7 million, $553.8 million and $484.8 million during 2018, 2017 and 2016, respectively.
|
•
|
Acquisitions of property, equipment and leasehold improvements, and other assets related to Jefferies Group include $71.4 million, $72.7 million and $103.3 million in 2018, 2017 and 2016, respectively. Jefferies Group made loans to and investments in associated companies of $1,929.6 million during 2018, $3,161.6 million during 2017 and $538.2 million during 2016. Jefferies Group received capital distributions and loan repayments from its associated companies of $1,873.0 million during 2018, $3,069.0 million during 2017 and $689.2 million during 2016. Additionally, Jefferies Group received proceeds of $173.1 million during 2017 from the sale of its investment in Jefferies LoanCore.
|
•
|
Within Merchant Banking, acquisitions of property, equipment and leasehold improvements, and other assets primarily reflect activity in our oil and gas production and development businesses. They totaled $253.9 million, $48.7 million and $153.1 million in 2018, 2017 and 2016, respectively. Proceeds from sale of subsidiaries and proceeds from sale of associated companies during 2018 primarily relate to the sale of our equity interests in Garcadia and our associated real estate. Proceeds from sale of subsidiaries during 2017 relate to the sale of Conwed. Loans to and investments in associated companies include $13.5 million to Golden Queen during 2018; $31.9 million to HomeFed, $32.0 million to Linkem and $62.8 million to real estate projects, of which $35.9 million was contributed by noncontrolling interests, during 2017; and $33.3 million to Linkem, $22.5 million to Garcadia and $153.5 million to real estate projects, of which $90.7 million was contributed by noncontrolling interests, during 2016. We received capital distributions and loan repayments from associated companies of $24.3 million from National Beef, $2.6 million from Golden Queen, $56.3 million from real estate projects and $0.6 million from Garcadia during 2018; $7.9 million from Garcadia and $25.6 million from real estate projects during 2017; and $10.2 million from Garcadia during 2016.
|
•
|
Net cash provided by (used for) investing activities of discontinued operations includes the net proceeds from sale of National Beef of $898.9 million during 2018 and acquisitions of property, equipment and leasehold improvements, and
|
•
|
Issuance of debt includes $2,450.7 million during 2018, $1,335.4 million during 2017 and $299.8 million during 2016 related to Jefferies Group. Repayment of debt includes $2,173.3 million during 2018, $524.1 million during 2017 and $373.2 million during 2016 related to Jefferies Group. Net change in bank overdrafts of $10.3 million in 2018, $(5.7) million in 2017 and $(46.5) million in 2016 related to Jefferies Group. Net change in other secured financings include proceeds of $159.4 million during 2018 and payments of $33.5 million and $7.3 million, respectively, during 2017 and 2016, related to Jefferies Group.
|
•
|
Within Merchant Banking, issuance of debt includes $304.0 million in 2018, $285.3 million in 2017 and $720.3 million in 2016. Their repayment of debt includes $505.0 million in 2018, $324.2 million in 2017 and $425.6 million in 2016. Net change in other secured financings include proceeds of $343.7 million, $34.7 million and $124.0 million during 2018, 2017 and 2016, respectively, related to Foursight Capital. Contributions from noncontrolling interests include $39.4 million during 2017 and $144.8 million during 2016 and distributions to noncontrolling interests include $12.0 million during 2017 and $18.0 million during 2016, related to real estate projects.
|
•
|
Purchases of common shares for treasury relate to shares purchased in the open market and shares received from participants in our stock compensation plans.
|
•
|
Net cash provided by (used for) financing activities of discontinued operations includes the issuance of debt by National Beef of $366.1 million during 2018 and $474.9 million during 2017 of borrowings under its bank credit facility and repayment of debt by National Beef of $175.1 million in 2018, $552.8 million in 2017 and $163.7 million in 2016.
|
|
|
|
|
Expected Maturity Date
|
||||||||||||||||||||
Contractual Obligations
|
|
Total
|
|
2019
|
|
2020
|
|
2021
and 2022 |
|
2023
and 2024 |
|
After
2024 |
||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||
Long-term debt
|
|
$
|
7,670.3
|
|
|
$
|
690.2
|
|
|
$
|
565.5
|
|
|
$
|
967.5
|
|
|
$
|
1,480.6
|
|
|
$
|
3,966.5
|
|
Estimated interest expense on debt
|
|
3,565.3
|
|
|
385.9
|
|
|
349.6
|
|
|
593.7
|
|
|
453.4
|
|
|
1,782.7
|
|
||||||
Operating leases, net of sublease income
|
|
732.9
|
|
|
65.5
|
|
|
56.6
|
|
|
119.1
|
|
|
116.2
|
|
|
375.5
|
|
||||||
Other
|
|
574.6
|
|
|
148.7
|
|
|
101.8
|
|
|
135.8
|
|
|
77.4
|
|
|
110.9
|
|
||||||
Total Contractual Obligations
|
|
$
|
12,543.1
|
|
|
$
|
1,290.3
|
|
|
$
|
1,073.5
|
|
|
$
|
1,816.1
|
|
|
$
|
2,127.6
|
|
|
$
|
6,235.6
|
|
|
2018
|
|
2017
|
||||
Securities purchased under agreements to resell:
|
|
|
|
||||
Period end
|
$
|
2,786
|
|
|
$
|
3,690
|
|
Month end average
|
5,232
|
|
|
6,195
|
|
||
Maximum month end
|
7,593
|
|
|
7,814
|
|
||
|
|
|
|
||||
Securities sold under agreements to repurchase:
|
|
|
|
|
|
||
Period end
|
$
|
8,643
|
|
|
$
|
8,661
|
|
Month end average
|
12,704
|
|
|
11,273
|
|
||
Maximum month end
|
15,579
|
|
|
13,679
|
|
•
|
Repayment of all unsecured debt maturing within one year and no incremental unsecured debt issuance;
|
•
|
Maturity rolloff of outstanding letters of credit with no further issuance and replacement with cash collateral;
|
•
|
Higher margin requirements than currently exist on assets on securities financing activity, including repurchase agreements;
|
•
|
Liquidity outflows related to possible credit downgrade;
|
•
|
Lower availability of secured funding;
|
•
|
Client cash withdrawals;
|
•
|
The anticipated funding of outstanding investment and loan commitments; and
|
•
|
Certain accrued expenses and other liabilities and fixed costs.
|
•
|
Illiquid assets such as equipment, goodwill, net intangible assets, exchange memberships, deferred tax assets and certain investments;
|
•
|
A portion of securities inventory that is not expected to be financed on a secured basis in a credit stressed environment (i.e., margin requirements); and
|
•
|
Drawdowns of unfunded commitments.
|
|
November 30, 2018
|
|
Average Balance
Fourth Quarter 2018 (1)
|
|
December 31, 2017
|
||||||
Cash and cash equivalents:
|
|
|
|
|
|
||||||
Cash in banks
|
$
|
2,333,476
|
|
|
$
|
2,367,239
|
|
|
$
|
2,244,207
|
|
Money market investments
|
2,812,410
|
|
|
2,023,884
|
|
|
2,920,285
|
|
|||
Total cash and cash equivalents
|
5,145,886
|
|
|
4,391,123
|
|
|
5,164,492
|
|
|||
|
|
|
|
|
|
||||||
Other sources of liquidity:
|
|
|
|
|
|
|
|
|
|||
Debt securities owned and securities purchased under agreements to
resell (2)
|
958,539
|
|
|
966,541
|
|
|
1,031,252
|
|
|||
Other (3)
|
499,576
|
|
|
531,030
|
|
|
513,293
|
|
|||
Total other sources
|
1,458,115
|
|
|
1,497,571
|
|
|
1,544,545
|
|
|||
|
|
|
|
|
|
||||||
Total cash and cash equivalents and other liquidity sources
|
$
|
6,604,001
|
|
|
$
|
5,888,694
|
|
|
$
|
6,709,037
|
|
(1)
|
Average balances are calculated based on weekly balances.
|
(2)
|
Consists of high quality sovereign government securities and reverse repurchase agreements collateralized by U.S. government securities and other high quality sovereign government securities; deposits with a central bank within the European Economic Area, Canada, Australia, Japan, Switzerland or the U.S.; and securities issued by a designated multilateral development bank and reverse repurchase agreements with underlying collateral comprised of these securities.
|
(3)
|
Other includes unencumbered inventory representing an estimate of the amount of additional secured financing that could be reasonably expected to be obtained from financial instruments owned that are currently not pledged after considering reasonable financing haircuts.
|
|
November 30, 2018
|
|
December 31, 2017
|
||||||||||||
|
Liquid Financial
Instruments
|
|
Unencumbered
Liquid Financial
Instruments (2)
|
|
Liquid Financial
Instruments
|
|
Unencumbered
Liquid Financial
Instruments (2)
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Corporate equity securities
|
$
|
1,907,064
|
|
|
$
|
317,189
|
|
|
$
|
1,718,617
|
|
|
$
|
272,380
|
|
Corporate debt securities
|
1,775,721
|
|
|
104,685
|
|
|
2,475,291
|
|
|
57,290
|
|
||||
U.S. Government, agency and municipal securities
|
2,648,843
|
|
|
294,030
|
|
|
1,954,697
|
|
|
185,481
|
|
||||
Other sovereign obligations
|
2,626,212
|
|
|
840,578
|
|
|
2,050,942
|
|
|
996,421
|
|
||||
Agency mortgage-backed securities (1)
|
2,972,638
|
|
|
—
|
|
|
1,742,977
|
|
|
—
|
|
||||
Loans and other receivables
|
272,201
|
|
|
—
|
|
|
243,664
|
|
|
—
|
|
||||
|
$
|
12,202,679
|
|
|
$
|
1,556,482
|
|
|
$
|
10,186,188
|
|
|
$
|
1,511,572
|
|
(1)
|
Consists solely of agency mortgage-backed securities issued by Freddie Mac, Fannie Mae and Ginnie Mae. These securities include pass-through securities, securities backed by adjustable rate mortgages, collateralized mortgage obligations, commercial mortgage-backed securities and interest- and principal-only securities.
|
(2)
|
Unencumbered liquid balances represent assets that can be sold or used as collateral for a loan, but have not been.
|
|
Rating
|
|
Outlook
|
|
|
|
|
Moody's Investors Service
|
Baa3
|
|
Stable
|
Standard and Poor's
|
BBB-
|
|
Stable
|
Fitch Ratings
|
BBB
|
|
Stable
|
|
|
|
|
Expected Maturity Date
|
||||||||||||||||||||
Commitments and Guarantees
|
|
Total
|
|
2019
|
|
2020
|
|
2021
and 2022 |
|
2023
and 2024 |
|
After
2024 |
||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||
Equity commitments
|
|
$
|
356.0
|
|
|
$
|
322.4
|
|
|
$
|
21.8
|
|
|
$
|
1.3
|
|
|
$
|
—
|
|
|
$
|
10.5
|
|
Loan commitments
|
|
315.0
|
|
|
250.0
|
|
|
7.5
|
|
|
54.0
|
|
|
3.5
|
|
|
—
|
|
||||||
Underwriting commitments
|
|
377.5
|
|
|
377.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Forward starting reverse repos
|
|
4,262.7
|
|
|
4,262.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Forward starting repos
|
|
2,931.8
|
|
|
2,931.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other unfunded commitments
|
|
269.1
|
|
|
194.8
|
|
|
—
|
|
|
69.4
|
|
|
4.9
|
|
|
—
|
|
||||||
Derivative contracts (1):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Non-credit related
|
|
17,984.0
|
|
|
12,024.2
|
|
|
2,372.3
|
|
|
2,976.1
|
|
|
281.1
|
|
|
330.3
|
|
||||||
Credit related
|
|
145.2
|
|
|
—
|
|
|
32.4
|
|
|
—
|
|
|
112.8
|
|
|
—
|
|
||||||
Standby letters of credit
|
|
54.2
|
|
|
53.1
|
|
|
—
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
||||||
Total Commitments and Guarantees
|
|
$
|
26,695.5
|
|
|
$
|
20,416.5
|
|
|
$
|
2,434.0
|
|
|
$
|
3,100.8
|
|
|
$
|
403.4
|
|
|
$
|
340.8
|
|
Level 1:
|
Quoted prices are available in active markets for identical assets or liabilities as of the reported date. Valuation adjustments and block discounts are not applied to Level 1 instruments.
|
Level 2:
|
Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these financial instruments includes cash instruments for which quoted prices are available but traded less frequently, derivative instruments fair values for which have been derived using model inputs that are directly observable in the market, or can be derived principally from or corroborated by observable market data, and instruments that are fair valued using other financial instruments, the parameters of which can be directly observed.
|
Level 3:
|
Instruments that have little to no pricing observability as of the reported date. These financial instruments are measured using management's best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation.
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
.
|
|
|
|
|
Daily VaR (1)
Value-at-Risk In Trading Portfolios
|
|
|
|
Daily VaR (1)
Value-at-Risk In Trading Portfolios
|
||||||||||||||||||||||||
(In millions)
Risk Categories
|
|
VaR at November 30, 2018
|
|
Daily VaR for 2018
|
|
VaR at December 31, 2017
|
|
Daily VaR for 2017
|
||||||||||||||||||||||||
|
|
|
|
Average
|
|
High
|
|
Low
|
|
|
|
Average
|
|
High
|
|
Low
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest Rates
|
|
$
|
5.33
|
|
|
$
|
4.88
|
|
|
$
|
6.82
|
|
|
$
|
2.18
|
|
|
$
|
3.38
|
|
|
$
|
5.11
|
|
|
$
|
9.59
|
|
|
$
|
2.63
|
|
Equity Prices
|
|
8.47
|
|
|
5.51
|
|
|
13.56
|
|
|
3.08
|
|
|
2.90
|
|
|
5.17
|
|
|
17.20
|
|
|
2.52
|
|
||||||||
Currency Rates
|
|
0.09
|
|
|
0.12
|
|
|
0.24
|
|
|
0.02
|
|
|
0.18
|
|
|
0.22
|
|
|
0.65
|
|
|
0.06
|
|
||||||||
Commodity Prices
|
|
0.48
|
|
|
0.53
|
|
|
1.51
|
|
|
0.24
|
|
|
0.35
|
|
|
0.73
|
|
|
2.20
|
|
|
0.27
|
|
||||||||
Diversification Effect (2)
|
|
(3.12
|
)
|
|
(3.48
|
)
|
|
N/A
|
|
|
N/A
|
|
|
(1.86
|
)
|
|
(3.44
|
)
|
|
N/A
|
|
|
N/A
|
|
||||||||
Firmwide
|
|
$
|
11.25
|
|
|
$
|
7.56
|
|
|
$
|
14.73
|
|
|
$
|
4.76
|
|
|
$
|
4.95
|
|
|
$
|
7.79
|
|
|
$
|
17.55
|
|
|
$
|
4.52
|
|
(1)
|
For the VaR numbers reported above, a one-day time horizon, with a one year look-back period, and a 95% confidence level were used.
|
(2)
|
The diversification effect is not applicable for the maximum and minimum VaR values as the Jefferies Group's VaR and VaR values for the four risk categories might have occurred on different days during the year.
|
|
10% Sensitivity
|
||
|
|
||
Private investments
|
$
|
20,088
|
|
Corporate debt securities in default
|
9,915
|
|
|
Trade claims
|
4,747
|
|
•
|
Loans and lending arising in connection with Jefferies Group's capital markets activities, which reflects its exposure at risk on a default event with no recovery of loans. Current exposure represents loans that have been drawn by the borrower and lending commitments that are outstanding. In addition, credit exposures on forward settling traded loans are included within our loans and lending exposures for consistency with the balance sheet categorization of these items.
|
•
|
Securities and margin financing transactions, which reflect Jefferies Group's credit exposure arising from reverse repurchase agreements, repurchase agreements and securities lending agreements to the extent the fair value of the underlying collateral differs from the contractual agreement amount and from margin provided to customers.
|
•
|
OTC derivatives, which are reported net by counterparty when a legal right of setoff exists under an enforceable master netting agreement. OTC derivative exposure is based on a contract at fair value, net of cash collateral received or posted under credit support agreements. In addition, credit exposures on forward settling trades are included within Jefferies Group's derivative credit exposures.
|
•
|
Cash and cash equivalents, which includes both interest-bearing and non-interest-bearing deposits at banks.
|
•
|
Client on-boarding and approving counterparty credit limits;
|
•
|
Negotiating, approving and monitoring credit terms in legal and master documentation;
|
•
|
Determining the analytical standards and risk parameters for ongoing management and monitoring credit risk books;
|
•
|
Actively managing daily exposure, exceptions and breaches; and
|
•
|
Monitoring daily margin call activity and counterparty performance.
|
Counterparty Credit Exposure by Region
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
Loans and Lending
|
|
Securities and
Margin Finance
|
|
OTC Derivatives
|
|
Total
|
|
Cash and Cash
Equivalents
|
|
Total with Cash and
Cash Equivalents
|
||||||||||||||||||||||||||||||||||||
|
At
|
|
At
|
|
At
|
|
At
|
|
At
|
|
At
|
||||||||||||||||||||||||||||||||||||
|
November 30, 2018
|
|
December 31, 2017
|
|
November 30, 2018
|
|
December 31, 2017
|
|
November 30, 2018
|
|
December 31, 2017
|
|
November 30, 2018
|
|
December 31, 2017
|
|
November 30, 2018
|
|
December 31, 2017
|
|
November 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Asia/Latin America/
Other
|
$
|
—
|
|
|
$
|
3.0
|
|
|
$
|
30.2
|
|
|
$
|
45.8
|
|
|
$
|
0.1
|
|
|
$
|
0.3
|
|
|
$
|
30.3
|
|
|
$
|
49.1
|
|
|
$
|
304.0
|
|
|
$
|
280.7
|
|
|
$
|
334.3
|
|
|
$
|
329.8
|
|
Europe
|
0.3
|
|
|
1.0
|
|
|
427.0
|
|
|
403.5
|
|
|
27.3
|
|
|
54.0
|
|
|
454.6
|
|
|
458.5
|
|
|
170.8
|
|
|
540.0
|
|
|
625.4
|
|
|
998.5
|
|
||||||||||||
North America
|
125.2
|
|
|
128.0
|
|
|
376.7
|
|
|
462.0
|
|
|
105.9
|
|
|
255.3
|
|
|
607.8
|
|
|
845.3
|
|
|
4,671.1
|
|
|
4,343.8
|
|
|
5,278.9
|
|
|
5,189.1
|
|
||||||||||||
Total
|
$
|
125.5
|
|
|
$
|
132.0
|
|
|
$
|
833.9
|
|
|
$
|
911.3
|
|
|
$
|
133.3
|
|
|
$
|
309.6
|
|
|
$
|
1,092.7
|
|
|
$
|
1,352.9
|
|
|
$
|
5,145.9
|
|
|
$
|
5,164.5
|
|
|
$
|
6,238.6
|
|
|
$
|
6,517.4
|
|
Counterparty Credit Exposure by Industry
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
Loans and Lending
|
|
Securities and
Margin Finance
|
|
OTC Derivatives
|
|
Total
|
|
Cash and Cash
Equivalents
|
|
Total with Cash and
Cash Equivalents
|
||||||||||||||||||||||||||||||||||||
|
At
|
|
At
|
|
At
|
|
At
|
|
At
|
|
At
|
||||||||||||||||||||||||||||||||||||
|
November 30, 2018
|
|
December 31, 2017
|
|
November 30, 2018
|
|
December 31, 2017
|
|
November 30, 2018
|
|
December 31, 2017
|
|
November 30, 2018
|
|
December 31, 2017
|
|
November 30, 2018
|
|
December 31, 2017
|
|
November 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Asset Managers
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.6
|
|
|
$
|
15.9
|
|
|
$
|
—
|
|
|
$
|
7.1
|
|
|
$
|
0.6
|
|
|
$
|
23.0
|
|
|
$
|
2,812.4
|
|
|
$
|
2,920.3
|
|
|
$
|
2,813.0
|
|
|
$
|
2,943.3
|
|
Banks, Broker-dealers
|
0.4
|
|
|
1.7
|
|
|
619.6
|
|
|
620.8
|
|
|
118.9
|
|
|
282.6
|
|
|
738.9
|
|
|
905.1
|
|
|
2,333.5
|
|
|
2,244.2
|
|
|
3,072.4
|
|
|
3,149.3
|
|
||||||||||||
Commodities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Corporates
|
92.9
|
|
|
87.5
|
|
|
—
|
|
|
—
|
|
|
7.2
|
|
|
14.7
|
|
|
100.1
|
|
|
102.2
|
|
|
—
|
|
|
—
|
|
|
100.1
|
|
|
102.2
|
|
||||||||||||
Other
|
32.2
|
|
|
42.8
|
|
|
213.7
|
|
|
274.6
|
|
|
7.2
|
|
|
5.2
|
|
|
253.1
|
|
|
322.6
|
|
|
—
|
|
|
—
|
|
|
253.1
|
|
|
322.6
|
|
||||||||||||
Total
|
$
|
125.5
|
|
|
$
|
132.0
|
|
|
$
|
833.9
|
|
|
$
|
911.3
|
|
|
$
|
133.3
|
|
|
$
|
309.6
|
|
|
$
|
1,092.7
|
|
|
$
|
1,352.9
|
|
|
$
|
5,145.9
|
|
|
$
|
5,164.5
|
|
|
$
|
6,238.6
|
|
|
$
|
6,517.4
|
|
|
November 30, 2018
|
||||||||||||||||||||||||||||||||||
|
Issuer Risk
|
|
Counterparty Risk
|
|
Issuer and Counterparty Risk
|
||||||||||||||||||||||||||||||
|
Fair Value of
Long Debt
Securities
|
|
Fair Value of
Short Debt
Securities
|
|
Net Derivative
Notional
Exposure
|
|
Loans
and
Lending
|
|
Securities
and Margin
Finance
|
|
OTC
Derivatives
|
|
Cash and
Cash Equivalents
|
|
Excluding
Cash and Cash Equivalents
|
|
Including
Cash and
Cash
Equivalents
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Finland
|
$
|
279.8
|
|
|
$
|
(6.7
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
273.1
|
|
|
$
|
274.1
|
|
Japan
|
97.7
|
|
|
(92.8
|
)
|
|
8.0
|
|
|
—
|
|
|
11.3
|
|
|
—
|
|
|
136.9
|
|
|
24.2
|
|
|
161.1
|
|
|||||||||
Italy
|
1,778.1
|
|
|
(1,267.5
|
)
|
|
(354.5
|
)
|
|
—
|
|
|
0.2
|
|
|
0.1
|
|
|
—
|
|
|
156.4
|
|
|
156.4
|
|
|||||||||
United Kingdom
|
311.6
|
|
|
(168.2
|
)
|
|
(30.3
|
)
|
|
0.3
|
|
|
63.1
|
|
|
18.5
|
|
|
(56.4
|
)
|
|
195.0
|
|
|
138.6
|
|
|||||||||
Belgium
|
65.4
|
|
|
(39.8
|
)
|
|
2.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
107.3
|
|
|
28.4
|
|
|
135.7
|
|
|||||||||
Netherlands
|
317.4
|
|
|
(316.1
|
)
|
|
70.4
|
|
|
—
|
|
|
39.5
|
|
|
—
|
|
|
—
|
|
|
111.2
|
|
|
111.2
|
|
|||||||||
Germany
|
175.4
|
|
|
(384.8
|
)
|
|
129.4
|
|
|
—
|
|
|
89.7
|
|
|
1.3
|
|
|
93.3
|
|
|
11.0
|
|
|
104.3
|
|
|||||||||
Switzerland
|
100.5
|
|
|
(50.1
|
)
|
|
5.7
|
|
|
—
|
|
|
37.7
|
|
|
2.7
|
|
|
3.8
|
|
|
96.5
|
|
|
100.3
|
|
|||||||||
Hong Kong
|
13.8
|
|
|
(39.7
|
)
|
|
3.5
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
84.9
|
|
|
(21.9
|
)
|
|
63.0
|
|
|||||||||
Singapore
|
21.1
|
|
|
(1.4
|
)
|
|
1.0
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
31.2
|
|
|
20.8
|
|
|
52.0
|
|
|||||||||
Total
|
$
|
3,160.8
|
|
|
$
|
(2,367.1
|
)
|
|
$
|
(164.0
|
)
|
|
$
|
0.3
|
|
|
$
|
242.1
|
|
|
$
|
22.6
|
|
|
$
|
402.0
|
|
|
$
|
894.7
|
|
|
$
|
1,296.7
|
|
|
December 31, 2017
|
||||||||||||||||||||||||||||||||||
|
Issuer Risk
|
|
Counterparty Risk
|
|
Issuer and Counterparty Risk
|
||||||||||||||||||||||||||||||
|
Fair Value of
Long Debt
Securities
|
|
Fair Value of
Short Debt
Securities
|
|
Net Derivative
Notional
Exposure
|
|
Loans
and
Lending
|
|
Securities
and Margin
Finance
|
|
OTC
Derivatives
|
|
Cash and
Cash Equivalents
|
|
Excluding
Cash and Cash Equivalents
|
|
Including
Cash and
Cash Equivalents
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Germany
|
$
|
493.3
|
|
|
$
|
(396.2
|
)
|
|
$
|
98.2
|
|
|
$
|
—
|
|
|
$
|
78.9
|
|
|
$
|
2.1
|
|
|
$
|
181.9
|
|
|
$
|
276.3
|
|
|
$
|
458.2
|
|
United Kingdom
|
634.6
|
|
|
(394.4
|
)
|
|
(72.1
|
)
|
|
0.7
|
|
|
97.8
|
|
|
26.9
|
|
|
45.0
|
|
|
293.5
|
|
|
338.5
|
|
|||||||||
Spain
|
217.9
|
|
|
(181.3
|
)
|
|
7.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
151.6
|
|
|
44.1
|
|
|
195.7
|
|
|||||||||
Japan
|
100.1
|
|
|
(81.3
|
)
|
|
4.1
|
|
|
—
|
|
|
25.8
|
|
|
—
|
|
|
136.3
|
|
|
48.7
|
|
|
185.0
|
|
|||||||||
Canada
|
205.3
|
|
|
(164.7
|
)
|
|
(128.5
|
)
|
|
—
|
|
|
17.3
|
|
|
222.8
|
|
|
7.4
|
|
|
152.2
|
|
|
159.6
|
|
|||||||||
Netherlands
|
315.9
|
|
|
(210.9
|
)
|
|
0.9
|
|
|
—
|
|
|
44.1
|
|
|
2.2
|
|
|
—
|
|
|
152.2
|
|
|
152.2
|
|
|||||||||
Switzerland
|
31.0
|
|
|
(16.9
|
)
|
|
(1.1
|
)
|
|
—
|
|
|
54.3
|
|
|
3.3
|
|
|
4.5
|
|
|
70.6
|
|
|
75.1
|
|
|||||||||
Hong Kong
|
23.0
|
|
|
(25.1
|
)
|
|
—
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
|
58.7
|
|
|
(1.1
|
)
|
|
57.6
|
|
|||||||||
Australia
|
50.5
|
|
|
(14.0
|
)
|
|
0.3
|
|
|
—
|
|
|
15.0
|
|
|
0.3
|
|
|
4.7
|
|
|
52.1
|
|
|
56.8
|
|
|||||||||
Singapore
|
36.0
|
|
|
(4.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24.7
|
|
|
31.8
|
|
|
56.5
|
|
|||||||||
Total
|
$
|
2,107.6
|
|
|
$
|
(1,489.0
|
)
|
|
$
|
(90.7
|
)
|
|
$
|
0.7
|
|
|
$
|
334.2
|
|
|
$
|
257.6
|
|
|
$
|
614.8
|
|
|
$
|
1,120.4
|
|
|
$
|
1,735.2
|
|
|
Expected Maturity Date
|
||||||||||||||||||||||||||||||
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Total
|
|
Fair Value
|
||||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||||||||||
Rate Sensitive Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Available for Sale Fixed
Income Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Government
|
$
|
1,072,856
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,072,856
|
|
|
$
|
1,072,856
|
|
Weighted-Average
Interest Rate
|
0.55
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Residential mortgage-backed:
Rated Investment Grade
|
$
|
23,914
|
|
|
$
|
20,467
|
|
|
$
|
17,692
|
|
|
$
|
15,279
|
|
|
$
|
13,382
|
|
|
$
|
119,784
|
|
|
$
|
210,518
|
|
|
$
|
210,518
|
|
Weighted-Average
Interest Rate
|
2.58
|
%
|
|
2.63
|
%
|
|
2.67
|
%
|
|
2.68
|
%
|
|
2.68
|
%
|
|
2.69
|
%
|
|
|
|
|
|
|
||||||||
Commercial mortgage-backed:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Rated Investment Grade
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,807
|
|
|
$
|
4,835
|
|
|
$
|
—
|
|
|
$
|
15,642
|
|
|
$
|
15,642
|
|
Weighted-Average
Interest Rate
|
|
|
|
|
|
|
|
4.52
|
%
|
|
3.52
|
%
|
|
|
|
|
|
|
|
|
|||||||||||
Other asset-backed:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Rated Investment Grade
|
$
|
16,337
|
|
|
$
|
46,679
|
|
|
$
|
24,906
|
|
|
$
|
4,194
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
92,116
|
|
|
$
|
92,116
|
|
Weighted-Average
Interest Rate
|
4.19
|
%
|
|
4.20
|
%
|
|
3.55
|
%
|
|
3.66
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Rated Less Than Investment
Grade/Not Rated
|
$
|
—
|
|
|
$
|
16,680
|
|
|
$
|
2,074
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,754
|
|
|
$
|
18,754
|
|
Weighted-Average
Interest Rate
|
|
|
5.37
|
%
|
|
6.39
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expected Maturity Date
|
||||||||||||||||||||||||||||||
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Total
|
|
Fair Value
|
||||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||||||||||
Rate Sensitive Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed Interest Rate Borrowings
|
$
|
684,528
|
|
|
$
|
—
|
|
|
$
|
750,000
|
|
|
$
|
28,000
|
|
|
$
|
1,350,000
|
|
|
$
|
3,856,434
|
|
|
$
|
6,668,962
|
|
|
$
|
6,524,459
|
|
Weighted-Average Interest Rate
|
8.49
|
%
|
|
|
|
6.88
|
%
|
|
3.05
|
%
|
|
5.49
|
%
|
|
5.34
|
%
|
|
|
|
|
|
|
|||||||||
Variable Interest Rate Borrowings
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
185,000
|
|
|
$
|
—
|
|
|
$
|
79,000
|
|
|
$
|
—
|
|
|
$
|
264,000
|
|
|
$
|
262,538
|
|
Weighted-Average Interest Rate
|
|
|
|
|
3.94
|
%
|
|
|
|
4.85
|
%
|
|
|
|
|
|
|
|
|
||||||||||||
Borrowings with Foreign Currency Exposure
|
$
|
5,655
|
|
|
$
|
565,500
|
|
|
$
|
—
|
|
|
$
|
4,524
|
|
|
$
|
—
|
|
|
$
|
161,733
|
|
|
$
|
737,412
|
|
|
$
|
725,676
|
|
Weighted-Average Interest Rate
|
0.68
|
%
|
|
2.38
|
%
|
|
|
|
2.25
|
%
|
|
|
|
2.95
|
%
|
|
|
|
|
|
|
Item 8
.
|
Financial Statements and Supplementary Data
.
|
Item 9
.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
.
|
Item 9A
.
|
Controls and Procedures
.
|
•
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company;
|
•
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
|
•
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the consolidated financial statements.
|
Item 9B
.
|
Other Information
.
|
Item 10
.
|
Directors, Executive Officers of the Registrant and Corporate Governance
.
|
Item 11
.
|
Executive Compensation
.
|
Item 12
.
|
Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
.
|
Item 13
.
|
Certain Relationships and Related Transactions, and Director Independence
.
|
Item 14
.
|
Principal Accountant Fees and Services
.
|
Item 15.
|
Exhibits and Financial Statement Schedules.
|
(a)(1)
|
Financial Statements.
|
Reports of Independent Registered Public Accounting Firms
|
F-1
|
Financial Statements:
|
|
Consolidated Statements of Financial Condition at November 30, 2018 and December 31, 2017
|
F-4
|
Consolidated Statements of Operations for the eleven months ended November 30, 2018 and the twelve months ended December 31, 2017 and 2016
|
F-5
|
Consolidated Statements of Comprehensive Income (Loss) for the eleven months ended November 30, 2018 and the twelve months ended December 31, 2017 and 2016
|
F-7
|
Consolidated Statements of Cash Flows for the eleven months ended November 30, 2018 and the twelve months ended December 31, 2017 and 2016
|
F-8
|
Consolidated Statements of Changes in Equity for the eleven months ended November 30, 2018 and the twelve months ended December 31, 2017 and 2016
|
F-10
|
Notes to Consolidated Financial Statements
|
F-11
|
(2)
|
Financial Statement Schedules.
|
(3)
|
See Exhibit Index below for a complete list of Exhibits to this report.
|
(b)
|
Exhibits.
|
Item 16
.
|
Form 10-K Summary
.
|
3.1
|
|
|
|
3.2
|
|
|
|
4.1
|
The Company undertakes to furnish the Securities and Exchange Commission, upon written request, a copy of all instruments with respect to long-term debt not filed herewith.
|
|
|
10.31
|
|
|
|
10.32
|
|
|
10.33
|
|
|
|
10.34
|
|
|
|
10.35
|
|
|
|
10.36
|
|
|
|
10.37
|
|
|
|
10.38
|
|
|
|
10.39
|
|
|
|
10.40
|
|
|
|
10.41
|
|
|
|
10.42
|
|
|
|
10.43
|
|
|
|
10.44
|
|
|
|
10.45
|
|
|
|
10.46
|
|
|
|
10.47
|
|
|
|
10.48
|
|
|
|
10.49
|
|
|
|
10.50
|
|
|
|
10.51
|
|
|
|
21
|
|
|
|
23.1
|
|
|
|
23.2
|
|
|
|
23.3
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32.1
|
|
|
|
32.2
|
|
|
|
101
|
Financial statements from the Annual Report on Form 10-K of Jefferies Financial Group Inc. for the eleven months ended November 30, 2018, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Statements of Financial Condition, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income (Loss), (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Changes in Equity, (vi) the Notes to Consolidated Financial Statements and (vii) the Financial Statement Schedule.
|
+
|
Management/Employment Contract or Compensatory Plan or Arrangement.
|
*
|
Incorporated by reference.
|
**
|
Furnished herewith pursuant to item 601(b) (32) of Regulation S-K.
|
|
|
JEFFERIES FINANCIAL GROUP INC.
|
|
|
|
|
|
Date: January 28, 2019
|
By:
|
|
/s/ John M. Dalton
|
|
|
|
Name: John M. Dalton
|
|
|
|
Title: Vice President and Controller
|
Date
|
|
Signature
|
Title
|
|
|
|
|
January 28, 2019
|
By:
|
/s/ Joseph S. Steinberg
|
Chairman of the Board
|
|
|
Joseph S. Steinberg
|
|
|
|
|
|
January 28, 2019
|
By:
|
/s/ Richard B. Handler
|
Chief Executive Officer and Director
|
|
|
Richard B. Handler
|
(Principal Executive Officer)
|
|
|
|
|
January 28, 2019
|
By:
|
/s/ Brian P. Friedman
|
President and Director
|
|
|
Brian P. Friedman
|
|
|
|
|
|
January 28, 2019
|
By:
|
/s/ Teresa S. Gendron
|
Vice President and Chief Financial Officer
|
|
|
Teresa S. Gendron
|
(Principal Financial Officer)
|
|
|
|
|
January 28, 2019
|
By:
|
/s/ John M. Dalton
|
Vice President and Controller
|
|
|
John M. Dalton
|
(Principal Accounting Officer)
|
|
|
|
|
January 28, 2019
|
By:
|
/s/ Linda L. Adamany
|
Director
|
|
|
Linda L. Adamany
|
|
|
|
|
|
January 28, 2019
|
By:
|
/s/ Barry J. Alperin
|
Director
|
|
|
Barry J. Alperin
|
|
|
|
|
|
January 28, 2019
|
By:
|
/s/ Robert D. Beyer
|
Director
|
|
|
Robert D. Beyer
|
|
|
|
|
|
January 28, 2019
|
By:
|
/s/ Francisco L. Borges
|
Director
|
|
|
Francisco L. Borges
|
|
|
|
|
|
January 28, 2019
|
By:
|
/s/ W. Patrick Campbell
|
Director
|
|
|
W. Patrick Campbell
|
|
|
|
|
|
January 28, 2019
|
By:
|
/s/ MaryAnne Gilmartin
|
Director
|
|
|
MaryAnne Gilmartin
|
|
|
|
|
|
January 28, 2019
|
By:
|
/s/ Robert E. Joyal
|
Director
|
|
|
Robert E. Joyal
|
|
|
|
|
|
January 28, 2019
|
By:
|
/s/ Jacob M. Katz
|
Director
|
|
|
Jacob M. Katz
|
|
|
|
|
|
January 28, 2019
|
By:
|
/s/ Jeffrey C. Keil
|
Director
|
|
|
Jeffrey C. Keil
|
|
|
|
|
|
January 28, 2019
|
By:
|
/s/ Michael T. O'Kane
|
Director
|
|
|
Michael T. O'Kane
|
|
|
|
|
|
January 28, 2019
|
By:
|
/s/ Stuart H. Reese
|
Director
|
|
|
Stuart H. Reese
|
|
|
November 30, 2018
|
|
December 31, 2017
|
||||
ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
5,258,809
|
|
|
$
|
5,275,480
|
|
Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations
|
707,960
|
|
|
578,014
|
|
||
Financial instruments owned, including securities pledged of $13,059,802 and $10,842,051:
|
|
|
|
|
|
||
Trading assets, at fair value
|
17,463,256
|
|
|
16,082,676
|
|
||
Available for sale securities
|
1,409,886
|
|
|
716,561
|
|
||
Total financial instruments owned
|
18,873,142
|
|
|
16,799,237
|
|
||
Loans to and investments in associated companies
|
2,417,332
|
|
|
2,066,829
|
|
||
Securities borrowed
|
6,538,212
|
|
|
7,721,803
|
|
||
Securities purchased under agreements to resell
|
2,785,758
|
|
|
3,689,559
|
|
||
Receivables
|
6,287,401
|
|
|
5,419,015
|
|
||
Intangible assets, net and goodwill
|
1,890,131
|
|
|
2,463,180
|
|
||
Deferred tax asset, net
|
512,789
|
|
|
743,811
|
|
||
Other assets
|
1,859,561
|
|
|
2,412,180
|
|
||
Total assets (1)
|
$
|
47,131,095
|
|
|
$
|
47,169,108
|
|
|
|
|
|
||||
LIABILITIES
|
|
|
|
|
|
||
Short-term borrowings
|
$
|
387,492
|
|
|
$
|
436,215
|
|
Trading liabilities, at fair value
|
9,478,946
|
|
|
8,454,965
|
|
||
Securities loaned
|
1,838,688
|
|
|
2,843,911
|
|
||
Securities sold under agreements to repurchase
|
8,643,069
|
|
|
8,660,511
|
|
||
Other secured financings
|
1,534,271
|
|
|
1,029,485
|
|
||
Payables, expense accruals and other liabilities
|
7,407,030
|
|
|
7,167,666
|
|
||
Long-term debt
|
7,617,563
|
|
|
7,885,783
|
|
||
Total liabilities (1)
|
36,907,059
|
|
|
36,478,536
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
||||
|
|
|
|
||||
MEZZANINE EQUITY
|
|
|
|
|
|
||
Redeemable noncontrolling interests
|
19,779
|
|
|
426,593
|
|
||
Mandatorily redeemable convertible preferred shares
|
125,000
|
|
|
125,000
|
|
||
|
|
|
|
||||
EQUITY
|
|
|
|
|
|
||
Common shares, par value $1 per share, authorized 600,000,000 shares; 307,515,472 and 356,227,038 shares issued and outstanding, after deducting 109,460,774 and 60,165,980 shares held in treasury
|
307,515
|
|
|
356,227
|
|
||
Additional paid-in capital
|
3,854,847
|
|
|
4,676,038
|
|
||
Accumulated other comprehensive income
|
288,286
|
|
|
372,724
|
|
||
Retained earnings
|
5,610,218
|
|
|
4,700,968
|
|
||
Total Jefferies Financial Group Inc. shareholders' equity
|
10,060,866
|
|
|
10,105,957
|
|
||
Noncontrolling interests
|
18,391
|
|
|
33,022
|
|
||
Total equity
|
10,079,257
|
|
|
10,138,979
|
|
||
|
|
|
|
||||
Total
|
$
|
47,131,095
|
|
|
$
|
47,169,108
|
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Commissions and other fees
|
$
|
634,271
|
|
|
$
|
593,257
|
|
|
$
|
611,574
|
|
Principal transactions
|
232,224
|
|
|
923,418
|
|
|
534,784
|
|
|||
Investment banking
|
1,904,870
|
|
|
1,764,285
|
|
|
1,193,973
|
|
|||
Interest income
|
1,294,325
|
|
|
993,198
|
|
|
926,089
|
|
|||
Manufacturing revenues
|
357,427
|
|
|
326,197
|
|
|
412,826
|
|
|||
Other
|
586,611
|
|
|
448,551
|
|
|
168,765
|
|
|||
Total revenues
|
5,009,728
|
|
|
5,048,906
|
|
|
3,848,011
|
|
|||
Interest expense of Jefferies Group
|
1,245,694
|
|
|
971,461
|
|
|
812,637
|
|
|||
Net revenues
|
3,764,034
|
|
|
4,077,445
|
|
|
3,035,374
|
|
|||
|
|
|
|
|
|
||||||
Expenses:
|
|
|
|
|
|
|
|
|
|||
Compensation and benefits
|
1,862,782
|
|
|
1,950,935
|
|
|
1,688,325
|
|
|||
Cost of sales
|
307,071
|
|
|
280,952
|
|
|
337,039
|
|
|||
Floor brokerage and clearing fees
|
184,210
|
|
|
174,506
|
|
|
167,205
|
|
|||
Interest expense
|
89,249
|
|
|
101,202
|
|
|
95,757
|
|
|||
Depreciation and amortization
|
120,317
|
|
|
110,395
|
|
|
117,111
|
|
|||
Selling, general and other expenses
|
961,328
|
|
|
778,052
|
|
|
797,127
|
|
|||
Total expenses
|
3,524,957
|
|
|
3,396,042
|
|
|
3,202,564
|
|
|||
Income (loss) from continuing operations before income taxes and income (loss) related to associated companies
|
239,077
|
|
|
681,403
|
|
|
(167,190
|
)
|
|||
Income (loss) related to associated companies
|
57,023
|
|
|
(74,901
|
)
|
|
154,598
|
|
|||
Income (loss) from continuing operations before income taxes
|
296,100
|
|
|
606,502
|
|
|
(12,592
|
)
|
|||
Income tax provision
|
19,008
|
|
|
642,286
|
|
|
25,773
|
|
|||
Income (loss) from continuing operations
|
277,092
|
|
|
(35,784
|
)
|
|
(38,365
|
)
|
|||
Income from discontinued operations, net of income tax provision of $47,045, $118,681 and $96,336
|
130,063
|
|
|
288,631
|
|
|
232,686
|
|
|||
Gain on disposal of discontinued operations, net of income tax provision of $229,553, $0 and $0
|
643,921
|
|
|
—
|
|
|
—
|
|
|||
Net income
|
1,051,076
|
|
|
252,847
|
|
|
194,321
|
|
|||
Net loss attributable to the noncontrolling interests
|
12,975
|
|
|
3,455
|
|
|
1,426
|
|
|||
Net income attributable to the redeemable noncontrolling interests
|
(37,263
|
)
|
|
(84,576
|
)
|
|
(65,746
|
)
|
|||
Preferred stock dividends
|
(4,470
|
)
|
|
(4,375
|
)
|
|
(4,063
|
)
|
|||
Net income attributable to Jefferies Financial Group Inc. common shareholders
|
$
|
1,022,318
|
|
|
$
|
167,351
|
|
|
$
|
125,938
|
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
Basic earnings (loss) per common share attributable to Jefferies Financial Group Inc. common shareholders:
|
|
|
|
|
|
||||||
Income (loss) from continuing operations
|
$
|
0.82
|
|
|
$
|
(0.10
|
)
|
|
$
|
(0.10
|
)
|
Income from discontinued operations
|
0.27
|
|
|
0.55
|
|
|
0.44
|
|
|||
Gain on disposal of discontinued operations
|
1.84
|
|
|
—
|
|
|
—
|
|
|||
Net income
|
$
|
2.93
|
|
|
$
|
0.45
|
|
|
$
|
0.34
|
|
|
|
|
|
|
|
||||||
Diluted earnings (loss) per common share attributable to Jefferies Financial Group Inc. common shareholders:
|
|
|
|
|
|
|
|
|
|||
Income (loss) from continuing operations
|
$
|
0.81
|
|
|
$
|
(0.10
|
)
|
|
$
|
(0.10
|
)
|
Income from discontinued operations
|
0.26
|
|
|
0.55
|
|
|
0.44
|
|
|||
Gain on disposal of discontinued operations
|
1.83
|
|
|
—
|
|
|
—
|
|
|||
Net income
|
$
|
2.90
|
|
|
$
|
0.45
|
|
|
$
|
0.34
|
|
|
|
|
|
|
|
||||||
Amounts attributable to Jefferies Financial Group Inc. common shareholders:
|
|
|
|
|
|
|
|
|
|||
Income (loss) from continuing operations, net of taxes
|
$
|
285,475
|
|
|
$
|
(36,003
|
)
|
|
$
|
(37,937
|
)
|
Income from discontinued operations, net of taxes
|
92,922
|
|
|
203,354
|
|
|
163,875
|
|
|||
Gain on disposal of discontinued operations, net of taxes
|
643,921
|
|
|
—
|
|
|
—
|
|
|||
Net income
|
$
|
1,022,318
|
|
|
$
|
167,351
|
|
|
$
|
125,938
|
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
|
|
|
|
|
|
||||||
Net income
|
$
|
1,051,076
|
|
|
$
|
252,847
|
|
|
$
|
194,321
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|||
Net unrealized holding gains (losses) on investments arising during the period, net of income tax provision (benefit) of $(551), $3,450 and $2,262
|
(1,560
|
)
|
|
5,923
|
|
|
3,900
|
|
|||
Less: reclassification adjustment for net (gains) losses included in net income, net of income tax provision (benefit) of $37, $124 and $2
|
(109
|
)
|
|
(212
|
)
|
|
(4
|
)
|
|||
Net change in unrealized holding gains (losses) on investments, net of income tax provision (benefit) of $(588), $3,326 and $2,260
|
(1,669
|
)
|
|
5,711
|
|
|
3,896
|
|
|||
|
|
|
|
|
|
||||||
Net unrealized foreign exchange gains (losses) arising during the period, net of income tax provision (benefit) of $(11,089), $14,616 and $(3,530)
|
(71,543
|
)
|
|
78,493
|
|
|
(121,581
|
)
|
|||
Less: reclassification adjustment for foreign exchange (gains) losses included in net income, net of income tax provision (benefit) of $(16), $1,086 and $0
|
(20,459
|
)
|
|
5,310
|
|
|
—
|
|
|||
Net change in unrealized foreign exchange gains (losses), net of income tax provision (benefit) of $(11,073), $13,530 and $(3,530)
|
(92,002
|
)
|
|
83,803
|
|
|
(121,581
|
)
|
|||
|
|
|
|
|
|
||||||
Net unrealized gains (losses) on instrument specific credit risk arising during the period, net of income tax provision (benefit) of $9,289, $(13,215) and $(4,251)
|
29,620
|
|
|
(21,394
|
)
|
|
(6,494
|
)
|
|||
Less: reclassification adjustment for instrument specific credit risk (gains) losses included in net income, net of income tax provision (benefit) of $311, $0 and $0
|
(916
|
)
|
|
—
|
|
|
—
|
|
|||
Net change in unrealized instrument specific credit risk gains (losses), net of income tax provision (benefit) of $8,978, $(13,215) and $(4,251)
|
28,704
|
|
|
(21,394
|
)
|
|
(6,494
|
)
|
|||
|
|
|
|
|
|
||||||
Net unrealized gains (losses) on cash flow hedges arising during the period, net of income tax provision (benefit) of $552, $(593) and $0
|
1,608
|
|
|
(936
|
)
|
|
—
|
|
|||
Less: reclassification adjustment for cash flow hedges (gains) losses included in net income, net of income tax provision (benefit) of $0, $0 and $0
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net change in unrealized cash flow hedges gains (losses), net of income tax provision (benefit) of $552, $(593) and $0
|
1,608
|
|
|
(936
|
)
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Net pension gains (losses) arising during the period, net of income tax provision (benefit) of $(297), $2,018 and $(2,516)
|
(844
|
)
|
|
3,526
|
|
|
(5,451
|
)
|
|||
Less: reclassification adjustment for pension (gains) losses included in net income, net of income tax provision (benefit) of $(697), $(2,042) and $(700)
|
7,349
|
|
|
517
|
|
|
1,534
|
|
|||
Net change in pension liability benefits, net of income tax provision (benefit) of $400, $4,060 and $(1,816)
|
6,505
|
|
|
4,043
|
|
|
(3,917
|
)
|
|||
|
|
|
|
|
|
||||||
Other comprehensive income (loss), net of income taxes
|
(56,854
|
)
|
|
71,227
|
|
|
(128,096
|
)
|
|||
|
|
|
|
|
|
||||||
Comprehensive income
|
994,222
|
|
|
324,074
|
|
|
66,225
|
|
|||
Comprehensive loss attributable to the noncontrolling interests
|
12,975
|
|
|
3,455
|
|
|
1,426
|
|
|||
Comprehensive income attributable to the redeemable noncontrolling interests
|
(37,263
|
)
|
|
(84,576
|
)
|
|
(65,746
|
)
|
|||
Preferred stock dividends
|
(4,470
|
)
|
|
(4,375
|
)
|
|
(4,063
|
)
|
|||
|
|
|
|
|
|
||||||
Comprehensive income (loss) attributable to
Jefferies Financial Group Inc.
common shareholders
|
$
|
965,464
|
|
|
$
|
238,578
|
|
|
$
|
(2,158
|
)
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
Net cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
1,051,076
|
|
|
$
|
252,847
|
|
|
$
|
194,321
|
|
Adjustments to reconcile net income to net cash provided by operations:
|
|
|
|
|
|
|
|
|
|||
Pre-tax income from discontinued operations, including gain on disposal
|
(1,050,582
|
)
|
|
(407,312
|
)
|
|
(329,022
|
)
|
|||
Deferred income tax provision
|
236,406
|
|
|
712,055
|
|
|
118,631
|
|
|||
Depreciation and amortization of property, equipment and leasehold improvements
|
105,156
|
|
|
92,918
|
|
|
94,887
|
|
|||
Other amortization
|
(37,749
|
)
|
|
(28,159
|
)
|
|
(23,274
|
)
|
|||
Share-based compensation
|
48,249
|
|
|
48,384
|
|
|
33,597
|
|
|||
Provision for doubtful accounts
|
35,223
|
|
|
36,452
|
|
|
24,341
|
|
|||
Net securities (gains) losses
|
939
|
|
|
(23,028
|
)
|
|
(29,542
|
)
|
|||
Income related to associated companies
|
(130,685
|
)
|
|
(34,494
|
)
|
|
(171,782
|
)
|
|||
Distributions from associated companies
|
162,988
|
|
|
143,286
|
|
|
191,455
|
|
|||
Net losses related to property and equipment, and other assets
|
32,461
|
|
|
32,814
|
|
|
83,010
|
|
|||
Gain on sale of subsidiaries and associated companies
|
(221,712
|
)
|
|
(179,605
|
)
|
|
—
|
|
|||
Net change in:
|
|
|
|
|
|
|
|
|
|||
Securities deposited with clearing and depository organizations
|
64,911
|
|
|
163
|
|
|
(99,893
|
)
|
|||
Trading assets
|
(1,451,472
|
)
|
|
(648,703
|
)
|
|
2,763,558
|
|
|||
Securities borrowed
|
1,137,134
|
|
|
50,660
|
|
|
(805,779
|
)
|
|||
Securities purchased under agreements to resell
|
807,619
|
|
|
234,740
|
|
|
(112,777
|
)
|
|||
Receivables from brokers, dealers and clearing organizations
|
(602,950
|
)
|
|
(555,109
|
)
|
|
(488,623
|
)
|
|||
Receivables from customers of securities operations
|
(465,960
|
)
|
|
(732,344
|
)
|
|
340,690
|
|
|||
Other receivables
|
30,864
|
|
|
(216,189
|
)
|
|
(186,631
|
)
|
|||
Other assets
|
33,484
|
|
|
(8,102
|
)
|
|
(232,925
|
)
|
|||
Trading liabilities
|
1,142,878
|
|
|
(25,765
|
)
|
|
1,726,582
|
|
|||
Securities loaned
|
(964,137
|
)
|
|
381
|
|
|
(122,946
|
)
|
|||
Securities sold under agreements to repurchase
|
36,956
|
|
|
1,838,793
|
|
|
(3,144,433
|
)
|
|||
Payables to brokers, dealers and clearing organizations
|
250,603
|
|
|
(1,079,516
|
)
|
|
569,246
|
|
|||
Payables to customers of securities operations
|
512,760
|
|
|
366,721
|
|
|
(483,188
|
)
|
|||
Trade payables, expense accruals and other liabilities
|
(112,488
|
)
|
|
365,385
|
|
|
240,025
|
|
|||
Other
|
(125,519
|
)
|
|
(2,810
|
)
|
|
(61,900
|
)
|
|||
Net cash provided by operating activities - continuing operations
|
526,453
|
|
|
234,463
|
|
|
87,628
|
|
|||
Net cash provided by operating activities - discontinued operations
|
164,650
|
|
|
553,831
|
|
|
484,786
|
|
|||
Net cash provided by operating activities
|
691,103
|
|
|
788,294
|
|
|
572,414
|
|
|||
|
|
|
|
|
|
||||||
Net cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|||
Acquisitions of property, equipment and leasehold improvements, and other assets
|
(325,666
|
)
|
|
(123,027
|
)
|
|
(256,668
|
)
|
|||
Proceeds from disposals of property and equipment, and other assets
|
14,052
|
|
|
28,042
|
|
|
46,675
|
|
|||
Proceeds from sale of subsidiaries, net of expenses and cash of operations sold
|
100,000
|
|
|
289,767
|
|
|
—
|
|
|||
Proceeds from sale of associated companies
|
379,074
|
|
|
173,105
|
|
|
—
|
|
|||
Acquisitions, net of cash acquired
|
—
|
|
|
—
|
|
|
(9,673
|
)
|
|||
Purchases of and advances on notes, loans and other receivables
|
(351,831
|
)
|
|
(49,325
|
)
|
|
(342,281
|
)
|
|||
Collections on notes, loans and other receivables
|
216,426
|
|
|
272,439
|
|
|
121,825
|
|
|||
Loans to and investments in associated companies
|
(1,956,983
|
)
|
|
(3,305,791
|
)
|
|
(763,528
|
)
|
|||
Capital distributions and loan repayment from associated companies
|
1,973,739
|
|
|
3,106,423
|
|
|
703,108
|
|
|||
Deconsolidation of subsidiary entities
|
—
|
|
|
(21,129
|
)
|
|
(326
|
)
|
|||
Purchases of investments (other than short-term)
|
(3,423,191
|
)
|
|
(1,146,595
|
)
|
|
(739,298
|
)
|
|||
Proceeds from maturities of investments
|
1,084,277
|
|
|
344,223
|
|
|
162,393
|
|
|||
Proceeds from sales of investments
|
1,571,507
|
|
|
443,300
|
|
|
483,360
|
|
|||
Other
|
130
|
|
|
1,339
|
|
|
4,420
|
|
|||
Net cash provided by (used for) investing activities - continuing operations
|
(718,466
|
)
|
|
12,771
|
|
|
(589,993
|
)
|
|||
Net cash provided by (used for) investing activities - discontinued operations
|
860,909
|
|
|
(67,405
|
)
|
|
(46,222
|
)
|
|||
Net cash provided by (used for) investing activities
|
142,443
|
|
|
(54,634
|
)
|
|
(636,215
|
)
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
Net cash flows from financing activities:
|
|
|
|
|
|
||||||
Issuance of debt, net of issuance costs
|
$
|
2,754,665
|
|
|
$
|
1,620,691
|
|
|
$
|
1,020,050
|
|
Other changes in short-term borrowings, net
|
—
|
|
|
23,324
|
|
|
204,882
|
|
|||
Repayment of debt
|
(2,678,323
|
)
|
|
(848,350
|
)
|
|
(798,865
|
)
|
|||
Net change in other secured financings
|
503,043
|
|
|
1,248
|
|
|
116,702
|
|
|||
Net change in bank overdrafts
|
10,290
|
|
|
(5,650
|
)
|
|
(46,536
|
)
|
|||
Issuance of common shares
|
3,611
|
|
|
1,501
|
|
|
1,062
|
|
|||
Net contributions from (distributions to) redeemable noncontrolling interests
|
455
|
|
|
(185
|
)
|
|
812
|
|
|||
Distributions to noncontrolling interests
|
(7,408
|
)
|
|
(12,031
|
)
|
|
(18,544
|
)
|
|||
Contributions from noncontrolling interests
|
113
|
|
|
40,072
|
|
|
154,522
|
|
|||
Purchase of common shares for treasury
|
(1,130,854
|
)
|
|
(100,477
|
)
|
|
(95,020
|
)
|
|||
Dividends paid
|
(151,758
|
)
|
|
(117,407
|
)
|
|
(91,296
|
)
|
|||
Other
|
1
|
|
|
(1
|
)
|
|
488
|
|
|||
Net cash provided by (used for) financing activities - continuing operations
|
(696,165
|
)
|
|
602,735
|
|
|
448,257
|
|
|||
Net cash provided by (used for) financing activities - discontinued operations
|
120,322
|
|
|
(167,934
|
)
|
|
(217,351
|
)
|
|||
Net cash provided by (used for) financing activities
|
(575,843
|
)
|
|
434,801
|
|
|
230,906
|
|
|||
|
|
|
|
|
|
||||||
Effect of foreign exchange rate changes on cash
|
(19,546
|
)
|
|
12,067
|
|
|
(27,498
|
)
|
|||
|
|
|
|
|
|
||||||
Change in cash classified as assets held for sale
|
—
|
|
|
(3,136
|
)
|
|
(5,206
|
)
|
|||
|
|
|
|
|
|
||||||
Net increase in cash, cash equivalents and restricted cash
|
238,157
|
|
|
1,177,392
|
|
|
134,401
|
|
|||
|
|
|
|
|
|
|
|
|
|||
Cash, cash equivalents and restricted cash at beginning of period
|
5,774,505
|
|
|
4,597,113
|
|
|
4,462,712
|
|
|||
|
|
|
|
|
|
|
|
|
|||
Cash, cash equivalents and restricted cash at end of period
|
$
|
6,012,662
|
|
|
$
|
5,774,505
|
|
|
$
|
4,597,113
|
|
|
|
|
|
|
|
|
November 30, 2018
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
5,258,809
|
|
|
$
|
5,275,480
|
|
|
$
|
3,807,558
|
|
Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations
|
673,141
|
|
|
478,284
|
|
|
757,444
|
|
|||
Other assets
|
80,712
|
|
|
20,741
|
|
|
32,111
|
|
|||
Total cash, cash equivalents and restricted cash
|
$
|
6,012,662
|
|
|
$
|
5,774,505
|
|
|
$
|
4,597,113
|
|
|
Jefferies Financial Group Inc. Common Shareholders
|
|
|
|
|
||||||||||||||||||||||
|
Common
Shares
$1 Par
Value
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Retained
Earnings
|
|
Subtotal
|
|
Non-controlling
Interests
|
|
Total
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance, January 1, 2016
|
$
|
362,617
|
|
|
$
|
4,986,819
|
|
|
$
|
438,793
|
|
|
$
|
4,612,982
|
|
|
$
|
10,401,211
|
|
|
$
|
64,679
|
|
|
$
|
10,465,890
|
|
Net income
|
|
|
|
|
|
|
|
|
|
125,938
|
|
|
125,938
|
|
|
(1,426
|
)
|
|
124,512
|
|
|||||||
Other comprehensive loss, net of taxes
|
|
|
|
|
|
|
(128,096
|
)
|
|
|
|
|
(128,096
|
)
|
|
|
|
|
(128,096
|
)
|
|||||||
Contributions from noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
154,522
|
|
|
154,522
|
|
|||||||
Distributions to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
(18,544
|
)
|
|
(18,544
|
)
|
|||||||
Deconsolidation of asset management entities
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
(9,709
|
)
|
|
(9,709
|
)
|
|||||||
Change in interest in consolidated subsidiary
|
|
|
|
(261
|
)
|
|
|
|
|
|
|
|
(261
|
)
|
|
261
|
|
|
—
|
|
|||||||
Reclassification to redeemable noncontrolling interest
|
|
|
|
|
|
|
|
|
—
|
|
|
(14,234
|
)
|
|
(14,234
|
)
|
|||||||||||
Share-based compensation expense
|
|
|
|
33,597
|
|
|
|
|
|
|
|
|
33,597
|
|
|
|
|
|
33,597
|
|
|||||||
Change in fair value of redeemable noncontrolling interests
|
|
|
|
(115,963
|
)
|
|
|
|
|
|
|
|
(115,963
|
)
|
|
|
|
|
(115,963
|
)
|
|||||||
Purchase of common shares for treasury
|
(5,434
|
)
|
|
(89,586
|
)
|
|
|
|
|
|
|
|
(95,020
|
)
|
|
|
|
|
(95,020
|
)
|
|||||||
Dividends ($.25 per common share)
|
|
|
|
|
|
|
|
|
|
(93,529
|
)
|
|
(93,529
|
)
|
|
|
|
|
(93,529
|
)
|
|||||||
Other
|
2,242
|
|
|
(2,019
|
)
|
|
|
|
|
|
|
|
223
|
|
|
|
|
|
223
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance, December 31, 2016
|
359,425
|
|
|
4,812,587
|
|
|
310,697
|
|
|
4,645,391
|
|
|
10,128,100
|
|
|
175,549
|
|
|
10,303,649
|
|
|||||||
Net income
|
|
|
|
|
|
|
|
|
|
167,351
|
|
|
167,351
|
|
|
(3,455
|
)
|
|
163,896
|
|
|||||||
Other comprehensive income, net of taxes
|
|
|
|
|
|
|
71,227
|
|
|
|
|
|
71,227
|
|
|
|
|
|
71,227
|
|
|||||||
Reclassification of tax effects from accumulated other comprehensive income
|
|
|
|
|
(9,200
|
)
|
|
9,200
|
|
|
—
|
|
|
|
|
|
—
|
|
|||||||||
Contributions from noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
40,072
|
|
|
40,072
|
|
|||||||
Distributions to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
(12,031
|
)
|
|
(12,031
|
)
|
|||||||
Deconsolidation of real estate entity
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
(167,163
|
)
|
|
(167,163
|
)
|
|||||||
Share-based compensation expense
|
|
|
|
48,384
|
|
|
|
|
|
|
|
|
48,384
|
|
|
|
|
|
48,384
|
|
|||||||
Change in fair value of redeemable noncontrolling interests
|
|
|
|
(94,937
|
)
|
|
|
|
|
|
|
|
(94,937
|
)
|
|
|
|
|
(94,937
|
)
|
|||||||
Purchase of common shares for treasury
|
(4,024
|
)
|
|
(96,453
|
)
|
|
|
|
|
|
|
|
(100,477
|
)
|
|
|
|
|
(100,477
|
)
|
|||||||
Dividends ($.325 per common share)
|
|
|
|
|
|
|
|
|
|
(120,974
|
)
|
|
(120,974
|
)
|
|
|
|
|
(120,974
|
)
|
|||||||
Other
|
826
|
|
|
6,457
|
|
|
|
|
|
|
|
|
7,283
|
|
|
50
|
|
|
7,333
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance, December 31, 2017
|
356,227
|
|
|
4,676,038
|
|
|
372,724
|
|
|
4,700,968
|
|
|
10,105,957
|
|
|
33,022
|
|
|
10,138,979
|
|
|||||||
Cumulative effect of the adoption of accounting standards
|
|
|
|
|
(27,584
|
)
|
|
45,396
|
|
|
17,812
|
|
|
|
|
|
17,812
|
|
|||||||||
Balance, January 1, 2018, as adjusted
|
356,227
|
|
|
4,676,038
|
|
|
345,140
|
|
|
4,746,364
|
|
|
10,123,769
|
|
|
33,022
|
|
|
10,156,791
|
|
|||||||
Net income
|
|
|
|
|
|
|
|
|
|
1,022,318
|
|
|
1,022,318
|
|
|
(12,975
|
)
|
|
1,009,343
|
|
|||||||
Other comprehensive loss, net of taxes
|
|
|
|
|
|
|
(56,854
|
)
|
|
|
|
|
(56,854
|
)
|
|
|
|
|
(56,854
|
)
|
|||||||
Contributions from noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
113
|
|
|
113
|
|
|||||||
Reversal of cumulative National Beef redeemable noncontrolling interests fair value adjustments prior to deconsolidation
|
|
|
|
237,669
|
|
|
|
|
|
|
|
|
237,669
|
|
|
|
|
237,669
|
|
||||||||
Distributions to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
(7,408
|
)
|
|
(7,408
|
)
|
|||||||
Consolidation of asset management entity
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
8,316
|
|
|
8,316
|
|
|||||||
Change in interest in consolidated subsidiary
|
|
|
|
2,677
|
|
|
|
|
|
|
|
|
2,677
|
|
|
(2,677
|
)
|
|
—
|
|
|||||||
Share-based compensation expense
|
|
|
|
48,249
|
|
|
|
|
|
|
|
|
48,249
|
|
|
|
|
|
48,249
|
|
|||||||
Change in fair value of redeemable noncontrolling interests
|
|
|
|
(26,551
|
)
|
|
|
|
|
|
|
|
(26,551
|
)
|
|
|
|
|
(26,551
|
)
|
|||||||
Exercise of options to purchase common shares
|
109
|
|
|
2,376
|
|
|
|
|
|
|
2,485
|
|
|
|
|
|
2,485
|
|
|||||||||
Purchase of common shares for treasury
|
(50,223
|
)
|
|
(1,098,199
|
)
|
|
|
|
|
|
|
|
(1,148,422
|
)
|
|
|
|
|
(1,148,422
|
)
|
|||||||
Dividends ($.45 per common share)
|
|
|
|
|
|
|
|
|
|
(158,464
|
)
|
|
(158,464
|
)
|
|
|
|
|
(158,464
|
)
|
|||||||
Other
|
1,402
|
|
|
12,588
|
|
|
|
|
|
|
|
|
13,990
|
|
|
|
|
|
13,990
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance, November 30, 2018
|
$
|
307,515
|
|
|
$
|
3,854,847
|
|
|
$
|
288,286
|
|
|
$
|
5,610,218
|
|
|
$
|
10,060,866
|
|
|
$
|
18,391
|
|
|
$
|
10,079,257
|
|
Level 1:
|
Quoted prices are available in active markets for identical assets or liabilities at the reported date. Valuation adjustments and block discounts are not applied to Level 1 instruments.
|
Level 2:
|
Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable at the reported date. The nature of these financial instruments includes cash instruments for which quoted prices are available but traded less frequently, derivative instruments fair values for which have been derived using model inputs that are directly observable in the market, or can be derived principally from or corroborated by observable market data, and instruments that are fair valued using other financial instruments, the parameters of which can be directly observed.
|
Level 3:
|
Instruments that have little to no pricing observability at the reported date. These financial instruments are measured using management's best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation.
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
|
(In thousands)
|
||||||||||
Cash paid during the year for:
|
|
|
|
|
|
||||||
Interest
|
$
|
1,377,781
|
|
|
$
|
1,120,191
|
|
|
$
|
957,140
|
|
Income tax payments (refunds), net
|
$
|
37,559
|
|
|
$
|
15,361
|
|
|
$
|
(13,738
|
)
|
|
|
Eleven Months Ended November 30,
|
||||||
|
|
2018
|
|
2017 (Unaudited)
|
||||
|
|
|
|
|
||||
Net revenues
|
|
$
|
3,764,034
|
|
|
$
|
4,031,333
|
|
Total expenses
|
|
3,524,957
|
|
|
3,336,359
|
|
||
Income (loss) related to associated companies
|
|
57,023
|
|
|
(76,864
|
)
|
||
Income from continuing operations before income taxes
|
|
296,100
|
|
|
618,110
|
|
||
Income tax provision
|
|
19,008
|
|
|
195,550
|
|
||
Income from continuing operations
|
|
277,092
|
|
|
422,560
|
|
||
Income from discontinued operations, including gain on disposal, net of taxes
|
|
773,984
|
|
|
267,321
|
|
||
Net income attributable to the redeemable noncontrolling interests
|
|
(37,263
|
)
|
|
(78,506
|
)
|
||
Net income attributable to Jefferies Financial Group Inc. common shareholders
|
|
1,022,318
|
|
|
610,277
|
|
||
|
|
|
|
|
||||
Basic earnings per common share attributable to Jefferies Financial Group Inc. common shareholders:
|
|
|
|
|
||||
Income from continuing operations
|
|
$
|
0.82
|
|
|
$
|
1.14
|
|
Income from discontinued operations, including gain on disposal
|
|
2.11
|
|
|
0.51
|
|
||
Net income
|
|
$
|
2.93
|
|
|
$
|
1.65
|
|
|
|
|
|
|
||||
Diluted earnings per common share attributable to Jefferies Financial Group Inc. common shareholders:
|
|
|
|
|
||||
Income from continuing operations
|
|
$
|
0.81
|
|
|
$
|
1.13
|
|
Income from discontinued operations, including gain on disposal
|
|
2.09
|
|
|
0.50
|
|
||
Net income
|
|
$
|
2.90
|
|
|
$
|
1.63
|
|
•
|
Investment Banking Revenues.
Advisory fees from mergers and acquisitions engagements are recognized at a point in time when the related transaction is completed, as the performance obligation is to successfully broker a specific transaction.
|
•
|
Certain Capital Markets Revenues.
Revenues associated with price stabilization activities as part of a securities underwriting were historically recognized as part of Investment banking revenues. Under the new revenue standard, revenues from these activities are recognized within Principal transactions revenues, as these revenues are not considered to be within the scope of the new standard.
|
•
|
Investment
Banking Advisory Expenses.
Historically, expenses associated with investment banking advisory assignments were deferred until reimbursed by the client, the related fee revenue is recognized or the engagement is otherwise concluded. Under the new revenue standard, expenses are deferred only to the extent they are explicitly reimbursable by the client and the related revenue is recognized at a point in time. All other investment banking advisory related expenses, including expenses incurred related to restructuring assignments, are expensed as incurred.
|
•
|
Investment Banking Underwriting and Advisory Expenses.
Expenses have historically been recorded net of client reimbursements and/or netted against revenues. Under the new revenue standard, all investment banking expenses will be recognized within their respective expense category in the Consolidated Statements of Operations and any expense reimbursements will be recognized as Investment banking revenues (i.e., expenses are no longer recorded net of client reimbursements and are not netted against revenues).
|
|
|
Eleven Months Ended
November 30, 2018
|
||||||||||
|
|
As Reported
|
|
Impact of Adoption of Revenue Recognition Standard
|
|
Financial Results Prior to Adoption of Revenue Recognition Standard
|
||||||
Revenues:
|
|
|
|
|
|
|
||||||
Commissions and other fees
|
|
$
|
634,271
|
|
|
$
|
—
|
|
|
$
|
634,271
|
|
Principal transactions
|
|
232,224
|
|
|
—
|
|
|
232,224
|
|
|||
Investment banking
|
|
1,904,870
|
|
|
131,789
|
|
|
1,773,081
|
|
|||
Interest income
|
|
1,294,325
|
|
|
—
|
|
|
1,294,325
|
|
|||
Manufacturing revenues
|
|
357,427
|
|
|
—
|
|
|
357,427
|
|
|||
Other
|
|
586,611
|
|
|
—
|
|
|
586,611
|
|
|||
Total revenues
|
|
5,009,728
|
|
|
131,789
|
|
|
4,877,939
|
|
|||
Interest expense of Jefferies Group
|
|
1,245,694
|
|
|
—
|
|
|
1,245,694
|
|
|||
Net revenues
|
|
3,764,034
|
|
|
131,789
|
|
|
3,632,245
|
|
|||
|
|
|
|
|
|
|
||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|||
Compensation and benefits
|
|
1,862,782
|
|
|
—
|
|
|
1,862,782
|
|
|||
Cost of sales
|
|
307,071
|
|
|
—
|
|
|
307,071
|
|
|||
Floor brokerage and clearing fees
|
|
184,210
|
|
|
—
|
|
|
184,210
|
|
|||
Interest expense
|
|
89,249
|
|
|
—
|
|
|
89,249
|
|
|||
Depreciation and amortization
|
|
120,317
|
|
|
—
|
|
|
120,317
|
|
|||
Selling, general and other expenses
|
|
961,328
|
|
|
131,789
|
|
|
829,539
|
|
|||
Total expenses
|
|
3,524,957
|
|
|
131,789
|
|
|
3,393,168
|
|
|||
|
|
|
|
|
|
|
||||||
Income from continuing operations before income taxes and income (loss) related to associated companies
|
|
$
|
239,077
|
|
|
$
|
—
|
|
|
$
|
239,077
|
|
|
November 30, 2018
|
||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Counterparty
and
Cash
Collateral
Netting (1)
|
|
Total
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Trading assets, at fair value:
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate equity securities
|
$
|
2,497,045
|
|
|
$
|
118,681
|
|
|
$
|
52,192
|
|
|
$
|
—
|
|
|
$
|
2,667,918
|
|
Corporate debt securities
|
—
|
|
|
2,683,180
|
|
|
9,484
|
|
|
—
|
|
|
2,692,664
|
|
|||||
Collateralized debt obligations and
collateralized loan obligations
|
—
|
|
|
72,949
|
|
|
36,105
|
|
|
—
|
|
|
109,054
|
|
|||||
U.S. government and federal agency securities
|
1,789,614
|
|
|
56,592
|
|
|
—
|
|
|
—
|
|
|
1,846,206
|
|
|||||
Municipal securities
|
—
|
|
|
894,253
|
|
|
—
|
|
|
—
|
|
|
894,253
|
|
|||||
Sovereign obligations
|
1,769,556
|
|
|
1,043,409
|
|
|
—
|
|
|
—
|
|
|
2,812,965
|
|
|||||
Residential mortgage-backed securities
|
—
|
|
|
2,163,629
|
|
|
19,603
|
|
|
—
|
|
|
2,183,232
|
|
|||||
Commercial mortgage-backed securities
|
—
|
|
|
819,406
|
|
|
10,886
|
|
|
—
|
|
|
830,292
|
|
|||||
Other asset-backed securities
|
—
|
|
|
239,381
|
|
|
53,175
|
|
|
—
|
|
|
292,556
|
|
|||||
Loans and other receivables
|
—
|
|
|
2,056,593
|
|
|
46,985
|
|
|
—
|
|
|
2,103,578
|
|
|||||
Derivatives
|
34,841
|
|
|
2,539,943
|
|
|
5,922
|
|
|
(2,413,931
|
)
|
|
166,775
|
|
|||||
Investments at fair value
|
—
|
|
|
—
|
|
|
396,254
|
|
|
—
|
|
|
396,254
|
|
|||||
FXCM term loan
|
—
|
|
|
—
|
|
|
73,150
|
|
|
—
|
|
|
73,150
|
|
|||||
Total trading assets, excluding investments at fair value based on NAV
|
$
|
6,091,056
|
|
|
$
|
12,688,016
|
|
|
$
|
703,756
|
|
|
$
|
(2,413,931
|
)
|
|
$
|
17,068,897
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Available for sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. government securities
|
$
|
1,072,856
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,072,856
|
|
Residential mortgage-backed securities
|
—
|
|
|
210,518
|
|
|
—
|
|
|
—
|
|
|
210,518
|
|
|||||
Commercial mortgage-backed securities
|
—
|
|
|
15,642
|
|
|
—
|
|
|
—
|
|
|
15,642
|
|
|||||
Other asset-backed securities
|
—
|
|
|
110,870
|
|
|
—
|
|
|
—
|
|
|
110,870
|
|
|||||
Total available for sale securities
|
$
|
1,072,856
|
|
|
$
|
337,030
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,409,886
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Trading liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Corporate equity securities
|
$
|
1,685,071
|
|
|
$
|
1,444
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,686,515
|
|
Corporate debt securities
|
—
|
|
|
1,505,618
|
|
|
522
|
|
|
—
|
|
|
1,506,140
|
|
|||||
U.S. government and federal agency securities
|
1,384,295
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,384,295
|
|
|||||
Sovereign obligations
|
1,735,242
|
|
|
661,095
|
|
|
—
|
|
|
—
|
|
|
2,396,337
|
|
|||||
Loans
|
—
|
|
|
1,371,630
|
|
|
6,376
|
|
|
—
|
|
|
1,378,006
|
|
|||||
Derivatives
|
26,473
|
|
|
3,586,694
|
|
|
27,536
|
|
|
(2,513,050
|
)
|
|
1,127,653
|
|
|||||
Total trading liabilities
|
$
|
4,831,081
|
|
|
$
|
7,126,481
|
|
|
$
|
34,434
|
|
|
$
|
(2,513,050
|
)
|
|
$
|
9,478,946
|
|
Long-term debt - structured notes
|
$
|
—
|
|
|
$
|
485,425
|
|
|
$
|
200,745
|
|
|
$
|
—
|
|
|
$
|
686,170
|
|
|
December 31, 2017
|
||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Counterparty
and
Cash
Collateral
Netting (1)
|
|
Total
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Trading assets, at fair value:
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate equity securities
|
$
|
2,975,463
|
|
|
$
|
60,300
|
|
|
$
|
22,270
|
|
|
$
|
—
|
|
|
$
|
3,058,033
|
|
Corporate debt securities
|
—
|
|
|
3,261,300
|
|
|
26,036
|
|
|
—
|
|
|
3,287,336
|
|
|||||
Collateralized debt obligations and
collateralized loan obligations
|
—
|
|
|
139,166
|
|
|
42,184
|
|
|
—
|
|
|
181,350
|
|
|||||
U.S. government and federal agency securities
|
1,269,230
|
|
|
39,443
|
|
|
—
|
|
|
—
|
|
|
1,308,673
|
|
|||||
Municipal securities
|
—
|
|
|
710,513
|
|
|
—
|
|
|
—
|
|
|
710,513
|
|
|||||
Sovereign obligations
|
1,381,552
|
|
|
1,035,907
|
|
|
—
|
|
|
—
|
|
|
2,417,459
|
|
|||||
Residential mortgage-backed securities
|
—
|
|
|
1,453,294
|
|
|
26,077
|
|
|
—
|
|
|
1,479,371
|
|
|||||
Commercial mortgage-backed securities
|
—
|
|
|
508,115
|
|
|
12,419
|
|
|
—
|
|
|
520,534
|
|
|||||
Other asset-backed securities
|
—
|
|
|
217,111
|
|
|
61,129
|
|
|
—
|
|
|
278,240
|
|
|||||
Loans and other receivables
|
—
|
|
|
1,620,581
|
|
|
47,304
|
|
|
—
|
|
|
1,667,885
|
|
|||||
Derivatives
|
165,396
|
|
|
3,323,278
|
|
|
9,295
|
|
|
(3,318,481
|
)
|
|
179,488
|
|
|||||
Investments at fair value
|
—
|
|
|
946
|
|
|
329,944
|
|
|
—
|
|
|
330,890
|
|
|||||
FXCM term loan
|
—
|
|
|
—
|
|
|
72,800
|
|
|
—
|
|
|
72,800
|
|
|||||
Total trading assets, excluding investments at fair value based on NAV
|
$
|
5,791,641
|
|
|
$
|
12,369,954
|
|
|
$
|
649,458
|
|
|
$
|
(3,318,481
|
)
|
|
$
|
15,492,572
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Available for sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Corporate equity securities (2)
|
$
|
88,486
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
88,486
|
|
U.S. government securities
|
552,805
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
552,805
|
|
|||||
Residential mortgage-backed securities
|
—
|
|
|
34,561
|
|
|
—
|
|
|
—
|
|
|
34,561
|
|
|||||
Commercial mortgage-backed securities
|
—
|
|
|
5,870
|
|
|
—
|
|
|
—
|
|
|
5,870
|
|
|||||
Other asset-backed securities
|
—
|
|
|
34,839
|
|
|
—
|
|
|
—
|
|
|
34,839
|
|
|||||
Total available for sale securities
|
$
|
641,291
|
|
|
$
|
75,270
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
716,561
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Trading liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Corporate equity securities
|
$
|
1,721,267
|
|
|
$
|
32,122
|
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
1,753,437
|
|
Corporate debt securities
|
—
|
|
|
1,688,825
|
|
|
522
|
|
|
—
|
|
|
1,689,347
|
|
|||||
U.S. government and federal agency securities
|
1,430,737
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,430,737
|
|
|||||
Sovereign obligations
|
1,216,643
|
|
|
956,992
|
|
|
—
|
|
|
—
|
|
|
2,173,635
|
|
|||||
Commercial mortgage-backed securities
|
—
|
|
|
—
|
|
|
105
|
|
|
—
|
|
|
105
|
|
|||||
Loans
|
—
|
|
|
1,148,824
|
|
|
3,486
|
|
|
—
|
|
|
1,152,310
|
|
|||||
Derivatives
|
249,361
|
|
|
3,480,506
|
|
|
16,041
|
|
|
(3,490,514
|
)
|
|
255,394
|
|
|||||
Total trading liabilities
|
$
|
4,618,008
|
|
|
$
|
7,307,269
|
|
|
$
|
20,202
|
|
|
$
|
(3,490,514
|
)
|
|
$
|
8,454,965
|
|
Short-term borrowings
|
$
|
—
|
|
|
$
|
23,324
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
23,324
|
|
Long-term debt - structured notes
|
$
|
—
|
|
|
$
|
606,956
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
606,956
|
|
(1)
|
Represents counterparty and cash collateral netting across the levels of the fair value hierarchy for positions with the same counterparty.
|
(2)
|
As of January 1, 2018, the Company adopted the FASB's new guidance that affects the accounting for equity investments and the presentation and disclosure requirements for financial instruments. At
November 30, 2018
, equity investments are primarily classified as Trading assets, at fair value and the change in fair value of equity securities is now recognized through the Consolidated Statements of Operations. See Note 4 for additional information.
|
•
|
Exchange Traded Equity Securities:
Exchange traded equity securities are measured based on quoted closing exchange prices obtained from external pricing services, which are generally obtained from external pricing services, and are categorized within Level 1 of the fair value hierarchy, otherwise they are categorized within Level 2 of the fair value hierarchy. To the extent these securities are actively traded, valuation adjustments are not applied.
|
•
|
Non-Exchange Traded Equity Securities
: Non-exchange traded equity securities are measured primarily using broker quotations, pricing data from external pricing services and prices observed from recently executed market transactions and are categorized within Level 2 of the fair value hierarchy. Where such information is not available, non-exchange traded equity securities are categorized within Level 3 of the fair value hierarchy and measured using valuation techniques involving quoted prices of or market data for comparable companies, similar company ratios and multiples (e.g., price/Earnings before interest, taxes, depreciation and amortization ("EBITDA"), price/book value), discounted cash flow analyses and transaction prices observed from subsequent financing or capital issuance by Jefferies Group. When using pricing data of comparable companies, judgment must be applied to adjust the pricing data to account for differences between the measured security and the comparable security (e.g., issuer market capitalization, yield, dividend rate, geographical concentration).
|
•
|
Equity Warrants:
Non-exchange traded equity warrants are measured primarily using pricing data from external pricing services, prices observed from recently executed market transactions and broker quotations and are categorized within Level 2 of the fair value hierarchy. Where such information is not available, non-exchange traded equity warrants are generally categorized within Level 3 of the fair value hierarchy and are measured using the Black-Scholes model with key inputs impacting the valuation including the underlying security price, implied volatility, dividend yield, interest rate curve, strike price and maturity date.
|
•
|
Corporate Bonds:
Corporate bonds are measured primarily using pricing data from external pricing services and broker quotations, where available, prices observed from recently executed market transactions and bond spreads or credit default swap spreads of the issuer adjusted for basis differences between the swap curve and the bond curve. Corporate bonds measured using these valuation methods are categorized within Level 2 of the fair value hierarchy. If broker quotes, pricing data or spread data is not available, alternative valuation techniques are used including cash flow models incorporating interest rate curves, single name or index credit default swap curves for comparable issuers and recovery rate assumptions. Corporate bonds measured using alternative valuation techniques are categorized within Level 3 of the fair value hierarchy and are a limited portion of our corporate bonds.
|
•
|
High Yield Corporate and Convertible Bonds:
A significant portion of our high yield corporate and convertible bonds are categorized within Level 2 of the fair value hierarchy and are measured primarily using broker quotations and pricing data from external pricing services, where available, and prices observed from recently executed market transactions of institutional size. Where pricing data is less observable, valuations are categorized within Level 3 of the fair value hierarchy and are based on pending transactions involving the issuer or comparable issuers, prices implied from an issuer's subsequent financing or recapitalization, models incorporating financial ratios and projected cash flows of the issuer and market prices for comparable issuers.
|
•
|
U.S. Treasury Securities:
U.S. Treasury securities are measured based on quoted market prices and categorized within Level 1 of the fair value hierarchy.
|
•
|
U.S. Agency Debt Securities:
Callable and non-callable U.S. agency debt securities are measured primarily based on quoted market prices obtained from external pricing services and are generally categorized within Level 1 or Level 2 of the fair value hierarchy.
|
•
|
Agency Residential Mortgage-Backed Securities:
Agency residential mortgage-backed securities include mortgage pass-through securities (fixed and adjustable rate), collateralized mortgage obligations and principal-only and interest-only (including inverse interest-only) securities. Agency residential mortgage-backed securities are generally measured using recent transactions, pricing data from external pricing services or expected future cash flow techniques that incorporate prepayment models and other prepayment assumptions to amortize the underlying mortgage loan collateral and are categorized within Level 2 of the fair value hierarchy. We use prices observed from recently executed transactions to develop market-clearing spread and yield curve assumptions. Valuation inputs with regard to the underlying collateral incorporate factors such as weighted average coupon, loan-to-value, credit scores, geographic location, maximum and average loan size, originator, servicer and weighted average loan age.
|
•
|
Non-Agency Residential Mortgage-Backed Securities:
The fair value of non-agency residential mortgage-backed securities is determined primarily using discounted cash flow methodologies and securities are categorized within Level 2 or Level 3 of the fair value hierarchy based on the observability and significance of the pricing inputs used. Performance attributes of the underlying mortgage loans are evaluated to estimate pricing inputs, such as prepayment rates, default rates and the severity of credit losses. Attributes of the underlying mortgage loans that affect the pricing inputs include, but are not limited to, weighted average coupon; average and maximum loan size; loan-to-value; credit scores; documentation type; geographic location; weighted average loan age; originator; servicer; historical prepayment, default and loss severity experience of the mortgage loan pool; and delinquency rate. Yield curves used in the discounted cash flow models are based on observed market prices for comparable securities and published interest rate data to estimate market yields. In addition, broker quotes, where available, are also referenced to compare prices primarily on interest-only securities.
|
•
|
Agency Commercial Mortgage-Backed Securities:
Government National Mortgage Association ("GNMA") project loan bonds are measured based on inputs corroborated from and benchmarked to observed prices of recent securitization transactions of similar securities with adjustments incorporating an evaluation of various factors, including prepayment speeds, default rates and cash flow structures, as well as the likelihood of pricing levels in the current market environment. Federal National Mortgage Association ("FNMA") Delegated Underwriting and Servicing ("DUS") mortgage-backed securities are generally measured by using prices observed from recently executed market transactions to estimate market-clearing spread levels for purposes of estimating fair value. GNMA project loan bonds and FNMA DUS mortgage-backed securities are categorized within Level 2 of the fair value hierarchy.
|
•
|
Non-Agency Commercial Mortgage-Backed Securities:
Non-agency commercial mortgage-backed securities are measured using pricing data obtained from external pricing services, prices observed from recently executed market transactions or based on expected cash flow models that incorporate underlying loan collateral characteristics and performance. Non-agency commercial mortgage-backed securities are categorized within Level 2 or Level 3 of the fair value hierarchy depending on the observability of the underlying inputs.
|
•
|
Corporate Loans:
Corporate loans categorized within Level 2 of the fair value hierarchy are measured based on market consensus pricing service quotations. Where available, market price quotations from external pricing services are reviewed to ensure they are supported by transaction data. Corporate loans categorized within Level 3 of the fair value hierarchy are measured based on price quotations that are considered to be less transparent, market prices for debt securities of the same creditor and estimates of future cash flows incorporating assumptions regarding creditor default and recovery rates and consideration of the issuer's capital structure.
|
•
|
Participation Certificates in Agency Residential Loans:
Valuations of participation certificates in agency residential loans are based on observed market prices of recently executed purchases and sales of similar loans and data provider pricing. The loan participation certificates are categorized within Level 2 of the fair value hierarchy given the observability and volume of recently executed transactions and availability of data provider pricing.
|
•
|
Project Loans and Participation Certificates in GNMA Project and Construction Loans:
Valuations of participation certificates in GNMA project and construction loans are based on inputs corroborated from and benchmarked to observed prices of recent securitizations with similar underlying loan collateral to derive an implied spread. Securitization prices are adjusted to estimate the fair value of the loans to account for the arbitrage that is realized at the time of securitization. The measurements are categorized within Level 2 of the fair value hierarchy given the observability and volume of recently executed transactions.
|
•
|
Consumer Loans and Funding Facilities:
Consumer and small business whole loans and related funding facilities are valued based on observed market transactions and incorporating valuation inputs including, but not limited to, delinquency and default rates, prepayment rates, borrower characteristics, loan risk grades and loan age. These assets are categorized within Level 2 or Level 3 of the fair value hierarchy.
|
•
|
Escrow and Trade Claim Receivables:
Escrow and trade claim receivables are categorized within Level 3 of the fair value hierarchy where fair value is estimated based on reference to market prices and implied yields of debt securities of the same or similar issuers. Escrow and trade claim receivables are categorized within Level 2 of the fair value hierarchy where fair value is based on recent observations in the same receivable.
|
•
|
Listed Derivative Contracts:
Listed derivative contracts that are actively traded are measured based on quoted exchange prices, broker quotes or vanilla option valuation models, such as Black-Scholes, using observable valuation inputs from the principal market or consensus pricing services. Exchange quotes and/or valuation inputs are generally obtained from external vendors and pricing services. Broker quotes are validated directly through observable and tradeable quotes. Listed derivative contracts that use unadjusted exchange close prices are generally categorized within Level 1 of the fair value hierarchy. All other listed derivative contracts are generally categorized within Level 2 of the fair value hierarchy.
|
•
|
Over-the-Counter ("OTC") Derivative Contracts:
OTC derivative contracts are generally valued using models, whose inputs reflect assumptions that we believe market participants would use in valuing the derivative in a current transaction. Where available, valuation inputs are calibrated from market data. For many OTC derivative contracts, the valuation models do not involve material subjectivity as the methodologies do not entail significant judgment and the inputs to valuation models do not involve a high degree of subjectivity as the valuation model inputs are readily observable or can be derived from actively quoted markets. OTC derivative contracts are primarily categorized within Level 2 of the fair value hierarchy given the observability and significance of the inputs to the valuation models. Where significant inputs to the valuation are unobservable, derivative instruments are categorized within Level 3 of the fair value hierarchy.
|
•
|
Oil Futures Derivatives:
Vitesse Energy Finance uses swaps and call and put options in order to reduce exposure to future oil price fluctuations. Vitesse Energy Finance accounts for the derivative instruments at fair value, which are classified as either Level 1 or Level 2 within the fair value hierarchy. Fair values classified as Level 1 are measured based on quoted closing exchange prices obtained from external pricing services and Level 2 are determined under the income valuation technique using an option-pricing model that is based on directly or indirectly observable inputs.
|
|
Fair Value (1)
|
|
Unfunded
Commitments
|
|
Redemption
Frequency
(if currently eligible)
|
||||
November 30, 2018
|
|
|
|
|
|
||||
Equity Long/Short Hedge Funds (2)
|
$
|
86,788
|
|
|
$
|
—
|
|
|
(2)
|
Equity Funds (3)
|
40,070
|
|
|
20,996
|
|
|
—
|
||
Commodity Funds (4)
|
10,129
|
|
|
—
|
|
|
Quarterly
|
||
Multi-asset Fund (5)
|
256,972
|
|
|
—
|
|
|
—
|
||
Other funds (6)
|
400
|
|
|
—
|
|
|
—
|
||
Total
|
$
|
394,359
|
|
|
$
|
20,996
|
|
|
|
|
|
|
|
|
|
||||
December 31, 2017
|
|
|
|
|
|
||||
Equity Long/Short Hedge Funds (2)
|
$
|
407,895
|
|
|
$
|
—
|
|
|
(2)
|
Equity Funds (3)
|
26,798
|
|
|
19,084
|
|
|
—
|
||
Multi-asset Fund (5)
|
154,805
|
|
|
—
|
|
|
—
|
||
Other funds (6)
|
606
|
|
|
—
|
|
|
—
|
||
Total
|
$
|
590,104
|
|
|
$
|
19,084
|
|
|
|
(1)
|
Where fair value is calculated based on NAV, fair value has been derived from each of the funds' capital statements.
|
(2)
|
This category includes investments in hedge funds that invest, long and short, in primarily equity securities in domestic and international markets in both the public and private sectors. At
December 31, 2017
,
73%
of these investments were redeemable with
10
business days or less prior written notice; these investments were primarily liquidated during 2018. At
November 30, 2018 and December 31, 2017
,
17%
and
15%
, respectively, of these investments are redeemable with
60
days prior written notice.
|
(3)
|
The investments in this category include investments in equity funds that invest in the equity of various U.S. and foreign private companies in the energy, technology, internet service and telecommunication service industries. These investments cannot be redeemed; instead distributions are received through the liquidation of the underlying assets of the funds, which are expected to liquidate in
one
to
ten
years.
|
(4)
|
This category includes investments in hedge funds that invest, long and short, primarily in commodities. Investments in this category are redeemable quarterly with
60
days prior written notice.
|
(5)
|
This category includes investments in hedge funds that invest, long and short, primarily in multi-asset securities in domestic and international markets in both the public and private sectors. At
November 30, 2018 and December 31, 2017
, investments representing approximately
15%
and
12%
, respectively, of the fair value of investments in this category are redeemable with
30
days prior written notice.
|
(6)
|
This category includes investments in funds that invest in loans secured by a first trust deed on property, domestic and international public high yield debt, private high yield investments, senior bank loans, public leveraged equities, distressed debt and private equity investments and there are no redemption provisions. This category also includes investments in fund of funds that invest in various private equity funds that are managed by Jefferies Group and have no redemption provisions. These investments are gradually being liquidated or Jefferies Group has requested redemption, however, Jefferies Group is unable to estimate when these funds will be received.
|
Eleven Months Ended November 30, 2018
|
|||||||||||||||||||||||||||||||||||
|
Balance, December 31, 2017
|
|
Total gains (losses)
(realized and unrealized) (1)
|
|
Purchases
|
|
Sales
|
|
Settlements
|
|
Issuances
|
|
Net transfers
into (out of)
Level 3
|
|
Balance at November 30, 2018
|
|
Changes in
unrealized gains/losses included in earnings relating to instruments still held at
November 30, 2018 (1)
|
||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Trading assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Corporate equity securities
|
$
|
22,270
|
|
|
$
|
24,914
|
|
|
$
|
31,669
|
|
|
$
|
(22,759
|
)
|
|
$
|
(3,977
|
)
|
|
$
|
—
|
|
|
$
|
75
|
|
|
$
|
52,192
|
|
|
$
|
23,665
|
|
Corporate debt securities
|
26,036
|
|
|
(439
|
)
|
|
10,352
|
|
|
(23,364
|
)
|
|
(1,679
|
)
|
|
—
|
|
|
(1,422
|
)
|
|
9,484
|
|
|
(2,606
|
)
|
|||||||||
CDOs and CLOs
|
42,184
|
|
|
(16,258
|
)
|
|
356,650
|
|
|
(353,330
|
)
|
|
(10,247
|
)
|
|
—
|
|
|
17,106
|
|
|
36,105
|
|
|
(9,495
|
)
|
|||||||||
Residential mortgage-backed securities
|
26,077
|
|
|
(6,970
|
)
|
|
3,118
|
|
|
(12,816
|
)
|
|
(513
|
)
|
|
—
|
|
|
10,707
|
|
|
19,603
|
|
|
521
|
|
|||||||||
Commercial mortgage-backed securities
|
12,419
|
|
|
(2,186
|
)
|
|
1,436
|
|
|
(471
|
)
|
|
(16,624
|
)
|
|
—
|
|
|
16,312
|
|
|
10,886
|
|
|
(4,000
|
)
|
|||||||||
Other asset-backed securities
|
61,129
|
|
|
(9,934
|
)
|
|
706,846
|
|
|
(677,220
|
)
|
|
(27,641
|
)
|
|
—
|
|
|
(5
|
)
|
|
53,175
|
|
|
(5,283
|
)
|
|||||||||
Loans and other receivables
|
47,304
|
|
|
(5,137
|
)
|
|
149,228
|
|
|
(130,832
|
)
|
|
(15,311
|
)
|
|
—
|
|
|
1,733
|
|
|
46,985
|
|
|
(8,457
|
)
|
|||||||||
Investments at fair value
|
329,944
|
|
|
76,636
|
|
|
9,798
|
|
|
(17,570
|
)
|
|
—
|
|
|
—
|
|
|
(2,554
|
)
|
|
396,254
|
|
|
76,042
|
|
|||||||||
Investment in FXCM
|
72,800
|
|
|
18,616
|
|
|
—
|
|
|
—
|
|
|
(18,266
|
)
|
|
—
|
|
|
—
|
|
|
73,150
|
|
|
7,723
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Trading liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Corporate equity securities
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(48
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate debt securities
|
522
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
522
|
|
|
—
|
|
|||||||||
Commercial mortgage-backed securities
|
105
|
|
|
(105
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Loans
|
3,486
|
|
|
84
|
|
|
(4,626
|
)
|
|
7,432
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,376
|
|
|
(28
|
)
|
|||||||||
Net derivatives (2)
|
6,746
|
|
|
(3,237
|
)
|
|
(17
|
)
|
|
14,920
|
|
|
(1,335
|
)
|
|
—
|
|
|
4,537
|
|
|
21,614
|
|
|
(646
|
)
|
|||||||||
Long-term debt (1)
|
—
|
|
|
(30,347
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
84,860
|
|
|
146,232
|
|
|
200,745
|
|
|
10,951
|
|
(1)
|
Realized and unrealized gains (losses) are primarily reported in Principal transactions revenues in the Consolidated Statements of Operations. Changes in instrument-specific credit risk related to structured notes are included in our Consolidated Statements of Comprehensive Income (Loss), net of tax. Changes in unrealized gains (losses) included in other comprehensive income (loss) for instruments still held at
November 30, 2018
were gains of
$19.4 million
.
|
(2)
|
Net derivatives represent Trading assets - Derivatives and Trading liabilities - Derivatives.
|
•
|
Commercial mortgage-backed securities of
$16.3 million
, residential mortgage-backed securities of
$15.3 million
and CDOs and CLOs of
$17.3 million
due to reduced pricing transparency.
|
•
|
Residential mortgage-backed securities of
$4.6 million
, corporate debt securities of
$3.6 million
and corporate equity securities of
$2.9 million
due to greater pricing transparency supporting classification into Level 2.
|
Twelve Months Ended December 31, 2017
|
|||||||||||||||||||||||||||||||||||
|
Balance, December 31, 2016
|
|
Total gains (losses)
(realized and unrealized) (1)
|
|
Purchases
|
|
Sales
|
|
Settlements
|
|
Issuances
|
|
Net transfers
into (out of)
Level 3
|
|
Balance at
December
31, 2017
|
|
Changes in
unrealized gains (losses) relating to instruments still held at
December
31, 2017 (1)
|
||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Trading assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Corporate equity securities
|
$
|
21,739
|
|
|
$
|
3,353
|
|
|
$
|
896
|
|
|
$
|
(1,623
|
)
|
|
$
|
52
|
|
|
$
|
—
|
|
|
$
|
(2,147
|
)
|
|
$
|
22,270
|
|
|
$
|
2,606
|
|
Corporate debt securities
|
25,005
|
|
|
(3,723
|
)
|
|
36,850
|
|
|
(34,077
|
)
|
|
(1,968
|
)
|
|
—
|
|
|
3,949
|
|
|
26,036
|
|
|
(3,768
|
)
|
|||||||||
CDOs and CLOS
|
54,354
|
|
|
(27,238
|
)
|
|
112,239
|
|
|
(101,226
|
)
|
|
(367
|
)
|
|
—
|
|
|
4,422
|
|
|
42,184
|
|
|
(20,262
|
)
|
|||||||||
Municipal securities
|
27,257
|
|
|
(1,547
|
)
|
|
—
|
|
|
(25,710
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Residential mortgage- backed securities
|
38,772
|
|
|
(10,817
|
)
|
|
6,805
|
|
|
(26,193
|
)
|
|
(115
|
)
|
|
—
|
|
|
17,625
|
|
|
26,077
|
|
|
(7,201
|
)
|
|||||||||
Commercial mortgage-backed securities
|
20,580
|
|
|
(5,346
|
)
|
|
3,275
|
|
|
(5,263
|
)
|
|
(1,018
|
)
|
|
—
|
|
|
191
|
|
|
12,419
|
|
|
(6,976
|
)
|
|||||||||
Other asset-backed securities
|
40,911
|
|
|
(17,705
|
)
|
|
77,508
|
|
|
(8,613
|
)
|
|
(25,799
|
)
|
|
—
|
|
|
(5,173
|
)
|
|
61,129
|
|
|
(12,562
|
)
|
|||||||||
Loans and other receivables
|
81,872
|
|
|
24,794
|
|
|
63,768
|
|
|
(53,095
|
)
|
|
(34,622
|
)
|
|
—
|
|
|
(35,413
|
)
|
|
47,304
|
|
|
17,451
|
|
|||||||||
Investments at fair value
|
314,359
|
|
|
20,975
|
|
|
18,528
|
|
|
(22,818
|
)
|
|
(1,100
|
)
|
|
—
|
|
|
—
|
|
|
329,944
|
|
|
22,999
|
|
|||||||||
Investment in FXCM
|
164,500
|
|
|
23,161
|
|
|
—
|
|
|
—
|
|
|
(114,861
|
)
|
|
—
|
|
|
—
|
|
|
72,800
|
|
|
1,070
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Trading liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Corporate equity securities
|
$
|
313
|
|
|
$
|
60
|
|
|
$
|
(373
|
)
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
48
|
|
|
$
|
—
|
|
Corporate debt securities
|
523
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
522
|
|
|
1
|
|
|||||||||
Commercial mortgage-backed securities
|
—
|
|
|
105
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
105
|
|
|
(105
|
)
|
|||||||||
Loans
|
378
|
|
|
196
|
|
|
(385
|
)
|
|
2,485
|
|
|
—
|
|
|
—
|
|
|
812
|
|
|
3,486
|
|
|
(2,639
|
)
|
|||||||||
Net derivatives (2)
|
3,441
|
|
|
(1,638
|
)
|
|
—
|
|
|
—
|
|
|
5,558
|
|
|
456
|
|
|
(1,071
|
)
|
|
6,746
|
|
|
(17,740
|
)
|
|||||||||
Other secured financings
|
418
|
|
|
(418
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(1)
|
Realized and unrealized gains (losses) are reported in Principal transactions revenues in the Consolidated Statements of Operations.
|
(2)
|
Net derivatives represent Trading assets - Derivatives and Trading liabilities - Derivatives.
|
•
|
Residential mortgage-backed securities of
$19.6 million
and corporate debt securities of
$8.3 million
due to a lack of observable market transactions.
|
•
|
Loans and other receivables of
$40.9 million
due to greater pricing transparency supporting classification into Level 2.
|
Twelve Months Ended December 31, 2016
|
|||||||||||||||||||||||||||||||||||
|
Balance, December 31, 2015
|
|
Total gains (losses)
(realized and unrealized) (1)
|
|
Purchases
|
|
Sales
|
|
Settlements
|
|
Issuances
|
|
Net transfers
into (out of)
Level 3
|
|
Balance at December 31, 2016
|
|
Changes in
unrealized gains (losses) relating to instruments still held at
December 31, 2016 (1)
|
||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Trading assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Corporate equity securities
|
$
|
40,906
|
|
|
$
|
(8,463
|
)
|
|
$
|
3,365
|
|
|
$
|
(49
|
)
|
|
$
|
(671
|
)
|
|
$
|
—
|
|
|
$
|
(13,349
|
)
|
|
$
|
21,739
|
|
|
$
|
291
|
|
Corporate debt securities
|
25,876
|
|
|
(16,230
|
)
|
|
27,242
|
|
|
(29,347
|
)
|
|
(7,223
|
)
|
|
—
|
|
|
24,687
|
|
|
25,005
|
|
|
(18,799
|
)
|
|||||||||
CDOs and CLOs
|
85,092
|
|
|
(14,918
|
)
|
|
52,316
|
|
|
(69,394
|
)
|
|
(2,750
|
)
|
|
—
|
|
|
4,008
|
|
|
54,354
|
|
|
(7,628
|
)
|
|||||||||
Municipal securities
|
—
|
|
|
(1,462
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,719
|
|
|
27,257
|
|
|
(1,462
|
)
|
|||||||||
Sovereign obligations
|
120
|
|
|
5
|
|
|
—
|
|
|
(125
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Residential mortgage-backed securities
|
70,263
|
|
|
(9,612
|
)
|
|
623
|
|
|
(12,249
|
)
|
|
(931
|
)
|
|
—
|
|
|
(9,322
|
)
|
|
38,772
|
|
|
(1,095
|
)
|
|||||||||
Commercial mortgage-backed securities
|
14,326
|
|
|
(7,550
|
)
|
|
3,132
|
|
|
(2,024
|
)
|
|
(2,229
|
)
|
|
—
|
|
|
14,925
|
|
|
20,580
|
|
|
(7,243
|
)
|
|||||||||
Other asset-backed securities
|
42,925
|
|
|
(14,381
|
)
|
|
133,986
|
|
|
(102,952
|
)
|
|
(8,769
|
)
|
|
—
|
|
|
(9,898
|
)
|
|
40,911
|
|
|
(18,056
|
)
|
|||||||||
Loans and other receivables
|
189,289
|
|
|
(42,566
|
)
|
|
75,264
|
|
|
(69,262
|
)
|
|
(46,851
|
)
|
|
—
|
|
|
(24,002
|
)
|
|
81,872
|
|
|
(52,003
|
)
|
|||||||||
Investments at fair value
|
199,794
|
|
|
54,538
|
|
|
29,728
|
|
|
(542
|
)
|
|
(1,107
|
)
|
|
—
|
|
|
31,948
|
|
|
314,359
|
|
|
54,608
|
|
|||||||||
Investment in FXCM (2)
|
625,689
|
|
|
(54,634
|
)
|
|
—
|
|
|
—
|
|
|
(406,555
|
)
|
|
—
|
|
|
—
|
|
|
164,500
|
|
|
(1,014
|
)
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Trading liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate equity securities
|
$
|
38
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
313
|
|
|
$
|
(38
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
313
|
|
|
$
|
—
|
|
Corporate debt securities
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
550
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
523
|
|
|
—
|
|
|||||||||
Loans
|
10,469
|
|
|
—
|
|
|
—
|
|
|
378
|
|
|
—
|
|
|
—
|
|
|
(10,469
|
)
|
|
378
|
|
|
—
|
|
|||||||||
Net derivatives (3)
|
(242
|
)
|
|
(1,760
|
)
|
|
—
|
|
|
11,101
|
|
|
31
|
|
|
2,067
|
|
|
(7,756
|
)
|
|
3,441
|
|
|
(6,458
|
)
|
|||||||||
Other secured financings
|
544
|
|
|
(126
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
418
|
|
|
(126
|
)
|
(1)
|
Realized and unrealized gains (losses) are reported in Principal transactions revenues in the Consolidated Statements of Operations.
|
(2)
|
Includes
$334.5 million
related to the settlement of our participation rights for equity ownership in FXCM on September 1, 2016. We classify the equity ownership as Loans to and investments in associated companies at
November 30, 2018 and December 31, 2017
.
|
(3)
|
Net derivatives represent Trading assets - Derivatives and Trading liabilities - Derivatives.
|
•
|
CDOs and CLOs of
$19.4 million
, residential mortgage-backed securities of
$17.5 million
, commercial mortgage-backed securities of
$17.4 million
and other asset-backed securities of
$16.9 million
, for which no recent trade activity was observed for purposes of determining observable inputs;
|
•
|
Loans and other receivables of
$13.8 million
due to a lower number of contributors for certain vendor quotes supporting classification within Level 2; and
|
•
|
Corporate debt securities of
$28.1 million
, investments at fair value of
$31.9 million
and municipal securities of
$28.7 million
due to a lack of observable market transactions.
|
•
|
Residential mortgage-backed securities of
$26.8 million
, other asset-backed securities of
$26.8 million
and CDOs and CLOs of
$15.4 million
for which market trades were observed in the year for either identical or similar securities;
|
•
|
Loans and other receivables of
$37.8 million
due to a greater number of contributors for certain vendor quotes supporting classification into Level 2; and
|
•
|
Corporate equity securities of
$19.2 million
due to an increase in observable market transactions.
|
November 30, 2018
|
|||||||||||||
Financial Instruments Owned
|
|
Fair Value
(in thousands)
|
|
Valuation
Technique
|
|
Significant
Unobservable Input(s)
|
|
Input/Range
|
|
Weighted
Average
|
|||
Corporate equity securities
|
|
$
|
43,644
|
|
|
|
|
|
|
|
|
|
|
Non-exchange traded securities
|
|
|
|
|
Market approach
|
|
Price
|
|
$1 to $75
|
|
$12.0
|
||
|
|
|
|
|
|
Transaction level
|
|
$47
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|||
Corporate debt securities
|
|
$
|
9,484
|
|
|
Market approach
|
|
Estimated recovery percentage
|
|
46%
|
|
—
|
|
|
|
|
|
|
|
Transaction level
|
|
$80
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|||
CDOs and CLOs
|
|
$
|
36,105
|
|
|
Discounted cash flows
|
|
Constant prepayment rate
|
|
10% to 20%
|
|
18
|
%
|
|
|
|
|
|
|
|
Constant default rate
|
|
1% to 2%
|
|
2
|
%
|
|
|
|
|
|
|
|
|
Loss severity
|
|
25% to 30%
|
|
26
|
%
|
|
|
|
|
|
|
|
|
Discount rate/yield
|
|
11% to 16%
|
|
14
|
%
|
|
|
|
|
|
Scenario analysis
|
|
Estimated recovery percentage
|
|
2% to 41%
|
|
23
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|||
Residential mortgage-backed securities
|
|
$
|
19,603
|
|
|
Discounted cash flows
|
|
Cumulative loss rate
|
|
4%
|
|
—
|
|
|
|
|
|
|
|
|
Duration (years)
|
|
13 years
|
|
—
|
|
|
|
|
|
|
|
|
|
Discount rate/yield
|
|
3%
|
|
—
|
|
|
|
|
|
|
|
|
Loss severity
|
|
0%
|
|
—
|
|
||
|
|
|
|
Market approach
|
|
Price
|
|
$100
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|||
Commercial mortgage-backed securities
|
|
$
|
9,444
|
|
|
Discounted cash flows
|
|
Cumulative loss rate
|
|
8% to 85%
|
|
45
|
%
|
|
|
|
|
|
|
|
Duration (years)
|
|
1 year to 3 years
|
|
1 year
|
||
|
|
|
|
|
|
Discount rate/yield
|
|
2% to 15%
|
|
6
|
%
|
||
|
|
|
|
|
|
Loss severity
|
|
64%
|
|
—
|
|
||
|
|
|
|
Scenario analysis
|
|
Estimated recovery percentage
|
|
26%
|
|
—
|
|
||
|
|
|
|
|
|
Price
|
|
$49
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|||
Other asset-backed securities
|
|
$
|
53,175
|
|
|
Discounted cash flows
|
|
Cumulative loss rate
|
|
12% to 30%
|
|
22
|
%
|
|
|
|
|
|
|
|
Duration (years)
|
|
1 year to 2 years
|
|
1 year
|
||
|
|
|
|
|
|
|
Discount rate/yield
|
|
6% to 12%
|
|
8
|
%
|
|
|
|
|
|
Market approach
|
|
Price
|
|
$100
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|||
Loans and other receivables
|
|
$
|
46,078
|
|
|
Market approach
|
|
Price
|
|
$50 to $100
|
|
$96.0
|
|
|
|
|
|
|
Scenario analysis
|
|
Estimated recovery percentage
|
|
13% to 117%
|
|
105
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Derivatives
|
|
$
|
4,602
|
|
|
|
|
|
|
|
|
|
|
Total return swaps
|
|
|
|
Market approach
|
|
Price
|
|
$97
|
|
—
|
|
||
Interest rate swaps
|
|
|
|
Market approach
|
|
Price
|
|
$20
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|||
Investments at fair value
|
|
$
|
368,231
|
|
|
|
|
|
|
|
|
|
|
Private equity securities
|
|
|
|
Market approach
|
|
Price
|
|
$3 to $250
|
|
$108.0
|
|||
|
|
|
|
|
|
Transaction level
|
|
$169
|
|
—
|
|
||
|
|
|
|
Scenario analysis
|
|
Discount rate/yield
|
|
20%
|
|
—
|
|
||
|
|
|
|
|
|
Revenue growth
|
|
0%
|
|
—
|
|
||
|
|
|
|
Contingent claims analysis
|
|
Volatility
|
|
25% to 35%
|
|
30
|
%
|
||
|
|
|
|
|
|
Duration (years)
|
|
4 years
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|||
Investment in FXCM
|
|
$
|
73,150
|
|
|
|
|
|
|
|
|
|
|
Term loan
|
|
|
|
Discounted cash flows
|
|
Term based on the pay off (years)
|
|
0 months to 0.3 years
|
|
0.3 years
|
|||
|
|
|
|
|
|
|
|
|
|
|
|||
Trading Liabilities
|
|
|
|
|
|
|
|
|
|
|
|||
Loans
|
|
$
|
6,376
|
|
|
Market approach
|
|
Price
|
|
$50 to $101
|
|
$74.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Derivatives
|
|
$
|
27,536
|
|
|
|
|
|
|
|
|
|
|
Equity options
|
|
|
|
Option model/default rate
|
|
Default probability
|
|
0%
|
|
—
|
|
||
|
|
|
|
Volatility benchmarking
|
|
Volatility
|
|
39% to 62%
|
|
50
|
%
|
||
Interest rate swaps
|
|
|
|
Market approach
|
|
Price
|
|
$20
|
|
—
|
|
||
Total return swaps
|
|
|
|
Market approach
|
|
Price
|
|
$97
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|||
Long-term debt
|
|
$
|
200,745
|
|
|
|
|
|
|
|
|
|
|
Structured notes
|
|
|
|
Market approach
|
|
Price
|
|
$78 to $94
|
|
$86.0
|
|||
|
|
|
|
|
|
Price
|
|
€68 to €110
|
|
€96.0
|
December 31, 2017
|
|||||||||||||
Financial Instruments Owned
|
|
Fair Value
(in thousands)
|
|
Valuation
Technique
|
|
Significant
Unobservable Input(s)
|
|
Input/Range
|
|
Weighted
Average
|
|||
|
|
|
|
|
|
|
|
|
|
|
|||
Corporate equity securities
|
|
$
|
18,109
|
|
|
|
|
|
|
|
|
|
|
Non-exchange traded securities
|
|
|
|
|
Market approach
|
|
Price
|
|
$3 to $75
|
|
$33.0
|
||
|
|
|
|
|
|
Underlying stock price
|
|
$6
|
|
—
|
|
||
|
|
|
|
Comparable pricing
|
|
Comparable asset price
|
|
$7
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|||
Corporate debt securities
|
|
$
|
26,036
|
|
|
Convertible bond model
|
|
Discount rate/yield
|
|
8%
|
|
—
|
|
|
|
|
|
|
|
Volatility
|
|
40%
|
|
—
|
|
||
|
|
|
|
Market approach
|
|
Estimated recovery percentage
|
|
17%
|
|
—
|
|
||
|
|
|
|
|
|
Price
|
|
$10
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|||
CDOs and CLOs
|
|
$
|
38,845
|
|
|
Discounted cash flows
|
|
Constant prepayment rate
|
|
20%
|
|
—
|
|
|
|
|
|
|
|
|
Constant default rate
|
|
2%
|
|
—
|
|
|
|
|
|
|
|
|
|
Loss severity
|
|
25% to 30%
|
|
26
|
%
|
|
|
|
|
|
|
|
|
Discount rate/yield
|
|
3% to 26%
|
|
12
|
%
|
|
|
|
|
|
Scenario analysis
|
|
Estimated recovery percentage
|
|
8% to 45%
|
|
26
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|||
Residential mortgage-backed securities
|
|
$
|
26,077
|
|
|
Discounted cash flows
|
|
Cumulative loss rate
|
|
3% to 19%
|
|
10
|
%
|
|
|
|
|
|
|
|
Duration (years)
|
|
2 years to 4 years
|
|
3 years
|
|
|
|
|
|
|
|
|
|
Discount rate/yield
|
|
6% to 10%
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Commercial mortgage-backed securities
|
|
$
|
12,419
|
|
|
Discounted cash flows
|
|
Discount rate/yield
|
|
2% to 26%
|
|
12
|
%
|
|
|
|
|
|
|
|
Cumulative loss rate
|
|
8% to 65%
|
|
44
|
%
|
|
|
|
|
|
|
|
Duration (years)
|
|
1 year to 3 years
|
|
2 years
|
|
||
|
|
|
|
Scenario analysis
|
|
Estimated recovery percentage
|
|
26% to 32%
|
|
28
|
%
|
||
|
|
|
|
|
|
Price
|
|
$52 to $56
|
|
$54.0
|
|||
|
|
|
|
|
|
|
|
|
|
|
|||
Other asset-backed securities
|
|
$
|
61,129
|
|
|
Discounted cash flows
|
|
Cumulative loss rate
|
|
0% to 33%
|
|
23
|
%
|
|
|
|
|
|
|
|
Duration (years)
|
|
1 year to 6 years
|
|
2 years
|
|
|
|
|
|
|
|
|
|
Discount rate/yield
|
|
5% to 39%
|
|
9
|
%
|
|
|
|
|
|
Market approach
|
|
Price
|
|
$100
|
|
—
|
|
||
|
|
|
|
Scenario analysis
|
|
Estimated recovery percentage
|
|
14%
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|||
Loans and other receivables
|
|
$
|
46,121
|
|
|
Market approach
|
|
Estimated recovery percentage
|
|
76%
|
|
—
|
|
|
|
|
|
|
|
|
Price
|
|
$54 to $100
|
|
$95.0
|
||
|
|
|
|
|
Scenario analysis
|
|
Estimated recovery percentage
|
|
13% to 107%
|
|
78
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Derivatives
|
|
$
|
9,295
|
|
|
|
|
|
|
|
|
|
|
Total return swaps
|
|
|
|
|
Market approach
|
|
Price
|
|
$101 to $106
|
|
$103.0
|
||
Interest rate swaps
|
|
|
|
|
Market approach
|
|
Credit spread
|
|
800 bps
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Investments at fair value
|
|
$
|
110,010
|
|
|
|
|
|
|
|
|
|
|
Private equity securities
|
|
|
|
|
Market approach
|
|
Transaction level
|
|
$3 to $250
|
|
$172.0
|
||
|
|
|
|
|
|
Price
|
|
$7
|
|
—
|
|
||
|
|
|
|
|
|
Discount rate
|
|
20%
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|||
Investment in FXCM
|
|
$
|
72,800
|
|
|
|
|
|
|
|
|
|
|
Term loan
|
|
|
|
|
Discounted cash flows
|
|
Term based on the pay off (years)
|
|
0 months to 1 year
|
|
0.2 years
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Trading Liabilities
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|||
Derivatives
|
|
$
|
16,041
|
|
|
|
|
|
|
|
|
|
|
Equity options
|
|
|
|
Option model/default rate
|
|
Default probability
|
|
0%
|
|
—
|
|
||
Unfunded commitments
|
|
|
|
|
Market approach
|
|
Price
|
|
$99
|
|
—
|
|
|
Total return swaps
|
|
|
|
Market approach
|
|
Price
|
|
$101 to $106
|
|
$103.0
|
|||
Variable funding note swaps
|
|
|
|
|
Discounted cash flows
|
|
Constant prepayment rate
|
|
20%
|
|
—
|
|
|
|
|
|
|
|
|
|
Constant default rate
|
|
2%
|
|
—
|
|
|
|
|
|
|
|
|
|
Loss severity
|
|
25%
|
|
—
|
|
|
|
|
|
|
|
|
|
Discount rate/yield
|
|
26%
|
|
—
|
|
•
|
Non-exchange traded securities using comparable pricing valuation techniques. A significant increase (decrease) in the comparable asset price in isolation would result in a significantly higher (lower) fair value measurement.
|
•
|
Corporate debt securities using a convertible bond model. A significant increase (decrease) in the bond discount rate/yield would result in a significantly lower (higher) fair value measurement. A significant increase (decrease) in volatility would result in a significantly higher (lower) fair value measurement.
|
•
|
Non-exchange traded securities, corporate debt securities, loans and other receivables, unfunded commitments, interest rate swaps, total return swaps, residential mortgage-backed securities, other asset-backed securities, private equity securities and structured notes using a market approach valuation technique. A significant increase (decrease) in the transaction level of a non-exchange traded security, corporate debt security and private equity security would result in a significantly higher (lower) fair value measurement. A significant increase (decrease) in the underlying stock price of the non-exchange traded securities would result in a significantly higher (lower) fair value measurement. A significant increase (decrease) in the credit spread of certain derivatives would result in a significantly lower (higher) fair value measurement. A significant increase (decrease) in the price of the private equity securities, non-exchange traded securities, corporate debt securities, unfunded commitments, total return swaps, interest rate swaps, residential mortgage-backed securities, other asset-backed securities, loans and other receivables or structured notes would result in a significantly higher (lower) fair value measurement. A significant increase (decrease) in the estimated recovery rates of the cash flow outcomes underlying the corporate debt securities or loans and other receivables would result in a significantly higher (lower) fair value measurement.
|
•
|
Loans and other receivables, CDOs and CLOs, commercial mortgage-backed securities, other asset-backed securities and private equity securities using scenario analysis. A significant increase (decrease) in the possible recovery rates of the cash flow outcomes underlying the investment would result in a significantly higher (lower) fair value measurement for the financial instrument. A significant increase (decrease) in the price of the commercial mortgage-backed securities would result in a significantly higher (lower) fair value measurement. A significant increase (decrease) in the discount rate/yield underlying the investment would result in a significantly lower (higher) fair value measurement. A significant increase (decrease) in the revenue growth underlying the investment would result in a significantly higher (lower) fair value measurement.
|
•
|
CDOs and CLOs, residential mortgage-backed securities, commercial mortgage-backed securities, other asset-backed securities and variable funding note swaps using a discounted cash flow valuation technique. A significant increase (decrease) in isolation in the constant default rate, loss severity or cumulative loss rate would result in a significantly lower (higher) fair value measurement. The impact of changes in the constant prepayment rate and duration would have differing impacts depending on the capital structure and type of security. A significant increase (decrease) in the discount rate/security yield would result in a significantly lower (higher) fair value measurement.
|
•
|
Derivative equity options using an option/default rate model. A significant increase (decrease) in default probability would result in a significantly lower (higher) fair value measurement.
|
•
|
Derivative equity options using volatility benchmarking. A significant increase (decrease) in volatility would result in a significantly higher (lower) fair value measurement.
|
•
|
Investments at fair value using contingent claims analysis. A significant increase (decrease) in volatility would result in a significantly lower (higher) fair value measurement. A significant increase (decrease) in duration would result in a significantly lower (higher) fair value measurement.
|
•
|
FXCM term loan using a discounted cash flow valuation technique. A significant increase (decrease) in term based on the time to pay off the loan would result in a higher (lower) fair value measurement.
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
Financial instruments owned:
|
|
|
|
|
|
||||||
Loans and other receivables
|
$
|
(3,856
|
)
|
|
$
|
22,088
|
|
|
$
|
(68,812
|
)
|
|
|
|
|
|
|
||||||
Financial instruments sold:
|
|
|
|
|
|
|
|
|
|||
Loans
|
(46
|
)
|
|
—
|
|
|
9
|
|
|||
Loan commitments
|
(739
|
)
|
|
230
|
|
|
5,509
|
|
|||
|
|
|
|
|
|
||||||
Long-term debt:
|
|
|
|
|
|
||||||
Changes in instrument specific credit risk (1)
|
38,064
|
|
|
(34,609
|
)
|
|
(10,745
|
)
|
|||
Other changes in fair value (2)
|
48,748
|
|
|
47,291
|
|
|
30,995
|
|
|||
|
|
|
|
|
|
||||||
Short-term borrowings:
|
|
|
|
|
|
||||||
Other changes in fair value (2)
|
—
|
|
|
(681
|
)
|
|
—
|
|
(1)
|
Changes in instrument specific credit risk related to structured notes are included in the Consolidated Statements of Comprehensive Income (Loss), net of taxes.
|
(2)
|
Other changes in fair value are included within Principal transactions revenues in the Consolidated Statements of Operations.
|
|
November 30, 2018
|
|
December 31, 2017
|
||||
Financial instruments owned:
|
|
|
|
||||
Loans and other receivables (1)
|
$
|
806,798
|
|
|
$
|
752,076
|
|
Loans and other receivables on nonaccrual status and/or 90 days or greater
past due (1) (2)
|
24,389
|
|
|
159,462
|
|
||
Long-term debt and short-term borrowings
|
114,669
|
|
|
32,839
|
|
(1)
|
Interest income is recognized separately from other changes in fair value and is included in Interest income in the Consolidated Statements of Operations.
|
(2)
|
Amounts include loans and other receivables
90
days or greater past due by which contractual principal exceeds fair value of
$20.5 million
and
$38.7 million
at
November 30, 2018 and December 31, 2017
, respectively.
|
|
Assets
|
|
Liabilities
|
||||||||||
|
Fair Value
|
|
Number of
Contracts (1)
|
|
Fair Value
|
|
Number of
Contracts (1)
|
||||||
November 30, 2018
|
|
|
|
|
|
|
|
||||||
Derivatives designated as accounting hedges - interest rate contracts
|
$
|
—
|
|
|
—
|
|
|
$
|
29,647
|
|
|
1
|
|
|
|
|
|
|
|
|
|
||||||
Derivatives not designated as accounting hedges:
|
|
|
|
|
|
|
|
||||||
Interest rate contracts
|
$
|
796,493
|
|
|
35,652
|
|
|
$
|
904,043
|
|
|
69,305
|
|
Foreign exchange contracts
|
311,270
|
|
|
10,086
|
|
|
314,989
|
|
|
1,602
|
|
||
Equity contracts
|
1,410,148
|
|
|
2,109,810
|
|
|
2,377,133
|
|
|
1,782,600
|
|
||
Commodity contracts
|
37,823
|
|
|
8,546
|
|
|
1,717
|
|
|
5,683
|
|
||
Credit contracts
|
24,972
|
|
|
130
|
|
|
13,174
|
|
|
93
|
|
||
Total
|
2,580,706
|
|
|
|
|
|
3,611,056
|
|
|
|
|
||
Counterparty/cash-collateral netting (2)
|
(2,413,931
|
)
|
|
|
|
(2,513,050
|
)
|
|
|
|
|||
Total derivatives not designated as accounting hedges
|
$
|
166,775
|
|
|
|
|
|
$
|
1,098,006
|
|
|
|
|
Total per Consolidated Statement of Financial Condition (3)
|
$
|
166,775
|
|
|
|
|
$
|
1,127,653
|
|
|
|
||
|
|
|
|
|
|
|
|
||||||
December 31, 2017
|
|
|
|
|
|
|
|
||||||
Derivatives designated as accounting hedges - interest rate contracts (4)
|
$
|
—
|
|
|
—
|
|
|
$
|
2,420
|
|
|
1
|
|
|
|
|
|
|
|
|
|
||||||
Derivatives not designated as accounting hedges:
|
|
|
|
|
|
|
|
||||||
Interest rate contracts (4)
|
$
|
1,717,058
|
|
|
38,941
|
|
|
$
|
1,708,776
|
|
|
12,828
|
|
Foreign exchange contracts
|
366,541
|
|
|
6,463
|
|
|
349,512
|
|
|
4,612
|
|
||
Equity contracts
|
1,373,016
|
|
|
2,728,750
|
|
|
1,638,258
|
|
|
2,118,526
|
|
||
Commodity contracts
|
3,093
|
|
|
7,249
|
|
|
5,141
|
|
|
6,047
|
|
||
Credit contracts
|
38,261
|
|
|
130
|
|
|
41,801
|
|
|
191
|
|
||
Total
|
3,497,969
|
|
|
|
|
|
3,743,488
|
|
|
|
|
||
Counterparty/cash-collateral netting (2)(4)
|
(3,318,481
|
)
|
|
|
|
(3,490,514
|
)
|
|
|
|
|||
Total derivatives not designated as accounting hedges
|
$
|
179,488
|
|
|
|
|
|
$
|
252,974
|
|
|
|
|
Total per Consolidated Statement of Financial Condition (3)
|
$
|
179,488
|
|
|
|
|
$
|
255,394
|
|
|
|
(1)
|
Number of exchange-traded contracts may include open futures contracts. The unsettled fair value of these futures contracts is included in Receivables and Payables, expense accruals and other liabilities in our Consolidated Statements of Financial Condition.
|
(2)
|
Amounts netted include both netting by counterparty and for cash collateral paid or received.
|
(3)
|
We have not received or pledged additional collateral under master netting agreements and/or other credit support agreements that is eligible to be offset beyond what has been offset in the Consolidated Statements of Financial Condition.
|
(4)
|
Pursuant to a rule change by the London Clearing House in the first fiscal quarter of 2018, variation margin exchanged each day with this clearing organization on certain interest rate derivatives is characterized as settlement payments as opposed to cash posted as collateral. The impact of this rule change would have been a reduction in gross interest rate derivative assets and liabilities as of December 31, 2017 of approximately
$800 million
, and a corresponding decrease in counterparty and cash collateral netting, with no impact to our Consolidated Statement of Financial Condition
.
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
|
|
|
|
|
|
||||||
Interest rate swaps
|
$
|
(25,539
|
)
|
|
$
|
(2,091
|
)
|
|
$
|
—
|
|
Long-term debt
|
27,363
|
|
|
8,124
|
|
|
—
|
|
|||
Total
|
$
|
1,824
|
|
|
$
|
6,033
|
|
|
$
|
—
|
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
|
|
|
|
|
|
||||||
Interest rate contracts
|
$
|
67,291
|
|
|
$
|
3,171
|
|
|
$
|
(36,559
|
)
|
Foreign exchange contracts
|
226
|
|
|
4,376
|
|
|
20,401
|
|
|||
Equity contracts
|
(267,187
|
)
|
|
(319,775
|
)
|
|
(635,305
|
)
|
|||
Commodity contracts
|
21,785
|
|
|
(9,049
|
)
|
|
(3,339
|
)
|
|||
Credit contracts
|
449
|
|
|
1,959
|
|
|
5,013
|
|
|||
Total
|
$
|
(177,436
|
)
|
|
$
|
(319,318
|
)
|
|
$
|
(649,789
|
)
|
|
OTC Derivative Assets (1) (2) (3)
|
||||||||||||||||||
|
0-12 Months
|
|
1-5 Years
|
|
Greater Than
5 Years
|
|
Cross-
Maturity
Netting (4)
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Commodity swaps, options and forwards
|
$
|
4,006
|
|
|
$
|
6,185
|
|
|
$
|
—
|
|
|
$
|
(1,445
|
)
|
|
$
|
8,746
|
|
Equity swaps and options
|
1,769
|
|
|
13,966
|
|
|
4,934
|
|
|
(1,889
|
)
|
|
18,780
|
|
|||||
Credit default swaps
|
66
|
|
|
12,060
|
|
|
3,984
|
|
|
(899
|
)
|
|
15,211
|
|
|||||
Total return swaps
|
95,130
|
|
|
19,519
|
|
|
—
|
|
|
(1,786
|
)
|
|
112,863
|
|
|||||
Foreign currency forwards, swaps and options
|
39,162
|
|
|
15,942
|
|
|
—
|
|
|
(12,528
|
)
|
|
42,576
|
|
|||||
Fixed income forwards
|
3,911
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,911
|
|
|||||
Interest rate swaps, options and forwards
|
27,851
|
|
|
93,303
|
|
|
103,165
|
|
|
(77,874
|
)
|
|
146,445
|
|
|||||
Total
|
$
|
171,895
|
|
|
$
|
160,975
|
|
|
$
|
112,083
|
|
|
$
|
(96,421
|
)
|
|
348,532
|
|
|
Cross product counterparty netting
|
|
|
|
|
|
|
|
|
|
|
|
|
(18,743
|
)
|
|||||
Total OTC derivative assets included in Trading assets
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
329,789
|
|
(1)
|
At
November 30, 2018
, we held exchange traded derivative assets, other derivatives assets and other credit agreements with a fair value of
$42.2 million
, which are not included in this table.
|
(2)
|
OTC derivative assets in the table above are gross of collateral received. OTC derivative assets are recorded net of collateral received in the Consolidated Statements of Financial Condition. At
November 30, 2018
, cash collateral received was
$205.3 million
.
|
(3)
|
Derivative fair values include counterparty netting within product category.
|
(4)
|
Amounts represent the netting of receivable balances with payable balances for the same counterparty within product category across maturity categories.
|
|
|
OTC Derivative Liabilities (1) (2) (3)
|
||||||||||||||||||
|
|
0-12 Months
|
|
1-5 Years
|
|
Greater Than
5 Years
|
|
Cross-Maturity
Netting (4)
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commodity swaps, options and forwards
|
|
$
|
1,074
|
|
|
$
|
371
|
|
|
$
|
—
|
|
|
$
|
(1,445
|
)
|
|
$
|
—
|
|
Equity swaps and options
|
|
52,466
|
|
|
83,938
|
|
|
35,730
|
|
|
(1,889
|
)
|
|
170,245
|
|
|||||
Credit default swaps
|
|
164
|
|
|
1,197
|
|
|
1,548
|
|
|
(899
|
)
|
|
2,010
|
|
|||||
Total return swaps
|
|
64,296
|
|
|
11,549
|
|
|
—
|
|
|
(1,786
|
)
|
|
74,059
|
|
|||||
Foreign currency forwards, swaps and options
|
|
43,593
|
|
|
15,546
|
|
|
—
|
|
|
(12,528
|
)
|
|
46,611
|
|
|||||
Interest rate swaps, options and forwards
|
|
30,518
|
|
|
135,874
|
|
|
196,171
|
|
|
(77,874
|
)
|
|
284,689
|
|
|||||
Total
|
|
$
|
192,111
|
|
|
$
|
248,475
|
|
|
$
|
233,449
|
|
|
$
|
(96,421
|
)
|
|
577,614
|
|
|
Cross product counterparty netting
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(18,743
|
)
|
|||||
Total OTC derivative liabilities included in Trading liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
558,871
|
|
(1)
|
At
November 30, 2018
, we held exchange traded derivative liabilities, other derivative liabilities and other credit agreements with a fair value of
$873.5 million
, which are not included in this table.
|
(2)
|
OTC derivative liabilities in the table above are gross of collateral pledged. OTC derivative liabilities are recorded net of collateral pledged in the Consolidated Statements of Financial Condition. At
November 30, 2018
, cash collateral pledged was
$304.7 million
.
|
(3)
|
Derivative fair values include counterparty netting within product category.
|
(4)
|
Amounts represent the netting of receivable balances with payable balances for the same counterparty within product category across maturity categories.
|
(1)
|
Jefferies Group utilizes internal credit ratings determined by the Jefferies Group Risk Management department. Credit ratings determined by Jefferies Group Risk Management use methodologies that produce ratings generally consistent with those produced by external rating agencies.
|
|
|
External Credit Rating
|
|
|
|
|
||||||||||
|
|
Investment Grade
|
|
Non-investment Grade
|
|
Unrated
|
|
Total Notional
|
||||||||
November 30, 2018
|
|
|
|
|
|
|
|
|
||||||||
Credit protection sold:
|
|
|
|
|
|
|
|
|
||||||||
Index credit default swaps
|
|
$
|
25.7
|
|
|
$
|
167.4
|
|
|
$
|
—
|
|
|
$
|
193.1
|
|
Single name credit default swaps
|
|
57.7
|
|
|
84.5
|
|
|
3.0
|
|
|
145.2
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
||||||||
Credit protection sold:
|
|
|
|
|
|
|
|
|
||||||||
Index credit default swaps
|
|
$
|
3.0
|
|
|
$
|
126.0
|
|
|
$
|
—
|
|
|
$
|
129.0
|
|
Single name credit default swaps
|
|
129.1
|
|
|
89.1
|
|
|
—
|
|
|
218.2
|
|
|
November 30, 2018
|
|
December 31, 2017
|
||||
|
|
|
|
||||
Derivative instrument liabilities with credit-risk-related contingent features
|
$
|
93.5
|
|
|
$
|
95.1
|
|
Collateral posted
|
(61.5
|
)
|
|
(86.4
|
)
|
||
Collateral received
|
91.5
|
|
|
5.6
|
|
||
Return of and additional collateral required in the event of a credit rating downgrade below investment grade (1)
|
123.3
|
|
|
14.3
|
|
(1)
|
These potential outflows include initial margin received from counterparties at the execution of the derivative contract. The initial margin will be returned if counterparties elect to terminate the contract after a downgrade.
|
Collateral Pledged
|
|
Securities Lending Arrangements
|
|
Repurchase Agreements
|
|
Total
|
||||||
November 30, 2018
|
|
|
|
|
|
|
||||||
Corporate equity securities
|
|
$
|
1,505,218
|
|
|
$
|
487,124
|
|
|
$
|
1,992,342
|
|
Corporate debt securities
|
|
333,221
|
|
|
1,853,309
|
|
|
2,186,530
|
|
|||
Mortgage- and asset-backed securities
|
|
249
|
|
|
2,820,543
|
|
|
2,820,792
|
|
|||
U.S. government and federal agency securities
|
|
—
|
|
|
8,181,947
|
|
|
8,181,947
|
|
|||
Municipal securities
|
|
—
|
|
|
604,274
|
|
|
604,274
|
|
|||
Sovereign securities
|
|
—
|
|
|
2,945,521
|
|
|
2,945,521
|
|
|||
Loans and other receivables
|
|
—
|
|
|
300,768
|
|
|
300,768
|
|
|||
Total
|
|
$
|
1,838,688
|
|
|
$
|
17,193,486
|
|
|
$
|
19,032,174
|
|
|
|
|
|
|
|
|
||||||
December 31, 2017
|
|
|
|
|
|
|
||||||
Corporate equity securities
|
|
$
|
2,353,798
|
|
|
$
|
214,413
|
|
|
$
|
2,568,211
|
|
Corporate debt securities
|
|
470,908
|
|
|
2,336,702
|
|
|
2,807,610
|
|
|||
Mortgage- and asset-backed securities
|
|
—
|
|
|
2,562,268
|
|
|
2,562,268
|
|
|||
U.S. government and federal agency securities
|
|
19,205
|
|
|
11,792,534
|
|
|
11,811,739
|
|
|||
Municipal securities
|
|
—
|
|
|
444,861
|
|
|
444,861
|
|
|||
Sovereign securities
|
|
—
|
|
|
2,023,530
|
|
|
2,023,530
|
|
|||
Loans and other receivables
|
|
—
|
|
|
454,941
|
|
|
454,941
|
|
|||
Total
|
|
$
|
2,843,911
|
|
|
$
|
19,829,249
|
|
|
$
|
22,673,160
|
|
|
|
Contractual Maturity
|
||||||||||||||||||
|
|
Overnight and Continuous
|
|
Up to 30 Days
|
|
31 to 90 Days
|
|
Greater than 90 Days
|
|
Total
|
||||||||||
November 30, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities lending arrangements
|
|
$
|
807,347
|
|
|
$
|
—
|
|
|
$
|
560,417
|
|
|
$
|
470,924
|
|
|
$
|
1,838,688
|
|
Repurchase agreements
|
|
7,849,052
|
|
|
1,915,325
|
|
|
6,042,951
|
|
|
1,386,158
|
|
|
17,193,486
|
|
|||||
Total
|
|
$
|
8,656,399
|
|
|
$
|
1,915,325
|
|
|
$
|
6,603,368
|
|
|
$
|
1,857,082
|
|
|
$
|
19,032,174
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities lending arrangements
|
|
$
|
1,676,940
|
|
|
$
|
—
|
|
|
$
|
741,971
|
|
|
$
|
425,000
|
|
|
$
|
2,843,911
|
|
Repurchase agreements
|
|
10,780,474
|
|
|
4,058,228
|
|
|
3,211,464
|
|
|
1,779,083
|
|
|
19,829,249
|
|
|||||
Total
|
|
$
|
12,457,414
|
|
|
$
|
4,058,228
|
|
|
$
|
3,953,435
|
|
|
$
|
2,204,083
|
|
|
$
|
22,673,160
|
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
|
|
|
|
|
|
||||||
Transferred assets
|
$
|
7,159.3
|
|
|
$
|
4,552.9
|
|
|
$
|
5,786.0
|
|
Proceeds on new securitizations
|
7,165.3
|
|
|
4,594.5
|
|
|
5,809.0
|
|
|||
Cash flows received on retained interests
|
48.5
|
|
|
28.7
|
|
|
28.2
|
|
|
November 30, 2018
|
|
December 31, 2017
|
||||||||||||
Securitization Type
|
Total
Assets
|
|
Retained
Interests
|
|
Total
Assets
|
|
Retained
Interests
|
||||||||
|
|
|
|
|
|
|
|
||||||||
U.S. government agency residential mortgage-backed securities
|
$
|
13,633.5
|
|
|
$
|
365.3
|
|
|
$
|
6,383.5
|
|
|
$
|
28.2
|
|
U.S. government agency commercial mortgage-backed securities
|
2,027.6
|
|
|
185.6
|
|
|
2,075.7
|
|
|
81.4
|
|
||||
CLOs
|
3,512.0
|
|
|
20.9
|
|
|
3,957.8
|
|
|
20.3
|
|
||||
Consumer and other loans
|
604.1
|
|
|
48.9
|
|
|
247.6
|
|
|
47.8
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
||||||||
November 30, 2018
|
|
|
|
|
|
|
|
||||||||
Bonds and notes:
|
|
|
|
|
|
|
|
||||||||
U.S. government securities
|
$
|
1,073,038
|
|
|
$
|
1
|
|
|
$
|
183
|
|
|
$
|
1,072,856
|
|
Residential mortgage-backed securities
|
211,209
|
|
|
376
|
|
|
1,067
|
|
|
210,518
|
|
||||
Commercial mortgage-backed securities
|
16,068
|
|
|
—
|
|
|
426
|
|
|
15,642
|
|
||||
Other asset-backed securities
|
111,447
|
|
|
1
|
|
|
578
|
|
|
110,870
|
|
||||
Total fixed maturities
|
1,411,762
|
|
|
378
|
|
|
2,254
|
|
|
1,409,886
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total Available for sale securities
|
$
|
1,411,762
|
|
|
$
|
378
|
|
|
$
|
2,254
|
|
|
$
|
1,409,886
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bonds and notes:
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. government securities
|
$
|
552,847
|
|
|
$
|
—
|
|
|
$
|
42
|
|
|
$
|
552,805
|
|
Residential mortgage-backed securities
|
34,381
|
|
|
272
|
|
|
92
|
|
|
34,561
|
|
||||
Commercial mortgage-backed securities
|
5,857
|
|
|
17
|
|
|
4
|
|
|
5,870
|
|
||||
Other asset-backed securities
|
34,837
|
|
|
46
|
|
|
44
|
|
|
34,839
|
|
||||
Total fixed maturities
|
627,922
|
|
|
335
|
|
|
182
|
|
|
628,075
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common stocks:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Banks, trusts and insurance companies
|
35,071
|
|
|
17,500
|
|
|
—
|
|
|
52,571
|
|
||||
Industrial, miscellaneous and all other
|
17,504
|
|
|
18,411
|
|
|
—
|
|
|
35,915
|
|
||||
Total equity securities
|
52,575
|
|
|
35,911
|
|
|
—
|
|
|
88,486
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total Available for sale securities
|
$
|
680,497
|
|
|
$
|
36,246
|
|
|
$
|
182
|
|
|
$
|
716,561
|
|
|
Amortized
Cost
|
|
Estimated
Fair Value
|
||||
|
(In thousands)
|
||||||
|
|
|
|
||||
Due within one year
|
$
|
1,073,038
|
|
|
$
|
1,072,856
|
|
|
1,073,038
|
|
|
1,072,856
|
|
||
Mortgage-backed and asset-backed securities
|
338,724
|
|
|
337,030
|
|
||
|
$
|
1,411,762
|
|
|
$
|
1,409,886
|
|
•
|
Purchases of securities in connection with Jefferies Group's trading and secondary market-making activities;
|
•
|
Retained interests held as a result of securitization activities, including the resecuritization of mortgage- and other asset-backed securities and the securitization of commercial mortgage, corporate and consumer loans;
|
•
|
Acting as placement agent and/or underwriter in connection with client-sponsored securitizations;
|
•
|
Financing of agency and non-agency mortgage- and other asset-backed securities;
|
•
|
Warehouse funding arrangements for client-sponsored consumer loan vehicles and CLOs through participation certificates, forward sale agreements and revolving loan and note commitments; and
|
•
|
Loans to, investments in and fees from various investment vehicles.
|
|
November 30, 2018
|
|
December 31, 2017
|
||||
|
|
|
|
||||
Cash
|
$
|
—
|
|
|
$
|
11.7
|
|
Financial instruments owned
|
—
|
|
|
37.6
|
|
||
Securities purchased under agreements to resell (1)
|
883.1
|
|
|
729.3
|
|
||
Receivables
|
626.0
|
|
|
318.1
|
|
||
Other
|
78.4
|
|
|
15.5
|
|
||
Total assets
|
$
|
1,587.5
|
|
|
$
|
1,112.2
|
|
|
|
|
|
||||
Other secured financings (2)
|
$
|
1,535.3
|
|
|
$
|
1,073.5
|
|
Other (3)
|
45.9
|
|
|
38.3
|
|
||
Total liabilities
|
$
|
1,581.2
|
|
|
$
|
1,111.8
|
|
(1)
|
Securities purchased under agreements to resell represent an amount due under a collateralized transaction on a related consolidated entity, which is eliminated in consolidation.
|
(2)
|
Approximately
$1.0 million
and
$44.1 million
of the secured financing represent amounts held by Jefferies Group in inventory and are eliminated in consolidation at
November 30, 2018 and December 31, 2017
, respectively.
|
(3)
|
Includes
$44.1 million
and
$32.0 million
at
November 30, 2018 and December 31, 2017
, respectively, of intercompany payables that are eliminated in consolidation.
|
|
Financial Statement
Carrying Amount
|
|
Maximum
Exposure to Loss
|
|
VIE Assets
|
||||||||||
|
Assets
|
|
Liabilities
|
|
|
|
|
||||||||
November 30, 2018
|
|
|
|
|
|
|
|
||||||||
CLOs
|
$
|
45.2
|
|
|
$
|
—
|
|
|
$
|
571.4
|
|
|
$
|
3,281.9
|
|
Consumer loan vehicles
|
462.1
|
|
|
—
|
|
|
807.1
|
|
|
3,273.1
|
|
||||
Related party private equity vehicles
|
35.5
|
|
|
—
|
|
|
53.5
|
|
|
108.3
|
|
||||
Other investment vehicles
|
203.6
|
|
|
—
|
|
|
214.7
|
|
|
5,719.1
|
|
||||
Total
|
$
|
746.4
|
|
|
$
|
—
|
|
|
$
|
1,646.7
|
|
|
$
|
12,382.4
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||
CLOs
|
$
|
168.1
|
|
|
$
|
8.9
|
|
|
$
|
1,030.4
|
|
|
$
|
5,364.3
|
|
Consumer loan vehicles
|
254.8
|
|
|
—
|
|
|
759.8
|
|
|
2,322.7
|
|
||||
Related party private equity vehicles
|
23.7
|
|
|
—
|
|
|
45.4
|
|
|
75.0
|
|
||||
Other investment vehicles
|
133.0
|
|
|
—
|
|
|
142.0
|
|
|
4,624.9
|
|
||||
Total
|
$
|
579.6
|
|
|
$
|
8.9
|
|
|
$
|
1,977.6
|
|
|
$
|
12,386.9
|
|
•
|
Forward sale agreements whereby Jefferies Group commits to sell, at a fixed price, corporate loans and ownership interests in an entity holding such corporate loans to CLOs;
|
•
|
Warehouse funding arrangements in the form of participation interests in corporate loans held by CLOs and commitments to fund such participation interests;
|
•
|
Trading positions in securities issued in a CLO transaction; and
|
•
|
Investments in variable funding notes issued by CLOs.
|
|
Loans to and investments in associated companies as of December 31, 2017
|
|
Income (losses) related to associated companies
|
|
Income (losses) related to Jefferies Group associated companies (1)
|
|
Contributions to (distributions from) associated companies, net
|
|
Other, including foreign exchange and unrealized gains (losses)
|
|
Loans to and investments in associated companies as of November 30, 2018
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Jefferies Finance
|
$
|
655,467
|
|
|
$
|
—
|
|
|
$
|
59,138
|
|
|
$
|
13,955
|
|
|
$
|
—
|
|
|
$
|
728,560
|
|
National Beef (2)
|
—
|
|
|
110,049
|
|
|
—
|
|
|
(48,656
|
)
|
|
592,237
|
|
|
653,630
|
|
||||||
Berkadia (3)
|
210,594
|
|
|
80,092
|
|
|
20,001
|
|
|
(65,197
|
)
|
|
(262
|
)
|
|
245,228
|
|
||||||
FXCM (4)
|
158,856
|
|
|
(83,174
|
)
|
|
—
|
|
|
—
|
|
|
(651
|
)
|
|
75,031
|
|
||||||
Garcadia Companies (5)
|
179,143
|
|
|
21,646
|
|
|
—
|
|
|
(26,962
|
)
|
|
(173,827
|
)
|
|
—
|
|
||||||
Linkem
|
192,136
|
|
|
(20,534
|
)
|
|
—
|
|
|
542
|
|
|
(6,987
|
)
|
|
165,157
|
|
||||||
HomeFed
|
341,874
|
|
|
(4,332
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
337,542
|
|
||||||
Golden Queen (6)
|
105,005
|
|
|
(51,990
|
)
|
|
—
|
|
|
10,941
|
|
|
—
|
|
|
63,956
|
|
||||||
54 Madison (7)
|
123,010
|
|
|
11,288
|
|
|
—
|
|
|
(47,224
|
)
|
|
—
|
|
|
87,074
|
|
||||||
Other
|
100,744
|
|
|
(6,022
|
)
|
|
(5,477
|
)
|
|
(18,275
|
)
|
|
(9,816
|
)
|
|
61,154
|
|
||||||
Total
|
$
|
2,066,829
|
|
|
$
|
57,023
|
|
|
$
|
73,662
|
|
|
$
|
(180,876
|
)
|
|
$
|
400,694
|
|
|
$
|
2,417,332
|
|
|
Loans to and investments in associated companies as of December 31, 2016
|
|
Income (losses) related to associated companies
|
|
Income (losses) related to Jefferies Group associated companies (1)
|
|
Contributions to (distributions from) associated companies, net
|
|
Other, including foreign exchange and unrealized gains (losses)
|
|
Loans to and investments in associated companies as of December 31, 2017
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Jefferies Finance
|
$
|
490,464
|
|
|
$
|
—
|
|
|
$
|
90,204
|
|
|
$
|
74,799
|
|
|
$
|
—
|
|
|
$
|
655,467
|
|
Jefferies LoanCore (8)
|
154,731
|
|
|
—
|
|
|
22,368
|
|
|
(3,994
|
)
|
|
(173,105
|
)
|
|
—
|
|
||||||
Berkadia
|
184,443
|
|
|
93,801
|
|
|
—
|
|
|
(67,384
|
)
|
|
(266
|
)
|
|
210,594
|
|
||||||
FXCM (4)
|
336,258
|
|
|
(177,644
|
)
|
|
—
|
|
|
—
|
|
|
242
|
|
|
158,856
|
|
||||||
Garcadia Companies
|
185,815
|
|
|
48,198
|
|
|
—
|
|
|
(54,870
|
)
|
|
—
|
|
|
179,143
|
|
||||||
Linkem
|
154,000
|
|
|
(32,561
|
)
|
|
—
|
|
|
31,996
|
|
|
38,701
|
|
|
192,136
|
|
||||||
HomeFed
|
302,231
|
|
|
7,725
|
|
|
—
|
|
|
31,918
|
|
|
—
|
|
|
341,874
|
|
||||||
Golden Queen (6)
|
111,302
|
|
|
(7,733
|
)
|
|
—
|
|
|
1,436
|
|
|
—
|
|
|
105,005
|
|
||||||
54 Madison (7) (9)
|
161,400
|
|
|
(6,224
|
)
|
|
—
|
|
|
35,204
|
|
|
(67,370
|
)
|
|
123,010
|
|
||||||
Other
|
44,454
|
|
|
(463
|
)
|
|
(3,177
|
)
|
|
31,837
|
|
|
28,093
|
|
|
100,744
|
|
||||||
Total
|
$
|
2,125,098
|
|
|
$
|
(74,901
|
)
|
|
$
|
109,395
|
|
|
$
|
80,942
|
|
|
$
|
(173,705
|
)
|
|
$
|
2,066,829
|
|
|
Loans to and investments in associated companies as of December 31, 2015
|
|
Income (losses) related to associated companies
|
|
Income (losses) related to Jefferies Group associated companies (1)
|
|
Contributions to (distributions from) associated companies, net
|
|
Other, including foreign exchange and unrealized gains (losses)
|
|
Loans to and investments in associated companies as of December 31, 2016
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Jefferies Finance
|
$
|
528,575
|
|
|
$
|
—
|
|
|
$
|
(1,761
|
)
|
|
$
|
(36,350
|
)
|
|
$
|
—
|
|
|
$
|
490,464
|
|
Jefferies LoanCore
|
288,741
|
|
|
—
|
|
|
21,221
|
|
|
(155,231
|
)
|
|
—
|
|
|
154,731
|
|
||||||
Berkadia
|
190,986
|
|
|
94,201
|
|
|
—
|
|
|
(100,766
|
)
|
|
22
|
|
|
184,443
|
|
||||||
FXCM (4)
|
—
|
|
|
1,919
|
|
|
—
|
|
|
—
|
|
|
334,339
|
|
|
336,258
|
|
||||||
Garcadia Companies
|
172,660
|
|
|
52,266
|
|
|
—
|
|
|
(39,111
|
)
|
|
—
|
|
|
185,815
|
|
||||||
Linkem
|
150,149
|
|
|
(22,867
|
)
|
|
—
|
|
|
33,303
|
|
|
(6,585
|
)
|
|
154,000
|
|
||||||
HomeFed
|
275,378
|
|
|
23,893
|
|
|
—
|
|
|
2,960
|
|
|
—
|
|
|
302,231
|
|
||||||
Golden Queen (6)
|
114,323
|
|
|
(3,021
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
111,302
|
|
||||||
54 Madison (9)
|
—
|
|
|
4,255
|
|
|
—
|
|
|
153,503
|
|
|
3,642
|
|
|
161,400
|
|
||||||
Other
|
36,557
|
|
|
3,952
|
|
|
(2,276
|
)
|
|
9,622
|
|
|
(3,401
|
)
|
|
44,454
|
|
||||||
Total
|
$
|
1,757,369
|
|
|
$
|
154,598
|
|
|
$
|
17,184
|
|
|
$
|
(132,070
|
)
|
|
$
|
328,017
|
|
|
$
|
2,125,098
|
|
(1)
|
Primarily classified in Investment banking revenues and Other revenues.
|
(2)
|
As discussed more fully in Notes 1 and 28, in June 2018, we completed the sale of
48%
of National Beef to Marfrig, reducing our ownership in National Beef to
31%
. As of the closing of the sale on June 5, 2018, we deconsolidated our investment in National Beef and account for our remaining interest under the equity method of accounting. The carrying value of our retained
31%
interest was adjusted to a fair value of
$592.3 million
on the date of sale.
|
(3)
|
In the fourth quarter of 2018, we transferred our interest in Berkadia to Jefferies Group.
|
(4)
|
As further described in Note 5, in 2016, we amended the terms of our loan and associated rights with FXCM. Through the amendments, we converted our participation rights for a
50%
voting interest in FXCM. Our investment in FXCM includes both our equity method investment in FXCM and our term loan with FXCM. Our equity method investment is included as Loans to and investments in associated companies and our term loan is included as Trading assets, at fair value in our Consolidated Statements of Financial Condition.
|
(5)
|
As more fully discussed in Note 1, during the third quarter of 2018, we sold
100%
of our equity interests in Garcadia and our associated real estate to our former partners, the Garff family.
|
(6)
|
At
November 30, 2018 and December 31, 2017 and 2016
, the balance reflects
$15.1 million
,
$30.5 million
and
$32.8 million
, respectively, related to a noncontrolling interest.
|
(7)
|
On November 30, 2017, we sold our interest in the general partner of the 54 Madison fund and as a result no longer control the 54 Madison investment committee. We retained
two
of the
four
seats on the investment committee and continue to have significant influence over the fund. We therefore deconsolidated the 54 Madison fund and account for our interest under the equity method of accounting.
|
(8)
|
On October 31, 2017, Jefferies Group sold all of its membership interests in Jefferies LoanCore for approximately
$173.1 million
.
|
(9)
|
At December 31, 2016, the balance reflects
$95.3 million
related to noncontrolling interests.
|
|
November 30, 2018
|
|
December 31, 2017
|
|
|
||||||
|
|
|
|
|
|
||||||
Assets
|
$
|
17,050,564
|
|
|
$
|
16,340,643
|
|
|
|
||
Liabilities
|
11,752,273
|
|
|
11,920,465
|
|
|
|
||||
Noncontrolling interest
|
154,963
|
|
|
169,274
|
|
|
|
||||
|
|
|
|
|
|
||||||
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
|
|
|
|
|
|
||||||
Revenues
|
$
|
7,694,612
|
|
|
$
|
4,883,063
|
|
|
$
|
4,275,016
|
|
Income from continuing operations before extraordinary items
|
852,649
|
|
|
503,489
|
|
|
422,167
|
|
|||
Net income
|
798,615
|
|
|
438,881
|
|
|
430,291
|
|
|||
The Company's income related to associated companies
|
130,685
|
|
|
34,494
|
|
|
171,782
|
|
|
Gross
Amounts
|
|
Netting in Consolidated Statement of Financial Condition
|
|
Net Amounts in Consolidated Statement of Financial Condition
|
|
Additional Amounts Available for Setoff (1)
|
|
Available Collateral (2)
|
|
Net Amount (3)
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Assets at November 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative contracts
|
$
|
2,580,706
|
|
|
$
|
(2,413,931
|
)
|
|
$
|
166,775
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
166,775
|
|
Securities borrowing arrangements
|
6,538,212
|
|
|
—
|
|
|
6,538,212
|
|
|
(468,778
|
)
|
|
(1,193,986
|
)
|
|
4,875,448
|
|
||||||
Reverse repurchase agreements
|
11,336,175
|
|
|
(8,550,417
|
)
|
|
2,785,758
|
|
|
(609,225
|
)
|
|
(2,126,730
|
)
|
|
49,803
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities at November 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivative contracts
|
$
|
3,640,703
|
|
|
$
|
(2,513,050
|
)
|
|
$
|
1,127,653
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,127,653
|
|
Securities lending arrangements
|
1,838,688
|
|
|
—
|
|
|
1,838,688
|
|
|
(468,778
|
)
|
|
(1,343,704
|
)
|
|
26,206
|
|
||||||
Repurchase agreements
|
17,193,486
|
|
|
(8,550,417
|
)
|
|
8,643,069
|
|
|
(609,225
|
)
|
|
(7,070,967
|
)
|
|
962,877
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Assets at December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivative contracts
|
$
|
3,497,969
|
|
|
$
|
(3,318,481
|
)
|
|
$
|
179,488
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
179,488
|
|
Securities borrowing arrangements
|
7,721,803
|
|
|
—
|
|
|
7,721,803
|
|
|
(966,712
|
)
|
|
(1,032,629
|
)
|
|
5,722,462
|
|
||||||
Reverse repurchase agreements
|
14,858,297
|
|
|
(11,168,738
|
)
|
|
3,689,559
|
|
|
(463,973
|
)
|
|
(3,207,147
|
)
|
|
18,439
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities at December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivative contracts
|
$
|
3,745,908
|
|
|
$
|
(3,490,514
|
)
|
|
$
|
255,394
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
255,394
|
|
Securities lending arrangements
|
2,843,911
|
|
|
—
|
|
|
2,843,911
|
|
|
(966,712
|
)
|
|
(1,795,408
|
)
|
|
81,791
|
|
||||||
Repurchase agreements
|
19,829,249
|
|
|
(11,168,738
|
)
|
|
8,660,511
|
|
|
(463,973
|
)
|
|
(7,067,512
|
)
|
|
1,129,026
|
|
(1)
|
Under master netting agreements with our counterparties, we have the legal right of offset with a counterparty, which incorporates all of the counterparty's outstanding rights and obligations under the arrangement. These balances reflect additional credit risk mitigation that is available by a counterparty in the event of a counterparty's default, but which are not netted in the balance sheet because other netting provisions of GAAP are not met. Further, for derivative assets and liabilities, amounts netted include cash collateral paid or received.
|
(2)
|
Includes securities received or paid under collateral arrangements with counterparties that could be liquidated in the event of a counterparty default and thus offset against a counterparty's rights and obligations under the respective repurchase agreements or securities borrowing or lending arrangements.
|
(3)
|
At
November 30, 2018
, amounts include
$4,825.7 million
of securities borrowing arrangements, for which we have received securities collateral of
$4,711.7 million
, and
$931.7 million
of repurchase agreements, for which we have pledged securities collateral of
$963.6 million
, which are subject to master netting agreements but we have not determined the agreements to be legally enforceable. At
December 31, 2017
, amounts include
$5,678.6 million
of securities borrowing arrangements, for which we have received securities collateral of
$5,516.7 million
, and
$1,084.4 million
of repurchase agreements, for which we have pledged securities collateral of
$1,115.9 million
, which are subject to master netting agreements but we have not determined the agreements to be legally enforceable.
|
|
November 30, 2018
|
|
December 31, 2017
|
||||
Indefinite lived intangibles:
|
|
|
|
||||
Exchange and clearing organization membership interests and registrations
|
$
|
8,524
|
|
|
$
|
8,551
|
|
|
|
|
|
||||
Amortizable intangibles:
|
|
|
|
|
|
||
Customer and other relationships, net of accumulated amortization of $102,579 and $230,074
|
67,894
|
|
|
347,767
|
|
||
Trademarks and tradename, net of accumulated amortization of $21,086 and $95,627
|
107,262
|
|
|
293,851
|
|
||
Supply contracts, net of accumulated amortization of $0 and $57,440
|
—
|
|
|
86,160
|
|
||
Other, net of accumulated amortization of $4,339 and $3,885
|
4,611
|
|
|
4,701
|
|
||
Total intangible assets, net
|
188,291
|
|
|
741,030
|
|
||
|
|
|
|
||||
Goodwill:
|
|
|
|
|
|
||
National Beef
|
—
|
|
|
14,991
|
|
||
Jefferies Group
|
1,698,381
|
|
|
1,703,300
|
|
||
Other operations
|
3,459
|
|
|
3,859
|
|
||
Total goodwill
|
1,701,840
|
|
|
1,722,150
|
|
||
|
|
|
|
||||
Total intangible assets, net and goodwill
|
$
|
1,890,131
|
|
|
$
|
2,463,180
|
|
|
November 30, 2018
|
|
December 31, 2017
|
||||
|
|
|
|
||||
Bank loans (1)
|
$
|
330,942
|
|
|
$
|
304,651
|
|
Floating rate puttable notes
|
56,550
|
|
|
108,240
|
|
||
Equity-linked notes
|
—
|
|
|
23,324
|
|
||
Total short-term borrowings
|
$
|
387,492
|
|
|
$
|
436,215
|
|
|
November 30, 2018
|
|
December 31, 2017
|
||||
Parent Company Debt:
|
|
|
|
||||
Senior Notes:
|
|
|
|
||||
5.50% Senior Notes due October 18, 2023, $750,000 principal
|
$
|
743,397
|
|
|
$
|
742,348
|
|
6.625% Senior Notes due October 23, 2043, $250,000 principal
|
246,719
|
|
|
246,673
|
|
||
Total long-term debt – Parent Company
|
990,116
|
|
|
989,021
|
|
||
|
|
|
|
||||
Subsidiary Debt (non-recourse to Parent Company):
|
|
|
|
|
|
||
Jefferies Group:
|
|
|
|
|
|
||
5.125% Senior Notes, due April 13, 2018, $0 and $678,300 principal
|
—
|
|
|
682,338
|
|
||
8.5% Senior Notes, due July 15, 2019, $680,800 principal
|
699,659
|
|
|
728,872
|
|
||
2.375% Euro Medium Term Notes, due May 20, 2020, $565,500 and $594,725 principal
|
564,702
|
|
|
593,334
|
|
||
6.875% Senior Notes, due April 15, 2021, $750,000 principal
|
791,814
|
|
|
808,157
|
|
||
2.25% Euro Medium Term Notes, due July 13, 2022, $4,524 and $4,758 principal
|
4,243
|
|
|
4,389
|
|
||
5.125% Senior Notes, due January 20, 2023, $600,000 principal
|
612,928
|
|
|
615,703
|
|
||
4.85% Senior Notes, due January 15, 2027, $750,000 principal (1)
|
709,484
|
|
|
736,357
|
|
||
6.45% Senior Debentures, due June 8, 2027, $350,000 principal
|
373,669
|
|
|
375,794
|
|
||
3.875% Convertible Senior Debentures, due November 1, 2029, $0 and $324,779 principal
|
—
|
|
|
324,779
|
|
||
4.15% Senior Notes, due January 23, 2030, $1,000,000 and $0 principal
|
987,788
|
|
|
—
|
|
||
6.25% Senior Debentures, due January 15, 2036, $500,000 principal
|
511,662
|
|
|
512,040
|
|
||
6.50% Senior Notes, due January 20, 2043, $400,000 principal
|
420,625
|
|
|
420,990
|
|
||
Structured Notes (2) (3)
|
686,170
|
|
|
614,091
|
|
||
Jefferies Group Revolving Credit Facility
|
183,539
|
|
|
—
|
|
||
National Beef Reducing Revolver Loan
|
—
|
|
|
120,000
|
|
||
National Beef Revolving Credit Facility
|
—
|
|
|
76,809
|
|
||
Foursight Capital Credit Facilities
|
—
|
|
|
170,455
|
|
||
Other
|
81,164
|
|
|
112,654
|
|
||
Total long-term debt – subsidiaries
|
6,627,447
|
|
|
6,896,762
|
|
||
|
|
|
|
||||
Long-term debt
|
$
|
7,617,563
|
|
|
$
|
7,885,783
|
|
(1)
|
Amounts include gains of
$27.4 million
and
$8.1 million
during the
eleven months ended November 30, 2018 and twelve months ended December 31, 2017
, respectively, associated with an interest rate swap based on its designation as a fair value hedge. See Notes 2 and 5 for further information.
|
(2)
|
Includes
$686.2 million
and
$607.0 million
at fair value at
November 30, 2018 and December 31, 2017
, respectively. These structured notes contain various interest rate payment terms and are accounted for at fair value, with changes in fair value resulting from a change in the instrument specific credit risk presented in Accumulated other comprehensive income and changes in fair value resulting from non-credit components recognized in Principal transactions revenues.
|
(3)
|
Of the
$686.2 million
of structured notes at
November 30, 2018
,
$5.7 million
matures in 2019,
$27.3 million
matures in 2022 and the remaining
$653.2 million
matures in 2024 or thereafter.
|
2019
|
$
|
690.2
|
|
2020
|
565.5
|
|
|
2021
|
935.0
|
|
|
2022
|
32.5
|
|
|
2023
|
1,429.0
|
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
||||
|
|
|
|
||||
Balance, beginning of year
|
$
|
412,128
|
|
|
$
|
321,962
|
|
Income allocated to redeemable noncontrolling interests
|
37,141
|
|
|
85,277
|
|
||
Distributions to redeemable noncontrolling interests
|
(70,681
|
)
|
|
(90,048
|
)
|
||
Increase in fair value of redeemable noncontrolling interests charged to additional paid-in capital
|
21,404
|
|
|
94,937
|
|
||
Reversal of cumulative National Beef redeemable noncontrolling interests fair value adjustment prior to deconsolidation
|
(237,669
|
)
|
|
—
|
|
||
Deconsolidation of National Beef
|
(162,323
|
)
|
|
—
|
|
||
Balance, end of year
|
$
|
—
|
|
|
$
|
412,128
|
|
|
Restricted Stock
|
|
Weighted- Average
Grant Date
Fair Value
|
|||
|
|
|
|
|||
Balance at January 1, 2016
|
2,004
|
|
|
$
|
24.56
|
|
Grants
|
356
|
|
|
$
|
18.23
|
|
Forfeited
|
(24
|
)
|
|
$
|
26.90
|
|
Fulfillment of service requirement
|
(974
|
)
|
|
$
|
25.65
|
|
Balance at December 31, 2016
|
1,362
|
|
|
$
|
22.09
|
|
Grants
|
391
|
|
|
$
|
23.65
|
|
Forfeited
|
—
|
|
|
$
|
—
|
|
Fulfillment of service requirement
|
(611
|
)
|
|
$
|
23.73
|
|
Balance at December 31, 2017
|
1,142
|
|
|
$
|
21.75
|
|
Grants
|
1,077
|
|
|
$
|
23.63
|
|
Forfeited
|
(30
|
)
|
|
$
|
16.49
|
|
Fulfillment of service requirement
|
(394
|
)
|
|
$
|
24.23
|
|
Balance at November 30, 2018
|
1,795
|
|
|
$
|
22.42
|
|
|
|
|
|
|
Weighted-Average
Grant Date
Fair Value
|
||||||||
|
Future
Service
Required
|
|
No Future
Service
Required
|
|
Future
Service
Required
|
|
No Future
Service
Required
|
||||||
|
|
|
|
|
|
|
|
||||||
Balance at January 1, 2016
|
3,388
|
|
|
8,583
|
|
|
$
|
26.90
|
|
|
$
|
26.68
|
|
Grants
|
—
|
|
|
128
|
|
|
$
|
—
|
|
|
$
|
14.21
|
|
Distributions of underlying shares
|
—
|
|
|
(1,683
|
)
|
|
$
|
—
|
|
|
$
|
26.59
|
|
Forfeited
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Fulfillment of service requirement
|
(3,320
|
)
|
|
3,320
|
|
|
$
|
26.90
|
|
|
$
|
26.90
|
|
Balance at December 31, 2016
|
68
|
|
|
10,348
|
|
|
$
|
26.90
|
|
|
$
|
26.61
|
|
Grants
|
—
|
|
|
104
|
|
|
$
|
—
|
|
|
$
|
21.55
|
|
Distributions of underlying shares
|
—
|
|
|
(175
|
)
|
|
$
|
—
|
|
|
$
|
26.46
|
|
Forfeited
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Fulfillment of service requirement
|
(36
|
)
|
|
36
|
|
|
$
|
26.90
|
|
|
$
|
26.90
|
|
Balance at December 31, 2017
|
32
|
|
|
10,313
|
|
|
$
|
26.90
|
|
|
$
|
26.57
|
|
Grants
|
—
|
|
|
161
|
|
|
$
|
—
|
|
|
$
|
20.24
|
|
Distributions of underlying shares
|
—
|
|
|
(192
|
)
|
|
$
|
—
|
|
|
$
|
26.39
|
|
Forfeited
|
(2
|
)
|
|
(1
|
)
|
|
$
|
26.90
|
|
|
$
|
22.16
|
|
Fulfillment of service requirement
|
(28
|
)
|
|
28
|
|
|
$
|
26.90
|
|
|
$
|
26.90
|
|
Balance at November 30, 2018
|
2
|
|
|
10,309
|
|
|
$
|
26.90
|
|
|
$
|
26.48
|
|
|
Target Number of Shares
|
|
Weighted- Average
Grant Date
Fair Value
|
|||
|
|
|
|
|||
Balance at January 1, 2016
|
—
|
|
|
$
|
—
|
|
Grants
|
3,434
|
|
|
$
|
9.68
|
|
Forfeited
|
—
|
|
|
$
|
—
|
|
Balance at December 31, 2016
|
3,434
|
|
|
$
|
9.68
|
|
Grants
|
2,221
|
|
|
$
|
19.06
|
|
Forfeited
|
—
|
|
|
$
|
—
|
|
Balance at December 31, 2017
|
5,655
|
|
|
$
|
13.37
|
|
Grants
|
3,813
|
|
|
$
|
26.16
|
|
Forfeited
|
—
|
|
|
$
|
—
|
|
Balance at November 30, 2018
|
9,468
|
|
|
$
|
18.52
|
|
|
Common
Shares
Subject
to Option
|
|
Weighted-
Average
Exercise
Prices
|
|
Weighted-
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value
|
|||||
|
|
|
|
|
|
|
|
|||||
Balance at January 1, 2016
|
661
|
|
|
$
|
24.97
|
|
|
|
|
|
||
Granted
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Exercised
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
Cancelled
|
(20
|
)
|
|
$
|
30.49
|
|
|
|
|
|
|
|
Balance at December 31, 2016
|
641
|
|
|
$
|
24.80
|
|
|
|
|
|
|
|
Granted
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Exercised
|
(20
|
)
|
|
$
|
22.75
|
|
|
|
|
$
|
65
|
|
Cancelled
|
(290
|
)
|
|
$
|
26.98
|
|
|
|
|
|
|
|
Balance at December 31, 2017
|
331
|
|
|
$
|
23.03
|
|
|
|
|
|
|
|
Granted
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Exercised
|
(109
|
)
|
|
$
|
22.87
|
|
|
|
|
$
|
136
|
|
Cancelled
|
(27
|
)
|
|
$
|
24.79
|
|
|
|
|
|
|
|
Balance at November 30, 2018
|
195
|
|
|
$
|
22.87
|
|
|
0.1 years
|
|
$
|
—
|
|
Exercisable at November 30, 2018
|
195
|
|
|
$
|
22.87
|
|
|
0.1 years
|
|
$
|
—
|
|
|
November 30, 2018
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||
|
|
|
|
|
|
||||||
Net unrealized gains on available for sale securities
|
$
|
542,832
|
|
|
$
|
572,085
|
|
|
$
|
561,497
|
|
Net unrealized foreign exchange losses
|
(193,402
|
)
|
|
(101,400
|
)
|
|
(184,829
|
)
|
|||
Net unrealized losses on instrument specific credit risk
|
(5,728
|
)
|
|
(34,432
|
)
|
|
(6,494
|
)
|
|||
Net unrealized gains (losses) on cash flow hedges
|
470
|
|
|
(1,138
|
)
|
|
—
|
|
|||
Net minimum pension liability
|
(55,886
|
)
|
|
(62,391
|
)
|
|
(59,477
|
)
|
|||
|
$
|
288,286
|
|
|
$
|
372,724
|
|
|
$
|
310,697
|
|
Details about Accumulated Other Comprehensive Income
Components
|
|
Amount Reclassified from Accumulated Other Comprehensive Income
|
|
Affected Line Item in the
Consolidated Statement
of Operations
|
||||||
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
|
||||
|
|
|
|
|
|
|
||||
Net unrealized gains on available for sale securities, net of income tax provision of $37 and $124
|
|
$
|
109
|
|
|
$
|
212
|
|
|
Other income
|
Net unrealized foreign exchange gains (losses), net of income tax provision (benefit) of $(16) and $1,086
|
|
20,459
|
|
|
(5,310
|
)
|
|
Other income and other expenses
|
||
Net unrealized gains on instrument specific credit risk, net of income tax provision of $311 and $0
|
|
916
|
|
|
—
|
|
|
Principal transactions revenues
|
||
Amortization of defined benefit pension plan actuarial losses, net of income tax benefit of $(697) and $(811)
|
|
(2,044
|
)
|
|
(1,748
|
)
|
|
Selling, general and other expenses, which includes pension expense. See Note 19 for information on this component.
|
||
Other pension, net of income tax benefit of $0 and $(1,231)
|
|
(5,305
|
)
|
|
1,231
|
|
|
Compensation and benefits expense and Income tax provision (benefit)
|
||
Total reclassifications for the period, net of tax
|
|
$
|
14,135
|
|
|
$
|
(5,615
|
)
|
|
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
||||
Change in projected benefit obligation:
|
|
|
|
||||
Projected benefit obligation, beginning of year
|
$
|
211,257
|
|
|
$
|
205,405
|
|
Interest cost
|
6,783
|
|
|
8,119
|
|
||
Actuarial (gains) losses
|
(16,646
|
)
|
|
6,644
|
|
||
Settlement payments
|
(3,133
|
)
|
|
—
|
|
||
Benefits paid
|
(7,000
|
)
|
|
(8,911
|
)
|
||
Projected benefit obligation, end of year
|
$
|
191,261
|
|
|
$
|
211,257
|
|
|
|
|
|
||||
Change in plan assets:
|
|
|
|
|
|
||
Fair value of plan assets, beginning of year
|
$
|
150,806
|
|
|
$
|
127,514
|
|
Actual return on plan assets
|
(7,676
|
)
|
|
22,192
|
|
||
Employer contributions
|
8,890
|
|
|
12,417
|
|
||
Benefits paid
|
(7,000
|
)
|
|
(8,911
|
)
|
||
Settlement payments
|
(3,133
|
)
|
|
—
|
|
||
Administrative expenses
|
(2,895
|
)
|
|
(2,406
|
)
|
||
Fair value of plan assets, end of year
|
$
|
138,992
|
|
|
$
|
150,806
|
|
|
|
|
|
||||
Funded status at end of year
|
$
|
(52,269
|
)
|
|
$
|
(60,451
|
)
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
Components of net periodic pension cost:
|
|
|
|
|
|
||||||
Interest cost
|
$
|
6,783
|
|
|
$
|
8,119
|
|
|
$
|
8,464
|
|
Expected return on plan assets
|
(7,217
|
)
|
|
(7,689
|
)
|
|
(7,589
|
)
|
|||
Settlement charge
|
365
|
|
|
—
|
|
|
—
|
|
|||
Actuarial losses
|
2,376
|
|
|
2,207
|
|
|
1,908
|
|
|||
Net periodic pension cost
|
$
|
2,307
|
|
|
$
|
2,637
|
|
|
$
|
2,783
|
|
|
|
|
|
|
|
||||||
Amounts recognized in other comprehensive income (loss):
|
|
|
|
|
|
||||||
Net (gains) losses arising during the period
|
$
|
1,141
|
|
|
$
|
(5,453
|
)
|
|
$
|
6,811
|
|
Settlement charge
|
(365
|
)
|
|
—
|
|
|
—
|
|
|||
Amortization of net loss
|
(2,376
|
)
|
|
(2,207
|
)
|
|
(1,908
|
)
|
|||
Total recognized in other comprehensive income (loss)
|
$
|
(1,600
|
)
|
|
$
|
(7,660
|
)
|
|
$
|
4,903
|
|
|
|
|
|
|
|
|
|
|
|||
Net amount recognized in net periodic benefit cost and other
comprehensive income (loss)
|
$
|
707
|
|
|
$
|
(5,023
|
)
|
|
$
|
7,686
|
|
|
November 30, 2018
|
|
December 31, 2017
|
||
WilTel Plan
|
|
|
|
||
Discount rate used to determine benefit obligation
|
4.35
|
%
|
|
3.51
|
%
|
Weighted-average assumptions used to determine net pension cost:
|
|
|
|
|
|
Discount rate
|
3.51
|
%
|
|
3.85
|
%
|
Expected long-term return on plan assets
|
7.00
|
%
|
|
7.00
|
%
|
|
|
|
|
||
Jefferies Group Plan
|
|
|
|
|
|
Discount rate used to determine benefit obligation
|
4.30
|
%
|
|
3.60
|
%
|
Weighted-average assumptions used to determine net pension cost:
|
|
|
|
|
|
Discount rate
|
3.60
|
%
|
|
3.90
|
%
|
Expected long-term return on plan assets
|
6.25
|
%
|
|
6.25
|
%
|
2019
|
$
|
9,689
|
|
2020
|
9,267
|
|
|
2021
|
9,491
|
|
|
2022
|
10,017
|
|
|
2023
|
13,292
|
|
|
2024 – 2028
|
66,801
|
|
|
|
|
Fair Value Measurements Using
|
||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
||||||
November 30, 2018
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
802
|
|
|
$
|
802
|
|
|
$
|
—
|
|
Growth Portfolio
|
18,656
|
|
|
—
|
|
|
18,656
|
|
|||
Liability-Driven Investing Portfolio
|
71,359
|
|
|
—
|
|
|
71,359
|
|
|||
Total
|
$
|
90,817
|
|
|
$
|
802
|
|
|
$
|
90,015
|
|
|
|
|
|
|
|
||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|||
Cash and cash equivalents
|
$
|
539
|
|
|
$
|
539
|
|
|
$
|
—
|
|
Growth Portfolio
|
65,625
|
|
|
—
|
|
|
65,625
|
|
|||
Liability-Driven Investing Portfolio
|
31,693
|
|
|
—
|
|
|
31,693
|
|
|||
Total
|
$
|
97,857
|
|
|
$
|
539
|
|
|
$
|
97,318
|
|
•
|
The Growth Portfolio consists of global equities and high yield investments.
|
•
|
The Liability-Driven Investing ("LDI") Portfolio consists of long duration credit bonds and a suite of long duration, Treasury-based instruments designed to provide capital-efficient interest rate exposure as well as target specific maturities. The objective of the LDI Portfolio is to seek to achieve performance similar to the WilTel plan's liability by seeking to match the interest rate sensitivity and credit sensitivity. The LDI Portfolio is managed to mitigate volatility in funded status deriving from changes in the discounted value of benefit obligations from market movements in the interest rate and credit components of the underlying discount curve.
|
Revenues from contracts with customers:
|
|
|
||
Commissions and other fees
|
|
$
|
634,271
|
|
Investment banking
|
|
1,904,870
|
|
|
Manufacturing revenues
|
|
357,427
|
|
|
Other
|
|
223,074
|
|
|
Total revenues from contracts with customers
|
|
3,119,642
|
|
|
|
|
|
||
Other sources of revenue:
|
|
|
||
Principal transactions
|
|
232,224
|
|
|
Interest income
|
|
1,294,325
|
|
|
Other
|
|
363,537
|
|
|
Total revenues from other sources
|
|
1,890,086
|
|
|
|
|
|
||
Total revenues
|
|
$
|
5,009,728
|
|
|
Reportable Segments
|
|
|
|
|
||||||||||||||
|
Jefferies Group
|
|
Merchant Banking
|
|
Corporate
|
|
Consolidation Adjustments
|
|
Total
|
||||||||||
Major Business Activity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Jefferies Group:
|
|
|
|
|
|
|
|
|
|
||||||||||
Equities (1)
|
$
|
649,631
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(919
|
)
|
|
$
|
648,712
|
|
Fixed Income (1)
|
13,839
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,839
|
|
|||||
Investment Banking
|
1,910,203
|
|
|
—
|
|
|
—
|
|
|
(5,333
|
)
|
|
1,904,870
|
|
|||||
Asset Management
|
21,214
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,214
|
|
|||||
Manufacturing revenues
|
—
|
|
|
357,427
|
|
|
—
|
|
|
—
|
|
|
357,427
|
|
|||||
Oil and gas revenues
|
—
|
|
|
136,109
|
|
|
—
|
|
|
—
|
|
|
136,109
|
|
|||||
Other revenues
|
—
|
|
|
37,471
|
|
|
—
|
|
|
—
|
|
|
37,471
|
|
|||||
Total revenues from contracts with customers
|
$
|
2,594,887
|
|
|
$
|
531,007
|
|
|
$
|
—
|
|
|
$
|
(6,252
|
)
|
|
$
|
3,119,642
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Primary Geographic Region:
|
|
|
|
|
|
|
|
|
|
||||||||||
Americas
|
$
|
2,207,826
|
|
|
$
|
529,471
|
|
|
$
|
—
|
|
|
$
|
(6,252
|
)
|
|
$
|
2,731,045
|
|
Europe, Middle East and Africa
|
304,370
|
|
|
1,264
|
|
|
—
|
|
|
—
|
|
|
305,634
|
|
|||||
Asia
|
82,691
|
|
|
272
|
|
|
—
|
|
|
—
|
|
|
82,963
|
|
|||||
Total revenues from contracts with customers
|
$
|
2,594,887
|
|
|
$
|
531,007
|
|
|
$
|
—
|
|
|
$
|
(6,252
|
)
|
|
$
|
3,119,642
|
|
(1)
|
Revenues from contracts with customers associated with the equities and fixed income businesses primarily represent commissions and other fee revenue.
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
Current taxes:
|
|
|
|
|
|
||||||
U.S. Federal
|
$
|
10,000
|
|
|
$
|
(1,060
|
)
|
|
$
|
(1,314
|
)
|
U.S. state and local
|
37,439
|
|
|
33,132
|
|
|
8,035
|
|
|||
Foreign
|
11,077
|
|
|
14,597
|
|
|
(4,638
|
)
|
|||
Total current
|
58,516
|
|
|
46,669
|
|
|
2,083
|
|
|||
|
|
|
|
|
|
||||||
Deferred taxes:
|
|
|
|
|
|
||||||
U.S. Federal
|
39,448
|
|
|
586,014
|
|
|
20,517
|
|
|||
U.S. state and local
|
(73,013
|
)
|
|
1,452
|
|
|
1,118
|
|
|||
Foreign
|
(5,943
|
)
|
|
8,151
|
|
|
2,055
|
|
|||
Total deferred
|
(39,508
|
)
|
|
595,617
|
|
|
23,690
|
|
|||
|
|
|
|
|
|
||||||
Total income tax provision
|
$
|
19,008
|
|
|
$
|
642,286
|
|
|
$
|
25,773
|
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
|
|
|
|
|
|
||||||
U.S.
|
$
|
284,177
|
|
|
$
|
535,955
|
|
|
$
|
7,960
|
|
Non-U.S. (1)
|
11,923
|
|
|
70,547
|
|
|
(20,552
|
)
|
|||
Income from continuing operations before income taxes
|
$
|
296,100
|
|
|
$
|
606,502
|
|
|
$
|
(12,592
|
)
|
(1)
|
For purposes of this table, non-U.S. income is defined as income generated from operations located outside the U.S.
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
|
|
|
|
|
|
||||||
Balance at beginning of period
|
$
|
169,020
|
|
|
$
|
148,848
|
|
|
$
|
150,867
|
|
Increases based on tax positions related to the current period
|
48,083
|
|
|
18,619
|
|
|
5,045
|
|
|||
Increases based on tax positions related to prior periods
|
17,521
|
|
|
10,358
|
|
|
3,697
|
|
|||
Decreases based on tax positions related to prior periods
|
(36,324
|
)
|
|
(8,805
|
)
|
|
(9,414
|
)
|
|||
Decreases related to settlements with taxing authorities
|
(980
|
)
|
|
—
|
|
|
(1,347
|
)
|
|||
Balance at end of period
|
$
|
197,320
|
|
|
$
|
169,020
|
|
|
$
|
148,848
|
|
|
November 30, 2018
|
|
December 31, 2017
|
||||
Deferred tax asset:
|
|
|
|
||||
Net operating loss carryover
|
$
|
282,650
|
|
|
$
|
599,839
|
|
Compensation and benefits
|
269,788
|
|
|
213,340
|
|
||
Tax credits
|
66,272
|
|
|
93,026
|
|
||
Securities valuation reserves
|
76,931
|
|
|
3,012
|
|
||
Other
|
156,751
|
|
|
130,735
|
|
||
|
852,392
|
|
|
1,039,952
|
|
||
Valuation allowance
|
(38,512
|
)
|
|
(93,758
|
)
|
||
|
813,880
|
|
|
946,194
|
|
||
Deferred tax liability:
|
|
|
|
|
|
||
Amortization of intangible assets
|
(69,970
|
)
|
|
(71,583
|
)
|
||
Investment in associated companies
|
(171,006
|
)
|
|
(83,114
|
)
|
||
Transition tax
|
—
|
|
|
(35,165
|
)
|
||
Other
|
(60,115
|
)
|
|
(12,521
|
)
|
||
|
(301,091
|
)
|
|
(202,383
|
)
|
||
Net deferred tax asset
|
$
|
512,789
|
|
|
$
|
743,811
|
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
|
|
|
|
|
|
||||||
Asset management fees
|
$
|
28,144
|
|
|
$
|
28,831
|
|
|
$
|
29,492
|
|
Dividend income
|
5,416
|
|
|
(452
|
)
|
|
3,856
|
|
|||
Income from associated companies classified as other revenues
|
73,975
|
|
|
75,889
|
|
|
17,184
|
|
|||
Revenues of oil and gas production and development businesses
|
127,090
|
|
|
61,541
|
|
|
49,890
|
|
|||
Net realized securities gains (losses)
|
(939
|
)
|
|
23,028
|
|
|
29,542
|
|
|||
Gain on sale of Garcadia
|
221,712
|
|
|
—
|
|
|
—
|
|
|||
Gain on sale of Conwed
|
—
|
|
|
178,236
|
|
|
—
|
|
|||
Other
|
131,213
|
|
|
81,478
|
|
|
38,801
|
|
|||
|
$
|
586,611
|
|
|
$
|
448,551
|
|
|
$
|
168,765
|
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
Numerator for earnings per share:
|
|
|
|
|
|
||||||
Net income attributable to Jefferies Financial Group Inc. common shareholders
|
$
|
1,022,318
|
|
|
$
|
167,351
|
|
|
$
|
125,938
|
|
Allocation of earnings to participating securities (1)
|
(5,107
|
)
|
|
(610
|
)
|
|
(574
|
)
|
|||
Net income attributable to Jefferies Financial Group Inc. common shareholders for basic earnings per share
|
1,017,211
|
|
|
166,741
|
|
|
125,364
|
|
|||
Adjustment to allocation of earnings to participating securities related to diluted shares (1)
|
28
|
|
|
(14
|
)
|
|
(19
|
)
|
|||
Mandatorily redeemable convertible preferred share dividends
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net income attributable to Jefferies Financial Group Inc. common shareholders for diluted earnings per share
|
$
|
1,017,239
|
|
|
$
|
166,727
|
|
|
$
|
125,345
|
|
|
|
|
|
|
|
||||||
Denominator for earnings per share:
|
|
|
|
|
|
|
|
|
|||
Weighted average common shares outstanding
|
337,817
|
|
|
358,482
|
|
|
361,151
|
|
|||
Weighted average shares of restricted stock outstanding with future service required
|
(1,707
|
)
|
|
(1,349
|
)
|
|
(1,645
|
)
|
|||
Weighted average RSUs outstanding with no future service required
|
11,151
|
|
|
11,064
|
|
|
11,705
|
|
|||
Denominator for basic earnings per share – weighted average shares
|
347,261
|
|
|
368,197
|
|
|
371,211
|
|
|||
Stock options
|
7
|
|
|
24
|
|
|
—
|
|
|||
Senior executive compensation plan awards
|
4,007
|
|
|
2,480
|
|
|
307
|
|
|||
Mandatorily redeemable convertible preferred shares
|
—
|
|
|
—
|
|
|
—
|
|
|||
Denominator for diluted earnings per share
|
351,275
|
|
|
370,701
|
|
|
371,518
|
|
(1)
|
Represents dividends declared during the period on participating securities plus an allocation of undistributed earnings to participating securities. Net losses are not allocated to participating securities. Participating securities represent restricted stock and RSUs for which requisite service has not yet been rendered and amounted to weighted-average shares of
1,724,800
,
1,401,000
and
1,986,800
for the eleven months ended November 30, 2018 and the twelve months ended December 31, 2017 and 2016
, respectively. Dividends declared on participating securities were not material
during the eleven months ended November 30, 2018 and the twelve months ended December 31, 2017 and 2016
. Undistributed earnings are allocated to participating securities based upon their right to share in earnings if all earnings for the period had been distributed.
|
2019
|
$
|
73,060
|
|
2020
|
63,982
|
|
|
2021
|
65,456
|
|
|
2022
|
63,840
|
|
|
2023
|
60,064
|
|
|
Thereafter
|
432,880
|
|
|
|
759,282
|
|
|
Less: sublease income
|
(26,415
|
)
|
|
|
$
|
732,867
|
|
|
Expected Maturity Date
|
|
|
||||||||||||||||||||
|
2019
|
|
2020
|
|
2021
and 2022 |
|
2023
and 2024 |
|
2025
and Later |
|
Maximum
Payout
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity commitments (1)
|
$
|
322.4
|
|
|
$
|
21.8
|
|
|
$
|
1.3
|
|
|
$
|
—
|
|
|
$
|
10.5
|
|
|
$
|
356.0
|
|
Loan commitments (1)
|
250.0
|
|
|
7.5
|
|
|
54.0
|
|
|
3.5
|
|
|
—
|
|
|
315.0
|
|
||||||
Underwriting commitments
|
377.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
377.5
|
|
||||||
Forward starting reverse repos (2)
|
4,262.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,262.7
|
|
||||||
Forward starting repos (2)
|
2,931.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,931.8
|
|
||||||
Other unfunded commitments (1)
|
194.8
|
|
|
—
|
|
|
69.4
|
|
|
4.9
|
|
|
—
|
|
|
269.1
|
|
||||||
|
$
|
8,339.2
|
|
|
$
|
29.3
|
|
|
$
|
124.7
|
|
|
$
|
8.4
|
|
|
$
|
10.5
|
|
|
$
|
8,512.1
|
|
(1)
|
Equity commitments, loan commitments and other unfunded commitments are presented by contractual maturity date. The amounts are however mostly available on demand.
|
(2)
|
At
November 30, 2018
,
$4,232.8 million
within forward starting securities purchased under agreements to resell and
all
of the securities sold under agreements to repurchase settled within three business days.
|
|
Expected Maturity Date
|
|
|
||||||||||||||||||||
Guarantee Type
|
2019
|
|
2020
|
|
2021
and 2022 |
|
2023
and 2024 |
|
2025
and Later |
|
Notional/
Maximum
Payout
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative contracts – non-credit related
|
$
|
12,024.2
|
|
|
$
|
2,372.3
|
|
|
$
|
2,976.1
|
|
|
$
|
281.1
|
|
|
$
|
330.3
|
|
|
$
|
17,984.0
|
|
Written derivative contracts – credit related
|
—
|
|
|
32.4
|
|
|
—
|
|
|
112.8
|
|
|
—
|
|
|
145.2
|
|
||||||
Total derivative contracts
|
$
|
12,024.2
|
|
|
$
|
2,404.7
|
|
|
$
|
2,976.1
|
|
|
$
|
393.9
|
|
|
$
|
330.3
|
|
|
$
|
18,129.2
|
|
|
November 30, 2018
|
|
December 31, 2017
|
||||||||||||
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
Other Assets:
|
|
|
|
|
|
|
|
||||||||
Notes and loans receivable (1)
|
$
|
680,015
|
|
|
$
|
676,152
|
|
|
$
|
579,071
|
|
|
$
|
565,285
|
|
|
|
|
|
|
|
|
|
||||||||
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Short-term borrowings (2)
|
387,492
|
|
|
387,492
|
|
|
412,891
|
|
|
412,891
|
|
||||
Long-term debt (3)
|
6,931,393
|
|
|
6,826,503
|
|
|
7,278,827
|
|
|
7,678,210
|
|
(1)
|
Notes and loans receivable: The fair values are estimated principally based on a discounted future cash flows model using market interest rates for similar instruments. If measured at fair value in the financial statements, these financial instruments would be classified as Level 3 in the fair value hierarchy.
|
(2)
|
Short-term borrowings: The fair values of short-term borrowings are estimated to be the carrying amount due to their short maturities. If measured at fair value in the financial statements, these financial instruments would be classified as Level 3 in the fair value hierarchy.
|
(3)
|
Long-term debt: The fair values are estimated using quoted prices, pricing information obtained from external data providers and, for certain variable rate debt, is estimated to be the carrying amount. If measured at fair value in the financial statements, these financial instruments would be classified as Level 2 and Level 3 in the fair value hierarchy.
|
|
|
Period Ended June 4, 2018 (1)
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
Revenues:
|
|
|
|
|
|
|
||||||
Beef processing services
|
|
$
|
3,137,611
|
|
|
$
|
7,353,663
|
|
|
$
|
7,021,902
|
|
Interest income
|
|
131
|
|
|
339
|
|
|
166
|
|
|||
Other
|
|
4,329
|
|
|
4,946
|
|
|
5,175
|
|
|||
Total revenues
|
|
3,142,071
|
|
|
7,358,948
|
|
|
7,027,243
|
|
|||
|
|
|
|
|
|
|
||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|||
Compensation and benefits
|
|
17,414
|
|
|
39,884
|
|
|
39,271
|
|
|||
Cost of sales
|
|
2,884,983
|
|
|
6,764,055
|
|
|
6,513,768
|
|
|||
Interest expense
|
|
4,316
|
|
|
6,657
|
|
|
12,946
|
|
|||
Depreciation and amortization
|
|
43,959
|
|
|
98,515
|
|
|
94,482
|
|
|||
Selling, general and other expenses
|
|
14,291
|
|
|
42,525
|
|
|
37,754
|
|
|||
Total expenses
|
|
2,964,963
|
|
|
6,951,636
|
|
|
6,698,221
|
|
|||
|
|
|
|
|
|
|
||||||
Income from discontinued operations before income taxes
|
|
177,108
|
|
|
407,312
|
|
|
329,022
|
|
|||
Income tax provision
|
|
47,045
|
|
|
118,681
|
|
|
96,336
|
|
|||
Income from discontinued operations, net of income tax provision
|
|
$
|
130,063
|
|
|
$
|
288,631
|
|
|
$
|
232,686
|
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
|
|
|
(In thousands)
|
|
|
||||||
Net revenues:
|
|
|
|
|
|
||||||
Reportable Segments:
|
|
|
|
|
|
||||||
Jefferies Group (1)
|
$
|
3,183,376
|
|
|
$
|
3,198,109
|
|
|
$
|
2,414,614
|
|
Merchant Banking (1) (2)
|
571,831
|
|
|
876,180
|
|
|
621,804
|
|
|||
Corporate
|
22,300
|
|
|
6,306
|
|
|
2,689
|
|
|||
Total net revenues related to reportable segments
|
3,777,507
|
|
|
4,080,595
|
|
|
3,039,107
|
|
|||
Consolidation adjustments
|
(13,473
|
)
|
|
(3,150
|
)
|
|
(3,733
|
)
|
|||
Total consolidated net revenues
|
$
|
3,764,034
|
|
|
$
|
4,077,445
|
|
|
$
|
3,035,374
|
|
|
|
|
|
|
|
||||||
Income (loss) from continuing operations before income taxes:
|
|
|
|
|
|
|
|
|
|||
Reportable Segments:
|
|
|
|
|
|
|
|
|
|||
Jefferies Group (1)
|
$
|
409,667
|
|
|
$
|
504,924
|
|
|
$
|
29,972
|
|
Merchant Banking (1) (2)
|
10,488
|
|
|
228,373
|
|
|
85,188
|
|
|||
Corporate
|
(66,140
|
)
|
|
(78,802
|
)
|
|
(72,344
|
)
|
|||
Income from continuing operations before income taxes related to reportable segments
|
354,015
|
|
|
654,495
|
|
|
42,816
|
|
|||
Parent Company interest
|
(54,090
|
)
|
|
(58,943
|
)
|
|
(58,881
|
)
|
|||
Consolidation adjustments
|
(3,825
|
)
|
|
10,950
|
|
|
3,473
|
|
|||
Total consolidated income (loss) from continuing operations before income taxes
|
$
|
296,100
|
|
|
$
|
606,502
|
|
|
$
|
(12,592
|
)
|
|
|
|
|
|
|
||||||
Depreciation and amortization expenses:
|
|
|
|
|
|
|
|
|
|||
Reportable Segments:
|
|
|
|
|
|
|
|
|
|||
Jefferies Group (1)
|
$
|
68,296
|
|
|
$
|
62,668
|
|
|
$
|
60,206
|
|
Merchant Banking (1)
|
48,852
|
|
|
44,257
|
|
|
53,286
|
|
|||
Corporate
|
3,169
|
|
|
3,470
|
|
|
3,619
|
|
|||
Total consolidated depreciation and amortization expenses
|
$
|
120,317
|
|
|
$
|
110,395
|
|
|
$
|
117,111
|
|
|
|
|
|
|
|
||||||
|
November 30, 2018
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||
Identifiable assets employed:
|
|
|
|
|
|
|
|
|
|||
Reportable Segments:
|
|
|
|
|
|
|
|
|
|||
Jefferies Group (1) (3)
|
$
|
41,224,984
|
|
|
$
|
39,575,732
|
|
|
$
|
36,992,096
|
|
Merchant Banking (1)
|
4,190,484
|
|
|
4,903,530
|
|
|
5,120,337
|
|
|||
National Beef
|
—
|
|
|
1,460,539
|
|
|
1,498,317
|
|
|||
Corporate
|
1,838,037
|
|
|
1,299,628
|
|
|
1,543,238
|
|
|||
Identifiable assets employed related to reportable segments
|
47,253,505
|
|
|
47,239,429
|
|
|
45,153,988
|
|
|||
Consolidation adjustments
|
(122,410
|
)
|
|
(70,321
|
)
|
|
(82,681
|
)
|
|||
Total consolidated assets
|
$
|
47,131,095
|
|
|
$
|
47,169,108
|
|
|
$
|
45,071,307
|
|
(1)
|
Amounts related to LAM and Berkadia are included in Merchant Banking prior to their transfer to Jefferies Group in the fourth quarter of 2018. Revenues related to the net assets transferred were
$6.7 million
,
$49.6 million
and
$26.5 million
for the eleven months ended November 30, 2018 and the twelve months ended December 31, 2017 and 2016
, respectively. Income from continuing operations before income taxes related to the net assets transferred were
$47.7 million
,
$118.4 million
and
$109.4 million
for the eleven months ended November 30, 2018 and the twelve months ended December 31, 2017 and 2016
,
|
(2)
|
Merchant Banking Net revenues and Income (loss) from continuing operations before income taxes include realized and unrealized gains (losses) relating to our investment in FXCM of
$18.6 million
and
$(64.6) million
, respectively, for the
eleven months ended November 30, 2018
;
$23.2 million
and
$(154.5) million
, respectively, for the
twelve months ended December 31, 2017
; and
$(54.6) million
and
$(52.7) million
, respectively, for the
twelve months ended December 31, 2016
.
|
(3)
|
At
November 30, 2018 and December 31, 2017 and 2016
, includes
$243.2 million
,
$213.0 million
and
$337.6 million
, respectively, of Jefferies Group's deferred tax asset, net.
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
|
|
|
|
|
|
||||||
Americas (1)
|
$
|
2,652,917
|
|
|
$
|
2,602,741
|
|
|
$
|
1,870,355
|
|
Europe (2)
|
434,895
|
|
|
489,583
|
|
|
458,046
|
|
|||
Asia
|
95,564
|
|
|
105,785
|
|
|
86,213
|
|
|||
|
$
|
3,183,376
|
|
|
$
|
3,198,109
|
|
|
$
|
2,414,614
|
|
(1)
|
Substantially all relates to U.S. results.
|
(2)
|
Substantially all relates to U.K. results.
|
|
First
Quarter (1)
|
|
Second
Quarter (2)
|
|
Third
Quarter (3)
|
|
Fourth
Quarter (4)
|
||||||||
|
(In thousands, except per share amounts)
|
||||||||||||||
2018
|
|
|
|
|
|
|
|
||||||||
Net revenues
|
$
|
895,435
|
|
|
$
|
911,159
|
|
|
$
|
1,150,846
|
|
|
$
|
806,594
|
|
Income (loss) from continuing operations
|
86,192
|
|
|
27,917
|
|
|
182,301
|
|
|
(19,318
|
)
|
||||
Income from discontinued operations, net of taxes
|
52,957
|
|
|
77,106
|
|
|
—
|
|
|
—
|
|
||||
Gain on disposal of discontinued operations, net of taxes
|
—
|
|
|
643,921
|
|
|
—
|
|
|
—
|
|
||||
Net (income) loss attributable to the noncontrolling interest
|
1,344
|
|
|
(136
|
)
|
|
12,000
|
|
|
(233
|
)
|
||||
Net (income) loss attributable to the redeemable noncontrolling interests
|
(14,796
|
)
|
|
(22,108
|
)
|
|
(390
|
)
|
|
31
|
|
||||
Preferred stock dividends
|
(1,172
|
)
|
|
(1,171
|
)
|
|
(1,276
|
)
|
|
(851
|
)
|
||||
Net income (loss) attributable to Jefferies Financial Group Inc. common shareholders
|
124,525
|
|
|
725,529
|
|
|
192,635
|
|
|
(20,371
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic earnings (loss) per common share attributable to Jefferies Financial Group Inc. common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) from continuing operations
|
$
|
0.23
|
|
|
$
|
0.08
|
|
|
$
|
0.56
|
|
|
$
|
(0.06
|
)
|
Income from discontinued operations
|
0.11
|
|
|
0.15
|
|
|
—
|
|
|
—
|
|
||||
Gain on disposal of discontinued operations
|
—
|
|
|
1.82
|
|
|
—
|
|
|
—
|
|
||||
Net income (loss)
|
$
|
0.34
|
|
|
$
|
2.05
|
|
|
$
|
0.56
|
|
|
$
|
(0.06
|
)
|
Number of shares used in calculation
|
366,427
|
|
|
352,049
|
|
|
341,434
|
|
|
329,101
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Diluted earnings (loss) per common share attributable to Jefferies Financial Group Inc. common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) from continuing operations
|
$
|
0.23
|
|
|
$
|
0.08
|
|
|
$
|
0.55
|
|
|
$
|
(0.06
|
)
|
Income from discontinued operations
|
0.11
|
|
|
0.15
|
|
|
—
|
|
|
—
|
|
||||
Gain on disposal of discontinued operations
|
—
|
|
|
1.80
|
|
|
—
|
|
|
—
|
|
||||
Net income (loss)
|
$
|
0.34
|
|
|
$
|
2.03
|
|
|
$
|
0.55
|
|
|
$
|
(0.06
|
)
|
Number of shares used in calculation
|
373,461
|
|
|
356,075
|
|
|
350,307
|
|
|
329,101
|
|
||||
|
|
|
|
|
|
|
|
||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net revenues
|
$
|
1,306,526
|
|
|
$
|
856,861
|
|
|
$
|
857,223
|
|
|
$
|
1,056,835
|
|
Income (loss) from continuing operations
|
249,751
|
|
|
20,072
|
|
|
15,778
|
|
|
(321,385
|
)
|
||||
Income from discontinued operations, net of taxes
|
44,172
|
|
|
53,990
|
|
|
120,989
|
|
|
69,480
|
|
||||
Net (income) loss attributable to the noncontrolling interest
|
523
|
|
|
1,446
|
|
|
(28
|
)
|
|
1,514
|
|
||||
Net income attributable to the redeemable noncontrolling interests
|
(12,022
|
)
|
|
(16,300
|
)
|
|
(36,216
|
)
|
|
(20,038
|
)
|
||||
Preferred stock dividends
|
(1,016
|
)
|
|
(1,015
|
)
|
|
(1,172
|
)
|
|
(1,172
|
)
|
||||
Net income (loss) attributable to Jefferies Financial Group Inc. common shareholders
|
281,408
|
|
|
58,193
|
|
|
99,351
|
|
|
(271,601
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic earnings (loss) per common share attributable to Jefferies Financial Group Inc. common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) from continuing operations
|
$
|
0.67
|
|
|
$
|
0.06
|
|
|
$
|
0.04
|
|
|
$
|
(0.88
|
)
|
Income from discontinued operations
|
0.09
|
|
|
0.10
|
|
|
0.23
|
|
|
0.14
|
|
||||
Net income (loss)
|
$
|
0.76
|
|
|
$
|
0.16
|
|
|
$
|
0.27
|
|
|
$
|
(0.74
|
)
|
Number of shares used in calculation
|
369,267
|
|
|
369,212
|
|
|
367,828
|
|
|
366,000
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Diluted earnings (loss) per common share attributable to Jefferies Financial Group Inc. common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) from continuing operations
|
$
|
0.66
|
|
|
$
|
0.06
|
|
|
$
|
0.04
|
|
|
$
|
(0.88
|
)
|
Income from discontinued operations
|
0.09
|
|
|
0.10
|
|
|
0.23
|
|
|
0.14
|
|
||||
Net income (loss)
|
$
|
0.75
|
|
|
$
|
0.16
|
|
|
$
|
0.27
|
|
|
$
|
(0.74
|
)
|
Number of shares used in calculation
|
375,721
|
|
|
371,552
|
|
|
370,198
|
|
|
366,000
|
|
|
November 30, 2018
|
|
December 31, 2017
|
||||
ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
48,540
|
|
|
$
|
12,317
|
|
Financial instruments owned:
|
|
|
|
||||
Trading assets, at fair value
|
338,067
|
|
|
200,804
|
|
||
Available for sale securities
|
—
|
|
|
16,378
|
|
||
Total financial instruments owned
|
338,067
|
|
|
217,182
|
|
||
Investments in subsidiaries
|
9,774,541
|
|
|
18,615,819
|
|
||
Advances to subsidiaries
|
224,653
|
|
|
542,976
|
|
||
Investments in associated companies
|
929,477
|
|
|
288,382
|
|
||
Deferred tax asset, net
|
63,211
|
|
|
205,773
|
|
||
Other assets
|
10,186
|
|
|
8,815
|
|
||
Total assets
|
$
|
11,388,675
|
|
|
$
|
19,891,264
|
|
|
|
|
|
||||
LIABILITIES
|
|
|
|
|
|
||
Accrued interest payable
|
$
|
6,629
|
|
|
$
|
11,447
|
|
Pension liabilities
|
45,721
|
|
|
52,841
|
|
||
Other payables, expense accruals and other liabilities
|
160,339
|
|
|
31,919
|
|
||
Advances from subsidiaries
|
4
|
|
|
8,575,079
|
|
||
Long-term debt
|
990,116
|
|
|
989,021
|
|
||
Total liabilities
|
1,202,809
|
|
|
9,660,307
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
||||
|
|
|
|
||||
MEZZANINE EQUITY
|
|
|
|
|
|
||
Mandatorily redeemable convertible preferred shares
|
125,000
|
|
|
125,000
|
|
||
|
|
|
|
||||
EQUITY
|
|
|
|
|
|
||
Common shares, par value $1 per share, authorized 600,000,000 shares; 307,515,472 and 356,227,038 shares issued and outstanding, after deducting 109,460,774 and 60,165,980 shares held in treasury
|
307,515
|
|
|
356,227
|
|
||
Additional paid-in capital
|
3,854,847
|
|
|
4,676,038
|
|
||
Accumulated other comprehensive income
|
288,286
|
|
|
372,724
|
|
||
Retained earnings
|
5,610,218
|
|
|
4,700,968
|
|
||
Total Jefferies Financial Group Inc. shareholders' equity
|
10,060,866
|
|
|
10,105,957
|
|
||
|
|
|
|
||||
Total
|
$
|
11,388,675
|
|
|
$
|
19,891,264
|
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Principal transactions
|
$
|
120,886
|
|
|
$
|
(9,754
|
)
|
|
$
|
16,735
|
|
Other
|
663
|
|
|
277
|
|
|
2,300
|
|
|||
Total revenues
|
121,549
|
|
|
(9,477
|
)
|
|
19,035
|
|
|||
|
|
|
|
|
|
||||||
Expenses:
|
|
|
|
|
|
|
|
|
|||
Compensation and benefits
|
49,955
|
|
|
47,462
|
|
|
39,693
|
|
|||
WilTel pension expense
|
2,659
|
|
|
2,957
|
|
|
2,989
|
|
|||
Interest expense
|
54,090
|
|
|
58,943
|
|
|
58,881
|
|
|||
Intercompany interest expense
|
3,642
|
|
|
361,446
|
|
|
293,527
|
|
|||
Selling, general and other expenses
|
21,664
|
|
|
20,821
|
|
|
19,244
|
|
|||
Total expenses
|
132,010
|
|
|
491,629
|
|
|
414,334
|
|
|||
Loss from continuing operations before income taxes, income related to associated companies and equity in earnings of subsidiaries
|
(10,461
|
)
|
|
(501,106
|
)
|
|
(395,299
|
)
|
|||
Income related to associated companies
|
96,808
|
|
|
3,183
|
|
|
21,195
|
|
|||
Income (loss) from continuing operations before income taxes and equity in earnings of subsidiaries
|
86,347
|
|
|
(497,923
|
)
|
|
(374,104
|
)
|
|||
Income tax benefit
|
(5,281
|
)
|
|
(47,329
|
)
|
|
(117,699
|
)
|
|||
Income (loss) from continuing operations before equity in earnings of subsidiaries
|
91,628
|
|
|
(450,594
|
)
|
|
(256,405
|
)
|
|||
Equity in earnings from continuing operations of subsidiaries, net of taxes
|
198,317
|
|
|
418,966
|
|
|
222,531
|
|
|||
Income (loss) from continuing operations
|
289,945
|
|
|
(31,628
|
)
|
|
(33,874
|
)
|
|||
Equity in earnings from discontinued operations of subsidiaries, net of taxes
|
92,922
|
|
|
203,354
|
|
|
163,875
|
|
|||
Gain on disposal of discontinued operations, net of taxes
|
643,921
|
|
|
—
|
|
|
—
|
|
|||
Net income
|
1,026,788
|
|
|
171,726
|
|
|
130,001
|
|
|||
Preferred stock dividends
|
(4,470
|
)
|
|
(4,375
|
)
|
|
(4,063
|
)
|
|||
Net income attributable to Jefferies Financial Group Inc. common shareholders
|
$
|
1,022,318
|
|
|
$
|
167,351
|
|
|
$
|
125,938
|
|
|
|
|
|
|
|
||||||
Basic earnings per common share attributable to Jefferies Financial Group Inc. common shareholders:
|
|
|
|
|
|
||||||
Income (loss) from continuing operations
|
$
|
0.82
|
|
|
$
|
(0.10
|
)
|
|
$
|
(0.10
|
)
|
Income from discontinued operations
|
0.27
|
|
|
0.55
|
|
|
0.44
|
|
|||
Gain on disposal of discontinued operations
|
1.84
|
|
|
—
|
|
|
—
|
|
|||
Net income
|
$
|
2.93
|
|
|
$
|
0.45
|
|
|
$
|
0.34
|
|
|
|
|
|
|
|
||||||
Diluted earnings per common share attributable to Jefferies Financial Group Inc. common shareholders:
|
|
|
|
|
|
|
|
|
|||
Income (loss) from continuing operations
|
$
|
0.81
|
|
|
$
|
(0.10
|
)
|
|
$
|
(0.10
|
)
|
Income from discontinued operations
|
0.26
|
|
|
0.55
|
|
|
0.44
|
|
|||
Gain on disposal of discontinued operations
|
1.83
|
|
|
—
|
|
|
—
|
|
|||
Net income
|
$
|
2.90
|
|
|
$
|
0.45
|
|
|
$
|
0.34
|
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
|
|
|
|
|
|
||||||
Net income
|
$
|
1,026,788
|
|
|
$
|
171,726
|
|
|
$
|
130,001
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|||
Net unrealized holding gains (losses) on investments arising during the period, net of income tax provision (benefit) of $(551), $3,450 and $2,262
|
(1,560
|
)
|
|
5,923
|
|
|
3,900
|
|
|||
Less: reclassification adjustment for net (gains) losses included in net income, net of income tax provision (benefit) of $37, $124 and $2
|
(109
|
)
|
|
(212
|
)
|
|
(4
|
)
|
|||
Net change in unrealized holding gains (losses) on investments, net of income tax provision (benefit) of $(588), $3,326 and $2,260
|
(1,669
|
)
|
|
5,711
|
|
|
3,896
|
|
|||
|
|
|
|
|
|
||||||
Net unrealized foreign exchange gains (losses) arising during the period, net of income tax provision (benefit) of $(11,089), $14,616 and $(3,530)
|
(71,543
|
)
|
|
78,493
|
|
|
(121,581
|
)
|
|||
Less: reclassification adjustment for foreign exchange (gains) losses included in net income, net of income tax provision (benefit) of $(16), $1,086 and $0
|
(20,459
|
)
|
|
5,310
|
|
|
—
|
|
|||
Net change in unrealized foreign exchange gains (losses), net of income tax provision (benefit) of $(11,073), $13,530 and $(3,530)
|
(92,002
|
)
|
|
83,803
|
|
|
(121,581
|
)
|
|||
|
|
|
|
|
|
||||||
Net unrealized gains (losses) on instrument specific credit risk arising during the period, net of income tax provision (benefit) of $9,289, $(13,215) and $(4,251)
|
29,620
|
|
|
(21,394
|
)
|
|
(6,494
|
)
|
|||
Less: reclassification adjustment for instrument specific credit risk (gains) losses included in net income, net of income tax provision (benefit) of $311, $0 and $0
|
(916
|
)
|
|
—
|
|
|
—
|
|
|||
Net change in unrealized instrument specific credit risk gains (losses), net of income tax provision (benefit) of $8,978, $(13,215) and $(4,251)
|
28,704
|
|
|
(21,394
|
)
|
|
(6,494
|
)
|
|||
|
|
|
|
|
|
||||||
Net unrealized gains (losses) on cash flow hedges arising during the period, net of income tax provision (benefit) of $552, $(593) and $0
|
1,608
|
|
|
(936
|
)
|
|
—
|
|
|||
Less: reclassification adjustment for cash flow hedges (gains) losses included in net income, net of income tax provision (benefit) of $0, $0 and $0
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net change in unrealized cash flow hedges gains (losses), net of income tax provision (benefit) of $552, $(593) and $0
|
1,608
|
|
|
(936
|
)
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Net pension gains (losses) arising during the period, net of income tax provision (benefit) of $(297), $2,018 and $(2,516)
|
(844
|
)
|
|
3,526
|
|
|
(5,451
|
)
|
|||
Less: reclassification adjustment for pension (gains) losses included in net income, net of income tax provision (benefit) of $(697), $(2,042) and $(700)
|
7,349
|
|
|
517
|
|
|
1,534
|
|
|||
Net change in pension liability benefits, net of income tax provision (benefit) of $400, $4,060 and $(1,816)
|
6,505
|
|
|
4,043
|
|
|
(3,917
|
)
|
|||
|
|
|
|
|
|
||||||
Other comprehensive income (loss), net of income taxes
|
(56,854
|
)
|
|
71,227
|
|
|
(128,096
|
)
|
|||
|
|
|
|
|
|
||||||
Comprehensive income
|
969,934
|
|
|
242,953
|
|
|
1,905
|
|
|||
Preferred stock dividends
|
(4,470
|
)
|
|
(4,375
|
)
|
|
(4,063
|
)
|
|||
Comprehensive income (loss) attributable to Jefferies Financial Group Inc. common shareholders
|
$
|
965,464
|
|
|
$
|
238,578
|
|
|
$
|
(2,158
|
)
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
Net cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
1,026,788
|
|
|
$
|
171,726
|
|
|
$
|
130,001
|
|
Adjustments to reconcile net income to net cash provided by (used for) operations:
|
|
|
|
|
|
|
|
|
|||
Deferred income tax provision (benefit)
|
142,085
|
|
|
116,942
|
|
|
(12,220
|
)
|
|||
Accretion of interest
|
944
|
|
|
975
|
|
|
921
|
|
|||
Share-based compensation
|
48,249
|
|
|
48,384
|
|
|
33,597
|
|
|||
Equity in earnings of subsidiaries, including equity in earnings of discontinued operations
|
(291,239
|
)
|
|
(622,320
|
)
|
|
(386,406
|
)
|
|||
Gain on disposal of discontinued operation
|
(873,474
|
)
|
|
—
|
|
|
—
|
|
|||
Income related to associated companies
|
(96,808
|
)
|
|
(3,183
|
)
|
|
(21,195
|
)
|
|||
Distributions from associated companies
|
24,711
|
|
|
5,641
|
|
|
1,861
|
|
|||
Net change in:
|
|
|
|
|
|
|
|
|
|||
Trading assets
|
(120,886
|
)
|
|
22,415
|
|
|
(40,235
|
)
|
|||
Other assets
|
129
|
|
|
1,250
|
|
|
(708
|
)
|
|||
Accrued interest payable
|
(4,818
|
)
|
|
—
|
|
|
—
|
|
|||
Pension liabilities
|
(5,231
|
)
|
|
(8,461
|
)
|
|
(13,111
|
)
|
|||
Other payables, expense accruals and other liabilities
|
(1,712
|
)
|
|
(7,763
|
)
|
|
(73,663
|
)
|
|||
Income taxes receivable/payable, net
|
242,637
|
|
|
(164,684
|
)
|
|
(90,898
|
)
|
|||
Other
|
6,315
|
|
|
2,316
|
|
|
1,262
|
|
|||
Net cash provided by (used for) operating activities
|
97,690
|
|
|
(436,762
|
)
|
|
(470,794
|
)
|
|||
|
|
|
|
|
|
||||||
Net cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|||
Distributions from subsidiaries, net
|
38,304
|
|
|
50,122
|
|
|
239,297
|
|
|||
Collections on notes, loans and other receivables
|
—
|
|
|
—
|
|
|
16,233
|
|
|||
Investments in associated companies
|
(1,228
|
)
|
|
(45,457
|
)
|
|
(11,611
|
)
|
|||
Capital distributions from associated companies
|
24,442
|
|
|
2,796
|
|
|
1,501
|
|
|||
Purchases of investments (other than short-term)
|
(1,500
|
)
|
|
(1,316
|
)
|
|
(2,242
|
)
|
|||
Other
|
—
|
|
|
1,886
|
|
|
—
|
|
|||
Net cash provided by investing activities - continuing operations
|
60,018
|
|
|
8,031
|
|
|
243,178
|
|
|||
Net cash provided by investing activities - discontinued operations
|
1,158,655
|
|
|
337,690
|
|
|
201,382
|
|
|||
Net cash provided by investing activities
|
1,218,673
|
|
|
345,721
|
|
|
444,560
|
|
|||
|
|
|
|
|
|
||||||
Net cash flows from financing activities:
|
|
|
|
|
|
||||||
Advances from (to) subsidiaries, net
|
(1,139
|
)
|
|
214,519
|
|
|
265,762
|
|
|||
Issuance of common shares
|
3,611
|
|
|
1,501
|
|
|
1,062
|
|
|||
Purchase of common shares for treasury
|
(1,130,854
|
)
|
|
(100,477
|
)
|
|
(95,020
|
)
|
|||
Dividends paid
|
(151,758
|
)
|
|
(117,407
|
)
|
|
(91,296
|
)
|
|||
Net cash provided by (used for) financing activities
|
(1,280,140
|
)
|
|
(1,864
|
)
|
|
80,508
|
|
|||
|
|
|
|
|
|
||||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
36,223
|
|
|
(92,905
|
)
|
|
54,274
|
|
|||
|
|
|
|
|
|
|
|
|
|||
Cash, cash equivalents and restricted cash at beginning of period
|
12,317
|
|
|
105,222
|
|
|
50,948
|
|
|||
|
|
|
|
|
|
|
|
|
|||
Cash, cash equivalents and restricted cash at end of period
|
$
|
48,540
|
|
|
$
|
12,317
|
|
|
$
|
105,222
|
|
|
Eleven Months Ended November 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
Cash paid for:
|
|
|
|
|
|
|
|
|
|||
Interest
|
$
|
57,813
|
|
|
$
|
57,813
|
|
|
$
|
57,813
|
|
Income tax payments (refunds), net
|
32,576
|
|
|
1,440
|
|
|
(10,199
|
)
|
|||
|
|
|
|
|
|
||||||
Non-cash investing activities:
|
|
|
|
|
|
|
|
|
|||
Investments contributed to subsidiary
|
$
|
—
|
|
|
$
|
25,328
|
|
|
$
|
423,009
|
|
Investments transferred from subsidiary
|
—
|
|
|
—
|
|
|
2,022
|
|
|||
Dividends received from subsidiaries
|
8,450,147
|
|
|
32,792
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
NOVEMBER 30, 2018
|
|
NOVEMBER 30, 2017
|
|
||||
ASSETS
|
|
|
|
|
|
||||
Cash
|
|
$
|
1,033,048
|
|
|
$
|
1,555,484
|
|
|
Restricted cash
|
|
468,934
|
|
|
875,270
|
|
|
||
Loans receivable, net of deferred loan fees
|
|
4,479,225
|
|
|
4,813,182
|
|
|
||
Less allowance for loan losses
|
|
(35,353
|
)
|
|
(61,788
|
)
|
|
||
Loans receivable, net
|
|
4,443,872
|
|
|
4,751,394
|
|
|
||
Loans held for sale, net
|
|
1,550,175
|
|
|
712,546
|
|
|
||
Accrued interest receivable
|
|
33,382
|
|
|
32,393
|
|
|
||
Held-to-maturity securities (includes $39,480 CLO notes pledged as collateral)
|
|
45,735
|
|
|
—
|
|
|
||
Investments
|
|
57,779
|
|
|
46,148
|
|
|
||
Other assets
|
|
143,618
|
|
|
191,708
|
|
|
||
TOTAL ASSETS
|
|
$
|
7,776,543
|
|
|
$
|
8,164,943
|
|
|
LIABILITIES AND MEMBERS’ EQUITY
|
|
|
|
|
|
||||
LIABILITIES:
|
|
|
|
|
|
||||
Credit facilities, net
|
|
$
|
186,232
|
|
|
$
|
318,103
|
|
|
Secured notes payable, net
|
|
3,620,191
|
|
|
3,882,817
|
|
|
||
Interest payable
|
|
49,235
|
|
|
46,686
|
|
|
||
Securities sold under agreement to repurchase
|
|
39,480
|
|
|
—
|
|
|
||
Other liabilities
|
|
393,613
|
|
|
525,403
|
|
|
||
Due to affiliates
|
|
44,214
|
|
|
46,130
|
|
|
||
Long-term debt, net
|
|
2,054,023
|
|
|
2,073,479
|
|
|
||
Total liabilities
|
|
6,386,988
|
|
|
6,892,618
|
|
|
||
MEMBERS’ EQUITY
|
|
1,389,555
|
|
|
1,272,325
|
|
|
||
TOTAL LIABILITIES AND MEMBERS’ EQUITY
|
|
$
|
7,776,543
|
|
|
$
|
8,164,943
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
NOVEMBER 30, 2018
|
|
NOVEMBER 30, 2017
|
|
||||
ASSETS
|
|
|
|
|
|
||||
Restricted cash
|
|
$
|
410,045
|
|
|
$
|
817,890
|
|
|
Loans receivable, net of deferred loan fees
|
|
3,881,340
|
|
|
4,226,943
|
|
|
||
Less allowance for loan losses
|
|
(31,061
|
)
|
|
(47,364
|
)
|
|
||
Loans receivable, net
|
|
3,850,279
|
|
|
4,179,579
|
|
|
||
Accrued interest receivable
|
|
16,589
|
|
|
18,788
|
|
|
||
Investments
|
|
29,934
|
|
|
27,452
|
|
|
||
Other assets
|
|
63,265
|
|
|
105,042
|
|
|
||
TOTAL ASSETS
|
|
$
|
4,370,112
|
|
|
$
|
5,148,751
|
|
|
LIABILITIES
|
|
|
|
|
|
||||
Credit facilities, net
|
|
$
|
—
|
|
|
$
|
154,772
|
|
|
Secured notes payable, net
|
|
3,620,555
|
|
|
3,882,817
|
|
|
||
Interest payable
|
|
22,252
|
|
|
18,772
|
|
|
||
Other liabilities
|
|
120,549
|
|
|
278,155
|
|
|
||
Due to affiliates
|
|
8,111
|
|
|
11,249
|
|
|
||
TOTAL LIABILITIES
|
|
$
|
3,771,467
|
|
|
$
|
4,345,765
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
NOVEMBER 30,
2018
|
|
NOVEMBER 30,
2017
|
|
NOVEMBER 30,
2016
|
|
||||||
NET FEE AND INTEREST INCOME:
|
|
|
|
|
|
|
|
||||||
Fee income, net
|
|
$
|
282,856
|
|
|
$
|
270,023
|
|
|
$
|
130,356
|
|
|
Interest income
|
|
405,534
|
|
|
356,533
|
|
|
292,457
|
|
|
|||
Total interest and net fee income
|
|
688,390
|
|
|
626,556
|
|
|
422,813
|
|
|
|||
Interest expense
|
|
396,229
|
|
|
341,143
|
|
|
273,833
|
|
|
|||
Net interest and net fee income
|
|
292,161
|
|
|
285,413
|
|
|
148,980
|
|
|
|||
Provision for loan losses
|
|
18,897
|
|
|
33,854
|
|
|
37,880
|
|
|
|||
Net interest and fee income after provision for loan losses
|
|
273,264
|
|
|
251,559
|
|
|
111,100
|
|
|
|||
OTHER GAINS (LOSSES), NET
|
|
9,123
|
|
|
6,680
|
|
|
(75,548
|
)
|
|
|||
OTHER EXPENSES:
|
|
|
|
|
|
|
|
||||||
Compensation and benefits
|
|
32,093
|
|
|
28,806
|
|
|
24,533
|
|
|
|||
General, administrative and other
|
|
45,564
|
|
|
41,464
|
|
|
32,148
|
|
|
|||
Total other expenses
|
|
77,657
|
|
|
70,270
|
|
|
56,681
|
|
|
|||
EARNINGS (LOSSES) BEFORE INCOME TAX EXPENSE
|
|
204,730
|
|
|
187,969
|
|
|
(21,129
|
)
|
|
|||
INCOME TAX EXPENSE (BENEFIT)
|
|
7,500
|
|
|
6,300
|
|
|
(1,514
|
)
|
|
|||
NET EARNINGS (LOSS)
|
|
$
|
197,230
|
|
|
$
|
181,669
|
|
|
$
|
(19,615
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
CLASS A
MEMBERS |
|
CLASS B
MEMBERS |
|
TOTAL
MEMBERS’ EQUITY |
||||||
BALANCE—December 1, 2016
|
$
|
873,136
|
|
|
$
|
67,923
|
|
|
$
|
941,059
|
|
Contributions
|
149,597
|
|
|
—
|
|
|
149,597
|
|
|||
Net earnings
|
145,335
|
|
|
36,334
|
|
|
181,669
|
|
|||
BALANCE—November 30, 2017
|
$
|
1,168,068
|
|
|
$
|
104,257
|
|
|
$
|
1,272,325
|
|
Distributions
|
(64,000
|
)
|
|
(16,000
|
)
|
|
(80,000
|
)
|
|||
Net earnings
|
157,784
|
|
|
39,446
|
|
|
197,230
|
|
|||
BALANCE—November 30, 2018
|
$
|
1,261,852
|
|
|
$
|
127,703
|
|
|
$
|
1,389,555
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
NOVEMBER 30,
2018
|
|
NOVEMBER 30,
2017
|
|
NOVEMBER 30,
2016
|
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
||||||
Net earnings (loss)
|
|
$
|
197,230
|
|
|
$
|
181,669
|
|
|
$
|
(19,615
|
)
|
|
Adjustments to reconcile net earnings (loss) to net cash
(used in) provided by operating activities: |
|
|
|
|
|
|
|
||||||
Amortization of deferred loan fees and discounts
|
|
(74,471
|
)
|
|
(81,050
|
)
|
|
(50,022
|
)
|
|
|||
Amortization of deferred structuring fees
|
|
23,418
|
|
|
21,281
|
|
|
19,797
|
|
|
|||
Amortization of discount on secured notes
|
|
12,576
|
|
|
12,671
|
|
|
9,611
|
|
|
|||
Issuance costs associated with extinguishment of debt
|
|
18,305
|
|
|
14,122
|
|
|
—
|
|
|
|||
Provision for loan losses
|
|
18,897
|
|
|
33,854
|
|
|
37,880
|
|
|
|||
Realized (gain) loss on sale of loans held for sale
|
|
(10,445
|
)
|
|
(6,467
|
)
|
|
34,545
|
|
|
|||
Change in fair value of loans held for sale
|
|
5
|
|
|
4,634
|
|
|
8,267
|
|
|
|||
Realized (gain) loss on sales of investments
|
|
(492
|
)
|
|
(1,047
|
)
|
|
24,597
|
|
|
|||
Unrealized loss (gain) on investments
|
|
2,116
|
|
|
(1,863
|
)
|
|
8,139
|
|
|
|||
Deferred income tax (benefit) expense
|
|
(91
|
)
|
|
550
|
|
|
55
|
|
|
|||
(Increase) decrease in operating assets:
|
|
|
|
|
|
|
|
||||||
Origination of loans held for sale
|
|
(33,441,105
|
)
|
|
(27,330,698
|
)
|
|
(9,570,812
|
)
|
|
|||
Proceeds from sales of loans held for sale
|
|
32,278,095
|
|
|
27,398,380
|
|
|
8,842,177
|
|
|
|||
Principal collections on loans held for sale
|
|
368,127
|
|
|
65,904
|
|
|
3,215
|
|
|
|||
Accrued interest receivable
|
|
(989
|
)
|
|
401
|
|
|
(445
|
)
|
|
|||
Other assets
|
|
22,798
|
|
|
(15,522
|
)
|
|
(12,051
|
)
|
|
|||
Increase (decrease) in operating liabilities:
|
|
|
|
|
|
|
|
||||||
Interest payable
|
|
2,550
|
|
|
12,563
|
|
|
6,297
|
|
|
|||
Other liabilities
|
|
85,799
|
|
|
12,183
|
|
|
4,679
|
|
|
|||
Due to affiliates
|
|
(1,916
|
)
|
|
22,159
|
|
|
15,796
|
|
|
|||
Net cash (used in) provided by operating activities
|
|
(499,593
|
)
|
|
343,724
|
|
|
(637,890
|
)
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
||||||
Origination and purchases of loans receivable
|
|
(5,686,660
|
)
|
|
(4,209,182
|
)
|
|
(3,824,179
|
)
|
|
|||
Principal collections of loans receivable
|
|
4,037,095
|
|
|
3,190,000
|
|
|
2,714,137
|
|
|
|||
Proceeds from sales of loans held for sale
|
|
1,772,021
|
|
|
799,869
|
|
|
790,602
|
|
|
|||
Net change in restricted cash
|
|
406,336
|
|
|
100,621
|
|
|
300,009
|
|
|
|||
Purchases of investments
|
|
(14,564
|
)
|
|
(159,379
|
)
|
|
(661,896
|
)
|
|
|||
Purchases of HTM Securities
|
|
(45,735
|
)
|
|
—
|
|
|
—
|
|
|
|||
Proceeds from sales of investments
|
|
17,716
|
|
|
317,235
|
|
|
690,183
|
|
|
|||
Net cash provided by investing activities
|
|
486,209
|
|
|
39,164
|
|
|
8,856
|
|
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
||||||
Contributions from members
|
|
—
|
|
|
149,597
|
|
|
—
|
|
|
|||
Distributions to members
|
|
(80,000
|
)
|
|
—
|
|
|
(34,100
|
)
|
|
|||
Proceeds from borrowings on credit facilities
|
|
8,459,941
|
|
|
9,900,244
|
|
|
1,108,814
|
|
|
|||
Repayments on credit facilities
|
|
(8,598,345
|
)
|
|
(9,929,577
|
)
|
|
(1,147,242
|
)
|
|
|||
Proceeds from secured notes, net of issuance costs
|
|
1,500,979
|
|
|
1,749,986
|
|
|
326,478
|
|
|
|||
Repayments of secured notes payable
|
|
(1,819,759
|
)
|
|
(1,779,088
|
)
|
|
(454,780
|
)
|
|
|||
Purchases of secured notes
|
|
—
|
|
|
—
|
|
|
(3,263
|
)
|
|
|||
Proceeds from sale of secured notes
|
|
15,142
|
|
|
—
|
|
|
—
|
|
|
|||
Securities sold under agreement to repurchase
|
|
39,201
|
|
|
—
|
|
|
—
|
|
|
Proceeds from long-term debt, net of issuance costs
|
|
—
|
|
|
637,191
|
|
|
—
|
|
|
|||
Payment of issuance costs on long-term debt
|
|
(1,031
|
)
|
|
—
|
|
|
—
|
|
|
|||
Repayment of long-term debt
|
|
(2,500
|
)
|
|
(212,313
|
)
|
|
(2,150
|
)
|
|
|||
Repurchase of long-term debt
|
|
(22,680
|
)
|
|
—
|
|
|
—
|
|
|
|||
Net cash (used in) provided by financing activities
|
|
(509,052
|
)
|
|
516,040
|
|
|
(206,243
|
)
|
|
|||
NET (DECREASE) INCREASE IN CASH
|
|
(522,436
|
)
|
|
898,928
|
|
|
(835,277
|
)
|
|
|||
CASH—Beginning of the year
|
|
1,555,484
|
|
|
656,556
|
|
|
1,491,833
|
|
|
|||
CASH—End of the year
|
|
$
|
1,033,048
|
|
|
$
|
1,555,484
|
|
|
$
|
656,556
|
|
|
SUPPLEMENTAL INFORMATION:
|
|
|
|
|
|
|
|
||||||
Cash paid for interest
|
|
$
|
331,561
|
|
|
$
|
277,348
|
|
|
$
|
237,719
|
|
|
Cash paid for income taxes, net
|
|
$
|
593
|
|
|
$
|
193
|
|
|
$
|
279
|
|
|
NONCASH ITEMS:
|
|
|
|
|
|
|
|
||||||
Transfer of loans held for sale, net to loans receivable, net
|
|
$
|
—
|
|
|
$
|
44,136
|
|
|
$
|
—
|
|
|
Restructuring of loans receivable to investments
|
|
$
|
60,476
|
|
|
$
|
54,028
|
|
|
$
|
24,414
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
2018
|
|
2017
|
||||
Principal and interest collections on loans held in credit facilities and CLOs
|
$
|
207,763
|
|
|
$
|
265,064
|
|
Reserves held in credit facilities and CLOs to support future operations
|
261,171
|
|
|
610,206
|
|
||
Total restricted cash
|
$
|
468,934
|
|
|
$
|
875,270
|
|
|
|
|
|
|
|
|
|
|
||||
|
2018
|
|
2017
|
||||
Loans receivable:
|
|
|
|
||||
Originated
|
$
|
1,770,247
|
|
|
$
|
1,687,531
|
|
Secondary
|
2,771,751
|
|
|
3,203,298
|
|
||
Total loans receivable
|
4,541,998
|
|
|
4,890,829
|
|
||
Less: original issue discount
|
(56,048
|
)
|
|
(68,650
|
)
|
||
Total loans receivable, net of original issue discount
|
4,485,950
|
|
|
4,822,179
|
|
||
Less: deferred loan fees
(1)
|
(6,725
|
)
|
|
(8,997
|
)
|
||
Total loans receivable, net of deferred loan fees
|
4,479,225
|
|
|
4,813,182
|
|
||
Less: allowance for loan losses
|
(35,353
|
)
|
|
(61,788
|
)
|
||
Total loans receivable, net
|
$
|
4,443,872
|
|
|
$
|
4,751,394
|
|
|
|
|
|
(1)
|
Unamortized deferred loan fees received in connection with revolving credit facilities are classified within Other liabilities on the Consolidated Balance Sheets.
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
LOANS
30-89 DAYS PAST DUE |
|
LOANS
90 OR MORE DAYS PAST DUE |
|
TOTAL
PAST DUE LOANS |
|
CURRENT
LOANS |
|
TOTAL
LOANS |
||||||||||
Originated
|
$
|
—
|
|
|
$
|
1,268
|
|
|
$
|
1,268
|
|
|
$
|
1,730,644
|
|
|
$
|
1,731,912
|
|
Secondary
|
—
|
|
|
—
|
|
|
—
|
|
|
2,754,038
|
|
|
2,754,038
|
|
|||||
Total
|
$
|
—
|
|
|
$
|
1,268
|
|
|
$
|
1,268
|
|
|
$
|
4,484,682
|
|
|
$
|
4,485,950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
LOANS
30-89 DAYS PAST DUE |
|
LOANS
90 OR MORE DAYS PAST DUE |
|
TOTAL
PAST DUE LOANS |
|
CURRENT
LOANS |
|
TOTAL
LOANS |
||||||||||
Originated
|
$
|
8,098
|
|
|
$
|
—
|
|
|
$
|
8,098
|
|
|
$
|
1,635,842
|
|
|
$
|
1,643,940
|
|
Secondary
|
—
|
|
|
—
|
|
|
—
|
|
|
3,178,239
|
|
|
3,178,239
|
|
|||||
Total
|
$
|
8,098
|
|
|
$
|
—
|
|
|
$
|
8,098
|
|
|
$
|
4,814,081
|
|
|
$
|
4,822,179
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
RECORDED
INVESTMENT |
|
UNPAID
PRINCIPAL BALANCE |
|
RELATED
ALLOWANCE |
|
AVERAGE
RECORDED INVESTMENT |
||||||||
Originated
|
$
|
98,447
|
|
|
$
|
118,602
|
|
|
$
|
5,584
|
|
|
$
|
103,417
|
|
Secondary
|
—
|
|
|
—
|
|
|
—
|
|
|
6,139
|
|
||||
Total
|
$
|
98,447
|
|
|
$
|
118,602
|
|
|
$
|
5,584
|
|
|
$
|
109,556
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
RECORDED
INVESTMENT |
|
UNPAID
PRINCIPAL BALANCE |
|
RELATED
ALLOWANCE |
|
AVERAGE
RECORDED INVESTMENT |
||||||||
Originated
|
$
|
108,386
|
|
|
$
|
143,295
|
|
|
$
|
20,363
|
|
|
$
|
85,344
|
|
Secondary
|
12,277
|
|
|
30,146
|
|
|
9,590
|
|
|
12,595
|
|
||||
Total
|
$
|
120,663
|
|
|
$
|
173,441
|
|
|
$
|
29,953
|
|
|
$
|
97,939
|
|
|
|
|
|
|
|
|
|
|
■
|
the types of loans;
|
■
|
the expected loss with regard to the loan type;
|
■
|
the internal credit rating assigned to the loans; and
|
■
|
type of industry for a given loan.
|
|
|
|
|
|
CONSOLIDATED
BALANCE SHEETS |
|
CONSOLIDATED
STATEMENTS OF EARNINGS |
Allowance for losses on:
|
|
|
|
Loans
|
Allowance for loan losses
|
|
Provision for loan losses
|
Unfunded loan commitments
|
Other liabilities
|
|
General, administrative and other
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
ORIGINATED
|
|
SECONDARY
|
|
TOTAL
|
||||||
Balance, November 30, 2017
|
$
|
29,369
|
|
|
$
|
32,419
|
|
|
$
|
61,788
|
|
Provision for (recovery of) loan losses—general
|
1,604
|
|
|
(3,670
|
)
|
|
(2,066
|
)
|
|||
Provision for loan losses—specific
|
20,862
|
|
|
101
|
|
|
20,963
|
|
|||
Transfers to loans held for sale, net
|
—
|
|
|
(1,726
|
)
|
|
(1,726
|
)
|
|||
Charge-offs
|
(35,641
|
)
|
|
(7,965
|
)
|
|
(43,606
|
)
|
|||
Balance, November 30, 2018
|
16,194
|
|
|
19,159
|
|
|
35,353
|
|
|||
Balance, end of period—general
|
$
|
10,610
|
|
|
$
|
19,159
|
|
|
$
|
29,769
|
|
Balance, end of period—specific
|
$
|
5,584
|
|
|
$
|
—
|
|
|
$
|
5,584
|
|
Loans receivable:
|
|
|
|
|
|
||||||
Loans collectively evaluated—general
|
$
|
1,633,465
|
|
|
$
|
2,754,038
|
|
|
$
|
4,387,503
|
|
Loans individually evaluated—specific
|
98,447
|
|
|
—
|
|
|
98,447
|
|
|||
Total
|
$
|
1,731,912
|
|
|
$
|
2,754,038
|
|
|
$
|
4,485,950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
ORIGINATED
|
|
SECONDARY
|
|
TOTAL
|
||||||
Balance, November 30, 2016
|
$
|
35,603
|
|
|
$
|
30,294
|
|
|
$
|
65,897
|
|
(Recovery of) provision for loan losses—general
|
(5,788
|
)
|
|
2,778
|
|
|
(3,010
|
)
|
|||
Provision for loan losses—specific
|
33,301
|
|
|
3,563
|
|
|
36,864
|
|
|||
Transfers to loans held for sale, net
|
(2,240
|
)
|
|
(500
|
)
|
|
(2,740
|
)
|
|||
Charge-offs
|
(31,507
|
)
|
|
(3,716
|
)
|
|
(35,223
|
)
|
|||
Balance, November 30, 2017
|
29,369
|
|
|
32,419
|
|
|
61,788
|
|
|||
Balance, end of period—general
|
$
|
9,006
|
|
|
$
|
22,829
|
|
|
$
|
31,835
|
|
Balance, end of period—specific
|
$
|
20,363
|
|
|
$
|
9,590
|
|
|
$
|
29,953
|
|
Loans receivable:
|
|
|
|
|
|
||||||
Loans collectively evaluated—general
|
$
|
1,535,554
|
|
|
$
|
3,165,962
|
|
|
$
|
4,701,516
|
|
Loans individually evaluated—specific
|
108,386
|
|
|
12,277
|
|
|
120,663
|
|
|||
Total
|
$
|
1,643,940
|
|
|
$
|
3,178,239
|
|
|
$
|
4,822,179
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
ORIGINATED
|
|
SECONDARY
|
|
TOTAL
|
||||||
Balance, November 30, 2015
|
$
|
17,454
|
|
|
$
|
36,516
|
|
|
$
|
53,970
|
|
Provision for loan losses—general
|
3,751
|
|
|
5,857
|
|
|
9,608
|
|
|||
Provision for loan losses—specific
|
15,045
|
|
|
13,227
|
|
|
28,272
|
|
|||
Transfers to loans held for sale, net
|
—
|
|
|
(12,654
|
)
|
|
(12,654
|
)
|
|||
Charge-offs
|
(647
|
)
|
|
(12,652
|
)
|
|
(13,299
|
)
|
|||
Balance, November 30, 2016
|
35,603
|
|
|
30,294
|
|
|
65,897
|
|
|||
Balance, end of period—general
|
$
|
14,787
|
|
|
$
|
20,051
|
|
|
$
|
34,838
|
|
Balance, end of period—specific
|
$
|
20,816
|
|
|
$
|
10,243
|
|
|
$
|
31,059
|
|
Loans receivable:
|
|
|
|
|
|
||||||
Loans collectively evaluated—general
|
$
|
1,895,992
|
|
|
$
|
2,527,816
|
|
|
$
|
4,423,808
|
|
Loans individually evaluated—specific
|
61,948
|
|
|
12,912
|
|
|
74,860
|
|
|||
Total
|
$
|
1,957,940
|
|
|
$
|
2,540,728
|
|
|
$
|
4,498,668
|
|
|
|
|
|
|
|
■
|
Industry segment
|
■
|
Position within the industry
|
■
|
Earnings/Operating Cash Flows
|
■
|
Asset/Liability values
|
■
|
Financial flexibility/debt capacity
|
■
|
Management and controls
|
■
|
Grade 1—Issuers assigned this grade are characterized as substantially risk free and having an extremely strong capacity to meet all financial obligations.
|
■
|
Grade 2—Issuers assigned this grade are characterized as representing minimal risk.
|
|
■
|
Grade 3—Issuers assigned this grade are characterized as representing modest risk.
|
■
|
Grade 4—Issuers assigned this grade are characterized as representing better than average risk.
|
■
|
Grade 5—Issuers assigned this grade are characterized as representing average risk.
|
■
|
Grade 6—Issuers assigned this grade are characterized as representing acceptable risk.
|
■
|
Grade 7—Issuers assigned this grade are currently vulnerable to adverse business, financial and economic conditions and are characterized by increasing credit risk. They possess potential weakness that may, if not checked or corrected, weaken the asset or result in a likelihood of default at some future date. The increasing risk has or may result in discounted pricing levels or decreased trading liquidity.
|
■
|
Grade 8—Issuers assigned this grade are characterized by inadequate repayment capacity and/or recovery of the obligor or of the collateral pledged resulting in potential loss if deficiencies are not corrected.
|
■
|
Grade 9—Issuers assigned this grade are in (a) payment default at any level in its debt structure or (b) bankruptcy. In addition, asset weaknesses may make collection or liquidation in full, on the basis of existing facts, highly questionable and improbable.
|
■
|
Grade 10—Issuers assigned this grade are charged-off.
|
|
|
|
|
|
|
|
||||||
ICG
|
|
ORIGINATED
|
|
SECONDARY
|
|
TOTAL
|
||||||
5.2
|
|
$
|
—
|
|
|
$
|
10,466
|
|
|
$
|
10,466
|
|
5.5
|
|
—
|
|
|
70,622
|
|
|
70,622
|
|
|||
5.8
|
|
18,902
|
|
|
336,214
|
|
|
355,116
|
|
|||
6.2
|
|
186,438
|
|
|
579,700
|
|
|
766,138
|
|
|||
6.5
|
|
650,182
|
|
|
910,136
|
|
|
1,560,318
|
|
|||
6.8
|
|
468,457
|
|
|
602,168
|
|
|
1,070,625
|
|
|||
7.2
|
|
185,593
|
|
|
130,332
|
|
|
315,925
|
|
|||
7.5
|
|
111,694
|
|
|
99,814
|
|
|
211,508
|
|
|||
7.8
|
|
50,602
|
|
|
236
|
|
|
50,838
|
|
|||
8.2
|
|
12,496
|
|
|
14,350
|
|
|
26,846
|
|
|||
8.5
|
|
16,649
|
|
|
—
|
|
|
16,649
|
|
|||
9.2
|
|
30,899
|
|
|
—
|
|
|
30,899
|
|
|||
Total
|
|
$
|
1,731,912
|
|
|
$
|
2,754,038
|
|
|
$
|
4,485,950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
ICG
|
|
ORIGINATED
|
|
SECONDARY
|
|
TOTAL
|
||||||
5.2
|
|
$
|
—
|
|
|
$
|
4,460
|
|
|
$
|
4,460
|
|
5.5
|
|
—
|
|
|
60,891
|
|
|
60,891
|
|
|||
5.8
|
|
17,709
|
|
|
351,776
|
|
|
369,485
|
|
|||
6.2
|
|
132,084
|
|
|
785,241
|
|
|
917,325
|
|
|||
6.5
|
|
681,244
|
|
|
1,119,830
|
|
|
1,801,074
|
|
|||
6.8
|
|
430,524
|
|
|
690,347
|
|
|
1,120,871
|
|
|||
7.2
|
|
165,412
|
|
|
82,632
|
|
|
248,044
|
|
|||
7.5
|
|
106,642
|
|
|
40,148
|
|
|
146,790
|
|
|||
7.8
|
|
37,379
|
|
|
17,756
|
|
|
55,135
|
|
|||
8.2
|
|
53,403
|
|
|
11,474
|
|
|
64,877
|
|
|||
8.5
|
|
1,266
|
|
|
—
|
|
|
1,266
|
|
|||
9.2
|
|
18,277
|
|
|
13,684
|
|
|
31,961
|
|
|||
Total
|
|
$
|
1,643,940
|
|
|
$
|
3,178,239
|
|
|
$
|
4,822,179
|
|
|
|
|
|
|
|
|
■
|
Payment default of principal and/or interest
|
■
|
Bankruptcy declaration
|
■
|
Going concern opinion issued by the borrower’s auditors
|
■
|
Insufficient cash flow to service debt with low likelihood of turnaround in the short term
|
■
|
Securities (public) are de-listed
|
■
|
Refinancing sources are unlikely
|
■
|
Financial covenants breach is unlikely to be amended
|
■
|
Modification of interest rate below market rate
|
■
|
The borrower does not otherwise have access to funding for debt with similar risk characteristics in the market at the restructured rate and terms
|
■
|
Capitalization of interest
|
■
|
Delaying principal and/or interest for a period of year or more
|
■
|
Forgiveness of some or all of the principal balance
|
|
|
|
|
|
|
|
||||||
|
PRE-
MODIFICATION OUTSTANDING RECORDED AMOUNT |
|
POST-
MODIFICATION OUTSTANDING RECORDED AMOUNT |
|
INVESTMENT IN
TDR SUBSEQUENTLY DEFAULTED |
||||||
Primary
|
$
|
149,712
|
|
|
$
|
85,427
|
|
|
$
|
—
|
|
Secondary
|
34,216
|
|
|
24,943
|
|
|
—
|
|
|||
Total
|
$
|
183,928
|
|
|
$
|
110,370
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
PRE-
MODIFICATION OUTSTANDING RECORDED AMOUNT |
|
POST-
MODIFICATION OUTSTANDING RECORDED AMOUNT |
|
INVESTMENT IN
TDR SUBSEQUENTLY DEFAULTED |
||||||
Primary
|
$
|
118,923
|
|
|
$
|
92,546
|
|
|
$
|
—
|
|
Secondary
|
68,982
|
|
|
38,371
|
|
|
—
|
|
|||
Total
|
$
|
187,905
|
|
|
$
|
130,917
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
2018
|
|
2017
|
||||
Loans held for sale
|
$
|
1,574,923
|
|
|
$
|
722,551
|
|
Less:
|
|
|
|
||||
Original issue discount
|
(15,198
|
)
|
|
(2,636
|
)
|
||
Valuation allowance
|
(2,880
|
)
|
|
—
|
|
||
Deferred loan fees, net
|
(6,670
|
)
|
|
(7,369
|
)
|
||
Loans held for sale, net
|
$
|
1,550,175
|
|
|
$
|
712,546
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Contractual Maturity
|
|||||||||||||||
|
Overnight and
Continuous |
|
Up to 30 days
|
|
30-90 days
|
|
Greater than
90 days |
|
Total
|
|||||||
Repurchase-to-maturity transactions
|
|
|
|
|
|
|
|
|
|
|||||||
CLO notes
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
39,480
|
|
|
$
|
39,480
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
1-5 YEARS
|
|
TOTAL
|
||||
Interest rate swaps
|
$
|
246,858
|
|
|
$
|
246,858
|
|
|
|
|
|
|
|
|
|
||||
|
1-5 YEARS
|
|
TOTAL
|
||||
Interest rate swaps
|
$
|
1,080,889
|
|
|
$
|
1,080,889
|
|
TRS
|
$
|
3,442
|
|
|
$
|
3,442
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NOVEMBER 30, 2018
|
|
LEVEL 1
|
|
LEVEL 2
|
|
LEVEL 3
|
|
NET ASSET
VALUE |
|
TOTAL
|
||||||||||
Assets, nonrecurring basis:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans held for sale, net
|
|
$
|
—
|
|
|
$
|
1,550,175
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,550,175
|
|
Assets, recurring basis:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investments
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investments in affiliates
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,810
|
)
|
|
$
|
(1,810
|
)
|
CLO Notes
|
|
—
|
|
|
10,900
|
|
|
—
|
|
|
—
|
|
|
10,900
|
|
|||||
Interest rate swaps
|
|
—
|
|
|
1,496
|
|
|
—
|
|
|
—
|
|
|
1,496
|
|
|||||
Corporate equity securities
|
|
—
|
|
|
11
|
|
|
47,182
|
|
|
—
|
|
|
47,193
|
|
|||||
Total Investments
|
|
$
|
—
|
|
|
$
|
12,407
|
|
|
$
|
47,182
|
|
|
$
|
(1,810
|
)
|
|
$
|
57,779
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
NOVEMBER 30, 2017
|
|
LEVEL 1
|
|
LEVEL 2
|
|
LEVEL 3
|
|
TOTAL
|
||||||||
Assets, nonrecurring basis:
|
|
|
|
|
|
|
|
|
||||||||
Loans held for sale, net
|
|
$
|
—
|
|
|
$
|
712,546
|
|
|
$
|
—
|
|
|
$
|
712,546
|
|
Assets, recurring basis:
|
|
|
|
|
|
|
|
|
||||||||
Investments
|
|
|
|
|
|
|
|
|
||||||||
Bonds
|
|
$
|
—
|
|
|
$
|
4,145
|
|
|
$
|
—
|
|
|
$
|
4,145
|
|
Notes
|
|
—
|
|
|
—
|
|
|
2,351
|
|
|
2,351
|
|
||||
Interest rate swaps
|
|
—
|
|
|
1,698
|
|
|
—
|
|
|
1,698
|
|
||||
Corporate equity securities
|
|
—
|
|
|
631
|
|
|
32,511
|
|
|
33,142
|
|
||||
Total return swap
|
|
—
|
|
|
—
|
|
|
4,812
|
|
|
4,812
|
|
||||
Total Investments
|
|
$
|
—
|
|
|
$
|
6,474
|
|
|
$
|
39,674
|
|
|
$
|
46,148
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
BALANCE AT
DECEMBER 1,
2017
|
|
PURCHASES/
ADDITIONS
|
|
SETTLEMENTS,
NET
|
|
TOTAL GAINS/
LOSSES
(REALIZED
AND
UNREALIZED)
(1)
|
|
NET
TRANSFERS
IN AND
OUT OF
LEVEL 3
|
|
BALANCE AT
NOVEMBER 30,
2018
|
|
NET CHANGE IN
UNREALIZED
GAINS/LOSSES
RELATING TO
INSTRUMENTS
STILL
HELD AT
NOVEMBER 30,
2018
|
||||||||||||||
Corporate equity securities
|
|
$
|
32,511
|
|
|
$
|
18,126
|
|
|
$
|
—
|
|
|
$
|
(3,455
|
)
|
|
$
|
—
|
|
|
$
|
47,182
|
|
|
$
|
(3,455
|
)
|
Notes
|
|
$
|
2,351
|
|
|
$
|
—
|
|
|
$
|
(2,767
|
)
|
|
$
|
416
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total return swap
|
|
$
|
4,812
|
|
|
$
|
296
|
|
|
$
|
(5,814
|
)
|
|
$
|
706
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
BALANCE AT
DECEMBER 1,
2016
|
|
PURCHASES/
ADDITIONS
|
|
SETTLEMENTS,
NET
|
|
TOTAL GAINS/
LOSSES
(REALIZED
AND
UNREALIZED)
(1)
|
|
NET
TRANSFERS
IN AND
OUT OF
LEVEL 3
|
|
BALANCE AT
NOVEMBER 30,
2017
|
|
NET CHANGE IN
UNREALIZED
GAINS/LOSSES
RELATING TO
INSTRUMENTS
STILL
HELD AT
NOVEMBER 30,
2017
|
||||||||||||||
Corporate equity securities
|
|
$
|
8,877
|
|
|
$
|
20,802
|
|
|
$
|
—
|
|
|
$
|
2,832
|
|
|
$
|
—
|
|
|
$
|
32,511
|
|
|
$
|
2,832
|
|
Notes
|
|
$
|
2,370
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(19
|
)
|
|
$
|
—
|
|
|
$
|
2,351
|
|
|
$
|
(19
|
)
|
Total return swap
|
|
$
|
3,309
|
|
|
$
|
456
|
|
|
$
|
—
|
|
|
$
|
1,047
|
|
|
$
|
—
|
|
|
$
|
4,812
|
|
|
$
|
1,047
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Total gains and losses (realized and unrealized) are recorded in Other gains (losses), net on the Consolidated Statements of Earnings.
|
|
|
|
|
|
|
|
|
|
|
|
|
||
FINANCIAL INSTRUMENTS OWNED
|
|
FAIR VALUE
(IN THOUSANDS) |
|
VALUATION
TECHNIQUE
|
|
SIGNIFICANT
UNOBSERVABLE INPUT(S)
|
|
INPUT
RANGE
|
|
WEIGHTED
AVERAGE
|
||
Corporate equity securities
|
|
|
|
|
|
|
|
|
|
|
||
Non-exchange traded
securities |
|
$
|
47,182
|
|
|
|
|
EBITDA multiple
|
|
1.6x-13.7x
|
|
7.8x
|
|
|
|
|
Market Approach
|
|
Revenue multiple
|
|
1.0x-2.4x
|
|
1.6x
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
FINANCIAL INSTRUMENTS OWNED
|
|
FAIR VALUE
(IN THOUSANDS) |
|
VALUATION
TECHNIQUE
|
|
SIGNIFICANT
UNOBSERVABLE INPUT(S)
|
|
INPUT
RANGE
|
|
WEIGHTED
AVERAGE
|
||||
Corporate equity securities
|
|
|
|
|
|
|
|
|
|
|
||||
Non-exchange traded
securities |
|
$
|
32,511
|
|
|
|
|
EBITDA multiple
|
|
5.6x-10.7x
|
|
|
7.8x
|
|
|
|
|
|
Market Approach
|
|
|
|
|
|
|
||||
|
|
|
|
Discounted Cash Flows
|
|
Revenue multiple
|
|
0.5x-2.0x
|
|
|
1.3x
|
|
||
Investments
|
|
|
|
|
|
|
|
|
|
|
||||
Notes
|
|
$
|
2,351
|
|
|
Asset Approach
|
|
Collateral Liquidation Values
|
|
N/A
(1)
|
|
|
N/A
(1)
|
|
Derivatives
|
|
|
|
|
|
|
|
|
|
|
||||
Total return swap
|
|
$
|
4,812
|
|
|
Discounted Cash Flows
|
|
—
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
Constant prepayment rate
|
|
20.0
|
%
|
|
20.0
|
%
|
||
|
|
|
|
|
|
Constant default rate
|
|
2.0
|
%
|
|
2.0
|
%
|
||
|
|
|
|
|
|
Loss severity
|
|
25.0
|
%
|
|
25.0
|
%
|
||
|
|
|
|
|
|
Yield
|
|
26.0
|
%
|
|
26.0
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
(1)
|
There is no meaningful quantitative information to provide as the methods of valuation are investment specific.
|
|
|
|
|
|
||||||||||||
|
NOVEMBER 30, 2018
|
|
NOVEMBER 30, 2017
|
||||||||||||
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Financial assets:
|
|
|
|
|
|
|
|
||||||||
Cash
|
$
|
1,033,048
|
|
|
$
|
1,033,048
|
|
|
$
|
1,555,484
|
|
|
$
|
1,555,484
|
|
Restricted cash
|
468,934
|
|
|
468,934
|
|
|
875,270
|
|
|
875,270
|
|
||||
Loans receivable, net
|
4,443,872
|
|
|
4,328,669
|
|
|
4,751,394
|
|
|
4,688,556
|
|
||||
CLO notes
(1)
|
45,735
|
|
|
43,962
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
5,991,589
|
|
|
$
|
5,874,613
|
|
|
$
|
7,182,148
|
|
|
$
|
7,119,310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
NOVEMBER 30, 2018
|
|
NOVEMBER 30, 2017
|
||||||||||||
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Financial liabilities:
|
|
|
|
|
|
|
|
||||||||
Credit facilities, net
|
$
|
186,232
|
|
|
$
|
192,083
|
|
|
$
|
318,103
|
|
|
$
|
323,806
|
|
Secured notes payable, net
|
3,620,191
|
|
|
3,646,054
|
|
|
3,882,817
|
|
|
3,976,732
|
|
||||
Securities sold under agreement to repurchase
|
39,480
|
|
|
38,929
|
|
|
—
|
|
|
—
|
|
||||
Long-term debt, net
|
2,054,023
|
|
|
2,062,584
|
|
|
2,073,479
|
|
|
2,152,397
|
|
||||
Total
|
$
|
5,899,926
|
|
|
$
|
5,939,650
|
|
|
$
|
6,274,399
|
|
|
$
|
6,452,935
|
|
|
|
|
|
|
|
|
|
(1)
|
For the year ended November 30, 2018 the Company did not record any OTTI.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
THIRD
PARTY FRONTING LINE |
|
MEMBERS’
FRONTING LINE |
|
APEX
CLO 2017 III WH |
|
APEX
CLO 2018 WH II |
|
CLO 2012
WH |
|
JFIN
BUSINESS CREDIT FUND I LLC |
|
JFUND III
LLC |
|
TOTAL
|
||||||||||||||||
Total availability under
the facility |
$
|
800.0
|
|
|
$
|
500.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
100.0
|
|
|
$
|
300.0
|
|
|
$
|
1,700.0
|
|
Outstanding
balance |
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54.0
|
|
|
138.1
|
|
|
192.1
(1)
|
|
||||||||
Current availability
|
$
|
800.0
|
|
|
$
|
500.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
46.0
|
|
|
$
|
161.9
|
|
|
$
|
1,507.9
|
|
Principal balance of loans pledged as collateral
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
73.2
|
|
|
$
|
249.0
|
|
|
322.2
|
|
|
Largest outstanding amounts during the periods
|
977.2
|
|
|
500.0
|
|
|
359.3
|
|
|
259.6
|
|
|
126.7
|
|
|
55.4
|
|
|
148.6
|
|
|
2,426.8
|
|
||||||||
Interest expense incurred
|
3.4
|
|
|
2.0
|
|
|
3.0
|
|
|
3.0
|
|
|
0.9
|
|
|
1.3
|
|
|
6.5
|
|
|
20.1
|
|
||||||||
Undrawn facility fees incurred
|
5.9
|
|
|
2.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
2.0
|
|
|
10.8
|
|
||||||||
Variable interest rate based on LIBOR
|
4.67
|
%
|
|
5.30
|
%
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
4.04
|
%
|
|
4.76
|
%
|
|
|
|||||||||
Maturity Date
|
2/20/2019
(2&3)
|
|
|
3/1/2019
(4&5)
|
|
|
Terminated
|
|
|
Terminated
|
|
|
Terminated
|
|
|
9/12/2021
|
|
|
2/10/2022
(6)
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Outstanding balance does not include $5.9 million of deferred structuring fees which is recorded as a direct reduction of the credit facility on the consolidated balance sheet.
|
(2)
|
On February 21, 2018, the Third Party Fronting Line was increased to $800.0 million from $500.0 million.
|
(3)
|
Third Party Fronting line included a temporary increase of $233.0 million from 2/27/2018 to 3/27/2018.
|
(4)
|
The Member’s $500 million Fronting Line was renewed until March 1, 2019.
|
(5)
|
Each Member, at their discretion may make available additional advances in excess of its committed amount.
|
(6)
|
On February 10, 2017, the maturity of the facility was extended until February 10, 2022.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
THIRD
PARTY FRONTING LINE |
|
MEMBERS’
FRONTING LINE |
|
APEX
CLO 2017 III WH |
|
CLO 2016
II WH |
|
JFIN
BUSINESS CREDIT FUND I LLC |
|
JFUND III
LLC |
|
JFUND V
LLC |
|
TOTAL
|
||||||||||||||||
Total availability under the
facility |
$
|
500.0
|
|
|
$
|
500.0
|
|
|
$
|
250.0
|
|
|
$
|
—
|
|
|
$
|
100.0
|
|
|
$
|
300.0
|
|
|
$
|
—
|
|
|
$
|
1,650.0
|
|
Outstanding balance
|
—
|
|
|
—
|
|
|
154.8
|
|
|
—
|
|
|
23.4
|
|
|
145.6
|
|
|
—
|
|
|
323.8
(1)
|
|
||||||||
Current availability
|
$
|
500.0
|
|
|
$
|
500.0
|
|
|
$
|
95.2
|
|
|
$
|
—
|
|
|
$
|
76.6
|
|
|
$
|
154.4
|
|
|
$
|
—
|
|
|
$
|
1,326.2
|
|
Principal balance of loans
pledged as collateral |
$
|
—
|
|
|
$
|
—
|
|
|
$
|
246.6
|
|
|
$
|
—
|
|
|
$
|
32.0
|
|
|
$
|
251.1
|
|
|
$
|
—
|
|
|
$
|
529.7
|
|
Largest outstanding
amounts during the periods |
500.0
|
|
|
1,100.0
(2)
|
|
|
154.8
|
|
|
325.3
|
|
|
43.9
|
|
|
193.1
|
|
|
345.6
|
|
|
2,662.7
|
|
||||||||
Interest expense incurred
|
4.4
|
|
|
5.1
|
|
|
0.9
|
|
|
1.6
|
|
|
0.7
|
|
|
6.7
|
|
|
3.1
|
|
|
22.5
|
|
||||||||
Undrawn facility fees incurred
|
3.0
|
|
|
1.7
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
1.2
|
|
|
1.0
|
|
|
7.2
|
|
||||||||
Variable interest rate based on LIBOR
|
4.19
|
%
|
|
4.92
|
%
|
|
3.34
|
%
|
|
2.98
|
%
|
|
2.88
|
%
|
|
3.75
|
%
|
|
3.05
|
%
|
|
—
|
|
||||||||
Maturity Date
|
2/26/2018
(3)
|
|
|
3/1/2018
(4)
|
|
|
8/4/2018
|
|
|
Terminated
|
|
|
9/12/2021
|
|
|
2/10/2022
(5)
|
|
|
Terminated
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Outstanding balance does not include $5.7 million of deferred structuring fees which is recorded as a direct reduction of the credit facility on consolidated balance sheet.
|
(2)
|
Each Member, at their discretion may make available additional advances in excess of its committed amount.
|
(3)
|
On February 27, 2016, the Third Party Fronting Line was increased to $500.0 million from $481.7 million.
|
(4)
|
After March 1, 2016, the Members’ Fronting Line contains annual automatic one-year extensions, absent a 60-day termination notice by either party.
|
(5)
|
On February 10, 2017, the maturity of the facility was extended until February 10, 2022.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
THIRD
PARTY FRONTING LINE |
|
MEMBERS’
FRONTING LINE |
|
JFIN CLO
2016-II WH |
|
JFIN CLO
2016 WH |
|
JFIN
BUSINESS CREDIT FUND I LLC |
|
JFUND III
LLC |
|
TOTAL
|
||||||||||||||
Total availability under the facility
|
$
|
500.0
|
|
|
$
|
500.0
|
|
|
$
|
200.0
|
|
|
$
|
—
|
|
|
$
|
100.0
|
|
|
$
|
300.0
|
|
|
$
|
1,600.0
|
|
Outstanding balance
|
—
|
|
|
—
|
|
|
124.2
|
|
|
—
|
|
|
33.4
|
|
|
189.3
|
|
|
346.9
(1)
|
|
|||||||
Current availability
|
$
|
500.0
|
|
|
$
|
500.0
|
|
|
$
|
75.8
|
|
|
$
|
—
|
|
|
$
|
66.6
|
|
|
$
|
110.7
|
|
|
$
|
1,253.1
|
|
Principal balance of loans pledged as
collateral |
$
|
—
|
|
|
$
|
—
|
|
|
$
|
219.4
|
|
|
$
|
—
|
|
|
$
|
45.0
|
|
|
$
|
312.1
|
|
|
$
|
576.5
|
|
Largest outstanding amounts during the
periods |
218.6
|
|
|
300.0
|
|
|
124.2
|
|
|
227.8
|
|
|
50.1
|
|
|
247.3
|
|
|
1,168.0
|
|
|||||||
Interest expense incurred
|
0.3
|
|
|
0.1
|
|
|
0.3
|
|
|
1.3
|
|
|
0.7
|
|
|
7.1
|
|
|
9.8
|
|
|||||||
Undrawn facility fees incurred
|
4.5
|
|
|
2.7
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
0.4
|
|
|
7.8
|
|
|||||||
Variable interest rate based on
LIBOR |
3.88
|
%
|
|
4.19
|
%
|
|
2.88
|
%
|
|
1.95
|
%
|
|
2.39
|
%
|
|
3.22
|
%
|
|
—
|
|
|||||||
Maturity Date
|
2/25/2017
|
|
|
3/1/2017
|
|
|
6/30/2017
|
|
|
Terminated
|
|
|
9/12/2021
|
|
|
2/12/2019
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Outstanding balance does not include $4.1 million of deferred structuring fees.
|
|
|
|
|
|
|
|
||||
|
|
NOVEMBER 30,
2018
|
|
NOVEMBER 30,
2017
|
|
||||
Due in 2019
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Due in 2020
|
|
—
|
|
|
37,378
|
|
|
||
Due in 2021
|
|
—
|
|
|
—
|
|
|
||
Due in 2022
|
|
—
|
|
|
137,141
|
|
|
||
Due in 2023
|
|
—
|
|
|
177,096
|
|
|
||
Thereafter
|
|
3,620,192
|
|
|
3,531,202
|
|
|
||
Total
|
|
$
|
3,620,192
|
|
|
$
|
3,882,817
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
DESCRIPTION
|
|
ISSUE DATE
|
|
OUTSTANDING
PRINCIPAL AMOUNT |
|
MATURITY
|
|
INTEREST
RATE
|
|
INTEREST
PAYMENT
DATES
|
|||
2020 Notes
(1)
|
|
3/26/2013
|
|
$
|
600.0
|
|
|
April 1, 2020
|
|
7.375
|
%
|
|
April and October 1
|
2021 Notes
(1)
|
|
10/14/2014
|
|
$
|
425.0
|
|
|
April 15, 2021
|
|
7.500
|
%
|
|
April and October 15
|
2022 Notes
(1)
|
|
3/31/2014
|
|
$
|
415.0
|
|
|
April 15, 2022
|
|
6.875
|
%
|
|
April and October 15
|
2024 Notes
(1)
|
|
8/03/2017
|
|
$
|
387.3
|
|
|
August 15, 2024
|
|
7.250
|
%
|
|
February and August 15
|
Secured Term Loan
(2)
|
|
8/03/2017
|
|
$
|
247.5
|
|
|
August 3, 2024
(3)
|
|
Libor +2.500%
|
|
|
Last business day of each fiscal quarter
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Collectively, the 2020 Notes, 2021 Notes, 2022 Notes and the 2024 Notes are referred to as the “Senior Notes”.
|
(2)
|
Issued with a Libor floor of 1%.
|
(3)
|
The Secured Term Loan matures on August 3, 2024, or December 31, 2019 if the amount outstanding on the 2020 Notes, 2021 Notes, 2022 Notes exceeds $100.0 million on such date.
|
|
|
|
|
|
|
|
|
||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Underwriting fees
|
$
|
641,094
|
|
|
$
|
625,754
|
|
|
$
|
262,933
|
|
Administration fees
|
11,137
|
|
|
8,399
|
|
|
9,508
|
|
|||
Other fees
|
67,887
|
|
|
61,024
|
|
|
52,104
|
|
|||
|
720,118
|
|
|
695,177
|
|
|
324,545
|
|
|||
Less:
|
|
|
|
|
|
||||||
Deferred underwriting fees
|
(136,292
|
)
|
|
(113,179
|
)
|
|
(72,227
|
)
|
|||
Jefferies LLC fees, net
(1)
|
(268,705
|
)
|
|
(279,337
|
)
|
|
(99,013
|
)
|
|||
Third party fees
|
(32,265
|
)
|
|
(32,638
|
)
|
|
(22,949
|
)
|
|||
Fee income, net
|
$
|
282,856
|
|
|
$
|
270,023
|
|
|
$
|
130,356
|
|
|
|
|
|
|
|
(1)
|
Jefferies LLC is a wholly owned subsidiary of JGL.
|
|
|
|
|
|
|
||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Realized gain (loss) on sale of loans held for sale
|
$
|
10,445
|
|
|
$
|
6,467
|
|
|
$
|
(34,545
|
)
|
Change in fair value of loans held for sale
|
(5
|
)
|
|
(4,634
|
)
|
|
(8,267
|
)
|
|||
Realized gain (loss) on investments
|
492
|
|
|
1,047
|
|
|
(24,597
|
)
|
|||
Unrealized gain (loss) on investments
|
(2,116
|
)
|
|
1,863
|
|
|
(8,139
|
)
|
|||
Dividends
|
307
|
|
|
1,937
|
|
|
—
|
|
|||
Other gains (losses), net
|
$
|
9,123
|
|
|
$
|
6,680
|
|
|
$
|
(75,548
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
2018
|
|
2017
|
|
2016
|
|
||||||
Current—local
|
|
$
|
7,591
|
|
|
$
|
5,750
|
|
|
$
|
(1,569
|
)
|
|
Deferred—local
|
|
(91
|
)
|
|
550
|
|
|
55
|
|
|
|||
Total income tax expense (benefit)
|
|
$
|
7,500
|
|
|
$
|
6,300
|
|
|
$
|
(1,514
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Management fees charged by BCM
|
$
|
912
|
|
|
$
|
2,807
|
|
|
$
|
1,488
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Compensation and benefits
|
$
|
31,661
|
|
|
$
|
24,222
|
|
|
$
|
28,919
|
|
Administration expenses
|
26,003
|
|
|
22,938
|
|
|
13,935
|
|
|||
Occupancy expenses
|
3,322
|
|
|
2,928
|
|
|
2,999
|
|
|||
New York City Unincorporated Business Tax
|
635
|
|
|
291
|
|
|
347
|
|
|||
Expenses charged by Jefferies
|
$
|
61,621
|
|
|
$
|
50,379
|
|
|
$
|
46,200
|
|
|
|
|
|
|
|
|
|
JEFFERIES FINANCIAL GROUP INC.
|
Exhibit 21
|
Subsidiaries as of November 30, 2018
|
|
|
State/Country
|
Name
|
of Incorporation
|
|
|
Baldwin Enterprise, LLC
|
Colorado
|
Apex Credit Partners LLC
|
Delaware
|
54 Mad Holding LLC
|
Delaware
|
BEI Italia Wireless LLC
|
Delaware
|
BEI PSVI Holding, LLC
|
Delaware
|
Chrome Capital Group LLC
|
Delaware
|
Foursight Funding LLC
|
Delaware
|
Foursight Funding II LLC
|
Delaware
|
Garcadia Auto, LLC
|
Delaware
|
Gauss LLC
|
Delaware
|
Jefferies Finance LLC
|
Delaware
|
Jefferies Financial Products, LLC
|
Delaware
|
Jefferies Financial Services, Inc.
|
Delaware
|
Jefferies Funding LLC
|
Delaware
|
Jefferies Group Capital Finance Inc.
|
Delaware
|
Jefferies Group LLC
|
Delaware
|
Jefferies Investment Advisers, LLC
|
Delaware
|
Jefferies Leveraged Credit Products, LLC
|
Delaware
|
Jefferies LLC
|
Delaware
|
Jefferies Research Services LLC
|
Delaware
|
Jefferies Structured Credit LLC
|
Delaware
|
JETX Energy, LLC
|
Delaware
|
JFIN Asset Management LLC
|
Delaware
|
LAM Holding LLC
|
Delaware
|
Leucadia Asset Management LLC
|
Delaware
|
Leucadia Aviation, Inc.
|
Delaware
|
Leucadia Funding LLC
|
Delaware
|
Leucadia LLC
|
Delaware
|
LUK-FX Holdings, LLC
|
Delaware
|
LUK HRG LLC
|
Delaware
|
LUK Servicing, LLC
|
Delaware
|
M Science LLC
|
Delaware
|
Nead Corporation
|
Delaware
|
Vitesse Energy, LLC
|
Delaware
|
Vitesse Energy Finance LLC
|
Delaware
|
Alumni Forest Products, LLC
|
Georgia
|
Idaho Timber of Carthage, LLC
|
Idaho
|
Idaho Timber of North Carolina, LLC
|
Idaho
|
Phlcorp Holding LLC
|
Pennsylvania
|
Foursight Capital LLC
|
Utah
|
Jefferies (Australia) Pty Ltd.
|
Australia
|
Jefferies Securities, Inc.
|
British Columbia
|
Jefferies International Limited
|
England & Wales
|
Leucadia Investment Management Ltd.
|
England & Wales
|
Jefferies Hong Kong Limited
|
Hong Kong
|
Jefferies Singapore Limited
|
Hong Kong
|
Jefferies India Private Limited
|
India
|
Jefferies (Japan) Limited
|
Japan
|
1.
|
I have reviewed this transition report on Form 10-K of Jefferies Financial Group Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
|
|
|
|
Date: January 28, 2019
|
By:
|
/s/ Richard B. Handler
|
|
|
Name: Richard B. Handler
|
|
|
Title: Chief Executive Officer
|
1.
|
I have reviewed this transition report on Form 10-K of Jefferies Financial Group Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
|
|
|
|
Date: January 28, 2019
|
By:
|
/s/ Teresa S. Gendron
|
|
|
Name: Teresa S. Gendron
|
|
|
Title: Chief Financial Officer
|
(1)
|
the accompanying Form 10-K report for the period ending November 30, 2018 as filed with the U.S. Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
|
|
|
Date: January 28, 2019
|
By:
|
/s/ Richard B. Handler
|
|
|
Name: Richard B. Handler
|
|
|
Title: Chief Executive Officer
|
(1)
|
the accompanying Form 10-K report for the period ending November 30, 2018 as filed with the U.S. Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
|
|
|
Date: January 28, 2019
|
By:
|
/s/ Teresa S. Gendron
|
|
|
Name: Teresa S. Gendron
|
|
|
Title: Chief Financial Officer
|