|
☒
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the fiscal year ended
|
November 30, 2019
|
☐
|
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 Number)
|
||
|
|
|
|
520 Madison Avenue
|
New York,
|
New York
|
10022
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Shares, par value $1 per share
|
JEF
|
New York Stock Exchange
|
Large accelerated filer
|
☒
|
|
Accelerated filer
|
☐
|
|
Non-accelerated filer
|
☐
|
|
|
|
|
|
|
|
|
Smaller reporting company
|
☐
|
|
Emerging growth company
|
☐
|
|
|
|
Item 15.
|
Exhibits and Financial Statement Schedules.
|
(a)(1)
|
Financial Statements.
|
Reports of Independent Registered Public Accounting Firm
|
F-1***
|
Financial Statements:
|
|
Consolidated Statements of Financial Condition at November 30, 2019 and 2018
|
F-4***
|
Consolidated Statements of Operations for the twelve months ended November 30, 2019, the eleven months ended November 30, 2018 and the twelve months ended December 31, 2017
|
F-5***
|
Consolidated Statements of Comprehensive Income (Loss) for the twelve months ended November 30, 2019, the eleven months ended November 30, 2018 and the twelve months ended December 31, 2017
|
F-7***
|
Consolidated Statements of Cash Flows for the twelve months ended November 30, 2019, the eleven months ended November 30, 2018 and the twelve months ended December 31, 2017
|
F-8***
|
Consolidated Statements of Changes in Equity for the twelve months ended November 30, 2019, the eleven months ended November 30, 2018 and the twelve months ended December 31, 2017
|
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.
|
|
|
4.2
|
|
|
|
10.1
|
|
|
|
10.2
|
|
|
|
10.3
|
|
|
|
10.4
|
|
|
|
10.5
|
|
|
|
10.6
|
|
|
|
10.7
|
|
|
|
10.8
|
|
|
|
10.9
|
|
|
|
10.10
|
|
|
|
10.11
|
|
|
|
10.12
|
|
|
|
10.13
|
|
|
|
21
|
|
|
|
23.1
|
|
|
|
23.2
|
|
|
|
23.3
|
|
|
|
23.4
|
|
|
|
23.5
|
|
|
|
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 twelve months ended November 30, 2019, formatted in Inline Extensible Business Reporting Language (iXBRL): (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.***
|
|
|
101.INS
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the iXBRL document.
|
|
|
101.SCH
|
iXBRL Taxonomy Extension Schema Document.
|
|
|
101.CAL
|
iXBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
101.DEF
|
iXBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
101.LAB
|
iXBRL Taxonomy Extension Label Linkbase Document.
|
|
|
101.PRE
|
iXBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
104
|
Cover Page Interactive Data File, formatted in iXBRL (included in Exhibit 101).
|
+
|
Management/Employment Contract or Compensatory Plan or Arrangement.
|
*
|
Incorporated by reference.
|
**
|
Furnished herewith pursuant to item 601(b) (32) of Regulation S-K.
|
***
|
Included in Part IV in Jefferies Annual Report on Form 10-K for the fiscal year ended November 30, 2019, which was initially filed with the U.S. Securities and Exchange Commission on January 29, 2020.
|
|
|
JEFFERIES FINANCIAL GROUP INC.
|
|
|
|
|
|
Date: March 26, 2020
|
By:
|
|
/s/ John M. Dalton
|
|
|
|
Name: John M. Dalton
|
|
|
|
Title: Vice President and Controller
|
|
December 28, 2019
|
|
December 29, 2018(a)
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
12,507
|
|
|
$
|
46,746
|
|
Accounts receivable, less allowance for returns and doubtful accounts of $2,540 and $2,584, respectively
|
290,391
|
|
|
225,251
|
|
||
Due from affiliates
|
961
|
|
|
803
|
|
||
Other receivables
|
5,887
|
|
|
4,718
|
|
||
Inventories
|
287,795
|
|
|
256,338
|
|
||
Other current assets
|
28,819
|
|
|
21,025
|
|
||
Total current assets
|
626,360
|
|
|
554,881
|
|
||
Property, plant and equipment, at cost:
|
|
|
|
||||
Land and improvements
|
35,453
|
|
|
27,056
|
|
||
Buildings and improvements
|
261,280
|
|
|
230,422
|
|
||
Machinery and equipment
|
536,763
|
|
|
452,084
|
|
||
Trailers and automotive equipment
|
3,410
|
|
|
2,576
|
|
||
Furniture and fixtures
|
15,540
|
|
|
13,899
|
|
||
Construction in progress
|
88,372
|
|
|
59,853
|
|
||
|
940,818
|
|
|
785,890
|
|
||
Less accumulated depreciation
|
412,921
|
|
|
343,104
|
|
||
Net property, plant and equipment
|
527,897
|
|
|
442,786
|
|
||
Goodwill
|
30,634
|
|
|
14,991
|
|
||
Other intangibles, net of accumulated amortization of $364,196 and $316,782, respectively
|
506,092
|
|
|
494,286
|
|
||
Right of use assets, net of accumulated amortization of $21,306 and $0, respectively
|
90,907
|
|
|
—
|
|
||
Other assets
|
29,316
|
|
|
19,581
|
|
||
Total Assets
|
$
|
1,811,206
|
|
|
$
|
1,526,525
|
|
Liabilities and Members’ Capital
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current installments of long-term debt
|
$
|
19,678
|
|
|
$
|
18,198
|
|
Current portion of right of use liabilities
|
25,248
|
|
|
—
|
|
||
Cattle purchases payable
|
116,280
|
|
|
109,083
|
|
||
Accounts payable — trade
|
109,232
|
|
|
88,936
|
|
||
Due to affiliates
|
2,762
|
|
|
150
|
|
||
Accrued compensation and benefits
|
151,920
|
|
|
111,046
|
|
||
Accrued insurance
|
21,819
|
|
|
24,515
|
|
||
Other accrued expenses and liabilities
|
44,794
|
|
|
34,399
|
|
||
Total current liabilities
|
491,733
|
|
|
386,327
|
|
||
Long-term debt, excluding current installments
|
410,560
|
|
|
161,639
|
|
||
Long-term portion of right of use liabilities
|
67,077
|
|
|
—
|
|
||
Other liabilities
|
21,603
|
|
|
22,273
|
|
||
Total liabilities
|
990,973
|
|
|
570,239
|
|
||
Commitments and contingencies
|
|
|
|
||||
Members’ capital:
|
|
|
|
||||
Members’ capital
|
820,332
|
|
|
956,365
|
|
||
Accumulated other comprehensive loss
|
(99
|
)
|
|
(79
|
)
|
||
Total members’ capital
|
820,233
|
|
|
956,286
|
|
||
Total Liabilities and Members' capital
|
$
|
1,811,206
|
|
|
$
|
1,526,525
|
|
|
52 weeks ended
December 28, 2019 |
|
52 weeks ended
December 29, 2018(a) |
|
52 weeks ended
December 30, 2017 |
||||||
Net sales
|
$
|
8,579,568
|
|
|
$
|
7,680,763
|
|
|
$
|
7,353,662
|
|
Costs and expenses:
|
|
|
|
|
|
||||||
Cost of sales
|
7,554,273
|
|
|
6,890,424
|
|
|
6,764,057
|
|
|||
Selling, general and administrative
|
83,005
|
|
|
74,720
|
|
|
77,459
|
|
|||
Depreciation and amortization
|
121,598
|
|
|
105,512
|
|
|
98,515
|
|
|||
Total costs and expenses
|
7,758,876
|
|
|
7,070,656
|
|
|
6,940,031
|
|
|||
Operating income
|
820,692
|
|
|
610,107
|
|
|
413,631
|
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest income
|
465
|
|
|
314
|
|
|
339
|
|
|||
Interest expense
|
(11,515
|
)
|
|
(10,483
|
)
|
|
(6,658
|
)
|
|||
Income before taxes
|
809,642
|
|
|
599,938
|
|
|
407,312
|
|
|||
Income tax expense
|
3,038
|
|
|
2,607
|
|
|
2,238
|
|
|||
Net income
|
$
|
806,604
|
|
|
$
|
597,331
|
|
|
$
|
405,074
|
|
|
52 weeks ended
December 28, 2019 |
|
52 weeks ended
December 29, 2018(a) |
|
52 weeks ended
December 30, 2017 |
||||||
Net income
|
$
|
806,604
|
|
|
$
|
597,331
|
|
|
$
|
405,074
|
|
Other comprehensive income:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(20
|
)
|
|
(22
|
)
|
|
80
|
|
|||
Comprehensive income
|
$
|
806,584
|
|
|
$
|
597,309
|
|
|
$
|
405,154
|
|
|
52 weeks ended
December 28, 2019 |
|
52 weeks ended
December 29, 2018(a) |
|
52 weeks ended
December 30, 2017 |
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
806,604
|
|
|
$
|
597,331
|
|
|
$
|
405,074
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
121,598
|
|
|
105,512
|
|
|
98,515
|
|
|||
Provision for returns and doubtful accounts
|
11,294
|
|
|
9,575
|
|
|
9,416
|
|
|||
Deferred income tax provision
|
166
|
|
|
248
|
|
|
823
|
|
|||
Gain on disposal of property, plant and equipment
|
(93
|
)
|
|
(960
|
)
|
|
(1,144
|
)
|
|||
Amortization of debt issuance costs
|
735
|
|
|
722
|
|
|
766
|
|
|||
Change in assets and liabilities, net of acquisition of businesses:
|
|
|
|
|
|
||||||
Accounts receivable
|
(57,561
|
)
|
|
(41,361
|
)
|
|
(29,370
|
)
|
|||
Due from affiliates
|
(158
|
)
|
|
(17
|
)
|
|
132
|
|
|||
Other receivables
|
(1,169
|
)
|
|
4,584
|
|
|
(2,787
|
)
|
|||
Inventories
|
(12,980
|
)
|
|
14,615
|
|
|
14,051
|
|
|||
Other assets
|
(17,480
|
)
|
|
(9,829
|
)
|
|
(4,598
|
)
|
|||
Right of use assets and lease liabilities, net
|
1,418
|
|
|
—
|
|
|
—
|
|
|||
Cattle purchases payable
|
(11
|
)
|
|
(7,649
|
)
|
|
24,460
|
|
|||
Accounts payable
|
8,674
|
|
|
(1,851
|
)
|
|
7,485
|
|
|||
Due to affiliates
|
2,612
|
|
|
(612
|
)
|
|
(251
|
)
|
|||
Accrued compensation and benefits
|
40,874
|
|
|
28,406
|
|
|
13,930
|
|
|||
Accrued insurance
|
(2,696
|
)
|
|
9,854
|
|
|
(10,381
|
)
|
|||
Other accrued expenses and liabilities
|
4,633
|
|
|
6,611
|
|
|
27,905
|
|
|||
Net cash provided by operating activities
|
906,460
|
|
|
715,179
|
|
|
554,026
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Capital expenditures, including interest capitalized
|
(91,553
|
)
|
|
(96,530
|
)
|
|
(70,446
|
)
|
|||
Acquisition of Iowa Premium LLC, net of cash acquired
|
(145,195
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from sale of property, plant and equipment
|
1,916
|
|
|
2,122
|
|
|
2,791
|
|
|||
Net cash used in investing activities
|
(234,832
|
)
|
|
(94,408
|
)
|
|
(67,655
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Receipts under revolving credit lines
|
167,696
|
|
|
255,288
|
|
|
280,000
|
|
|||
Payments under revolving credit lines
|
(200,000
|
)
|
|
(290,288
|
)
|
|
(200,000
|
)
|
|||
Repayments of term note payable
|
—
|
|
|
—
|
|
|
(17,500
|
)
|
|||
Receipts under reducing revolving credit lines
|
741,250
|
|
|
300,000
|
|
|
197,500
|
|
|||
Payments under reducing revolving credit lines
|
(470,250
|
)
|
|
(285,000
|
)
|
|
(335,000
|
)
|
|||
Net repayments of other indebtedness/capital leases
|
(1,429
|
)
|
|
(105
|
)
|
|
(119
|
)
|
|||
Cash paid for financing costs
|
(450
|
)
|
|
—
|
|
|
(2,769
|
)
|
|||
Cash paid for common control acquisition
|
(60,000
|
)
|
|
—
|
|
|
—
|
|
|||
Member distributions
|
(882,637
|
)
|
|
(572,409
|
)
|
|
(427,739
|
)
|
|||
Net cash used in financing activities
|
(705,820
|
)
|
|
(592,514
|
)
|
|
(505,627
|
)
|
|||
Effect of exchange rate changes on cash
|
(47
|
)
|
|
(27
|
)
|
|
70
|
|
|||
Net (decrease) increase in cash
|
(34,239
|
)
|
|
28,230
|
|
|
(19,186
|
)
|
|||
Cash and cash equivalents at beginning of period
|
46,746
|
|
|
18,516
|
|
|
37,702
|
|
|||
Cash and cash equivalents at end of period
|
$
|
12,507
|
|
|
$
|
46,746
|
|
|
$
|
18,516
|
|
Supplemental disclosures:
|
|
|
|
|
|
||||||
Cash paid during the period for interest
|
$
|
11,409
|
|
|
$
|
11,333
|
|
|
$
|
6,512
|
|
Cash paid during the period for taxes
|
$
|
1,458
|
|
|
$
|
1,906
|
|
|
$
|
792
|
|
Supplemental non-cash disclosures of investing and financing activities:
|
|
|
|
|
|
||||||
Non-cash additions to property, plant and equipment
|
$
|
11,551
|
|
|
$
|
3,677
|
|
|
$
|
—
|
|
Assets acquired through capital lease
|
$
|
12,849
|
|
|
$
|
147
|
|
|
$
|
137
|
|
|
Members’ Capital
|
|
Accumulated Other
Comprehensive
(Loss) Income
|
|
TOTAL
|
||||||
Balance at December 31, 2016
|
$
|
951,930
|
|
|
$
|
(137
|
)
|
|
$
|
951,793
|
|
Net income
|
405,074
|
|
|
—
|
|
|
405,074
|
|
|||
Distributions
|
(427,739
|
)
|
|
—
|
|
|
(427,739
|
)
|
|||
Foreign currency translation adjustments
|
—
|
|
|
80
|
|
|
80
|
|
|||
Balance at December 30, 2017
|
$
|
929,265
|
|
|
$
|
(57
|
)
|
|
$
|
929,208
|
|
Net income
|
597,331
|
|
|
—
|
|
|
597,331
|
|
|||
Equity acquired in common control transaction
|
2,178
|
|
|
—
|
|
|
2,178
|
|
|||
Distributions
|
(572,409
|
)
|
|
—
|
|
|
(572,409
|
)
|
|||
Foreign currency translation adjustments
|
—
|
|
|
(22
|
)
|
|
(22
|
)
|
|||
Balance at December 29, 2018 (a)
|
$
|
956,365
|
|
|
$
|
(79
|
)
|
|
$
|
956,286
|
|
Net income
|
806,604
|
|
|
—
|
|
|
806,604
|
|
|||
Contributions
|
157,181
|
|
|
—
|
|
|
157,181
|
|
|||
Common control transaction distribution
|
(60,000
|
)
|
|
—
|
|
|
(60,000
|
)
|
|||
Distributions
|
(1,039,818
|
)
|
|
—
|
|
|
(1,039,818
|
)
|
|||
Foreign currency translation adjustments
|
—
|
|
|
(20
|
)
|
|
(20
|
)
|
|||
Balance at December 28, 2019
|
$
|
820,332
|
|
|
$
|
(99
|
)
|
|
$
|
820,233
|
|
Period Ended
|
|
Beginning Balance
|
|
Provision
|
|
Charge Off
|
|
Ending Balance
|
||||||||
December 30, 2017
|
|
$
|
(3,944
|
)
|
|
$
|
(9,416
|
)
|
|
$
|
9,149
|
|
|
$
|
(4,211
|
)
|
December 29, 2018
|
|
$
|
(4,211
|
)
|
|
$
|
(9,575
|
)
|
|
$
|
11,202
|
|
|
$
|
(2,584
|
)
|
December 28, 2019
|
|
$
|
(2,584
|
)
|
|
$
|
(11,294
|
)
|
|
$
|
11,338
|
|
|
$
|
(2,540
|
)
|
|
December 28, 2019
|
|
December 29, 2018
|
||||
Dressed and boxed beef products
|
$
|
212,231
|
|
|
$
|
190,683
|
|
Beef by-products
|
38,542
|
|
|
35,789
|
|
||
Parts, supplies and other
|
37,022
|
|
|
29,866
|
|
||
Total inventory
|
$
|
287,795
|
|
|
$
|
256,338
|
|
|
December 28, 2019
|
|
December 29, 2018
|
||||
Beginning balance
|
$
|
14,991
|
|
|
$
|
14,991
|
|
Iowa Premium, LLC acquisition
|
15,643
|
|
|
—
|
|
||
Ending balance
|
$
|
30,634
|
|
|
$
|
14,991
|
|
|
Weighted
Average
Amortization
Period
|
|
December 28, 2019
|
||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
||||||
Intangible assets subject to amortization:
|
|
|
|
|
|
||||
Customer relationships
|
18
|
|
$
|
433,300
|
|
|
$
|
181,675
|
|
Trade names
|
20
|
|
290,148
|
|
|
104,934
|
|
||
Cattle supply relationships
|
15
|
|
143,600
|
|
|
76,587
|
|
||
Other
|
6
|
|
3,240
|
|
|
1,000
|
|
||
Total intangible assets
|
18
|
|
$
|
870,288
|
|
|
$
|
364,196
|
|
|
Weighted
Average
Amortization
Period
|
|
December 29, 2018
|
||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
||||||
Intangible assets subject to amortization:
|
|
|
|
|
|
||||
Customer relationships
|
18
|
|
$
|
406,530
|
|
|
$
|
158,095
|
|
Trade names
|
20
|
|
260,108
|
|
|
91,093
|
|
||
Cattle supply relationships
|
15
|
|
143,600
|
|
|
67,013
|
|
||
Other
|
10
|
|
830
|
|
|
581
|
|
||
Total intangible assets
|
18
|
|
$
|
811,068
|
|
|
$
|
316,782
|
|
Estimated amortization expense for fiscal years ending:
|
|
||
2020
|
$
|
49,134
|
|
2021
|
49,134
|
|
|
2022
|
49,051
|
|
|
2023
|
48,713
|
|
|
2024
|
48,445
|
|
|
Thereafter
|
261,615
|
|
|
Total
|
$
|
506,092
|
|
|
December 28, 2019
|
|
December 29, 2018
|
||||
Beef, pork & beef by-products
|
$
|
8,735,243
|
|
|
$
|
7,811,381
|
|
Other
|
229,174
|
|
|
229,931
|
|
||
Intercompany
|
(384,849
|
)
|
|
(360,549
|
)
|
||
Net Sales
|
$
|
8,579,568
|
|
|
$
|
7,680,763
|
|
|
December 28, 2019
|
|
December 29, 2018
|
|
Change
|
||||||
Contract liabilities
|
$
|
21,079
|
|
|
$
|
15,096
|
|
|
$
|
5,983
|
|
|
December 29, 2018
|
|
December 30, 2017
|
|
Change
|
||||||
Contract liabilities
|
$
|
15,096
|
|
|
$
|
20,904
|
|
|
$
|
(5,808
|
)
|
|
December 28, 2019
|
||
Operating lease cost:
|
|
||
Fixed rent expense
|
$
|
25,494
|
|
Variable rent expense
|
14
|
|
|
Finance lease cost:
|
|
||
Amortization of ROU assets
|
1,752
|
|
|
Interest expense
|
437
|
|
|
Short-term lease cost
|
6,448
|
|
|
|
|
||
Net lease cost
|
$
|
34,145
|
|
|
|
||
Lease cost - Cost of sales
|
29,388
|
|
|
Lease cost - SG&A
|
2,568
|
|
|
Lease cost - Depreciation & Amortization
|
1,752
|
|
|
Lease cost - Interest expense
|
437
|
|
|
Net lease cost
|
$
|
34,145
|
|
|
December 28, 2019
|
||
Finance lease ROU assets
|
$
|
11,388
|
|
Finance lease liabilities:
|
|
||
Current installments of long-term debt
|
1,832
|
|
|
Long-term debt
|
9,895
|
|
|
Operating
|
|
Finance
|
||||
Due in:
|
|
|
|
||||
2020
|
$
|
28,052
|
|
|
$
|
2,287
|
|
2021
|
26,051
|
|
|
2,237
|
|
||
2022
|
20,860
|
|
|
2,309
|
|
||
2023
|
11,758
|
|
|
1,963
|
|
||
2024
|
6,401
|
|
|
2,133
|
|
||
Thereafter
|
7,070
|
|
|
2,346
|
|
||
Total
|
100,192
|
|
|
13,275
|
|
||
|
|
|
|
||||
Future interest
|
(7,867
|
)
|
|
(1,548
|
)
|
||
|
|
|
|
||||
Lease liabilities recognized
|
$
|
92,325
|
|
|
$
|
11,727
|
|
Tangible assets and liabilities
|
|
||
Cash and cash equivalents
|
$
|
7,975
|
|
Accounts receivable
|
18,873
|
|
|
Inventory
|
18,477
|
|
|
Other current assets
|
69
|
|
|
Property, plant and equipment
|
48,815
|
|
|
Other assets
|
146
|
|
|
Accounts payable
|
(3,748
|
)
|
|
Cattle purchases payable
|
(7,208
|
)
|
|
Other accrued expenses and liabilities
|
(5,092
|
)
|
|
Other intangible assets
|
59,220
|
|
|
Goodwill
|
15,643
|
|
|
Net assets acquired
|
$
|
153,170
|
|
|
Weighted-Average Amortization Period
|
|
Amount
|
||
Identifiable Intangible Assets:
|
|
|
|
||
Trade names
|
20
|
|
$
|
30,040
|
|
Non-compete
|
4
|
|
2,410
|
|
|
Noncontractual customer relationships
|
15
|
|
26,770
|
|
|
Total identifiable intangible assets
|
|
|
$
|
59,220
|
|
|
December 28, 2019
|
|
December 29, 2018
|
||||
Short-term debt:
|
|
|
|
||||
Reducing revolver credit facility (a)
|
18,750
|
|
|
18,750
|
|
||
Current portion of loan costs (c)
|
(904
|
)
|
|
(723
|
)
|
||
Current portion of capital lease obligations (c)
|
1,832
|
|
|
171
|
|
||
|
19,678
|
|
|
18,198
|
|
||
Long-term debt:
|
|
|
|
||||
Reducing revolver credit facility (a)
|
387,250
|
|
|
116,250
|
|
||
Industrial Development Revenue Bonds (b)
|
2,000
|
|
|
2,000
|
|
||
Revolving credit facility (a)
|
12,696
|
|
|
45,000
|
|
||
Long-term portion of loan costs (c)
|
(1,281
|
)
|
|
(1,746
|
)
|
||
Long-term capital lease obligations (c)
|
9,895
|
|
|
135
|
|
||
|
410,560
|
|
|
161,639
|
|
||
Total debt
|
$
|
430,238
|
|
|
$
|
179,837
|
|
|
Minimum
Principal
Maturities
|
||
Fiscal year ending December:
|
|
||
2020
|
$
|
19,678
|
|
2021
|
19,708
|
|
|
2022
|
382,806
|
|
|
2023
|
1,765
|
|
|
2024
|
1,997
|
|
|
Thereafter
|
4,284
|
|
|
Total minimum principal maturities
|
$
|
430,238
|
|
|
52 weeks ended
December 28, 2019 |
|
52 weeks ended
December 29, 2018 |
|
52 weeks ended
December 30, 2017 |
||||||
Current provision:
|
|
|
|
|
|
||||||
Federal
|
$
|
1,442
|
|
|
$
|
1,233
|
|
|
$
|
764
|
|
State
|
1,338
|
|
|
1,081
|
|
|
594
|
|
|||
Foreign
|
92
|
|
|
45
|
|
|
57
|
|
|||
Total current tax expense
|
2,872
|
|
|
2,359
|
|
|
1,415
|
|
|||
Deferred provision:
|
|
|
|
|
|
||||||
Federal
|
136
|
|
|
200
|
|
|
707
|
|
|||
State
|
30
|
|
|
48
|
|
|
116
|
|
|||
Foreign
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total deferred tax expense
|
166
|
|
|
248
|
|
|
823
|
|
|||
Total income tax expense
|
$
|
3,038
|
|
|
$
|
2,607
|
|
|
$
|
2,238
|
|
|
52 weeks ended
December 28, 2019 |
|
52 weeks ended
December 29, 2018 |
|
52 weeks ended
December 30, 2017 |
||||||
Computed “expected” income tax expense
|
$
|
169,865
|
|
|
$
|
125,395
|
|
|
$
|
142,559
|
|
Passthrough “expected” income tax expense
|
(168,442
|
)
|
|
(124,152
|
)
|
|
(141,632
|
)
|
|||
State taxes, net of federal
|
1,368
|
|
|
1,129
|
|
|
710
|
|
|||
Permanent differences
|
249
|
|
|
229
|
|
|
313
|
|
|||
Rate Change
|
—
|
|
|
—
|
|
|
312
|
|
|||
Other
|
(2
|
)
|
|
6
|
|
|
(24
|
)
|
|||
Total income tax expense
|
$
|
3,038
|
|
|
$
|
2,607
|
|
|
$
|
2,238
|
|
|
December 28, 2019
|
|
December 29, 2018
|
||||
Deferred tax assets:
|
|
|
|
||||
Accounts receivable, due to allowance for doubtful accounts
|
$
|
17
|
|
|
$
|
18
|
|
Intangible assets
|
22
|
|
|
41
|
|
||
Self-insurance and workers’ compensation accruals
|
712
|
|
|
822
|
|
||
Employee benefit accruals
|
174
|
|
|
174
|
|
||
Total gross deferred tax assets
|
925
|
|
|
1,055
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Plant and equipment, principally due to differences in depreciation
|
1,112
|
|
|
1,076
|
|
||
Other
|
64
|
|
|
65
|
|
||
Total gross deferred tax liabilities
|
1,176
|
|
|
1,141
|
|
||
Net deferred tax liabilities
|
$
|
(251
|
)
|
|
$
|
(86
|
)
|
|
52 weeks ended
December 28, 2019 |
|
52 weeks ended
December 29, 2018 |
|
52 weeks ended
December 30, 2017 |
||||||
Sales to:
|
|
|
|
|
|
||||||
Beef Products, Inc. (1)
|
$
|
34,773
|
|
|
$
|
28,360
|
|
|
$
|
31,672
|
|
MF Foods USA, LLC (2)
|
57
|
|
|
—
|
|
|
—
|
|
|||
Total sales to affiliate
|
$
|
34,830
|
|
|
$
|
28,360
|
|
|
$
|
31,672
|
|
Purchases from:
|
|
|
|
|
|
||||||
Beef Products, Inc. (1)
|
$
|
12,565
|
|
|
$
|
12,750
|
|
|
$
|
13,410
|
|
Weston Importers, LTD (3)
|
656
|
|
|
—
|
|
|
—
|
|
|||
Total purchases from affiliate
|
$
|
13,221
|
|
|
$
|
12,750
|
|
|
$
|
13,410
|
|
(1)
|
Beef Products, Inc. (BPI) is an affiliate of NBPCo Holdings
|
(2)
|
MF Foods USA, LLC is a wholly owned subsidiary of Marfrig
|
(3)
|
Weston Importers, LTD is a wholly owned subsidiary of Marfrig
|
•
|
Level 1 - quoted prices in active markets for identical assets or liabilities accessible by the reporting entity.
|
•
|
Level 2 - observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
|
•
|
Level 3 - unobservable inputs for an asset or liability. Unobservable inputs should only be used to the extent observable inputs are not available.
|
Description
|
|
December 28, 2019
|
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable
Inputs (Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Other current assets — derivatives
|
|
$
|
722
|
|
|
$
|
25
|
|
|
$
|
697
|
|
|
$
|
—
|
|
Other accrued expenses and liabilities — derivatives
|
|
$
|
644
|
|
|
$
|
637
|
|
|
$
|
7
|
|
|
$
|
—
|
|
Description
|
|
December 29, 2018
|
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable
Inputs (Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Other current assets — derivatives
|
|
$
|
571
|
|
|
$
|
—
|
|
|
$
|
571
|
|
|
$
|
—
|
|
Other accrued expenses and liabilities — derivatives
|
|
$
|
575
|
|
|
$
|
566
|
|
|
$
|
9
|
|
|
$
|
—
|
|
•
|
Forward purchase contracts for cattle for use in our beef plants
|
•
|
Exchange traded futures contracts for cattle
|
•
|
Exchange traded futures contracts for agricultural products
|
|
Derivative Asset
As of December 28, 2019 |
|
Derivative Liability
As of December 28, 2019
|
||||||||
|
Balance Sheet
Location
|
|
Fair Value
|
|
Balance Sheet
Location
|
|
Fair Value
|
||||
Commodity contracts
|
Other current assets
|
|
$
|
722
|
|
|
Other accrued expenses and liabilities
|
|
$
|
644
|
|
Totals
|
|
|
$
|
722
|
|
|
|
|
$
|
644
|
|
|
Derivative Asset
As of December 29, 2018 |
|
Derivative Liability
As of December 29, 2018
|
||||||||
|
Balance Sheet
Location
|
|
Fair Value
|
|
Balance Sheet
Location
|
|
Fair Value
|
||||
Commodity contracts
|
Other current assets
|
|
$
|
571
|
|
|
Other accrued expenses and liabilities
|
|
$
|
575
|
|
Totals
|
|
|
$
|
571
|
|
|
|
|
$
|
575
|
|
|
|
|
|
Amount of Gain or (Loss)
Recognized in
Income on Derivatives
|
||||||||||
Derivatives Not Designated as
Hedging Instruments
|
|
Location of Gain or (Loss)
Recognized in Income
on Derivatives
|
|
Fiscal Year
Ended December 28, 2019 |
|
Fiscal Year
Ended December 29, 2018 |
|
Fiscal Year
Ended December 30, 2017 |
||||||
Commodity contracts
|
|
Net sales
|
|
$
|
(11
|
)
|
|
$
|
5,876
|
|
|
$
|
6,046
|
|
Commodity contracts
|
|
Cost of sales
|
|
2,443
|
|
|
4,936
|
|
|
(9,242
|
)
|
|||
Totals
|
|
|
|
$
|
2,432
|
|
|
$
|
10,812
|
|
|
$
|
(3,196
|
)
|
Berkadia Commercial Mortgage Holding LLC
2019 Consolidated Financial Statements
Contents
|
|
Page(s)
|
|
|
1
|
|
|
|
Consolidated Financial Statements
|
|
|
|
2
|
|
|
|
3
|
|
|
|
4
|
|
|
|
5
|
|
|
|
6
|
|
|
|
7-37
|
Berkadia Commercial Mortgage Holding LLC
Consolidated Balance Sheets
As of December 31, 2019 and 2018
|
(in thousands of dollars)
|
Audited
|
||||||
2019
|
|
2018
|
|||||
|
|
|
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
45,780
|
|
|
$
|
29,497
|
|
Restricted cash
|
21,447
|
|
|
7,095
|
|
||
Servicing advances and other receivables
|
130,004
|
|
|
176,766
|
|
||
Investment securities available for sale
|
25,453
|
|
|
24,511
|
|
||
Investment security at fair value
|
96,799
|
|
|
111,326
|
|
||
Loans held for sale at fair value
|
1,015,711
|
|
|
1,298,109
|
|
||
Loans held for investment at fair value
|
75,188
|
|
|
94,476
|
|
||
Loans held for investment at amortized cost, net
|
671,126
|
|
|
527,406
|
|
||
Mortgage servicing rights, net of valuation allowance of $15.1 million and $5.3 million as of December 31,2019 and 2018, respectively
|
924,419
|
|
|
874,644
|
|
||
Intangible assets, net
|
15,658
|
|
|
21,183
|
|
||
Other assets
|
119,320
|
|
|
107,897
|
|
||
Total assets
|
$
|
3,140,905
|
|
|
$
|
3,272,910
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Financial guarantee liability
|
$
|
326,083
|
|
|
$
|
311,091
|
|
Accrued compensation and benefits
|
126,762
|
|
|
113,048
|
|
||
Accounts payable and other liabilities
|
83,775
|
|
|
73,573
|
|
||
Secured borrowings
|
541,154
|
|
|
771,037
|
|
||
Commercial paper
|
1,472,000
|
|
|
1,472,000
|
|
||
Total liabilities
|
2,549,774
|
|
|
2,740,749
|
|
||
|
|
|
|
||||
Commitments and Contingencies (Note 20)
|
—
|
|
|
—
|
|
||
|
|
|
|
||||
Equity
|
|
|
|
||||
Members' equity
|
592,515
|
|
|
534,405
|
|
||
Accumulated other comprehensive loss, net of tax:
|
|
|
|
||||
Net unrealized gain (loss) on investment securities
|
360
|
|
|
(599
|
)
|
||
Net foreign currency translation adjustment
|
(1,744
|
)
|
|
(1,645
|
)
|
||
Total accumulated other comprehensive loss, net of tax
|
(1,384
|
)
|
|
(2,244
|
)
|
||
Total equity
|
591,131
|
|
|
532,161
|
|
||
Total liabilities and equity
|
$
|
3,140,905
|
|
|
$
|
3,272,910
|
|
Berkadia Commercial Mortgage Holding LLC
Consolidated Statements of Income
Years Ended December 31, 2019, 2018 and 2017
|
|
Audited
|
|
Unaudited
|
||||||||
(in thousands of dollars)
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
Revenues and Other Income
|
|
|
|
|
|
||||||
Mortgage servicing fees
|
$
|
211,132
|
|
|
$
|
190,933
|
|
|
$
|
160,822
|
|
Net gains
|
300,087
|
|
|
282,749
|
|
|
252,761
|
|
|||
Interest income
|
142,939
|
|
|
158,843
|
|
|
137,832
|
|
|||
Loan origination fees
|
159,913
|
|
|
162,760
|
|
|
149,104
|
|
|||
Brokerage commission income
|
93,665
|
|
|
87,453
|
|
|
82,551
|
|
|||
Other income
|
71,428
|
|
|
57,624
|
|
|
41,778
|
|
|||
Total revenues and other income
|
979,164
|
|
|
940,362
|
|
|
824,848
|
|
|||
|
|
|
|
|
|
||||||
Expenses
|
|
|
|
|
|
||||||
Salaries, incentive compensation and employee benefits
|
388,602
|
|
|
364,384
|
|
|
323,984
|
|
|||
Depreciation and amortization
|
170,062
|
|
|
157,249
|
|
|
144,027
|
|
|||
Impairment (recovery) of mortgage servicing rights, net
|
9,763
|
|
|
(14,344
|
)
|
|
(8,012
|
)
|
|||
Brokerage commission expense
|
70,630
|
|
|
64,165
|
|
|
55,994
|
|
|||
Interest expense
|
44,639
|
|
|
54,479
|
|
|
42,282
|
|
|||
Other expenses
|
78,206
|
|
|
76,658
|
|
|
72,671
|
|
|||
Total expenses
|
761,902
|
|
|
702,591
|
|
|
630,946
|
|
|||
|
|
|
|
|
|
||||||
Income before income tax provision
|
217,262
|
|
|
237,771
|
|
|
193,902
|
|
|||
Income tax provision
|
2,883
|
|
|
3,064
|
|
|
3,172
|
|
|||
Net income
|
$
|
214,379
|
|
|
$
|
234,707
|
|
|
$
|
190,730
|
|
Berkadia Commercial Mortgage Holding LLC
Consolidated Statements of Comprehensive Income
Years Ended December 31, 2019, 2018 and 2017
|
(in thousands of dollars)
|
Audited
|
|
Unaudited
|
||||||||
2019
|
|
2018
|
|
2017
|
|||||||
|
|
|
|
|
|
||||||
Net income
|
$
|
214,379
|
|
|
$
|
234,707
|
|
|
$
|
190,730
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Net unrealized holding gains (losses) on investments arising during the period, net of tax
|
959
|
|
|
675
|
|
|
(1,106
|
)
|
|||
Less: reclassification adjustment for net gains (losses) included in net income (1), net of tax
|
—
|
|
|
(751
|
)
|
|
139
|
|
|||
Net change in unrealized holding gains (losses) on investments, net of tax
|
959
|
|
|
(76
|
)
|
|
(967
|
)
|
|||
|
|
|
|
|
|
||||||
Net foreign currency translation adjustments arising during the period, net of tax
|
(99
|
)
|
|
(917
|
)
|
|
377
|
|
|||
Other comprehensive income (loss), net of tax
|
860
|
|
|
(993
|
)
|
|
(590
|
)
|
|||
Comprehensive income
|
$
|
215,239
|
|
|
$
|
233,714
|
|
|
$
|
190,140
|
|
(1)
|
Reported as a component of net gains in the consolidated statements of income.
|
Berkadia Commercial Mortgage Holding LLC
Consolidated Statements of Changes in Equity
Years Ended December 31, 2019, 2018 and 2017
|
(in thousands of dollars)
|
Members'
Equity
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
|
||||||
Balance, January 1, 2017 (Unaudited)
|
$
|
427,756
|
|
|
$
|
(661
|
)
|
|
$
|
427,095
|
|
Net income
|
190,730
|
|
|
—
|
|
|
190,730
|
|
|||
Other comprehensive loss
|
—
|
|
|
(590
|
)
|
|
(590
|
)
|
|||
Dividends paid
|
(145,977
|
)
|
|
—
|
|
|
(145,977
|
)
|
|||
Balance, December 31, 2017 (Unaudited)
|
472,509
|
|
|
(1,251
|
)
|
|
471,258
|
|
|||
|
|
|
|
|
|
||||||
Net income
|
234,707
|
|
|
—
|
|
|
234,707
|
|
|||
Other comprehensive loss
|
—
|
|
|
(993
|
)
|
|
(993
|
)
|
|||
Dividends paid
|
(172,811
|
)
|
|
—
|
|
|
(172,811
|
)
|
|||
Balance, December 31, 2018 (Audited)
|
534,405
|
|
|
(2,244
|
)
|
|
532,161
|
|
|||
|
|
|
|
|
|
||||||
Net income
|
214,379
|
|
|
—
|
|
|
214,379
|
|
|||
Other comprehensive income
|
—
|
|
|
860
|
|
|
860
|
|
|||
Dividends paid
|
(156,269
|
)
|
|
—
|
|
|
(156,269
|
)
|
|||
Balance, December 31, 2019 (Audited)
|
$
|
592,515
|
|
|
$
|
(1,384
|
)
|
|
$
|
591,131
|
|
Berkadia Commercial Mortgage Holding LLC
Consolidated Statements of Cash Flows
Years Ended December 31, 2019, 2018 and 2017
|
(in thousands of dollars)
|
Audited
|
|
Unaudited
|
||||||||
2019
|
|
2018
|
|
2017
|
|||||||
|
|
|
|
|
|
||||||
Operating Activities
|
|
|
|
|
|
||||||
Net income
|
$
|
214,379
|
|
|
$
|
234,707
|
|
|
$
|
190,730
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Net gains
|
(300,087
|
)
|
|
(282,749
|
)
|
|
(252,761
|
)
|
|||
Depreciation and amortization
|
170,062
|
|
|
157,249
|
|
|
144,027
|
|
|||
Impairment (recovery) of mortgage servicing rights, net
|
9,763
|
|
|
(14,344
|
)
|
|
(8,012
|
)
|
|||
Other adjustments to net income
|
2,930
|
|
|
(69
|
)
|
|
3,936
|
|
|||
Net change in assets and liabilities which provided (used) cash:
|
|
|
|
|
|
||||||
Servicing advances and other receivables
|
46,596
|
|
|
97,807
|
|
|
(51,920
|
)
|
|||
Other assets
|
(16,423
|
)
|
|
(29,956
|
)
|
|
1,808
|
|
|||
Accrued compensation and benefits
|
13,725
|
|
|
14,331
|
|
|
14,492
|
|
|||
Accounts payable and other liabilities
|
(5,164
|
)
|
|
(5,504
|
)
|
|
(5,563
|
)
|
|||
Proceeds from sales of loans held for sale
|
18,374,700
|
|
|
17,918,376
|
|
|
17,416,515
|
|
|||
Origination of loans held for sale
|
(17,994,236
|
)
|
|
(18,240,030
|
)
|
|
(16,444,968
|
)
|
|||
Net cash provided by (used in) operating activities
|
516,245
|
|
|
(150,182
|
)
|
|
1,008,284
|
|
|||
|
|
|
|
|
|
||||||
Investing Activities
|
|
|
|
|
|
||||||
Purchases of property and equipment
|
(5,546
|
)
|
|
(9,072
|
)
|
|
(7,135
|
)
|
|||
Proceeds from sales of and repayments of loans held for investment
|
482,300
|
|
|
600,527
|
|
|
519,882
|
|
|||
Origination of loans held for investment
|
(601,248
|
)
|
|
(403,832
|
)
|
|
(611,043
|
)
|
|||
Purchases of investment securities available for sale
|
—
|
|
|
—
|
|
|
(35,202
|
)
|
|||
Proceeds from maturities of investment securities available for sale
|
—
|
|
|
—
|
|
|
17,536
|
|
|||
Proceeds from sales of investment securities available for sale
|
—
|
|
|
24,483
|
|
|
—
|
|
|||
Proceeds received from investment security at fair value
|
27,586
|
|
|
35,018
|
|
|
45,943
|
|
|||
Purchases of mortgage servicing rights
|
(1,012
|
)
|
|
—
|
|
|
—
|
|
|||
Purchases of equity-method investments
|
—
|
|
|
(14,000
|
)
|
|
—
|
|
|||
Other investing activities, net
|
(200
|
)
|
|
(100
|
)
|
|
(5,195
|
)
|
|||
Net cash (used in) provided by investing activities
|
(98,120
|
)
|
|
233,024
|
|
|
(75,214
|
)
|
|||
|
|
|
|
|
|
||||||
Financing Activities
|
|
|
|
|
|
||||||
Net (decrease) increase in secured borrowings
|
(231,796
|
)
|
|
53,053
|
|
|
(843,814
|
)
|
|||
Proceeds from issuance of commercial paper
|
1,772,000
|
|
|
1,472,000
|
|
|
1,472,000
|
|
|||
Repayments of commercial paper
|
(1,772,000
|
)
|
|
(1,472,000
|
)
|
|
(1,472,000
|
)
|
|||
Contingent consideration payments
|
(1,428
|
)
|
|
(1,774
|
)
|
|
(1,032
|
)
|
|||
Dividends paid
|
(156,269
|
)
|
|
(172,811
|
)
|
|
(145,977
|
)
|
|||
Net cash used in financing activities
|
(389,493
|
)
|
|
(121,532
|
)
|
|
(990,823
|
)
|
|||
|
|
|
|
|
|
||||||
Effect of Foreign Exchange Rates on Cash
|
2,003
|
|
|
5,439
|
|
|
(3,433
|
)
|
|||
Net increase (decrease) in Cash and cash equivalents and Restricted cash
|
30,635
|
|
|
(33,251
|
)
|
|
(61,186
|
)
|
|||
Cash and cash equivalents and Restricted cash, January 1
|
36,592
|
|
|
69,843
|
|
|
131,029
|
|
|||
Cash and cash equivalents and Restricted cash, December 31
|
$
|
67,227
|
|
|
$
|
36,592
|
|
|
$
|
69,843
|
|
|
|
|
|
|
|
||||||
Supplemental Disclosures of Cash Flow Information
|
|
|
|
|
|
||||||
Income taxes paid
|
$
|
1,889
|
|
|
$
|
2,910
|
|
|
$
|
2,730
|
|
Interest paid
|
45,530
|
|
|
53,683
|
|
|
37,981
|
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements
(2017 not covered by the auditor’s report)
|
1.
|
Organization and Operations
|
2.
|
Risks and Uncertainties
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
3.
|
Summary of Significant Accounting Policies
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
4.
|
Net Worth and Liquidity Requirements
|
(in thousands of dollars)
|
2019
|
|
2018
|
||||||||||
Net Worth
|
Minimum
Net Worth
Requirement
|
|
Net Worth
|
Minimum
Net Worth
Requirement
|
|||||||||
|
|
|
|
|
|
||||||||
HUD
|
$
|
895,435
|
|
$
|
2,500
|
|
|
$
|
793,321
|
|
$
|
2,500
|
|
Ginnie Mae
|
895,435
|
|
25,241
|
|
|
793,321
|
|
24,563
|
|
||||
Freddie Mac
|
920,895
|
|
5,000
|
|
|
810,137
|
|
5,000
|
|
||||
Fannie Mae
|
1,082,883
|
|
148,756
|
|
|
970,345
|
|
135,393
|
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
5.
|
Net Gains
|
|
Audited
|
|
Unaudited
|
||||||||
(in thousands of dollars)
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
Loans held for sale at fair value
|
$
|
88,425
|
|
|
$
|
63,049
|
|
|
$
|
62,317
|
|
Loans held for investment at fair value
|
4,596
|
|
|
(4,405
|
)
|
|
(2,694
|
)
|
|||
Originated mortgage servicing rights
|
214,936
|
|
|
249,541
|
|
|
261,920
|
|
|||
Derivatives gains (losses)
|
(1,156
|
)
|
|
1,897
|
|
|
(3,772
|
)
|
|||
Net change in financial guarantee liability
|
(14,992
|
)
|
|
(30,502
|
)
|
|
(85,090
|
)
|
|||
Investment security at fair value
|
13,059
|
|
|
7,257
|
|
|
26,389
|
|
|||
Other
|
(4,781
|
)
|
|
(4,088
|
)
|
|
(6,309
|
)
|
|||
Total
|
$
|
300,087
|
|
|
$
|
282,749
|
|
|
$
|
252,761
|
|
6.
|
Servicing Advances and Other Receivables
|
(in thousands of dollars)
|
2019
|
|
2018
|
||||
|
|
|
|
||||
Principal and interest advances
|
$
|
57,624
|
|
|
$
|
84,306
|
|
Tax and insurance advances
|
32,294
|
|
|
31,736
|
|
||
Total servicing advances
|
89,918
|
|
|
116,042
|
|
||
Proceeds receivable from loan sales and payoffs
|
—
|
|
|
16,845
|
|
||
Service fee receivable
|
19,064
|
|
|
18,049
|
|
||
Interest receivable
|
12,147
|
|
|
14,502
|
|
||
Other
|
8,875
|
|
|
11,328
|
|
||
Total
|
$
|
130,004
|
|
|
$
|
176,766
|
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
7.
|
Investment Securities Available for Sale
|
(in thousands of dollars)
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
(Losses)
|
|
Fair
Value
|
||||||||
|
|
|
|
|
|
|
|
||||||||
U.S. Treasuries
|
$
|
25,088
|
|
|
$
|
365
|
|
|
$
|
—
|
|
|
$
|
25,453
|
|
Total
|
$
|
25,088
|
|
|
$
|
365
|
|
|
$
|
—
|
|
|
$
|
25,453
|
|
(in thousands of dollars)
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
(Losses)
|
|
Fair
Value
|
||||||||
|
|
|
|
|
|
|
|
||||||||
U.S. Treasuries
|
$
|
25,109
|
|
|
$
|
—
|
|
|
$
|
(598
|
)
|
|
$
|
24,511
|
|
Total
|
$
|
25,109
|
|
|
$
|
—
|
|
|
$
|
(598
|
)
|
|
$
|
24,511
|
|
|
Audited
|
|
Unaudited
|
||||||||
(in thousands of dollars)
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
Gross realized gains
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
141
|
|
Gross realized (losses)
|
—
|
|
|
(756
|
)
|
|
—
|
|
|||
Net realized gains (losses)
|
$
|
—
|
|
|
$
|
(756
|
)
|
|
$
|
141
|
|
Proceeds received
|
$
|
—
|
|
|
$
|
24,483
|
|
|
$
|
17,536
|
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
(in thousands of dollars)
|
Amortized
Cost
|
|
Fair Value
|
||||
|
|
|
|
||||
Due in one year or less
|
$
|
—
|
|
|
$
|
—
|
|
Due after one year through five years
|
25,088
|
|
|
25,453
|
|
||
Due after five years through ten years
|
—
|
|
|
—
|
|
||
Due after ten years
|
—
|
|
|
—
|
|
||
Total
|
$
|
25,088
|
|
|
$
|
25,453
|
|
8.
|
Investment Security at Fair Value
|
(in thousands of dollars)
|
2019
|
|
2018
|
||||
|
|
|
|
||||
Fair value at beginning of period
|
$
|
111,326
|
|
|
$
|
139,087
|
|
Proceeds received
|
(27,586
|
)
|
|
(35,018
|
)
|
||
Total net realized/unrealized gains
|
13,059
|
|
|
7,257
|
|
||
Fair value at end of period
|
$
|
96,799
|
|
|
$
|
111,326
|
|
9.
|
Loans Held for Sale at Fair Value
|
(in thousands of dollars)
|
2019
|
|
2018
|
||||
|
|
|
|
||||
Permanent loans:
|
|
|
|
||||
Freddie Mac
|
$
|
256,107
|
|
|
$
|
899,678
|
|
Fannie Mae
|
640,953
|
|
|
276,823
|
|
||
FHA
|
63,760
|
|
|
61,755
|
|
||
FHA construction loans
|
54,891
|
|
|
59,853
|
|
||
Total
|
$
|
1,015,711
|
|
|
$
|
1,298,109
|
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
(in thousands of dollars)
|
Unpaid
Principal
Balance
|
Unrealized
Gains
|
Fair Value
|
||||||
|
|
|
|
||||||
Balance as of December 31, 2019
|
$
|
985,210
|
|
$
|
30,501
|
|
$
|
1,015,711
|
|
Balance as of December 31, 2018
|
$
|
1,277,133
|
|
$
|
20,976
|
|
$
|
1,298,109
|
|
(in thousands of dollars)
|
2019
|
|||||
Carrying
Amount
|
|
Percent of
Portfolio
|
||||
|
|
|
|
|||
Maryland
|
$
|
237,545
|
|
|
23.4
|
%
|
Texas
|
177,230
|
|
|
17.4
|
|
|
Georgia
|
105,865
|
|
|
10.4
|
|
|
Other
|
495,071
|
|
|
48.8
|
|
|
Total
|
$
|
1,015,711
|
|
|
100.0
|
%
|
(in thousands of dollars)
|
2018
|
|||||
Carrying Amount
|
|
Percent of Portfolio
|
||||
|
|
|
|
|||
New York
|
$
|
208,229
|
|
|
16.0
|
%
|
California
|
152,484
|
|
|
11.7
|
|
|
Florida
|
137,068
|
|
|
10.6
|
|
|
Other
|
800,328
|
|
|
61.7
|
|
|
Total
|
$
|
1,298,109
|
|
|
100.0
|
%
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
10.
|
Loans Held for Investment at Amortized Cost
|
(in thousands of dollars)
|
2019
|
|
2018
|
||||
|
|
|
|
||||
Adjustable rate
|
$
|
631,592
|
|
|
$
|
485,349
|
|
Fixed rate
|
41,894
|
|
|
45,351
|
|
||
Total
|
673,486
|
|
|
530,700
|
|
||
Allowance for loan losses
|
(2,360
|
)
|
|
(3,294
|
)
|
||
Total
|
$
|
671,126
|
|
|
$
|
527,406
|
|
(in thousands of dollars)
|
2019
|
|||||
Carrying
Amount
|
|
Percent of
Portfolio
|
||||
|
|
|
|
|||
Multifamily
|
$
|
342,859
|
|
|
50.9
|
%
|
Healthcare
|
286,072
|
|
|
42.5
|
|
|
Other
|
44,555
|
|
|
6.6
|
|
|
Total
|
$
|
673,486
|
|
|
100.0
|
%
|
(in thousands of dollars)
|
2018
|
|||||
Carrying Amount
|
|
Percent of Portfolio
|
||||
|
|
|
|
|||
Healthcare
|
$
|
251,561
|
|
|
47.4
|
%
|
Multifamily
|
216,887
|
|
|
40.9
|
|
|
Other
|
62,252
|
|
|
11.7
|
|
|
Total
|
$
|
530,700
|
|
|
100.0
|
%
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
(in thousands of dollars)
|
2019
|
|||||
Carrying
Amount
|
|
Percent of
Portfolio
|
||||
|
|
|
|
|||
New York
|
$
|
144,529
|
|
|
21.5
|
%
|
Florida
|
90,443
|
|
|
13.4
|
|
|
Virginia
|
74,759
|
|
|
11.1
|
|
|
Other
|
363,755
|
|
|
54.0
|
|
|
Total
|
$
|
673,486
|
|
|
100.0
|
%
|
|
2018
|
|||||
(in thousands of dollars)
|
Carrying
Amount
|
|
Percent of
Portfolio
|
|||
|
|
|
|
|||
Florida
|
$
|
93,228
|
|
|
17.6
|
%
|
California
|
88,434
|
|
|
16.7
|
|
|
Other
|
349,038
|
|
|
65.7
|
|
|
Total
|
$
|
530,700
|
|
|
100.0
|
%
|
11.
|
Mortgage Servicing Rights
|
(in thousands of dollars)
|
2019
|
|
2018
|
||||
|
|
|
|
||||
Balance at beginning of period
|
$
|
874,644
|
|
|
$
|
752,968
|
|
Additions
|
215,939
|
|
|
249,541
|
|
||
Amortization
|
(156,401
|
)
|
|
(142,209
|
)
|
||
Total
|
934,182
|
|
|
860,300
|
|
||
Net change in valuation allowance
|
(9,763
|
)
|
|
14,344
|
|
||
Balance at end of period
|
$
|
924,419
|
|
|
$
|
874,644
|
|
(in thousands of dollars)
|
2019
|
|
2018
|
||||
|
|
|
|
||||
Balance at beginning of period
|
$
|
5,317
|
|
|
$
|
19,661
|
|
Aggregate impairments
|
19,121
|
|
|
5,317
|
|
||
Aggregate recoveries
|
(9,358
|
)
|
|
(19,661
|
)
|
||
Balance at end of period
|
$
|
15,080
|
|
|
$
|
5,317
|
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
(in thousands of dollars)
|
Carrying
Amount
|
Fair Value
|
||||
|
|
|
||||
December 31, 2019
|
$
|
924,419
|
|
$
|
1,015,342
|
|
December 31, 2018
|
$
|
874,644
|
|
$
|
953,745
|
|
12.
|
Loans Serviced
|
(in thousands of dollars)
|
Number of
Loans
|
|
Unpaid
Principal
Balance
|
|
Weighted
Average Rate
|
|
Weighted
Average
Remaining
Maturity
(years)
|
||||
|
|
|
|
|
|
|
|
||||
Fee for service
|
9,971
|
|
|
$
|
163,798,837
|
|
|
4.42
|
%
|
|
7.6
|
CMBS (1)
|
1,062
|
|
|
9,542,181
|
|
|
4.75
|
|
|
4.8
|
|
Agency
|
5,736
|
|
|
84,839,325
|
|
|
4.11
|
|
|
10.6
|
|
Other
|
1,717
|
|
|
20,697,311
|
|
|
4.27
|
|
|
11.0
|
|
Total
|
18,486
|
|
|
$
|
278,877,654
|
|
|
4.33
|
%
|
|
8.7
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
(in thousands of dollars)
|
Number of
Loans
|
|
Unpaid
Principal
Balance
|
|
Weighted
Average Rate
|
|
Weighted
Average
Remaining
Maturity
(years)
|
||||
|
|
|
|
|
|
|
|
||||
Fee for service
|
9,690
|
|
|
$
|
131,940,158
|
|
|
4.57
|
%
|
|
7.9
|
CMBS (1)
|
1,471
|
|
|
10,670,869
|
|
|
5.10
|
|
|
4.3
|
|
Agency
|
5,227
|
|
|
75,917,602
|
|
|
4.24
|
|
|
10.7
|
|
Other
|
1,570
|
|
|
16,824,221
|
|
|
4.46
|
|
|
10.5
|
|
Total
|
17,958
|
|
|
$
|
235,352,850
|
|
|
4.48
|
%
|
|
8.8
|
(1)
|
The Company is the named special or designated sub-special servicer on approximately $2.0 billion and $0.9 billion of loans for which it also acts as the primary or master servicer as of December 31, 2019 and 2018, respectively. Such loans are reported as a component of CMBS in the tables above.
|
2019
|
|
2018
|
||||||||||||
|
Carrying
Amount
|
|
Percent of
Portfolio
|
|
|
Carrying
Amount
|
|
Percent of
Portfolio
|
||||||
|
|
|
|
|
|
|
|
|
||||||
California
|
$
|
39,088,380
|
|
|
14.0
|
%
|
|
California
|
$
|
36,598,593
|
|
|
15.6
|
%
|
New York
|
23,837,215
|
|
|
8.5
|
|
|
New York
|
22,036,892
|
|
|
9.4
|
|
||
Texas
|
23,420,180
|
|
|
8.4
|
|
|
Texas
|
21,491,325
|
|
|
9.1
|
|
||
Florida
|
19,853,396
|
|
|
7.1
|
|
|
Florida
|
18,510,083
|
|
|
7.9
|
|
||
Illinois
|
9,545,461
|
|
|
3.4
|
|
|
Virginia
|
9,362,652
|
|
|
4.0
|
|
||
Other
|
163,133,022
|
|
|
58.6
|
|
|
Other
|
127,353,305
|
|
|
54.0
|
|
||
Total
|
$
|
278,877,654
|
|
|
100.0
|
%
|
|
Total
|
$
|
235,352,850
|
|
|
100.0
|
%
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
13.
|
Intangible Assets
|
2019
|
|
2018
|
||||||||||||||||||||
Original
Balance
|
|
Accumulated
Amortization
|
|
Carrying
Value
|
|
Original
Balance
|
|
Accumulated
Amortization
|
|
Carrying
Value
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
$
|
49,237
|
|
|
$
|
(33,579
|
)
|
|
$
|
15,658
|
|
|
$
|
49,237
|
|
|
$
|
(28,054
|
)
|
|
$
|
21,183
|
|
14.
|
Other Assets
|
(in thousands of dollars)
|
2019
|
|
2018
|
||||
|
|
|
|
||||
Property, equipment and leasehold improvements at cost
|
$
|
62,837
|
|
|
$
|
58,271
|
|
Accumulated depreciation and amortization
|
(41,405
|
)
|
|
(34,025
|
)
|
||
Property, equipment and leasehold improvements, net
|
21,432
|
|
|
24,246
|
|
||
Prepaid expenses
|
63,535
|
|
|
50,440
|
|
||
Derivative assets
|
7,726
|
|
|
4,931
|
|
||
Loans receivable from related parties
|
10,990
|
|
|
9,920
|
|
||
Equity-method investments
|
12,324
|
|
|
12,979
|
|
||
Other
|
3,313
|
|
|
5,381
|
|
||
Total
|
$
|
119,320
|
|
|
$
|
107,897
|
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
15.
|
Accounts Payable and Other Liabilities
|
(in thousands of dollars)
|
2019
|
|
2018
|
||||
|
|
|
|
||||
General accounts payable and accrued expenses
|
$
|
26,903
|
|
|
$
|
31,706
|
|
Good faith and escrow deposits
|
32,997
|
|
|
22,913
|
|
||
Contingent liabilities
|
13,331
|
|
|
12,260
|
|
||
Derivative liabilities
|
3,722
|
|
|
1,941
|
|
||
Due to Agencies
|
5,118
|
|
|
4,251
|
|
||
Other
|
1,704
|
|
|
502
|
|
||
Total
|
$
|
83,775
|
|
|
$
|
73,573
|
|
16.
|
Secured Borrowings and Commercial Paper
|
|
Amount
|
|
Weighted Average Rate
|
||||||||||
(in thousands of dollars)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||
|
|
|
|
|
|
|
|
||||||
Secured borrowings
|
$
|
541,154
|
|
|
$
|
771,037
|
|
|
2.93
|
%
|
|
3.77
|
%
|
Commercial paper
|
1,472,000
|
|
|
1,472,000
|
|
|
0.05
|
|
|
0.06
|
|
||
Total
|
$
|
2,013,154
|
|
|
$
|
2,243,037
|
|
|
0.82
|
%
|
|
1.34
|
%
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
17.
|
Income Taxes
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
|
Audited
|
|
Unaudited
|
||||||||
(in thousands of dollars)
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
Current income tax provision:
|
|
|
|
|
|
||||||
Federal
|
$
|
428
|
|
|
$
|
150
|
|
|
$
|
1,056
|
|
State
|
1,635
|
|
|
696
|
|
|
1,001
|
|
|||
Foreign
|
792
|
|
|
1,623
|
|
|
1,067
|
|
|||
Total current income tax provision
|
2,855
|
|
|
2,469
|
|
|
3,124
|
|
|||
|
|
|
|
|
|
||||||
Deferred income tax provision (benefit):
|
|
|
|
|
|
||||||
Federal
|
(264
|
)
|
|
253
|
|
|
(261
|
)
|
|||
State
|
327
|
|
|
342
|
|
|
328
|
|
|||
Foreign
|
(35
|
)
|
|
—
|
|
|
(19
|
)
|
|||
Total deferred income tax provision (benefit)
|
28
|
|
|
595
|
|
|
48
|
|
|||
Total income tax provision
|
$
|
2,883
|
|
|
$
|
3,064
|
|
|
$
|
3,172
|
|
|
Audited
|
|
Unaudited
|
||||||||
(in thousands of dollars)
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
Income tax expense at the U.S. federal statutory rate
|
$
|
45,625
|
|
|
$
|
49,932
|
|
|
$
|
67,866
|
|
Impact of change in federal corporate tax rate
|
—
|
|
|
—
|
|
|
521
|
|
|||
Income not subject to federal income tax
|
(44,862
|
)
|
|
(49,064
|
)
|
|
(66,621
|
)
|
|||
State income taxes
|
1,946
|
|
|
989
|
|
|
1,275
|
|
|||
Other, net
|
174
|
|
|
1,207
|
|
|
131
|
|
|||
Total income tax provision
|
$
|
2,883
|
|
|
$
|
3,064
|
|
|
$
|
3,172
|
|
(in thousands of dollars)
|
2019
|
|
2018
|
||||
|
|
|
|
||||
Total deferred tax assets
|
$
|
3,928
|
|
|
$
|
3,340
|
|
Total deferred tax liabilities
|
(4,709
|
)
|
|
(3,094
|
)
|
||
Deferred tax assets, net
|
$
|
(781
|
)
|
|
$
|
246
|
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
United States – federal
|
2016 and forward
|
United States – states
|
2015 and forward
|
India
|
2017 and forward
|
18.
|
Fair Value Measurements of Assets and Liabilities
|
Level 1
|
Fair value is based on unadjusted quoted prices in active markets for identical assets or liabilities.
|
Level 2
|
Fair value is based on significant inputs other than Level 1 inputs, which are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability through corroboration with observable market data. Level 2 inputs include quoted market prices for identical or similar assets and liabilities in less active markets.
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
Level 3
|
Fair value is based on at least one or more significant unobservable inputs for the asset or liability. These inputs reflect the Company’s view about the assumptions market participants would use in pricing the asset or liability.
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
(in thousands of dollars)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Balance as of December 31,
2019 |
||||||||
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Loans held for sale at fair value
|
$
|
—
|
|
|
$
|
1,015,711
|
|
|
$
|
—
|
|
|
$
|
1,015,711
|
|
Loans held for investment at fair value
|
—
|
|
|
75,188
|
|
|
—
|
|
|
75,188
|
|
||||
Investment securities available for sale
|
25,453
|
|
|
—
|
|
|
—
|
|
|
25,453
|
|
||||
Investment security at fair value
|
—
|
|
|
—
|
|
|
96,799
|
|
|
96,799
|
|
||||
Derivative assets:
|
|
|
|
|
|
|
|
||||||||
Interest rate lock commitments
|
—
|
|
|
—
|
|
|
6,813
|
|
|
6,813
|
|
||||
Forward sale commitments
|
—
|
|
|
912
|
|
|
—
|
|
|
912
|
|
||||
Total assets
|
$
|
25,453
|
|
|
$
|
1,091,811
|
|
|
$
|
103,612
|
|
|
$
|
1,220,876
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities:
|
|
|
|
|
|
|
|
||||||||
Forward sale commitments
|
$
|
—
|
|
|
$
|
3,722
|
|
|
$
|
—
|
|
|
$
|
3,722
|
|
Total liabilities
|
$
|
—
|
|
|
$
|
3,722
|
|
|
$
|
—
|
|
|
$
|
3,722
|
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
(in thousands of dollars)
|
Loans Held
for Investment
at Fair Value
|
|
Investment
Security at
Fair Value
|
|
Interest
Rate Lock
Commitments
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Beginning balance as of January 1, 2019
|
$
|
—
|
|
|
$
|
111,326
|
|
|
$
|
3,346
|
|
|
$
|
114,672
|
|
Settlements
|
—
|
|
|
(27,586
|
)
|
|
—
|
|
|
(27,586
|
)
|
||||
Total net realized/unrealized gains:
|
|
|
|
|
|
|
|
||||||||
Included in earnings
|
—
|
|
|
13,059
|
|
|
3,467
|
|
|
16,526
|
|
||||
Net transfers into/(out of) Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Ending balance as of December 31, 2019
|
$
|
—
|
|
|
$
|
96,799
|
|
|
$
|
6,813
|
|
|
$
|
103,612
|
|
The amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets still held as of December 31, 2019
|
$
|
—
|
|
|
$
|
(6,067
|
)
|
|
$
|
6,813
|
|
|
$
|
746
|
|
(in thousands of dollars)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Balance as of December 31, 2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Loans held for sale at fair value
|
$
|
—
|
|
|
$
|
1,298,109
|
|
|
$
|
—
|
|
|
$
|
1,298,109
|
|
Loans held for investment at fair value
|
—
|
|
|
94,476
|
|
|
—
|
|
|
94,476
|
|
||||
Investment securities available for sale
|
24,511
|
|
|
—
|
|
|
—
|
|
|
24,511
|
|
||||
Investment security at fair value
|
—
|
|
|
—
|
|
|
111,326
|
|
|
111,326
|
|
||||
Derivative assets:
|
|
|
|
|
|
|
|
||||||||
Interest rate lock commitments
|
—
|
|
|
—
|
|
|
3,346
|
|
|
3,346
|
|
||||
Forward sale commitments
|
—
|
|
|
1,585
|
|
|
—
|
|
|
1,585
|
|
||||
Total assets
|
$
|
24,511
|
|
|
$
|
1,394,170
|
|
|
$
|
114,672
|
|
|
$
|
1,533,353
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities:
|
|
|
|
|
|
|
|
||||||||
Forward sale commitments
|
$
|
—
|
|
|
$
|
1,941
|
|
|
$
|
—
|
|
|
$
|
1,941
|
|
Total liabilities
|
$
|
—
|
|
|
$
|
1,941
|
|
|
$
|
—
|
|
|
$
|
1,941
|
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
(in thousands of dollars)
|
Fair Value
|
Valuation Technique
|
Significant Unobservable Input(s)
|
Value/Range
|
||
|
|
|
|
|
||
Assets
|
|
|
||||
Investment security at fair value
|
$
|
111,326
|
|
DCF1
|
Discount rate Prepayment speed Net Credit Losses
|
9.00%
14.99% - 61.00%
0.42% - 9.38%
|
|
|
|
|
|
||
Derivative assets:
|
|
|
|
|
||
Interest rate lock commitments
|
3,346
|
|
DCF1
|
Discount rate
Prepayment speed
|
9.69% - 11.69%
2.02% - 38.98%
|
|
|
|
|
|
|
||
|
1 discounted cash flow
|
|
(in thousands of dollars)
|
Loans Held
for Investment
at Fair Value
|
|
Investment
Security
at Fair Value
|
|
Interest
Rate Lock
Commitments
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Beginning balance as of January 1, 2018
|
$
|
4,583
|
|
|
$
|
139,087
|
|
|
$
|
6,116
|
|
|
$
|
149,786
|
|
Settlements
|
(4,625
|
)
|
|
(35,018
|
)
|
|
—
|
|
|
(39,643
|
)
|
||||
Total net realized/unrealized gains:
|
|
|
|
|
|
|
|
||||||||
Included in earnings
|
42
|
|
|
7,257
|
|
|
(2,770
|
)
|
|
4,529
|
|
||||
Net transfers into/(out of) Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Ending balance as of December 31, 2018
|
$
|
—
|
|
|
$
|
111,326
|
|
|
$
|
3,346
|
|
|
$
|
114,672
|
|
The amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets still held as of December 31,2018
|
$
|
—
|
|
|
$
|
(16,696
|
)
|
|
$
|
3,346
|
|
|
$
|
(13,350
|
)
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
(in thousands of dollars)
|
2019
|
|
2018
|
||||||||||
Carrying
Amount
|
Fair
Value
|
|
Carrying
Amount
|
Fair
Value
|
|||||||||
|
|
|
|
|
|
||||||||
Financial Assets
|
|
|
|
|
|
||||||||
Investment securities available for sale
|
$
|
25,453
|
|
$
|
25,453
|
|
|
$
|
24,511
|
|
$
|
24,511
|
|
Investment security at fair value
|
96,799
|
|
96,799
|
|
|
111,326
|
|
111,326
|
|
||||
Loans held for sale at fair value
|
1,015,711
|
|
1,015,711
|
|
|
1,298,109
|
|
1,298,109
|
|
||||
Loans held for investment at fair value
|
75,188
|
|
75,188
|
|
|
94,476
|
|
94,476
|
|
||||
Loans held for investment at amortized cost, net
|
671,126
|
|
671,918
|
|
|
527,406
|
|
527,516
|
|
||||
Loans receivable from related parties
|
10,990
|
|
11,053
|
|
|
9,920
|
|
9,685
|
|
||||
Derivative assets
|
7,725
|
|
7,725
|
|
|
4,575
|
|
4,575
|
|
||||
|
|
|
|
|
|
||||||||
Financial Liabilities
|
|
|
|
|
|
||||||||
Financial guarantee liability
|
326,083
|
|
387,543
|
|
|
311,091
|
|
346,219
|
|
||||
Secured borrowings
|
541,154
|
|
541,154
|
|
|
771,037
|
|
771,037
|
|
||||
Commercial paper
|
1,472,000
|
|
1,472,000
|
|
|
1,472,000
|
|
1,472,000
|
|
||||
Derivative liabilities
|
3,722
|
|
3,722
|
|
|
1,585
|
|
1,585
|
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
19.
|
Financial Guarantee Liability
|
20.
|
Commitments and Contingencies
|
(in thousands of dollars)
|
2019
|
|
2018
|
||||
|
|
|
|
||||
Commitments to originate permanent loans
|
$
|
589,906
|
|
|
$
|
328,458
|
|
Commitments to fund construction loans
|
638,095
|
|
|
777,098
|
|
||
Total
|
$
|
1,228,001
|
|
|
$
|
1,105,556
|
|
|
|
|
|
||||
Commitments to sell loans
|
$
|
2,213,211
|
|
|
$
|
2,368,973
|
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
21.
|
Related Party Transactions and Relationships
|
Berkadia Commercial Mortgage Holding LLC
Notes to Consolidated Financial Statements (continued)
(2017 not covered by the auditor’s report)
|
22.
|
Subsequent Events
|
1.
|
I have reviewed this annual report on Form 10-K/A 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: March 26, 2020
|
By:
|
/s/ Richard B. Handler
|
|
|
Name: Richard B. Handler
|
|
|
Title: Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K/A 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: March 26, 2020
|
By:
|
/s/ Teresa S. Gendron
|
|
|
Name: Teresa S. Gendron
|
|
|
Title: Chief Financial Officer
|
(1)
|
This Amendment No. 1 to the Annual Report on Form 10-K for the period ending November 30, 2019 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: March 26, 2020
|
By:
|
/s/ Richard B. Handler
|
|
|
Name: Richard B. Handler
|
|
|
Title: Chief Executive Officer
|
(1)
|
This Amendment No. 1 to the Annual Report on Form 10-K for the period ending November 30, 2019 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: March 26, 2020
|
By:
|
/s/ Teresa S. Gendron
|
|
|
Name: Teresa S. Gendron
|
|
|
Title: Chief Financial Officer
|