|
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
☐
|
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
|
☐
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|
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|
February 29,
2020 |
|
November 30, 2019
|
||||
ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
6,710,659
|
|
|
$
|
7,678,821
|
|
Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations
|
742,134
|
|
|
796,797
|
|
||
Financial instruments owned, at fair value (including securities pledged of $13,446,620 and $12,058,522):
|
18,396,981
|
|
|
16,895,741
|
|
||
Loans to and investments in associated companies
|
1,562,628
|
|
|
1,652,957
|
|
||
Securities borrowed
|
6,708,788
|
|
|
7,624,642
|
|
||
Securities purchased under agreements to resell
|
4,907,031
|
|
|
4,299,598
|
|
||
Securities received as collateral
|
15,004
|
|
|
9,500
|
|
||
Receivables
|
7,234,029
|
|
|
5,744,106
|
|
||
Property, equipment and leasehold improvements, net
|
928,643
|
|
|
385,029
|
|
||
Intangible assets, net and goodwill
|
1,918,068
|
|
|
1,922,934
|
|
||
Other assets
|
2,654,158
|
|
|
2,450,109
|
|
||
Total assets (1)
|
$
|
51,778,123
|
|
|
$
|
49,460,234
|
|
|
|
|
|
||||
LIABILITIES
|
|
|
|
|
|
||
Short-term borrowings
|
$
|
623,156
|
|
|
$
|
548,490
|
|
Financial instruments sold, not yet purchased, at fair value
|
9,879,387
|
|
|
10,532,460
|
|
||
Securities loaned
|
1,891,912
|
|
|
1,525,140
|
|
||
Securities sold under agreements to repurchase
|
8,406,022
|
|
|
7,504,670
|
|
||
Other secured financings
|
2,920,709
|
|
|
3,070,611
|
|
||
Obligation to return securities received as collateral
|
15,004
|
|
|
9,500
|
|
||
Lease liabilities
|
607,535
|
|
|
—
|
|
||
Payables, expense accruals and other liabilities
|
9,447,230
|
|
|
8,179,013
|
|
||
Long-term debt
|
8,451,504
|
|
|
8,337,061
|
|
||
Total liabilities (1)
|
42,242,459
|
|
|
39,706,945
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
||
|
|
|
|
||||
MEZZANINE EQUITY
|
|
|
|
|
|
||
Redeemable noncontrolling interests
|
24,759
|
|
|
26,605
|
|
||
Mandatorily redeemable convertible preferred shares
|
125,000
|
|
|
125,000
|
|
||
|
|
|
|
||||
EQUITY
|
|
|
|
|
|
||
Common shares, par value $1 per share, authorized 600,000,000 shares; 277,109,287 and 291,644,153 shares issued and outstanding, after deducting 39,353,325 and 24,818,459 shares held in treasury
|
277,109
|
|
|
291,644
|
|
||
Additional paid-in capital
|
3,329,633
|
|
|
3,627,711
|
|
||
Accumulated other comprehensive income (loss)
|
(258,400
|
)
|
|
(273,039
|
)
|
||
Retained earnings
|
6,000,613
|
|
|
5,933,389
|
|
||
Total Jefferies Financial Group Inc. shareholders’ equity
|
9,348,955
|
|
|
9,579,705
|
|
||
Noncontrolling interests
|
36,950
|
|
|
21,979
|
|
||
Total equity
|
9,385,905
|
|
|
9,601,684
|
|
||
|
|
|
|
||||
Total
|
$
|
51,778,123
|
|
|
$
|
49,460,234
|
|
(1)
|
Total assets include assets related to variable interest entities of $938.4 million and $645.8 million at February 29, 2020 and November 30, 2019, respectively, and Total liabilities include liabilities related to variable interest entities of $2,926.2 million and $3,071.1 million at February 29, 2020 and November 30, 2019, respectively. See Note 7 for additional information related to variable interest entities.
|
|
For the Three Months Ended
|
||||||
|
February 29, 2020
|
|
February 28, 2019
|
||||
Revenues:
|
|
|
|
||||
Commissions and other fees
|
$
|
179,430
|
|
|
$
|
154,950
|
|
Principal transactions
|
404,864
|
|
|
246,182
|
|
||
Investment banking
|
592,002
|
|
|
285,596
|
|
||
Interest income
|
326,366
|
|
|
386,844
|
|
||
Manufacturing revenues
|
77,607
|
|
|
75,425
|
|
||
Other
|
111,995
|
|
|
46,015
|
|
||
Total revenues
|
1,692,264
|
|
|
1,195,012
|
|
||
Interest expense of Jefferies Group
|
305,936
|
|
|
366,569
|
|
||
Net revenues
|
1,386,328
|
|
|
828,443
|
|
||
|
|
|
|
||||
Expenses:
|
|
|
|
|
|
||
Compensation and benefits
|
670,193
|
|
|
409,592
|
|
||
Cost of sales
|
72,443
|
|
|
66,921
|
|
||
Floor brokerage and clearing fees
|
59,181
|
|
|
51,868
|
|
||
Interest expense
|
21,554
|
|
|
23,018
|
|
||
Depreciation and amortization
|
39,470
|
|
|
33,934
|
|
||
Selling, general and other expenses
|
297,838
|
|
|
221,106
|
|
||
Total expenses
|
1,160,679
|
|
|
806,439
|
|
||
|
|
|
|
||||
Income before income taxes and income (loss) related to associated companies
|
225,649
|
|
|
22,004
|
|
||
Income (loss) related to associated companies
|
(67,855
|
)
|
|
27,313
|
|
||
Income before income taxes
|
157,794
|
|
|
49,317
|
|
||
Income tax provision
|
45,773
|
|
|
2,302
|
|
||
Net income
|
112,021
|
|
|
47,015
|
|
||
Net (income) loss attributable to the noncontrolling interests
|
2,129
|
|
|
(1,066
|
)
|
||
Net loss attributable to the redeemable noncontrolling interests
|
282
|
|
|
138
|
|
||
Preferred stock dividends
|
(1,422
|
)
|
|
(1,276
|
)
|
||
|
|
|
|
|
|
||
Net income attributable to Jefferies Financial Group Inc. common shareholders
|
$
|
113,010
|
|
|
$
|
44,811
|
|
|
|
|
|
||||
Basic earnings per common share attributable to Jefferies Financial Group Inc. common shareholders:
|
|
|
|
||||
Net income
|
$
|
0.37
|
|
|
$
|
0.14
|
|
|
|
|
|
||||
Diluted earnings per common share attributable to Jefferies Financial Group Inc. common shareholders:
|
|
|
|
||||
Net income
|
$
|
0.37
|
|
|
$
|
0.14
|
|
|
|
|
|
||||
Amounts attributable to Jefferies Financial Group Inc. common shareholders:
|
|
|
|
||||
Net income
|
$
|
113,010
|
|
|
$
|
44,811
|
|
|
For the Three Months Ended
|
||||||
|
February 29, 2020
|
|
February 28, 2019
|
||||
|
|
|
|
||||
Net income
|
$
|
112,021
|
|
|
$
|
47,015
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||
Net unrealized holding gains (losses) on investments arising during the period, net of income tax provision (benefit) of $81 and $107
|
237
|
|
|
317
|
|
||
Less: reclassification adjustment for net (gains) losses included in net income, net of income tax provision (benefit) of $0 and $(377)
|
—
|
|
|
1,129
|
|
||
Net change in unrealized holding gains (losses) on investments, net of income tax provision (benefit) of $81 and $484
|
237
|
|
|
1,446
|
|
||
|
|
|
|
||||
Net unrealized foreign exchange gains (losses) arising during the period, net of income tax provision (benefit) of $(3,147) and $7,722
|
(9,233
|
)
|
|
30,954
|
|
||
Less: reclassification adjustment for foreign exchange (gains) losses included in net income, net of income tax provision (benefit) of $0 and $0
|
—
|
|
|
—
|
|
||
Net change in unrealized foreign exchange gains (losses), net of income tax provision (benefit) of $(3,147) and $7,722
|
(9,233
|
)
|
|
30,954
|
|
||
|
|
|
|
||||
Net unrealized gains (losses) on instrument specific credit risk arising during the period, net of income tax provision (benefit) of $7,939 and $5,949
|
23,248
|
|
|
17,535
|
|
||
Less: reclassification adjustment for instrument specific credit risk (gains) losses included in net income, net of income tax provision (benefit) of $86 and $(99)
|
(252
|
)
|
|
294
|
|
||
Net change in unrealized instrument specific credit risk gains (losses), net of income tax provision (benefit) of $7,853 and $6,048
|
22,996
|
|
|
17,829
|
|
||
|
|
|
|
||||
Net unrealized gains (losses) on cash flow hedges arising during the period, net of income tax provision (benefit) of $0 and $(86)
|
—
|
|
|
(251
|
)
|
||
Less: reclassification adjustment for cash flow hedges (gains) losses included in net income (loss), net of income tax provision (benefit) of $0 and $0
|
—
|
|
|
—
|
|
||
Net change in unrealized cash flow hedges gains (losses), net of income tax provision (benefit) of $0 and $(86)
|
—
|
|
|
(251
|
)
|
||
|
|
|
|
||||
Net pension gains (losses) arising during the period, net of income tax provision (benefit) of $0 and $0
|
—
|
|
|
—
|
|
||
Reclassification adjustment for pension (gains) losses included in net income, net of income tax provision (benefit) of $(224) and $(119)
|
639
|
|
|
355
|
|
||
Net change in pension liability, net of income tax provision (benefit) of $224 and $119
|
639
|
|
|
355
|
|
||
|
|
|
|
||||
Other comprehensive income, net of income taxes
|
14,639
|
|
|
50,333
|
|
||
|
|
|
|
||||
Comprehensive income
|
126,660
|
|
|
97,348
|
|
||
Comprehensive (income) loss attributable to the noncontrolling interests
|
2,129
|
|
|
(1,066
|
)
|
||
Comprehensive loss attributable to the redeemable noncontrolling interests
|
282
|
|
|
138
|
|
||
Preferred stock dividends
|
(1,422
|
)
|
|
(1,276
|
)
|
||
Comprehensive income attributable to Jefferies Financial Group Inc. common shareholders
|
$
|
127,649
|
|
|
$
|
95,144
|
|
|
For the Three Months Ended
|
||||||
|
February 29,
2020 |
|
February 28, 2019
|
||||
|
|
|
|
||||
Net cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
112,021
|
|
|
$
|
47,015
|
|
Adjustments to reconcile net income to net cash used for operations:
|
|
|
|
|
|
||
Deferred income tax provision
|
12,237
|
|
|
1,948
|
|
||
Depreciation and amortization of real estate, property, equipment and leasehold improvements
|
36,415
|
|
|
30,671
|
|
||
Other amortization
|
2,971
|
|
|
(9,225
|
)
|
||
Share-based compensation
|
9,947
|
|
|
11,813
|
|
||
Provision for doubtful accounts
|
10,870
|
|
|
9,672
|
|
||
(Income) loss related to associated companies
|
39,096
|
|
|
(38,650
|
)
|
||
Distributions from associated companies
|
49,646
|
|
|
120,573
|
|
||
Net losses related to property and equipment, and other assets
|
34,193
|
|
|
1,784
|
|
||
Lease expense
|
22,764
|
|
|
—
|
|
||
Lease payments
|
(18,388
|
)
|
|
—
|
|
||
Net change in:
|
|
|
|
||||
Securities deposited with clearing and depository organizations
|
(296,514
|
)
|
|
12
|
|
||
Financial instruments owned, at fair value
|
(1,526,004
|
)
|
|
(358,751
|
)
|
||
Securities borrowed
|
910,494
|
|
|
(674,484
|
)
|
||
Securities purchased under agreements to resell
|
(614,635
|
)
|
|
(660,842
|
)
|
||
Receivables from brokers, dealers and clearing organizations
|
(1,433,478
|
)
|
|
(1,094,082
|
)
|
||
Receivables from customers of securities operations
|
(48,710
|
)
|
|
417,327
|
|
||
Other receivables
|
(28,454
|
)
|
|
(27,067
|
)
|
||
Other assets
|
(231,104
|
)
|
|
(173,435
|
)
|
||
Financial instruments sold, not yet purchased, at fair value
|
(635,893
|
)
|
|
705,164
|
|
||
Securities loaned
|
371,286
|
|
|
378,261
|
|
||
Securities sold under agreements to repurchase
|
909,654
|
|
|
632,686
|
|
||
Payables to brokers, dealers and clearing organizations
|
1,569,726
|
|
|
301,741
|
|
||
Payables to customers of securities operations
|
(51,154
|
)
|
|
212,895
|
|
||
Trade payables, expense accruals and other liabilities
|
(199,966
|
)
|
|
(652,490
|
)
|
||
Other
|
74,897
|
|
|
33,509
|
|
||
Net cash used for operating activities
|
(918,083
|
)
|
|
(783,955
|
)
|
||
|
|
|
|
||||
Net cash flows from investing activities:
|
|
|
|
|
|
||
Acquisitions of property, equipment and leasehold improvements, and other assets
|
(60,982
|
)
|
|
(46,059
|
)
|
||
Proceeds from disposals of property and equipment, and other assets
|
1,230
|
|
|
2,313
|
|
||
Advances on notes, loans and other receivables
|
(239,241
|
)
|
|
(87,019
|
)
|
||
Collections on notes, loans and other receivables
|
229,476
|
|
|
57,013
|
|
||
Loans to and investments in associated companies
|
(864,422
|
)
|
|
(45,448
|
)
|
||
Capital distributions and loan repayments from associated companies
|
883,299
|
|
|
802
|
|
||
Purchases of investments (other than short-term)
|
—
|
|
|
(1,386
|
)
|
||
Proceeds from maturities of investments
|
—
|
|
|
527,148
|
|
||
Proceeds from sales of investments
|
1,330
|
|
|
667,488
|
|
||
Net cash provided by (used for) investing activities
|
(49,310
|
)
|
|
1,074,852
|
|
|
For the Three Months Ended
|
||||||
|
February 29,
2020 |
|
February 28, 2019
|
||||
|
|
|
|
||||
Net cash flows from financing activities:
|
|
|
|
||||
Issuance of debt, net of issuance costs
|
$
|
759,478
|
|
|
$
|
533,435
|
|
Repayment of debt
|
(555,076
|
)
|
|
(307,695
|
)
|
||
Net change in other secured financings
|
(150,485
|
)
|
|
(7,450
|
)
|
||
Net change in bank overdrafts
|
(34,518
|
)
|
|
(8,360
|
)
|
||
Contributions from noncontrolling interests
|
17,100
|
|
|
—
|
|
||
Purchase of common shares for treasury
|
(310,187
|
)
|
|
(214,661
|
)
|
||
Dividends paid
|
(42,793
|
)
|
|
(37,817
|
)
|
||
Other
|
316
|
|
|
4,211
|
|
||
Net cash used for financing activities
|
(316,165
|
)
|
|
(38,337
|
)
|
||
|
|
|
|
||||
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash
|
(2,927
|
)
|
|
13,194
|
|
||
|
|
|
|
||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
(1,286,485
|
)
|
|
265,754
|
|
||
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
8,480,435
|
|
|
6,012,662
|
|
||
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
7,193,950
|
|
|
$
|
6,278,416
|
|
|
February 29,
2020 |
|
February 28, 2019
|
||||
|
|
|
|
||||
Cash and cash equivalents
|
$
|
6,710,659
|
|
|
$
|
5,517,121
|
|
Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations
|
410,632
|
|
|
728,406
|
|
||
Other assets
|
72,659
|
|
|
32,889
|
|
||
Total cash, cash equivalents and restricted cash
|
$
|
7,193,950
|
|
|
$
|
6,278,416
|
|
|
Jefferies Financial Group Inc. Common Shareholders
|
|
|
|
|
||||||||||||||||||||||
|
Common
Shares $1 Par Value |
|
Additional
Paid-In Capital |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Retained
Earnings |
|
Subtotal
|
|
Noncontrolling
Interests |
|
Total
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance, December 1, 2019
|
$
|
291,644
|
|
|
$
|
3,627,711
|
|
|
$
|
(273,039
|
)
|
|
$
|
5,933,389
|
|
|
$
|
9,579,705
|
|
|
$
|
21,979
|
|
|
$
|
9,601,684
|
|
Net income
|
|
|
|
|
|
|
|
|
|
113,010
|
|
|
113,010
|
|
|
(2,129
|
)
|
|
110,881
|
|
|||||||
Other comprehensive income, net of taxes
|
|
|
|
|
|
|
14,639
|
|
|
|
|
|
14,639
|
|
|
|
|
|
14,639
|
|
|||||||
Contributions from noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
17,100
|
|
|
17,100
|
|
|||||||
Share-based compensation expense
|
|
|
|
9,947
|
|
|
|
|
|
|
|
|
9,947
|
|
|
|
|
|
9,947
|
|
|||||||
Change in fair value of redeemable noncontrolling interests
|
|
|
|
1,564
|
|
|
|
|
|
|
|
|
1,564
|
|
|
|
|
|
1,564
|
|
|||||||
Purchase of common shares for treasury
|
(14,738
|
)
|
|
(312,763
|
)
|
|
|
|
|
|
|
|
(327,501
|
)
|
|
|
|
|
(327,501
|
)
|
|||||||
Dividends ($0.15 per common share)
|
|
|
|
|
|
|
|
|
|
(45,786
|
)
|
|
(45,786
|
)
|
|
|
|
|
(45,786
|
)
|
|||||||
Other
|
203
|
|
|
3,174
|
|
|
|
|
|
|
|
|
3,377
|
|
|
—
|
|
|
3,377
|
|
|||||||
Balance, February 29, 2020
|
$
|
277,109
|
|
|
$
|
3,329,633
|
|
|
$
|
(258,400
|
)
|
|
$
|
6,000,613
|
|
|
$
|
9,348,955
|
|
|
$
|
36,950
|
|
|
$
|
9,385,905
|
|
|
Jefferies Financial Group Inc. Common Shareholders
|
|
|
|
|
||||||||||||||||||||||
|
Common
Shares $1 Par Value |
|
Additional
Paid-In Capital |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Retained
Earnings |
|
Subtotal
|
|
Noncontrolling
Interests |
|
Total
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance, December 1, 2018
|
$
|
307,515
|
|
|
$
|
3,854,847
|
|
|
$
|
288,286
|
|
|
$
|
5,610,218
|
|
|
$
|
10,060,866
|
|
|
$
|
18,391
|
|
|
$
|
10,079,257
|
|
Net income
|
|
|
|
|
|
|
|
|
|
44,811
|
|
|
44,811
|
|
|
1,066
|
|
|
45,877
|
|
|||||||
Other comprehensive income, net of taxes
|
|
|
|
|
|
|
50,333
|
|
|
|
|
|
50,333
|
|
|
|
|
|
50,333
|
|
|||||||
Contributions from noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
4,705
|
|
|
4,705
|
|
|||||||
Distributions to noncontrolling interests
|
|
|
|
|
|
|
|
|
—
|
|
|
(981
|
)
|
|
(981
|
)
|
|||||||||||
Share-based compensation expense
|
|
|
|
11,813
|
|
|
|
|
|
|
|
|
11,813
|
|
|
|
|
|
11,813
|
|
|||||||
Change in fair value of redeemable noncontrolling interests
|
|
|
|
(536
|
)
|
|
|
|
|
|
|
|
(536
|
)
|
|
|
|
|
(536
|
)
|
|||||||
Purchase of common shares for treasury
|
(9,728
|
)
|
|
(187,365
|
)
|
|
|
|
|
|
|
|
(197,093
|
)
|
|
|
|
|
(197,093
|
)
|
|||||||
Dividends ($0.125 per common share)
|
|
|
|
|
|
|
|
(40,094
|
)
|
|
(40,094
|
)
|
|
|
|
|
(40,094
|
)
|
|||||||||
Other
|
526
|
|
|
2,326
|
|
|
|
|
|
|
|
|
2,852
|
|
|
—
|
|
|
2,852
|
|
|||||||
Balance, February 28, 2019
|
$
|
298,313
|
|
|
$
|
3,681,085
|
|
|
$
|
338,619
|
|
|
$
|
5,614,935
|
|
|
$
|
9,932,952
|
|
|
$
|
23,181
|
|
|
$
|
9,956,133
|
|
|
For the Three Months Ended
|
||||||
|
February 29,
2020 |
|
February 28, 2019
|
||||
|
(In thousands)
|
||||||
Cash paid during the year for:
|
|
||||||
Interest
|
$
|
365,842
|
|
|
$
|
399,350
|
|
Income tax payments (refunds), net
|
$
|
(10,697
|
)
|
|
$
|
7,205
|
|
|
February 29, 2020
|
||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Counterparty
and
Cash
Collateral
Netting (1)
|
|
Total
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial instruments owned, at fair value:
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate equity securities
|
$
|
3,505,773
|
|
|
$
|
157,818
|
|
|
$
|
103,683
|
|
|
$
|
—
|
|
|
$
|
3,767,274
|
|
Corporate debt securities
|
—
|
|
|
2,841,055
|
|
|
25,090
|
|
|
—
|
|
|
2,866,145
|
|
|||||
Collateralized debt obligations and
collateralized loan obligations
|
—
|
|
|
97,325
|
|
|
29,784
|
|
|
—
|
|
|
127,109
|
|
|||||
U.S. government and federal agency securities
|
1,541,590
|
|
|
98,176
|
|
|
—
|
|
|
—
|
|
|
1,639,766
|
|
|||||
Municipal securities
|
—
|
|
|
775,960
|
|
|
—
|
|
|
—
|
|
|
775,960
|
|
|||||
Sovereign obligations
|
1,552,798
|
|
|
1,194,447
|
|
|
—
|
|
|
—
|
|
|
2,747,245
|
|
|||||
Residential mortgage-backed securities
|
—
|
|
|
1,080,695
|
|
|
16,970
|
|
|
—
|
|
|
1,097,665
|
|
|||||
Commercial mortgage-backed securities
|
—
|
|
|
441,669
|
|
|
4,264
|
|
|
—
|
|
|
445,933
|
|
|||||
Other asset-backed securities
|
—
|
|
|
260,009
|
|
|
41,903
|
|
|
—
|
|
|
301,912
|
|
|||||
Loans and other receivables
|
—
|
|
|
2,691,103
|
|
|
103,243
|
|
|
—
|
|
|
2,794,346
|
|
|||||
Derivatives
|
864
|
|
|
3,331,102
|
|
|
23,244
|
|
|
(2,717,442
|
)
|
|
637,768
|
|
|||||
Investments at fair value
|
—
|
|
|
51,609
|
|
|
184,507
|
|
|
—
|
|
|
236,116
|
|
|||||
FXCM term loan
|
—
|
|
|
—
|
|
|
61,628
|
|
|
—
|
|
|
61,628
|
|
|||||
Total financial instruments owned, at fair value, excluding investments at fair value based on NAV
|
$
|
6,601,025
|
|
|
$
|
13,020,968
|
|
|
$
|
594,316
|
|
|
$
|
(2,717,442
|
)
|
|
$
|
17,498,867
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities received as collateral
|
$
|
15,004
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,004
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Financial instruments sold, not yet purchased, at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Corporate equity securities
|
$
|
2,124,882
|
|
|
$
|
2,897
|
|
|
$
|
4,275
|
|
|
$
|
—
|
|
|
$
|
2,132,054
|
|
Corporate debt securities
|
—
|
|
|
1,772,490
|
|
|
767
|
|
|
—
|
|
|
1,773,257
|
|
|||||
U.S. government and federal agency securities
|
1,577,052
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,577,052
|
|
|||||
Sovereign obligations
|
1,070,355
|
|
|
808,136
|
|
|
—
|
|
|
—
|
|
|
1,878,491
|
|
|||||
Commercial mortgage-backed securities
|
—
|
|
|
—
|
|
|
35
|
|
|
—
|
|
|
35
|
|
|||||
Loans
|
—
|
|
|
1,813,027
|
|
|
7,859
|
|
|
—
|
|
|
1,820,886
|
|
|||||
Derivatives
|
37
|
|
|
3,412,660
|
|
|
134,087
|
|
|
(2,849,172
|
)
|
|
697,612
|
|
|||||
Total financial instruments sold, not yet purchased, at fair value
|
$
|
4,772,326
|
|
|
$
|
7,809,210
|
|
|
$
|
147,023
|
|
|
$
|
(2,849,172
|
)
|
|
$
|
9,879,387
|
|
Short-term borrowings
|
$
|
—
|
|
|
$
|
20,164
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20,164
|
|
Long-term debt
|
$
|
—
|
|
|
$
|
811,251
|
|
|
$
|
543,463
|
|
|
$
|
—
|
|
|
$
|
1,354,714
|
|
Obligation to return securities received as collateral
|
$
|
15,004
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,004
|
|
|
November 30, 2019
|
||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Counterparty
and
Cash
Collateral
Netting (1)
|
|
Total
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial instruments owned, at fair value:
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate equity securities
|
$
|
2,507,164
|
|
|
$
|
218,403
|
|
|
$
|
58,426
|
|
|
$
|
—
|
|
|
$
|
2,783,993
|
|
Corporate debt securities
|
—
|
|
|
2,472,245
|
|
|
7,490
|
|
|
—
|
|
|
2,479,735
|
|
|||||
Collateralized debt obligations and
collateralized loan obligations
|
—
|
|
|
124,225
|
|
|
28,788
|
|
|
—
|
|
|
153,013
|
|
|||||
U.S. government and federal agency securities
|
2,101,624
|
|
|
158,618
|
|
|
—
|
|
|
—
|
|
|
2,260,242
|
|
|||||
Municipal securities
|
—
|
|
|
742,326
|
|
|
—
|
|
|
—
|
|
|
742,326
|
|
|||||
Sovereign obligations
|
1,330,026
|
|
|
1,405,827
|
|
|
—
|
|
|
—
|
|
|
2,735,853
|
|
|||||
Residential mortgage-backed securities
|
—
|
|
|
1,069,066
|
|
|
17,740
|
|
|
—
|
|
|
1,086,806
|
|
|||||
Commercial mortgage-backed securities
|
—
|
|
|
424,060
|
|
|
6,110
|
|
|
—
|
|
|
430,170
|
|
|||||
Other asset-backed securities
|
—
|
|
|
303,847
|
|
|
42,563
|
|
|
—
|
|
|
346,410
|
|
|||||
Loans and other receivables
|
—
|
|
|
2,460,551
|
|
|
114,080
|
|
|
—
|
|
|
2,574,631
|
|
|||||
Derivatives
|
2,809
|
|
|
1,833,907
|
|
|
14,889
|
|
|
(1,433,197
|
)
|
|
418,408
|
|
|||||
Investments at fair value
|
—
|
|
|
32,688
|
|
|
205,412
|
|
|
—
|
|
|
238,100
|
|
|||||
FXCM term loan
|
—
|
|
|
—
|
|
|
59,120
|
|
|
—
|
|
|
59,120
|
|
|||||
Total financial instruments owned, at fair value, excluding investments at fair value based on NAV
|
$
|
5,941,623
|
|
|
$
|
11,245,763
|
|
|
$
|
554,618
|
|
|
$
|
(1,433,197
|
)
|
|
$
|
16,308,807
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities purchased under agreements to resell
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25,000
|
|
|
$
|
—
|
|
|
$
|
25,000
|
|
Securities received as collateral
|
$
|
9,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,500
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Financial instruments sold, not yet purchased, at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Corporate equity securities
|
$
|
2,755,601
|
|
|
$
|
7,438
|
|
|
$
|
4,487
|
|
|
$
|
—
|
|
|
$
|
2,767,526
|
|
Corporate debt securities
|
—
|
|
|
1,471,142
|
|
|
340
|
|
|
—
|
|
|
1,471,482
|
|
|||||
U.S. government and federal agency securities
|
1,851,981
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,851,981
|
|
|||||
Sovereign obligations
|
1,363,475
|
|
|
941,065
|
|
|
—
|
|
|
—
|
|
|
2,304,540
|
|
|||||
Commercial mortgage-backed securities
|
—
|
|
|
—
|
|
|
35
|
|
|
—
|
|
|
35
|
|
|||||
Loans
|
—
|
|
|
1,600,228
|
|
|
9,463
|
|
|
—
|
|
|
1,609,691
|
|
|||||
Derivatives
|
871
|
|
|
2,066,455
|
|
|
92,057
|
|
|
(1,632,178
|
)
|
|
527,205
|
|
|||||
Total financial instruments sold, not yet purchased, at fair value
|
$
|
5,971,928
|
|
|
$
|
6,086,328
|
|
|
$
|
106,382
|
|
|
$
|
(1,632,178
|
)
|
|
$
|
10,532,460
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
$
|
—
|
|
|
$
|
20,981
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20,981
|
|
Long-term debt
|
$
|
—
|
|
|
$
|
735,216
|
|
|
$
|
480,069
|
|
|
$
|
—
|
|
|
$
|
1,215,285
|
|
Obligation to return securities received as collateral
|
$
|
9,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,500
|
|
(1)
|
Represents counterparty and cash collateral netting across the levels of the fair value hierarchy for positions with the same counterparty.
|
•
|
Exchange-Traded Equity Securities: Exchange-traded equity securities are measured based on quoted closing exchange prices, 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
|
•
|
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.
|
•
|
Investment Grade Corporate Bonds: Investment grade 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. Investment grade 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. Investment grade corporate bonds measured using alternative valuation techniques are categorized within Level 2 or Level 3 of the fair value hierarchy and are a limited portion of our investment grade 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 obtained from external pricing services 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 or Level 3 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 Claim Receivables: Escrow and 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 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 observable 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
|
|
Fair Value (1)
|
|
Unfunded
Commitments
|
||||
February 29, 2020
|
|
|
|
||||
Equity Long/Short Hedge Funds (2)
|
$
|
303,941
|
|
|
$
|
—
|
|
Equity Funds (3)
|
36,754
|
|
|
13,957
|
|
||
Commodity Fund (4)
|
14,650
|
|
|
—
|
|
||
Multi-asset Funds (5)
|
542,609
|
|
|
—
|
|
||
Other Funds (6)
|
160
|
|
|
—
|
|
||
Total
|
$
|
898,114
|
|
|
$
|
13,957
|
|
|
|
|
|
||||
November 30, 2019
|
|
|
|
|
|
||
Equity Long/Short Hedge Funds (2)
|
$
|
291,593
|
|
|
$
|
—
|
|
Equity Funds (3)
|
44,576
|
|
|
14,621
|
|
||
Commodity Fund (4)
|
16,025
|
|
|
—
|
|
||
Multi-asset Funds (5)
|
234,583
|
|
|
—
|
|
||
Other Funds (6)
|
157
|
|
|
—
|
|
||
Total
|
$
|
586,934
|
|
|
$
|
14,621
|
|
(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, primarily in both public and private equity securities in domestic and international markets. At February 29, 2020 and November 30, 2019, 6% and 6%, respectively, of these investments are redeemable quarterly 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. These investments cannot be redeemed; instead distributions are received through the liquidation of the underlying assets of the funds, which are expected to be liquidated in approximately one to nine years.
|
(4)
|
This category includes investments in a hedge fund that invests, 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 February 29, 2020 and November 30, 2019, investments representing approximately 2% and 5%, respectively, of the fair value of investments in this category are redeemable with 30 days prior written notice.
|
(6)
|
This category includes investments in a fund that invests 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 a fund of funds that invests in various private equity funds that are managed by Jefferies Group and have no redemption provisions. Investments in the fund of funds are gradually being liquidated, however, the timing of when the proceeds will be received is uncertain.
|
Three Months Ended February 29, 2020
|
|||||||||||||||||||||||||||||||||||
|
Balance, November 30, 2019
|
|
Total gains/ losses
(realized and unrealized) (1)
|
|
Purchases
|
|
Sales
|
|
Settlements
|
|
Issuances
|
|
Net transfers
into (out of)
Level 3
|
|
Balance, February 29, 2020
|
|
Changes in
unrealized gains/losses included in earnings relating to instruments still held at
February 29, 2020 (1)
|
||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Financial instruments owned, at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Corporate equity securities
|
$
|
58,426
|
|
|
$
|
(8,280
|
)
|
|
$
|
2,792
|
|
|
$
|
(1,934
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
52,679
|
|
|
$
|
103,683
|
|
|
$
|
(8,291
|
)
|
Corporate debt securities
|
7,490
|
|
|
1,269
|
|
|
1,478
|
|
|
(503
|
)
|
|
(601
|
)
|
|
—
|
|
|
15,957
|
|
|
25,090
|
|
|
879
|
|
|||||||||
CDOs and CLOs
|
28,788
|
|
|
(1,940
|
)
|
|
17,594
|
|
|
(17,833
|
)
|
|
(4
|
)
|
|
—
|
|
|
3,179
|
|
|
29,784
|
|
|
(1,698
|
)
|
|||||||||
Residential mortgage-backed securities
|
17,740
|
|
|
(280
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(487
|
)
|
|
16,970
|
|
|
(250
|
)
|
|||||||||
Commercial mortgage-backed securities
|
6,110
|
|
|
(306
|
)
|
|
—
|
|
|
—
|
|
|
(1,401
|
)
|
|
—
|
|
|
(139
|
)
|
|
4,264
|
|
|
571
|
|
|||||||||
Other asset-backed securities
|
42,563
|
|
|
(4,159
|
)
|
|
81,323
|
|
|
(72,032
|
)
|
|
(1,974
|
)
|
|
—
|
|
|
(3,818
|
)
|
|
41,903
|
|
|
(3,797
|
)
|
|||||||||
Loans and other receivables
|
114,080
|
|
|
(4,307
|
)
|
|
62,940
|
|
|
(13,042
|
)
|
|
(57,479
|
)
|
|
—
|
|
|
1,051
|
|
|
103,243
|
|
|
(6,187
|
)
|
|||||||||
Investments at fair value
|
205,412
|
|
|
(27,333
|
)
|
|
6,504
|
|
|
(76
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
184,507
|
|
|
(27,333
|
)
|
|||||||||
FXCM term loan
|
59,120
|
|
|
2,508
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61,628
|
|
|
2,508
|
|
|||||||||
Securities purchased under
agreements to resell
|
25,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Financial instruments sold, not yet purchased, at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Corporate equity securities
|
$
|
4,487
|
|
|
$
|
291
|
|
|
$
|
(513
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
4,275
|
|
|
$
|
65
|
|
Corporate debt securities
|
340
|
|
|
(189
|
)
|
|
(13,832
|
)
|
|
14,079
|
|
|
369
|
|
|
—
|
|
|
—
|
|
|
767
|
|
|
(35
|
)
|
|||||||||
Commercial mortgage-backed securities
|
35
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
—
|
|
|||||||||
Loans
|
9,463
|
|
|
1
|
|
|
(9,872
|
)
|
|
2,781
|
|
|
—
|
|
|
—
|
|
|
5,486
|
|
|
7,859
|
|
|
(1
|
)
|
|||||||||
Net derivatives (2)
|
77,168
|
|
|
(17,528
|
)
|
|
(278
|
)
|
|
5,627
|
|
|
192
|
|
|
—
|
|
|
45,662
|
|
|
110,843
|
|
|
17,460
|
|
|||||||||
Long-term debt (1)
|
480,069
|
|
|
(9,016
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
128,475
|
|
|
(56,065
|
)
|
|
543,463
|
|
|
(5,590
|
)
|
(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 the 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 February 29, 2020 were gains of $14.6 million.
|
(2)
|
Net derivatives represent Financial instruments owned, at fair value - Derivatives and Financial instruments sold, not yet purchased, at fair value - Derivatives.
|
•
|
Corporate equity securities of $55.4 million, corporate debt securities of $16.5 million and loans and other receivables of $6.0 million due to reduced pricing transparency.
|
•
|
Other asset-backed securities of $6.3 million, loans and other receivables of $4.9 million and corporate equity securities of $2.7 million due to greater pricing transparency supporting classification into Level 2.
|
•
|
Net derivatives of $83.0 million and structured notes of $13.1 million due to reduced market and pricing transparency.
|
•
|
Structured notes of $69.1 million and net derivatives of $37.3 million due to greater market and pricing transparency.
|
Three Months Ended February 28, 2019
|
|||||||||||||||||||||||||||||||||||
|
Balance, November 30, 2018
|
|
Total gains/ losses
(realized and unrealized) (1)
|
|
Purchases
|
|
Sales
|
|
Settlements
|
|
Issuances
|
|
Net transfers
into (out of)
Level 3
|
|
Balance, February 28, 2019
|
|
Changes in
unrealized gains/ losses included in earnings relating to instruments still held at
February 28, 2019 (1)
|
||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Financial instruments owned, at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Corporate equity securities
|
$
|
52,192
|
|
|
$
|
4,488
|
|
|
$
|
1,410
|
|
|
$
|
(2,411
|
)
|
|
$
|
(66
|
)
|
|
$
|
—
|
|
|
$
|
(37
|
)
|
|
$
|
55,576
|
|
|
$
|
4,603
|
|
Corporate debt securities
|
9,484
|
|
|
466
|
|
|
3,568
|
|
|
(3,233
|
)
|
|
(834
|
)
|
|
—
|
|
|
1,479
|
|
|
10,930
|
|
|
498
|
|
|||||||||
CDOs and CLOs
|
36,105
|
|
|
(6,726
|
)
|
|
49,201
|
|
|
(32,759
|
)
|
|
(1,139
|
)
|
|
—
|
|
|
(1,538
|
)
|
|
43,144
|
|
|
(3,526
|
)
|
|||||||||
Residential mortgage-backed securities
|
19,603
|
|
|
462
|
|
|
975
|
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
(50
|
)
|
|
20,963
|
|
|
494
|
|
|||||||||
Commercial mortgage-backed securities
|
10,886
|
|
|
136
|
|
|
12
|
|
|
—
|
|
|
(41
|
)
|
|
—
|
|
|
1,827
|
|
|
12,820
|
|
|
96
|
|
|||||||||
Other asset-backed securities
|
53,175
|
|
|
(2,290
|
)
|
|
29,195
|
|
|
(30,060
|
)
|
|
(12,320
|
)
|
|
—
|
|
|
(1,814
|
)
|
|
35,886
|
|
|
(1,763
|
)
|
|||||||||
Loans and other receivables
|
46,985
|
|
|
814
|
|
|
40,061
|
|
|
(27,142
|
)
|
|
(1,990
|
)
|
|
—
|
|
|
19,323
|
|
|
78,051
|
|
|
130
|
|
|||||||||
Investments at fair value
|
396,254
|
|
|
(2,923
|
)
|
|
27,767
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
421,098
|
|
|
(2,923
|
)
|
|||||||||
FXCM term loan
|
73,150
|
|
|
450
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
73,600
|
|
|
450
|
|
|||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Financial instruments sold, not yet purchased, at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Corporate equity securities
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
80
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
78
|
|
|
$
|
2
|
|
Corporate debt securities
|
522
|
|
|
(241
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
449
|
|
|
730
|
|
|
241
|
|
|||||||||
Commercial mortgage-backed securities
|
—
|
|
|
70
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
70
|
|
|
(70
|
)
|
|||||||||
Loans
|
6,376
|
|
|
(229
|
)
|
|
(1,411
|
)
|
|
504
|
|
|
—
|
|
|
—
|
|
|
(1,820
|
)
|
|
3,420
|
|
|
338
|
|
|||||||||
Net derivatives (2)
|
21,614
|
|
|
(5,348
|
)
|
|
(2,804
|
)
|
|
3,084
|
|
|
169
|
|
|
—
|
|
|
12,260
|
|
|
28,975
|
|
|
3,333
|
|
|||||||||
Long-term debt (1)
|
200,745
|
|
|
(16,701
|
)
|
|
—
|
|
|
—
|
|
|
(5,665
|
)
|
|
92,016
|
|
|
12,744
|
|
|
283,139
|
|
|
4,045
|
|
(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 the 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 February 28, 2019 were gains of $12.7 million.
|
(2)
|
Net derivatives represent Financial instruments owned, at fair value - Derivatives and Financial instruments sold, not yet purchased, at fair value - Derivatives.
|
•
|
Loans and other receivables of $25.8 million, CDOs and CLOs of $14.1 million and other asset-backed securities of $10.8 million due to reduced pricing transparency.
|
•
|
CDOs and CLOs of $15.7 million, other asset-backed securities of $12.6 million and loans and other receivables of $6.5 million due to greater pricing transparency supporting classification into Level 2.
|
•
|
Structured notes of $22.2 million and net derivatives of $13.9 million due to reduced market and pricing transparency.
|
•
|
Structured notes of $9.4 million due to greater market transparency.
|
November 30, 2019
|
||||||||||||||||
|
|
Fair Value
(in thousands)
|
|
Valuation
Technique
|
|
Significant
Unobservable Input(s)
|
|
Input/Range
|
|
Weighted
Average
|
||||||
Financial instruments owned, at fair value
|
|
|
|
|
|
|
|
|
|
|
||||||
Corporate equity securities
|
|
$
|
29,017
|
|
|
|
|
|
|
|
|
|
|
|
||
Non-exchange-traded securities
|
|
|
|
Market approach
|
|
Price
|
|
$1
|
to
|
$140
|
|
$55
|
||||
|
|
|
|
|
|
Underlying stock price
|
|
$3
|
to
|
$5
|
|
$4
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate debt securities
|
|
$
|
7,490
|
|
|
Scenario analysis
|
|
Estimated recovery percentage
|
|
23
|
%
|
to
|
85%
|
|
46
|
%
|
|
|
|
|
|
|
Volatility
|
|
44%
|
|
—
|
|
|||||
|
|
|
|
|
|
Credit spread
|
|
750
|
|
—
|
|
|||||
|
|
|
|
|
|
Underlying stock price
|
|
£0.4
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
CDOs and CLOs
|
|
$
|
28,788
|
|
|
Discounted cash flows
|
|
Constant prepayment rate
|
|
20%
|
|
—
|
|
|||
|
|
|
|
|
|
|
Constant default rate
|
|
1
|
%
|
to
|
2%
|
|
2
|
%
|
|
|
|
|
|
|
|
|
Loss severity
|
|
25
|
%
|
to
|
37%
|
|
29
|
%
|
|
|
|
|
|
|
|
|
Discount rate/yield
|
|
12
|
%
|
to
|
21%
|
|
15
|
%
|
|
|
|
|
|
Scenario analysis
|
|
Estimated recovery percentage
|
|
3.25
|
%
|
to
|
36.5%
|
|
25
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Residential mortgage-backed securities
|
|
$
|
17,740
|
|
|
Discounted cash flows
|
|
Cumulative loss rate
|
|
2%
|
|
—
|
|
|||
|
|
|
|
|
|
|
Duration (years)
|
|
6.3 years
|
|
—
|
|
||||
|
|
|
|
|
|
|
Discount rate/yield
|
|
3%
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial mortgage-backed securities
|
|
$
|
6,110
|
|
|
Discounted cash flows
|
|
Cumulative loss rate
|
|
7.3%
|
|
—
|
|
|||
|
|
|
|
|
|
|
Duration (years)
|
|
0.2 years
|
|
—
|
|
||||
|
|
|
|
|
|
Discount rate/yield
|
|
85%
|
|
—
|
|
|||||
|
|
|
|
Scenario analysis
|
|
Estimated recovery percentage
|
|
44%
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other asset-backed securities
|
|
$
|
42,563
|
|
|
Discounted cash flows
|
|
Cumulative loss rate
|
|
7
|
%
|
to
|
31%
|
|
16
|
%
|
|
|
|
|
|
|
|
Duration (years)
|
|
0.5 years
|
|
to
|
3 years
|
|
1.5 years
|
||
|
|
|
|
|
|
|
Discount rate/yield
|
|
7
|
%
|
to
|
15%
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loans and other receivables
|
|
$
|
112,574
|
|
|
Market approach
|
|
Price
|
|
$36
|
to
|
$100
|
|
$90
|
||
|
|
|
|
|
Scenario analysis
|
|
Estimated recovery percentage
|
|
87
|
%
|
to
|
104%
|
|
99
|
%
|
|
|
|
|
|
Discounted cash flows
|
|
Term based on the pay off (years)
|
|
0 months
|
|
to
|
0.1 years
|
|
0.1 years
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives
|
|
$
|
13,826
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps
|
|
|
|
Market approach
|
|
Basis points upfront
|
|
0
|
|
to
|
16
|
|
6
|
|
||
Unfunded commitments
|
|
|
|
|
|
Price
|
|
$88
|
|
—
|
|
|||||
Equity options
|
|
|
|
Volatility benchmarking
|
|
Volatility
|
|
45%
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investments at fair value
|
|
$
|
157,504
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private equity securities
|
|
|
|
|
Market approach
|
|
Price
|
|
$8
|
to
|
$250
|
|
$80
|
|||
|
|
|
|
Scenario analysis
|
|
Discount rate/yield
|
|
19
|
%
|
to
|
21%
|
|
20
|
%
|
||
|
|
|
|
|
|
Revenue growth
|
|
0%
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investment in FXCM
|
|
$
|
59,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Term loan
|
|
|
|
|
Discounted cash flows
|
|
Term based on the pay off (years)
|
|
0 months
|
|
to
|
1.2 years
|
|
1.2 years
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Securities purchased under agreements to resell
|
|
$
|
25,000
|
|
|
Market approach
|
|
Spread to 6 month LIBOR
|
|
500
|
|
—
|
|
|||
|
|
|
|
|
|
Duration (years)
|
|
1.5 years
|
|
—
|
|
|||||
Financial instruments sold, not yet purchased, at fair value
|
|
|
|
|
|
|
|
|
||||||||
Corporate equity securities
|
|
$
|
4,487
|
|
|
Market approach
|
|
Transaction level
|
|
$1
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loans
|
|
$
|
9,463
|
|
|
Market approach
|
|
Price
|
|
$50
|
to
|
$100
|
|
$88
|
||
|
|
|
|
Scenario analysis
|
|
Estimated recovery percentage
|
|
1%
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives
|
|
$
|
92,057
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity options
|
|
|
|
Volatility benchmarking
|
|
Volatility
|
|
21
|
%
|
to
|
61%
|
|
43
|
%
|
||
Interest rate swaps
|
|
|
|
Market approach
|
|
Basis points upfront
|
|
0
|
|
to
|
22
|
|
13
|
|
||
Cross currency swaps
|
|
|
|
|
|
Basis points upfront
|
|
2
|
|
—
|
|
|||||
Unfunded commitments
|
|
|
|
|
|
Price
|
|
$88
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Long-term debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Structured notes
|
|
$
|
480,069
|
|
|
Market approach
|
|
Price
|
|
$84
|
to
|
$108
|
|
$96
|
||
|
|
|
|
|
|
Price
|
|
€74
|
to
|
€103
|
|
€91
|
•
|
Corporate equity securities, corporate debt securities, loans and other receivables, certain derivatives, other asset-backed securities, private equity securities, securities purchased under agreements to resell and structured notes using a market approach valuation technique. A significant increase (decrease) in the transaction level of corporate equity securities would result in a significantly higher (lower) fair value measurement. A significant increase (decrease) in the price of the private equity securities, non-exchange-traded securities, unfunded commitments, corporate debt 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 underlying stock price of corporate equity securities 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 would result in a significantly higher (lower) fair value measurement. A significant increase (decrease) in the yield or duration, in isolation, of securities purchased under agreements to resell would result in a significantly lower (higher) fair value measurement. Depending on whether we are a receiver or (payer) of basis points upfront, a significant increase in basis points would result in a significant increase (decrease) in the fair value measurement of cross currency and interest rate swaps.
|
•
|
Loans and other receivables, commercial mortgage-backed securities, private equity securities, corporate debt securities and CDOs and CLOs using scenario analysis. A significant increase (decrease) in the possible recovery rates of the cash flow outcomes underlying the financial instrument would result in a significantly higher (lower) fair value measurement for the financial instrument. A significant increase (decrease) in the price of the underlying assets of the financial instruments would result in a significantly higher (lower) fair value measurement. A significant increase (decrease) in the volatility of the underlying stock price would result in a significantly higher (lower) fair value measurement. A significant increase (decrease) in the credit spread of the financial instrument would result in a significantly lower (higher) 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 loans and other receivables 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 volatility benchmarking. A significant increase (decrease) in volatility would result in a significantly higher (lower) 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 lower (higher) fair value measurement.
|
|
|
For the Three Months Ended
|
||||||
|
|
February 29, 2020
|
|
February 28, 2019
|
||||
Financial Instruments Owned, at fair value:
|
|
|
|
|
||||
Loans and other receivables
|
|
$
|
1,739
|
|
|
$
|
(7,335
|
)
|
|
|
|
|
|
||||
Financial Instruments Sold, Not Yet Purchased, at fair value:
|
|
|
|
|
|
|
||
Loans
|
|
$
|
(610
|
)
|
|
$
|
—
|
|
Loan commitments
|
|
$
|
(661
|
)
|
|
$
|
79
|
|
|
|
|
|
|
||||
Long-term Debt:
|
|
|
|
|
|
|
||
Changes in instrument specific credit risk (1)
|
|
$
|
29,432
|
|
|
$
|
23,483
|
|
Other changes in fair value (2)
|
|
$
|
(37,642
|
)
|
|
$
|
(10,643
|
)
|
|
|
|
|
|
||||
Short-term borrowings:
|
|
|
|
|
||||
Changes in instrument specific credit risk (1)
|
|
$
|
57
|
|
|
$
|
—
|
|
Other changes in fair value (2)
|
|
$
|
12
|
|
|
$
|
—
|
|
(1)
|
Changes in instrument specific credit risk related to structured notes are included in the Consolidated Statements of Comprehensive Income (Loss), net of tax.
|
(2)
|
Other changes in fair value are included in Principal transactions revenues in the Consolidated Statements of Operations.
|
|
February 29,
2020 |
|
November 30, 2019
|
||||
Financial Instruments Owned, at fair value:
|
|
|
|
||||
Loans and other receivables (1)
|
$
|
1,551,028
|
|
|
$
|
1,546,516
|
|
Loans and other receivables on nonaccrual status and/or 90 days or greater past due (1) (2)
|
$
|
267,678
|
|
|
$
|
197,215
|
|
Long-term debt and short-term borrowings
|
$
|
72,301
|
|
|
$
|
74,408
|
|
(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 all loans and other receivables 90 days or greater past due by which contractual principal exceeds fair value of $29.1 million and $22.2 million at February 29, 2020 and November 30, 2019, respectively.
|
|
Assets
|
|
Liabilities
|
||||||||||
|
Fair Value
|
|
Number of
Contracts (2)
|
|
Fair Value
|
|
Number of
Contracts (2)
|
||||||
February 29, 2020 (1)
|
|
|
|
|
|
|
|
||||||
Derivatives designated as accounting hedges:
|
|
|
|
|
|
|
|
||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
||||||
Cleared OTC
|
$
|
49,445
|
|
|
1
|
|
|
$
|
—
|
|
|
—
|
|
Total derivatives designated as accounting hedges
|
49,445
|
|
|
|
|
—
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||||
Derivatives not designated as accounting hedges:
|
|
|
|
|
|
|
|
||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
||||||
Exchange-traded
|
578
|
|
|
57,570
|
|
|
33
|
|
|
51,180
|
|
||
Cleared OTC
|
951,325
|
|
|
3,785
|
|
|
1,058,707
|
|
|
4,150
|
|
||
Bilateral OTC
|
596,520
|
|
|
1,770
|
|
|
280,336
|
|
|
460
|
|
||
Foreign exchange contracts:
|
|
|
|
|
|
|
|
||||||
Exchange-traded
|
—
|
|
|
619
|
|
|
—
|
|
|
1,205
|
|
||
Bilateral OTC
|
389,074
|
|
|
17,047
|
|
|
391,942
|
|
|
16,213
|
|
||
Equity contracts:
|
|
|
|
|
|
|
|
||||||
Exchange-traded
|
861,786
|
|
|
1,441,642
|
|
|
1,091,912
|
|
|
1,181,907
|
|
||
Bilateral OTC
|
449,287
|
|
|
3,716
|
|
|
706,813
|
|
|
3,740
|
|
||
Commodity contracts:
|
|
|
|
|
|
|
|
||||||
Exchange-traded
|
—
|
|
|
10,866
|
|
|
—
|
|
|
10,134
|
|
||
Bilateral OTC
|
40,159
|
|
|
3,640
|
|
|
—
|
|
|
—
|
|
||
Credit contracts:
|
|
|
|
|
|
|
|
||||||
Cleared OTC
|
4,220
|
|
|
39
|
|
|
3,566
|
|
|
23
|
|
||
Bilateral OTC
|
12,816
|
|
|
14
|
|
|
13,475
|
|
|
12
|
|
||
Total derivatives not designated as accounting hedges
|
3,305,765
|
|
|
|
|
|
3,546,784
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||||||
Total gross derivative assets/liabilities:
|
|
|
|
|
|
|
|
||||||
Exchange-traded
|
862,364
|
|
|
|
|
1,091,945
|
|
|
|
||||
Cleared OTC
|
1,004,990
|
|
|
|
|
1,062,273
|
|
|
|
||||
Bilateral OTC
|
1,487,856
|
|
|
|
|
1,392,566
|
|
|
|
||||
Amounts offset in Consolidated Statement of Financial Condition (3):
|
|
|
|
|
|
|
|
|
|||||
Exchange-traded
|
(802,389
|
)
|
|
|
|
(802,389
|
)
|
|
|
||||
Cleared OTC
|
(967,250
|
)
|
|
|
|
(982,561
|
)
|
|
|
||||
Bilateral OTC
|
(947,803
|
)
|
|
|
|
(1,064,222
|
)
|
|
|
||||
Net amounts in the Consolidated Statement of Financial Condition (4)
|
$
|
637,768
|
|
|
|
|
$
|
697,612
|
|
|
|
|
Assets
|
|
Liabilities
|
||||||||||
|
Fair Value
|
|
Number of
Contracts (2)
|
|
Fair Value
|
|
Number of
Contracts (2)
|
||||||
November 30, 2019 (1)
|
|
|
|
|
|
|
|
||||||
Derivatives designated as accounting hedges:
|
|
|
|
|
|
|
|
||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
||||||
Cleared OTC
|
$
|
28,663
|
|
|
1
|
|
|
$
|
—
|
|
|
—
|
|
Total derivatives designated as accounting hedges
|
28,663
|
|
|
|
|
—
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||||
Derivatives not designated as accounting hedges:
|
|
|
|
|
|
|
|
||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
||||||
Exchange-traded
|
1,191
|
|
|
65,226
|
|
|
103
|
|
|
38,464
|
|
||
Cleared OTC
|
213,224
|
|
|
3,329
|
|
|
284,433
|
|
|
3,443
|
|
||
Bilateral OTC
|
421,700
|
|
|
1,325
|
|
|
258,857
|
|
|
738
|
|
||
Foreign exchange contracts:
|
|
|
|
|
|
|
|
||||||
Exchange-traded
|
—
|
|
|
256
|
|
|
—
|
|
|
199
|
|
||
Bilateral OTC
|
191,218
|
|
|
9,257
|
|
|
187,836
|
|
|
9,187
|
|
||
Equity contracts:
|
|
|
|
|
|
|
|
||||||
Exchange-traded
|
717,494
|
|
|
1,714,538
|
|
|
962,535
|
|
|
1,481,388
|
|
||
Bilateral OTC
|
248,720
|
|
|
4,731
|
|
|
445,241
|
|
|
4,271
|
|
||
Commodity contracts:
|
|
|
|
|
|
|
|
||||||
Exchange-traded
|
—
|
|
|
5,524
|
|
|
—
|
|
|
4,646
|
|
||
Bilateral OTC
|
20,600
|
|
|
4,084
|
|
|
391
|
|
|
359
|
|
||
Credit contracts:
|
|
|
|
|
|
|
|
||||||
Cleared OTC
|
2,514
|
|
|
13
|
|
|
5,768
|
|
|
12
|
|
||
Bilateral OTC
|
6,281
|
|
|
25
|
|
|
14,219
|
|
|
28
|
|
||
Total derivatives not designated as accounting hedges
|
1,822,942
|
|
|
|
|
|
2,159,383
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||||||
Total gross derivative assets/liabilities:
|
|
|
|
|
|
|
|
||||||
Exchange-traded
|
718,685
|
|
|
|
|
962,638
|
|
|
|
||||
Cleared OTC
|
244,401
|
|
|
|
|
290,201
|
|
|
|
||||
Bilateral OTC
|
888,519
|
|
|
|
|
906,544
|
|
|
|
||||
Amounts offset in Consolidated Statement of Financial Condition (3):
|
|
|
|
|
|
|
|
||||||
Exchange-traded
|
(688,871
|
)
|
|
|
|
(688,871
|
)
|
|
|
||||
Cleared OTC
|
(222,869
|
)
|
|
|
|
(266,900
|
)
|
|
|
||||
Bilateral OTC
|
(521,457
|
)
|
|
|
|
(676,407
|
)
|
|
|
||||
Net amounts in the Consolidated Statement of Financial Condition (4)
|
$
|
418,408
|
|
|
|
|
$
|
527,205
|
|
|
|
(1)
|
Exchange-traded derivatives include derivatives executed on an organized exchange. Cleared OTC derivatives include derivatives executed bilaterally and subsequently novated to and cleared through central clearing counterparties. Bilateral OTC derivatives include derivatives executed and settled bilaterally without the use of an organized exchange or central clearing counterparty.
|
(2)
|
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 the Consolidated Statements of Financial Condition.
|
(3)
|
Amounts netted include both netting by counterparty and for cash collateral paid or received.
|
(4)
|
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.
|
|
For the Three Months Ended
|
||||||
|
February 29, 2020
|
|
February 28, 2019
|
||||
Interest rate swaps
|
$
|
24,465
|
|
|
$
|
14,587
|
|
Long-term debt
|
(24,867
|
)
|
|
(15,556
|
)
|
||
Total
|
$
|
(402
|
)
|
|
$
|
(969
|
)
|
|
For the Three Months Ended
|
||||||
|
February 29, 2020
|
|
February 28, 2019
|
||||
Interest rate contracts
|
$
|
(1,089
|
)
|
|
$
|
(69,831
|
)
|
Foreign exchange contracts
|
(2,321
|
)
|
|
(176
|
)
|
||
Equity contracts
|
136,888
|
|
|
(28,481
|
)
|
||
Commodity contracts
|
16,593
|
|
|
(19,273
|
)
|
||
Credit contracts
|
1,830
|
|
|
4,095
|
|
||
Total
|
$
|
151,901
|
|
|
$
|
(113,666
|
)
|
|
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
|
$
|
33,852
|
|
|
$
|
6,307
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
40,159
|
|
Equity forwards, swaps and options
|
28,521
|
|
|
7,516
|
|
|
6,959
|
|
|
(12,901
|
)
|
|
30,095
|
|
|||||
Credit default swaps
|
31
|
|
|
4,079
|
|
|
—
|
|
|
(38
|
)
|
|
4,072
|
|
|||||
Total return swaps
|
160,829
|
|
|
37,825
|
|
|
—
|
|
|
(11,543
|
)
|
|
187,111
|
|
|||||
Foreign currency forwards, swaps and options
|
66,282
|
|
|
3,757
|
|
|
3
|
|
|
(3,005
|
)
|
|
67,037
|
|
|||||
Fixed income forwards
|
8,847
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,847
|
|
|||||
Interest rate swaps, options and forwards
|
80,128
|
|
|
205,846
|
|
|
236,857
|
|
|
(41,190
|
)
|
|
481,641
|
|
|||||
Total
|
$
|
378,490
|
|
|
$
|
265,330
|
|
|
$
|
243,819
|
|
|
$
|
(68,677
|
)
|
|
818,962
|
|
|
Cross product counterparty netting
|
|
|
|
|
|
|
|
|
|
|
|
|
(15,399
|
)
|
|||||
Total OTC derivative assets included in Financial instruments owned, at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
803,563
|
|
(1)
|
At February 29, 2020, we held net exchange-traded derivative assets, other derivative assets and other credit agreements with a fair value of $74.5 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 February 29, 2020, cash collateral received was $240.3 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
|
||||||||||
Equity forwards, swaps and options
|
$
|
35,005
|
|
|
$
|
193,428
|
|
|
$
|
80,442
|
|
|
$
|
(12,901
|
)
|
|
$
|
295,974
|
|
Credit default swaps
|
1,401
|
|
|
2,539
|
|
|
—
|
|
|
(38
|
)
|
|
3,902
|
|
|||||
Total return swaps
|
140,657
|
|
|
71,668
|
|
|
—
|
|
|
(11,543
|
)
|
|
200,782
|
|
|||||
Foreign currency forwards, swaps and options
|
70,063
|
|
|
2,861
|
|
|
—
|
|
|
(3,005
|
)
|
|
69,919
|
|
|||||
Fixed income forwards
|
581
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
581
|
|
|||||
Interest rate swaps, options and forwards
|
45,919
|
|
|
105,566
|
|
|
111,531
|
|
|
(41,190
|
)
|
|
221,826
|
|
|||||
Total
|
$
|
293,626
|
|
|
$
|
376,062
|
|
|
$
|
191,973
|
|
|
$
|
(68,677
|
)
|
|
792,984
|
|
|
Cross product counterparty netting
|
|
|
|
|
|
|
|
|
|
|
|
|
(15,399
|
)
|
|||||
Total OTC derivative liabilities included in Financial instruments sold, not yet purchased, at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
777,585
|
|
(1)
|
At February 29, 2020, we held net exchange-traded derivative liabilities, other derivative liabilities and other credit agreements with a fair value of $292.1 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 February 29, 2020, cash collateral pledged was $372.1 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)
|
We utilize internal credit ratings determined by the Jefferies Group's 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
|
||||||||
February 29, 2020
|
|
|
|
|
|
|
|
|
||||||||
Credit protection sold:
|
|
|
|
|
|
|
|
|
||||||||
Index credit default swaps
|
|
$
|
2.0
|
|
|
$
|
291.0
|
|
|
$
|
—
|
|
|
$
|
293.0
|
|
Single name credit default swaps
|
|
$
|
17.8
|
|
|
$
|
7.9
|
|
|
$
|
—
|
|
|
$
|
25.7
|
|
|
|
|
|
|
|
|
|
|
||||||||
November 30, 2019
|
|
|
|
|
|
|
|
|
||||||||
Credit protection sold:
|
|
|
|
|
|
|
|
|
||||||||
Index credit default swaps
|
|
$
|
3.0
|
|
|
$
|
32.0
|
|
|
$
|
—
|
|
|
$
|
35.0
|
|
Single name credit default swaps
|
|
$
|
3.4
|
|
|
$
|
29.0
|
|
|
$
|
1.5
|
|
|
$
|
33.9
|
|
|
February 29,
2020 |
|
November 30, 2019
|
||||
Derivative instrument liabilities with credit-risk-related contingent features
|
$
|
168.1
|
|
|
$
|
42.9
|
|
Collateral posted
|
$
|
(87.3
|
)
|
|
$
|
(3.1
|
)
|
Collateral received
|
$
|
162.1
|
|
|
$
|
114.1
|
|
Return of and additional collateral required in the event of a credit rating downgrade below investment grade (1)
|
$
|
242.9
|
|
|
$
|
154.0
|
|
(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
|
|
Obligation to Return Securities Received as Collateral
|
|
Total
|
||||||||
February 29, 2020
|
|
|
|
|
|
|
|
|
||||||||
Corporate equity securities
|
|
$
|
1,682,285
|
|
|
$
|
328,156
|
|
|
$
|
5,096
|
|
|
$
|
2,015,537
|
|
Corporate debt securities
|
|
203,091
|
|
|
2,031,185
|
|
|
—
|
|
|
2,234,276
|
|
||||
Mortgage-backed and asset-backed securities
|
|
—
|
|
|
1,558,094
|
|
|
—
|
|
|
1,558,094
|
|
||||
U.S. government and federal agency securities
|
|
6,536
|
|
|
10,239,853
|
|
|
9,908
|
|
|
10,256,297
|
|
||||
Municipal securities
|
|
—
|
|
|
234,681
|
|
|
—
|
|
|
234,681
|
|
||||
Sovereign obligations
|
|
—
|
|
|
2,640,873
|
|
|
—
|
|
|
2,640,873
|
|
||||
Loans and other receivables
|
|
—
|
|
|
1,189,724
|
|
|
—
|
|
|
1,189,724
|
|
||||
Total
|
|
$
|
1,891,912
|
|
|
$
|
18,222,566
|
|
|
$
|
15,004
|
|
|
$
|
20,129,482
|
|
|
|
|
|
|
|
|
|
|
||||||||
November 30, 2019
|
|
|
|
|
|
|
|
|
||||||||
Corporate equity securities
|
|
$
|
1,314,395
|
|
|
$
|
129,558
|
|
|
$
|
—
|
|
|
$
|
1,443,953
|
|
Corporate debt securities
|
|
191,311
|
|
|
1,730,526
|
|
|
—
|
|
|
1,921,837
|
|
||||
Mortgage-backed and asset-backed securities
|
|
—
|
|
|
1,745,145
|
|
|
—
|
|
|
1,745,145
|
|
||||
U.S. government and federal agency securities
|
|
19,434
|
|
|
10,863,997
|
|
|
9,500
|
|
|
10,892,931
|
|
||||
Municipal securities
|
|
—
|
|
|
498,202
|
|
|
—
|
|
|
498,202
|
|
||||
Sovereign obligations
|
|
—
|
|
|
3,016,563
|
|
|
—
|
|
|
3,016,563
|
|
||||
Loans and other receivables
|
|
—
|
|
|
772,926
|
|
|
—
|
|
|
772,926
|
|
||||
Total
|
|
$
|
1,525,140
|
|
|
$
|
18,756,917
|
|
|
$
|
9,500
|
|
|
$
|
20,291,557
|
|
|
|
Contractual Maturity
|
||||||||||||||||||
|
|
Overnight and Continuous
|
|
Up to 30 Days
|
|
31 to 90 Days
|
|
Greater than 90 Days
|
|
Total
|
||||||||||
February 29, 2020
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities lending arrangements
|
|
$
|
629,013
|
|
|
$
|
83,922
|
|
|
$
|
1,019,736
|
|
|
$
|
159,241
|
|
|
$
|
1,891,912
|
|
Repurchase agreements
|
|
8,025,139
|
|
|
2,123,300
|
|
|
5,978,361
|
|
|
2,095,766
|
|
|
18,222,566
|
|
|||||
Obligation to return securities received as collateral
|
|
5,096
|
|
|
—
|
|
|
9,908
|
|
|
—
|
|
|
15,004
|
|
|||||
Total
|
|
$
|
8,659,248
|
|
|
$
|
2,207,222
|
|
|
$
|
7,008,005
|
|
|
$
|
2,255,007
|
|
|
$
|
20,129,482
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
November 30, 2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities lending arrangements
|
|
$
|
694,821
|
|
|
$
|
—
|
|
|
$
|
672,969
|
|
|
$
|
157,350
|
|
|
$
|
1,525,140
|
|
Repurchase agreements
|
|
6,614,026
|
|
|
1,556,260
|
|
|
8,988,528
|
|
|
1,598,103
|
|
|
18,756,917
|
|
|||||
Obligation to return securities received as collateral
|
|
—
|
|
|
—
|
|
|
9,500
|
|
|
—
|
|
|
9,500
|
|
|||||
Total
|
|
$
|
7,308,847
|
|
|
$
|
1,556,260
|
|
|
$
|
9,670,997
|
|
|
$
|
1,755,453
|
|
|
$
|
20,291,557
|
|
(In thousands)
|
Gross
Amounts
|
|
Netting in Consolidated Statements of Financial Condition
|
|
Net Amounts in Consolidated Statements of Financial Condition
|
|
Additional Amounts Available for Setoff (1)
|
|
Available Collateral (2)
|
|
Net Amount (3)
|
||||||||||||
Assets at February 29, 2020
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Securities borrowing arrangements
|
$
|
6,708,788
|
|
|
$
|
—
|
|
|
$
|
6,708,788
|
|
|
$
|
(418,602
|
)
|
|
$
|
(1,250,215
|
)
|
|
$
|
5,039,971
|
|
Reverse repurchase agreements
|
14,723,575
|
|
|
(9,816,544
|
)
|
|
4,907,031
|
|
|
(617,398
|
)
|
|
(4,260,370
|
)
|
|
29,263
|
|
||||||
Securities received as collateral
|
15,004
|
|
|
—
|
|
|
15,004
|
|
|
—
|
|
|
—
|
|
|
15,004
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities at February 29, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Securities lending arrangements
|
$
|
1,891,912
|
|
|
$
|
—
|
|
|
$
|
1,891,912
|
|
|
$
|
(418,602
|
)
|
|
$
|
(1,437,709
|
)
|
|
$
|
35,601
|
|
Repurchase agreements
|
18,222,566
|
|
|
(9,816,544
|
)
|
|
8,406,022
|
|
|
(617,398
|
)
|
|
(7,192,406
|
)
|
|
596,218
|
|
||||||
Obligation to return securities received as collateral
|
15,004
|
|
|
—
|
|
|
15,004
|
|
|
—
|
|
|
—
|
|
|
15,004
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Assets at November 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Securities borrowing arrangements
|
$
|
7,624,642
|
|
|
$
|
—
|
|
|
$
|
7,624,642
|
|
|
$
|
(361,394
|
)
|
|
$
|
(1,479,433
|
)
|
|
$
|
5,783,815
|
|
Reverse repurchase agreements
|
15,551,845
|
|
|
(11,252,247
|
)
|
|
4,299,598
|
|
|
(291,316
|
)
|
|
(3,929,977
|
)
|
|
78,305
|
|
||||||
Securities received as collateral
|
9,500
|
|
|
—
|
|
|
9,500
|
|
|
—
|
|
|
—
|
|
|
9,500
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities at November 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Securities lending arrangements
|
$
|
1,525,140
|
|
|
$
|
—
|
|
|
$
|
1,525,140
|
|
|
$
|
(361,394
|
)
|
|
$
|
(970,799
|
)
|
|
$
|
192,947
|
|
Repurchase agreements
|
18,756,917
|
|
|
(11,252,247
|
)
|
|
7,504,670
|
|
|
(291,316
|
)
|
|
(6,663,807
|
)
|
|
549,547
|
|
||||||
Obligation to return securities received as collateral
|
9,500
|
|
|
—
|
|
|
9,500
|
|
|
—
|
|
|
—
|
|
|
9,500
|
|
(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 Consolidated Statements of Financial Condition because other netting provisions of GAAP are not met.
|
(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 February 29, 2020, amounts include $4,981.1 million of securities borrowing arrangements, for which we have received securities collateral of $4,841.0 million, and $551.1 million of repurchase agreements, for which we have pledged securities collateral of $563.4 million, which are subject to master netting agreements, but we have not determined the agreements to be legally enforceable. At November 30, 2019, amounts include $5,683.4 million of securities borrowing arrangements, for which we have received securities collateral of $5,523.6 million, and $439.7 million of repurchase agreements, for which we have pledged securities collateral of $447.5 million, which are subject to master netting agreements, but we have not determined the agreements to be legally enforceable.
|
|
|
For the Three Months Ended
|
||||||
|
|
February 29, 2020
|
|
February 28, 2019
|
||||
Transferred assets
|
|
$
|
2,334.6
|
|
|
$
|
1,260.6
|
|
Proceeds on new securitizations
|
|
$
|
2,334.7
|
|
|
$
|
1,331.2
|
|
Cash flows received on retained interests
|
|
$
|
7.0
|
|
|
$
|
14.8
|
|
|
February 29, 2020
|
|
November 30, 2019
|
||||||||||||
Securitization Type
|
Total
Assets
|
|
Retained
Interests
|
|
Total
Assets
|
|
Retained
Interests
|
||||||||
U.S. government agency residential mortgage-backed securities
|
$
|
6,213.7
|
|
|
$
|
46.0
|
|
|
$
|
10,671.7
|
|
|
$
|
103.3
|
|
U.S. government agency commercial mortgage-backed securities
|
$
|
2,934.9
|
|
|
$
|
65.5
|
|
|
$
|
1,374.8
|
|
|
$
|
45.8
|
|
CLOs
|
$
|
2,871.2
|
|
|
$
|
48.8
|
|
|
$
|
3,006.7
|
|
|
$
|
58.4
|
|
Consumer and other loans
|
$
|
1,108.4
|
|
|
$
|
70.8
|
|
|
$
|
1,149.3
|
|
|
$
|
71.8
|
|
•
|
Purchases of securities in connection with our trading and secondary market-making activities;
|
•
|
Retained interests held as a result of securitization activities, including the resecuritization of mortgage-backed and other asset-backed securities and the securitization of 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-backed and other asset-backed securities;
|
•
|
Warehouse funding arrangements for client-sponsored consumer and mortgage loan vehicles and CLOs through participation agreements, forward sale agreements and revolving loan and note commitments; and
|
•
|
Loans to, investments in and fees from various investment vehicles.
|
|
February 29,
2020 |
|
November 30, 2019
|
||||
Securities purchased under agreements to resell (1)
|
$
|
2,166.9
|
|
|
$
|
2,467.3
|
|
Receivables
|
727.2
|
|
|
605.6
|
|
||
Other
|
74.4
|
|
|
38.7
|
|
||
Total assets
|
$
|
2,968.5
|
|
|
$
|
3,111.6
|
|
|
|
|
|
||||
Other secured financings
|
$
|
2,919.3
|
|
|
$
|
3,068.6
|
|
Other (2)
|
52.0
|
|
|
20.1
|
|
||
Total liabilities
|
$
|
2,971.3
|
|
|
$
|
3,088.7
|
|
(1)
|
Securities purchased under agreements to resell represent amounts due under collateralized transactions on related consolidated entities, which are eliminated in consolidation. At February 29, 2020, approximately $115.4 million of the Securities purchased under agreements to resell was not eliminated in consolidation.
|
(2)
|
Includes $49.4 million and $17.7 million at February 29, 2020 and November 30, 2019, respectively, of intercompany payables that are eliminated in consolidation.
|
|
Financial Statement
Carrying Amount
|
|
Maximum
Exposure to Loss
|
|
VIE Assets
|
||||||||||
|
Assets
|
|
Liabilities
|
|
|
||||||||||
February 29, 2020
|
|
|
|
|
|
|
|
||||||||
CLOs
|
$
|
70.2
|
|
|
$
|
0.6
|
|
|
$
|
117.5
|
|
|
$
|
6,631.0
|
|
Consumer loan and other asset-backed vehicles
|
279.8
|
|
|
—
|
|
|
407.8
|
|
|
2,596.7
|
|
||||
Related party private equity vehicles
|
23.8
|
|
|
—
|
|
|
34.9
|
|
|
67.0
|
|
||||
Other investment vehicles
|
843.1
|
|
|
—
|
|
|
1,033.8
|
|
|
10,774.6
|
|
||||
Total
|
$
|
1,216.9
|
|
|
$
|
0.6
|
|
|
$
|
1,594.0
|
|
|
$
|
20,069.3
|
|
|
|
|
|
|
|
|
|
||||||||
November 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||
CLOs
|
$
|
152.6
|
|
|
$
|
0.6
|
|
|
$
|
505.3
|
|
|
$
|
7,845.0
|
|
Consumer loan and other asset-backed vehicles
|
358.3
|
|
|
—
|
|
|
490.6
|
|
|
2,354.8
|
|
||||
Related party private equity vehicles
|
23.0
|
|
|
—
|
|
|
34.3
|
|
|
71.4
|
|
||||
Other investment vehicles
|
574.0
|
|
|
—
|
|
|
766.1
|
|
|
9,255.0
|
|
||||
Total
|
$
|
1,107.9
|
|
|
$
|
0.6
|
|
|
$
|
1,796.3
|
|
|
$
|
19,526.2
|
|
•
|
Forward sale agreements whereby we commit 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 beginning of period
|
|
Income (losses) related to associated companies
|
|
Income (losses) primarily related to Jefferies Group's associated companies (1)
|
|
Contributions to (distributions from) associated companies, net
|
|
Other
|
|
Loans to and investments in associated companies as of end of period
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2020
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Jefferies Finance
|
$
|
673,867
|
|
|
$
|
—
|
|
|
$
|
5,119
|
|
|
$
|
4,871
|
|
|
$
|
—
|
|
|
$
|
683,857
|
|
Berkadia
|
268,949
|
|
|
—
|
|
|
21,894
|
|
|
(36,165
|
)
|
|
305
|
|
|
254,983
|
|
||||||
FXCM (2)
|
70,223
|
|
|
(1,638
|
)
|
|
—
|
|
|
—
|
|
|
(144
|
)
|
|
68,441
|
|
||||||
Linkem (3)
|
194,847
|
|
|
(13,185
|
)
|
|
—
|
|
|
(359
|
)
|
|
(113
|
)
|
|
181,190
|
|
||||||
Real estate associated companies (4) (5)
|
255,309
|
|
|
(53,014
|
)
|
|
—
|
|
|
(29,415
|
)
|
|
—
|
|
|
172,880
|
|
||||||
Other (3)
|
189,762
|
|
|
(18
|
)
|
|
1,746
|
|
|
551
|
|
|
9,236
|
|
|
201,277
|
|
||||||
Total
|
$
|
1,652,957
|
|
|
$
|
(67,855
|
)
|
|
$
|
28,759
|
|
|
$
|
(60,517
|
)
|
|
$
|
9,284
|
|
|
$
|
1,562,628
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Jefferies Finance
|
$
|
728,560
|
|
|
$
|
—
|
|
|
$
|
(6,999
|
)
|
|
$
|
(71,348
|
)
|
|
$
|
—
|
|
|
$
|
650,213
|
|
Berkadia
|
245,228
|
|
|
—
|
|
|
22,649
|
|
|
(17,323
|
)
|
|
172
|
|
|
250,726
|
|
||||||
National Beef (6)
|
653,630
|
|
|
27,105
|
|
|
—
|
|
|
(25,596
|
)
|
|
3
|
|
|
655,142
|
|
||||||
FXCM (2)
|
75,031
|
|
|
(2,716
|
)
|
|
—
|
|
|
—
|
|
|
187
|
|
|
72,502
|
|
||||||
Linkem
|
165,157
|
|
|
(1,621
|
)
|
|
—
|
|
|
32,578
|
|
|
1,030
|
|
|
197,144
|
|
||||||
HomeFed (4)
|
337,542
|
|
|
1,983
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
339,525
|
|
||||||
Real estate associated companies
|
87,074
|
|
|
2,596
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
89,670
|
|
||||||
Other
|
125,110
|
|
|
(34
|
)
|
|
(4,313
|
)
|
|
5,728
|
|
|
(387
|
)
|
|
126,104
|
|
||||||
Total
|
$
|
2,417,332
|
|
|
$
|
27,313
|
|
|
$
|
11,337
|
|
|
$
|
(75,961
|
)
|
|
$
|
1,005
|
|
|
$
|
2,381,026
|
|
(1)
|
Primarily classified in Other revenues.
|
(2)
|
As further described in Note 3, our investment in FXCM includes both our equity method investment in FXCM and our term loan with FXCM. Our equity method investment is included in Loans to and investments in associated companies and our term loan is included in Financial instruments owned, at fair value in the Consolidated Statements of Financial Condition.
|
(3)
|
Loans to and investments in associated companies at February 29, 2020 and November 30, 2019 include loans and debt securities aggregating $75.1 million and $70.2 million, respectively, related to Linkem and Other.
|
(4)
|
During the third quarter of 2019, we completed a merger with HomeFed by which we acquired the remaining common stock of HomeFed. From July 1, 2019, the results of HomeFed are reflected on a consolidated basis. From July 1, 2019, HomeFed's equity method investments are included in Real estate associated companies.
|
(5)
|
Income (loss) related to Real estate associated companies for the three months ended February 29, 2020, includes a non-cash charge of $55.6 million to fully write-off the value of HomeFed's RedSky JZ Fulton Mall joint venture investment related to a softening of the Brooklyn real estate market.
|
(6)
|
On November 29, 2019, we sold our remaining equity interest in National Beef.
|
|
For the Three Months Ended
|
||||||
|
February 29, 2020
|
|
February 28, 2019
|
||||
National Beef
|
$
|
—
|
|
|
$
|
27,105
|
|
FXCM
|
(1,638
|
)
|
|
(2,716
|
)
|
||
Linkem
|
(13,185
|
)
|
|
(1,621
|
)
|
||
HomeFed
|
—
|
|
|
1,983
|
|
||
Real estate associated companies
|
(53,014
|
)
|
|
2,596
|
|
||
Other
|
(18
|
)
|
|
(34
|
)
|
||
Total
|
$
|
(67,855
|
)
|
|
$
|
27,313
|
|
|
For the Three Months Ended
|
||||||
|
February 29, 2020
|
|
February 28, 2019
|
||||
Jefferies Finance
|
$
|
5,119
|
|
|
$
|
(6,999
|
)
|
Berkadia
|
21,894
|
|
|
22,649
|
|
||
Other
|
1,746
|
|
|
(4,313
|
)
|
||
Total
|
$
|
28,759
|
|
|
$
|
11,337
|
|
|
For the Three Months Ended
|
||||||
|
February 29, 2020
|
|
February 28, 2019
|
||||
|
|
|
|
||||
Origination and syndication fee revenues (1)
|
$
|
37.7
|
|
|
$
|
21.9
|
|
Origination fee expenses (1)
|
5.6
|
|
|
5.4
|
|
||
CLO placement fee revenues (2)
|
0.4
|
|
|
1.3
|
|
||
Underwriting fees (3)
|
0.3
|
|
|
—
|
|
||
Service fees (4)
|
25.2
|
|
|
27.1
|
|
(1)
|
Jefferies Group engages in debt underwriting transactions with Jefferies Finance related to the originations and syndications of loans by Jefferies Finance. In connection with such services, Jefferies Group earned fees, which are recognized in Investment banking revenues in the Consolidated Statements of Operations. In addition, Jefferies Group paid fees to Jefferies Finance in respect of certain loans originated by Jefferies Finance, which are recognized in Selling, general and other expenses in the Consolidated Statements of Operations.
|
(2)
|
Jefferies Group acts as a placement agent for CLOs managed by Jefferies Finance, for which Jefferies Group recognized fees, which are included in Investment banking revenues in the Consolidated Statements of Operations. At February 29, 2020 and November 30, 2019, Jefferies Group held securities issued by CLOs managed by Jefferies Finance, which are included in Financial instruments owned, at fair value.
|
(3)
|
Jefferies Group acted as underwriter in connection with terms loans issued by Jefferies Finance.
|
(4)
|
Under a service agreement, Jefferies Group charged Jefferies Finance for services provided.
|
|
For the Three Months Ended
|
||||||
|
February 29,
2020 |
|
February 28,
2019 |
||||
Revenues
|
$
|
462,269
|
|
|
$
|
2,250,403
|
|
Income from continuing operations before extraordinary items
|
$
|
48,307
|
|
|
$
|
133,579
|
|
Net income
|
$
|
48,307
|
|
|
$
|
133,579
|
|
|
February 29,
2020 |
|
November 30, 2019
|
||||
Indefinite-lived intangibles:
|
|
|
|
||||
Exchange and clearing organization membership interests and registrations
|
$
|
8,269
|
|
|
$
|
8,273
|
|
|
|
|
|
||||
Amortizable intangibles:
|
|
|
|
|
|
||
Customer and other relationships, net of accumulated amortization of $113,077 and $111,060
|
57,426
|
|
|
59,575
|
|
||
Trademarks and tradenames, net of accumulated amortization of $25,682 and $24,800
|
102,729
|
|
|
103,790
|
|
||
Other, net of accumulated amortization of $6,333 and $5,366
|
10,349
|
|
|
11,316
|
|
||
Total intangible assets, net
|
178,773
|
|
|
182,954
|
|
||
|
|
|
|
||||
Goodwill:
|
|
|
|
|
|
||
Investment Banking and Capital Markets (1) (2)
|
1,556,125
|
|
|
1,556,810
|
|
||
Asset Management (1)
|
143,000
|
|
|
143,000
|
|
||
Real estate
|
36,711
|
|
|
36,711
|
|
||
Other operations
|
3,459
|
|
|
3,459
|
|
||
Total goodwill
|
1,739,295
|
|
|
1,739,980
|
|
||
|
|
|
|
||||
Total intangible assets, net and goodwill
|
$
|
1,918,068
|
|
|
$
|
1,922,934
|
|
(1)
|
As discussed further in Note 23, during the three months ended February 29, 2020, we changed our internal structure with regard to our operating segments. As a result, we created a separate operating segment that consists of the asset management activity previously included within our Investment Banking, Capital Markets and Asset Management segment. In order to reallocate goodwill that was previously contained in our Investment Banking, Capital Markets and Asset Management segment to the newly created Investment Banking and Capital Markets segment and the Asset Management segment, we performed a fair value analysis of the components.
|
(2)
|
The decrease in Investment Banking and Capital Markets goodwill during the three months ended February 29, 2020, primarily relates to translation adjustments.
|
|
February 29,
2020 |
|
November 30, 2019
|
||||
Bank loans (1)
|
$
|
602,992
|
|
|
$
|
527,509
|
|
Equity-linked notes
|
20,164
|
|
|
20,981
|
|
||
Total short-term borrowings
|
$
|
623,156
|
|
|
$
|
548,490
|
|
(1)
|
These short-term borrowings are recorded at cost in the Consolidated Statements of Financial Condition, which is a reasonable approximation of their fair values due to their liquid and short-term nature.
|
|
February 29,
2020 |
|
November 30, 2019
|
||||
Parent Company Debt:
|
|
|
|
||||
Senior Notes:
|
|
|
|
||||
5.50% Senior Notes due October 18, 2023, $750,000 principal
|
$
|
744,919
|
|
|
$
|
744,606
|
|
6.625% Senior Notes due October 23, 2043, $250,000 principal
|
246,786
|
|
|
246,772
|
|
||
Total long-term debt – Parent Company
|
991,705
|
|
|
991,378
|
|
||
|
|
|
|
||||
Subsidiary Debt (non-recourse to Parent Company):
|
|
|
|
|
|
||
Jefferies Group:
|
|
|
|
|
|
||
2.375% Euro Medium Term Notes, due May 20, 2020, $551,425 and $550,875 principal
|
551,306
|
|
|
550,622
|
|
||
6.875% Senior Notes, due April 15, 2021, $750,000 principal
|
770,351
|
|
|
774,738
|
|
||
2.25% Euro Medium Term Notes, due July 13, 2022, $4,411 and $4,407 principal
|
4,226
|
|
|
4,204
|
|
||
5.125% Senior Notes, due January 20, 2023, $600,000 principal
|
609,276
|
|
|
610,023
|
|
||
1.00% Euro Medium Term Notes, due July 19, 2024, $551,425 and $550,875 principal
|
549,534
|
|
|
548,880
|
|
||
4.85% Senior Notes, due January 15, 2027, $750,000 principal (1)
|
793,931
|
|
|
768,931
|
|
||
6.45% Senior Debentures, due June 8, 2027, $350,000 principal
|
370,846
|
|
|
371,426
|
|
||
4.15% Senior Notes, due January 23, 2030, $1,000,000 principal
|
988,886
|
|
|
988,662
|
|
||
6.25% Senior Debentures, due January 15, 2036, $500,000 principal
|
511,156
|
|
|
511,260
|
|
||
6.50% Senior Notes, due January 20, 2043, $400,000 principal
|
420,137
|
|
|
420,239
|
|
||
Structured Notes (2)
|
1,354,714
|
|
|
1,215,285
|
|
||
Jefferies Group Revolving Credit Facility
|
189,249
|
|
|
189,088
|
|
||
Jefferies Group Secured Bank Loan
|
50,000
|
|
|
50,000
|
|
||
HomeFed EB-5 Program debt
|
183,390
|
|
|
140,739
|
|
||
Foursight Capital Credit Facilities
|
(324
|
)
|
|
98,260
|
|
||
Vitesse Energy Finance Revolving Credit Facility
|
113,121
|
|
|
103,050
|
|
||
Other
|
—
|
|
|
276
|
|
||
Total long-term debt – subsidiaries
|
7,459,799
|
|
|
7,345,683
|
|
||
|
|
|
|
||||
Long-term debt
|
$
|
8,451,504
|
|
|
$
|
8,337,061
|
|
(1)
|
Amount includes losses of $24.9 million and of $15.6 million during the three months ended February 29, 2020 and February 28, 2019, respectively, associated with an interest rate swap based on its designation as a fair value hedge. See Note 4 for further information.
|
(2)
|
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 (loss) and changes in fair value resulting from non-credit components recognized in Principal transactions revenues.
|
|
|
Three Months Ended February 29, 2020
|
||
|
|
|
||
Premises and equipment - ROU assets
|
|
$
|
535,815
|
|
|
|
|
||
Weighted average:
|
|
|
||
Remaining lease term (in years)
|
|
11.1 years
|
|
|
Discount rate
|
|
2.9
|
%
|
|
|
Lease Liabilities
|
||
|
|
|
||
Remainder of 2020
|
|
$
|
46,865
|
|
2021
|
|
76,147
|
|
|
2022
|
|
73,862
|
|
|
2023
|
|
64,543
|
|
|
2024
|
|
61,329
|
|
|
2025 and thereafter
|
|
396,698
|
|
|
Total undiscounted cash flows
|
|
719,444
|
|
|
Less: Difference between undiscounted and discounted cash flows
|
|
(112,287
|
)
|
|
Operating leases amount in the Consolidated Statement of Financial Condition
|
|
607,157
|
|
|
Finance leases amount in the Consolidated Statement of Financial Condition
|
|
378
|
|
|
Total amount in the Consolidated Statement of Financial Condition
|
|
$
|
607,535
|
|
|
|
Three Months Ended February 29, 2020
|
||
|
|
|
||
Operating lease costs (1)
|
|
$
|
19,249
|
|
Variable lease costs (2)
|
|
3,515
|
|
|
Less: Sublease income
|
|
(1,848
|
)
|
|
Total lease cost, net
|
|
$
|
20,916
|
|
|
|
Three Months Ended February 29, 2020
|
||
|
|
|
||
Cash outflows - lease liabilities
|
|
$
|
18,388
|
|
Non-cash - ROU assets recorded for new and modified leases
|
|
$
|
11,761
|
|
2020
|
|
$
|
70,886
|
|
2021
|
|
73,374
|
|
|
2022
|
|
71,464
|
|
|
2023
|
|
62,552
|
|
|
2024
|
|
59,714
|
|
|
Thereafter
|
|
393,995
|
|
|
|
|
731,985
|
|
|
Less: sublease income
|
|
(21,883
|
)
|
|
|
|
$
|
710,102
|
|
|
February 29,
2020 |
|
November 30, 2019
|
||||
Net unrealized gains on available for sale securities
|
$
|
378
|
|
|
$
|
141
|
|
Net unrealized foreign exchange losses
|
(201,942
|
)
|
|
(192,709
|
)
|
||
Net unrealized gains (losses) on instrument specific credit risk
|
4,107
|
|
|
(18,889
|
)
|
||
Net minimum pension liability
|
(60,943
|
)
|
|
(61,582
|
)
|
||
|
$
|
(258,400
|
)
|
|
$
|
(273,039
|
)
|
Details about Accumulated Other Comprehensive Income (Loss) Components
|
|
Amount Reclassified from
Accumulated Other
Comprehensive Income (Loss)
|
|
Affected Line Item in the
Consolidated Statements
of Operations
|
||||||
|
|
For the Three Months Ended
|
|
|
||||||
|
|
February 29,
2020 |
|
February 28,
2019 |
|
|
||||
Net unrealized gains (losses) on available for sale securities, net of income tax provision (benefit) of $0 and $(377)
|
|
$
|
—
|
|
|
$
|
(1,129
|
)
|
|
Other revenues
|
Net unrealized gains (losses) on instrument specific credit risk, net of income tax provision (benefit) of $86 and $(99)
|
|
252
|
|
|
(294
|
)
|
|
Principal transactions revenues
|
||
Amortization of defined benefit pension plan actuarial losses, net of income tax benefit of $(224) and $(119)
|
|
(639
|
)
|
|
(355
|
)
|
|
Selling, general and other expenses, which includes pension expense
|
||
Total reclassifications for the period, net of tax
|
|
$
|
(387
|
)
|
|
$
|
(1,778
|
)
|
|
|
|
|
For the Three Months Ended
|
||||||
|
|
February 29, 2020
|
|
February 28, 2019
|
||||
Revenues from contracts with customers:
|
|
|
|
|
||||
Commissions and other fees (1)
|
|
$
|
179,430
|
|
|
$
|
154,950
|
|
Investment banking
|
|
592,002
|
|
|
285,596
|
|
||
Manufacturing revenues
|
|
77,607
|
|
|
75,425
|
|
||
Other
|
|
63,777
|
|
|
54,029
|
|
||
Total revenues from contracts with customers
|
|
912,816
|
|
|
570,000
|
|
||
|
|
|
|
|
||||
Other sources of revenue:
|
|
|
|
|
||||
Principal transactions
|
|
404,864
|
|
|
246,182
|
|
||
Interest income
|
|
326,366
|
|
|
386,844
|
|
||
Other
|
|
48,218
|
|
|
(8,014
|
)
|
||
Total revenues from other sources
|
|
779,448
|
|
|
625,012
|
|
||
|
|
|
|
|
||||
Total revenues
|
|
$
|
1,692,264
|
|
|
$
|
1,195,012
|
|
|
|
Reportable Segments
|
|
|
|
|
||||||||||||||||||
|
|
Investment Banking and Capital Markets
|
|
Asset Management
|
|
Merchant Banking
|
|
Corporate
|
|
Consolidation Adjustments
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Three months ended February 29, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Major Business Activity:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Jefferies Group:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equities (1)
|
|
$
|
176,249
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(105
|
)
|
|
$
|
176,144
|
|
Fixed Income (1)
|
|
3,286
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,286
|
|
||||||
Investment Banking - Underwriting
|
|
248,844
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
248,844
|
|
||||||
Investment Banking - Advisory
|
|
343,158
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
343,158
|
|
||||||
Asset Management
|
|
—
|
|
|
6,091
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,091
|
|
||||||
Manufacturing revenues
|
|
—
|
|
|
—
|
|
|
77,607
|
|
|
—
|
|
|
—
|
|
|
77,607
|
|
||||||
Oil and gas revenues
|
|
—
|
|
|
—
|
|
|
42,214
|
|
|
—
|
|
|
—
|
|
|
42,214
|
|
||||||
Other revenues
|
|
—
|
|
|
—
|
|
|
15,472
|
|
|
—
|
|
|
—
|
|
|
15,472
|
|
||||||
Total revenues from contracts with customers
|
|
$
|
771,537
|
|
|
$
|
6,091
|
|
|
$
|
135,293
|
|
|
$
|
—
|
|
|
$
|
(105
|
)
|
|
$
|
912,816
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Primary Geographic Region:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Americas
|
|
$
|
649,069
|
|
|
$
|
2,568
|
|
|
$
|
134,779
|
|
|
$
|
—
|
|
|
$
|
(105
|
)
|
|
$
|
786,311
|
|
Europe, Middle East and Africa
|
|
79,438
|
|
|
3,523
|
|
|
360
|
|
|
—
|
|
|
—
|
|
|
83,321
|
|
||||||
Asia
|
|
43,030
|
|
|
—
|
|
|
154
|
|
|
—
|
|
|
—
|
|
|
43,184
|
|
||||||
Total revenues from contracts with customers
|
|
$
|
771,537
|
|
|
$
|
6,091
|
|
|
$
|
135,293
|
|
|
$
|
—
|
|
|
$
|
(105
|
)
|
|
$
|
912,816
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Three months ended February 28, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Major Business Activity:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Jefferies Group:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equities (1)
|
|
$
|
152,074
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(192
|
)
|
|
$
|
151,882
|
|
Fixed Income (1)
|
|
3,068
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,068
|
|
||||||
Investment Banking - Underwriting
|
|
105,114
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
105,114
|
|
||||||
Investment Banking - Advisory
|
|
180,482
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
180,482
|
|
||||||
Asset Management
|
|
—
|
|
|
8,318
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,318
|
|
||||||
Manufacturing revenues
|
|
—
|
|
|
—
|
|
|
75,425
|
|
|
—
|
|
|
—
|
|
|
75,425
|
|
||||||
Oil and gas revenues
|
|
—
|
|
|
—
|
|
|
36,365
|
|
|
—
|
|
|
—
|
|
|
36,365
|
|
||||||
Other revenues
|
|
—
|
|
|
—
|
|
|
9,346
|
|
|
—
|
|
|
—
|
|
|
9,346
|
|
||||||
Total revenues from contracts with customers
|
|
$
|
440,738
|
|
|
$
|
8,318
|
|
|
$
|
121,136
|
|
|
$
|
—
|
|
|
$
|
(192
|
)
|
|
$
|
570,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Primary Geographic Region:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Americas
|
|
$
|
323,389
|
|
|
$
|
5,030
|
|
|
$
|
120,878
|
|
|
$
|
—
|
|
|
$
|
(192
|
)
|
|
$
|
449,105
|
|
Europe, Middle East and Africa
|
|
100,205
|
|
|
3,288
|
|
|
234
|
|
|
—
|
|
|
—
|
|
|
103,727
|
|
||||||
Asia
|
|
17,144
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
17,168
|
|
||||||
Total revenues from contracts with customers
|
|
$
|
440,738
|
|
|
$
|
8,318
|
|
|
$
|
121,136
|
|
|
$
|
—
|
|
|
$
|
(192
|
)
|
|
$
|
570,000
|
|
(1)
|
Revenues from contracts with customers associated with the equities and fixed income businesses primarily represent commissions and other fee revenue.
|
|
For the Three Months Ended
|
||||||
|
February 29, 2020
|
|
February 28, 2019
|
||||
Numerator for earnings per share:
|
|
|
|
||||
Net income attributable to Jefferies Financial Group Inc. common shareholders
|
$
|
113,010
|
|
|
$
|
44,811
|
|
Allocation of earnings to participating securities (1)
|
(695
|
)
|
|
(255
|
)
|
||
Net income attributable to Jefferies Financial Group Inc. common shareholders for basic earnings per share
|
112,315
|
|
|
44,556
|
|
||
Adjustment to allocation of earnings to participating securities related to diluted shares (1)
|
(3
|
)
|
|
(7
|
)
|
||
Mandatorily redeemable convertible preferred share dividends
|
1,422
|
|
|
—
|
|
||
Net income attributable to Jefferies Financial Group Inc. common shareholders for diluted earnings per share
|
$
|
113,734
|
|
|
$
|
44,549
|
|
|
|
|
|
||||
Denominator for earnings per share:
|
|
|
|
|
|
||
Weighted average common shares outstanding
|
286,682
|
|
|
304,533
|
|
||
Weighted average shares of restricted stock outstanding with future service required
|
(1,892
|
)
|
|
(1,828
|
)
|
||
Weighted average RSUs outstanding with no future service required
|
17,616
|
|
|
12,470
|
|
||
Denominator for basic earnings per share – weighted average shares
|
302,406
|
|
|
315,175
|
|
||
Stock options
|
10
|
|
|
—
|
|
||
Senior executive compensation plan awards
|
1,423
|
|
|
3,577
|
|
||
Mandatorily redeemable convertible preferred shares
|
4,441
|
|
|
—
|
|
||
Denominator for diluted earnings per share
|
308,280
|
|
|
318,752
|
|
(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 1,902,000 and 1,831,000 for the three months ended February 29, 2020 and February 28, 2019, respectively. Dividends declared on participating securities were not material during the three months ended February 29, 2020 and February 28, 2019. Undistributed earnings are allocated to participating securities based upon their right to share in earnings if all earnings for the period had been distributed.
|
|
Expected Maturity Date
|
|
|
||||||||||||||||||||
|
2020
|
|
2021
|
|
2022
and 2023 |
|
2024
and 2025 |
|
2026
and Later |
|
Maximum
Payout
|
||||||||||||
Equity commitments (1)
|
$
|
65.8
|
|
|
$
|
152.8
|
|
|
$
|
75.0
|
|
|
$
|
—
|
|
|
$
|
13.1
|
|
|
$
|
306.7
|
|
Loan commitments (1)
|
—
|
|
|
296.5
|
|
|
10.0
|
|
|
15.0
|
|
|
—
|
|
|
321.5
|
|
||||||
Underwriting commitments
|
292.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
292.0
|
|
||||||
Forward starting reverse repos (2)
|
4,131.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,131.5
|
|
||||||
Forward starting repos (2)
|
1,962.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,962.3
|
|
||||||
Other unfunded commitments (1)
|
—
|
|
|
128.0
|
|
|
—
|
|
|
4.9
|
|
|
—
|
|
|
132.9
|
|
||||||
|
$
|
6,451.6
|
|
|
$
|
577.3
|
|
|
$
|
85.0
|
|
|
$
|
19.9
|
|
|
$
|
13.1
|
|
|
$
|
7,146.9
|
|
(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 February 29, 2020, $4,124.2 million within forward starting securities purchased under agreements to resell and $1,953.1 million of the forward starting securities sold under agreements to repurchase settled within three business days.
|
|
Expected Maturity Date
|
|
|
||||||||||||||||||||
Guarantee Type
|
2020
|
|
2021
|
|
2022
and 2023 |
|
2024
and 2025 |
|
2026
and Later |
|
Notional/
Maximum
Payout
|
||||||||||||
Derivative contracts – non-credit related
|
$
|
9,031.5
|
|
|
$
|
3,777.4
|
|
|
$
|
5,502.0
|
|
|
$
|
1,704.4
|
|
|
$
|
50.1
|
|
|
$
|
20,065.4
|
|
Written derivative contracts – credit related
|
1.5
|
|
|
—
|
|
|
1.0
|
|
|
23.2
|
|
|
—
|
|
|
25.7
|
|
||||||
Total derivative contracts
|
$
|
9,033.0
|
|
|
$
|
3,777.4
|
|
|
$
|
5,503.0
|
|
|
$
|
1,727.6
|
|
|
$
|
50.1
|
|
|
$
|
20,091.1
|
|
|
February 29, 2020
|
|
November 30, 2019
|
||||||||||||
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
Receivables:
|
|
|
|
|
|
|
|
||||||||
Notes and loans receivable (1)
|
$
|
798,548
|
|
|
$
|
781,367
|
|
|
$
|
775,501
|
|
|
$
|
784,053
|
|
|
|
|
|
|
|
|
|
||||||||
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Short-term borrowings (2)
|
$
|
623,156
|
|
|
$
|
623,156
|
|
|
$
|
548,490
|
|
|
$
|
548,490
|
|
Long-term debt (3)
|
$
|
7,096,790
|
|
|
$
|
7,699,370
|
|
|
$
|
7,121,776
|
|
|
$
|
7,569,837
|
|
(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 carried at cost 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. Short-term borrowings that are accounted for at fair value include equity-linked notes, which are generally categorized within Level 2 of the fair value hierarchy, as the fair value is based on the price of the underlying equity security.
|
(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.
|
|
For the Three Months Ended
|
||||||
|
February 29, 2020
|
|
February 28, 2019
|
||||
|
(In thousands)
|
||||||
Net revenues:
|
|
|
|
||||
Reportable Segments:
|
|
|
|
||||
Investment Banking and Capital Markets
|
$
|
1,148,829
|
|
|
$
|
658,247
|
|
Asset Management
|
20,329
|
|
|
30,745
|
|
||
Merchant Banking
|
204,559
|
|
|
132,692
|
|
||
Corporate
|
9,792
|
|
|
4,193
|
|
||
Total net revenues related to reportable segments
|
1,383,509
|
|
|
825,877
|
|
||
Consolidation adjustments
|
2,819
|
|
|
2,566
|
|
||
Total consolidated net revenues
|
$
|
1,386,328
|
|
|
$
|
828,443
|
|
|
|
|
|
||||
Income (loss) before income taxes:
|
|
|
|
|
|
||
Reportable Segments:
|
|
|
|
|
|
||
Investment Banking and Capital Markets
|
$
|
249,957
|
|
|
$
|
55,117
|
|
Asset Management
|
(20,929
|
)
|
|
1,184
|
|
||
Merchant Banking
|
(53,623
|
)
|
|
26,389
|
|
||
Corporate
|
(7,754
|
)
|
|
(21,343
|
)
|
||
Income before income taxes related to reportable segments
|
167,651
|
|
|
61,347
|
|
||
Parent Company interest
|
(12,781
|
)
|
|
(14,762
|
)
|
||
Consolidation adjustments
|
2,924
|
|
|
2,732
|
|
||
Total consolidated income before income taxes
|
$
|
157,794
|
|
|
$
|
49,317
|
|
|
|
|
|
||||
Depreciation and amortization expenses:
|
|
|
|
|
|
||
Reportable Segments:
|
|
|
|
|
|
||
Investment Banking and Capital Markets
|
$
|
19,116
|
|
|
$
|
17,330
|
|
Asset Management
|
625
|
|
|
455
|
|
||
Merchant Banking
|
18,841
|
|
|
15,294
|
|
||
Corporate
|
888
|
|
|
855
|
|
||
Total consolidated depreciation and amortization expenses
|
$
|
39,470
|
|
|
$
|
33,934
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
|
Investment Banking and Capital Markets
|
|
Asset Management
|
|
Merchant Banking
|
|
Corporate
|
|
Parent Company Interest
|
|
Consolidation Adjustments
|
|
Total
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net revenues
|
$
|
1,148,829
|
|
|
$
|
20,329
|
|
|
$
|
204,559
|
|
|
$
|
9,792
|
|
|
$
|
—
|
|
|
$
|
2,819
|
|
|
$
|
1,386,328
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Compensation and benefits
|
620,924
|
|
|
22,221
|
|
|
17,190
|
|
|
9,858
|
|
|
—
|
|
|
—
|
|
|
670,193
|
|
|||||||
Cost of sales (1)
|
52,874
|
|
|
6,307
|
|
|
72,443
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
131,624
|
|
|||||||
Interest expense (2)
|
—
|
|
|
—
|
|
|
8,773
|
|
|
—
|
|
|
12,781
|
|
|
—
|
|
|
21,554
|
|
|||||||
Depreciation and amortization
|
19,116
|
|
|
625
|
|
|
18,841
|
|
|
888
|
|
|
—
|
|
|
—
|
|
|
39,470
|
|
|||||||
Selling, general and other expenses
|
205,958
|
|
|
12,105
|
|
|
73,080
|
|
|
6,800
|
|
|
—
|
|
|
(105
|
)
|
|
297,838
|
|
|||||||
Total expenses
|
898,872
|
|
|
41,258
|
|
|
190,327
|
|
|
17,546
|
|
|
12,781
|
|
|
(105
|
)
|
|
1,160,679
|
|
|||||||
Income (loss) before income taxes and loss related to associated companies
|
249,957
|
|
|
(20,929
|
)
|
|
14,232
|
|
|
(7,754
|
)
|
|
(12,781
|
)
|
|
2,924
|
|
|
225,649
|
|
|||||||
Loss related to associated companies
|
—
|
|
|
—
|
|
|
(67,855
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(67,855
|
)
|
|||||||
Income (loss) before income taxes
|
$
|
249,957
|
|
|
$
|
(20,929
|
)
|
|
$
|
(53,623
|
)
|
|
$
|
(7,754
|
)
|
|
$
|
(12,781
|
)
|
|
$
|
2,924
|
|
|
157,794
|
|
|
Income tax provision
|
|
|
|
|
|
|
|
|
|
|
|
|
45,773
|
|
|||||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
112,021
|
|
(1)
|
Includes Floor brokerage and clearing fees.
|
(2)
|
Interest expense within Merchant Banking of $8.8 million for the first quarter of 2020, primarily includes $7.4 million for Foursight Capital and $1.4 million for Vitesse Energy, LLC ("Vitesse Energy Finance").
|
|
Investment Banking and Capital Markets
|
|
Asset Management
|
|
Merchant Banking
|
|
Corporate
|
|
Parent Company Interest
|
|
Consolidation Adjustments
|
|
Total
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net revenues
|
$
|
658,247
|
|
|
$
|
30,745
|
|
|
$
|
132,692
|
|
|
$
|
4,193
|
|
|
$
|
—
|
|
|
$
|
2,566
|
|
|
$
|
828,443
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Compensation and benefits
|
361,314
|
|
|
16,854
|
|
|
13,903
|
|
|
17,521
|
|
|
—
|
|
|
—
|
|
|
409,592
|
|
|||||||
Cost of sales (1)
|
47,136
|
|
|
4,732
|
|
|
66,921
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
118,789
|
|
|||||||
Interest expense (2)
|
—
|
|
|
—
|
|
|
8,256
|
|
|
—
|
|
|
14,762
|
|
|
—
|
|
|
23,018
|
|
|||||||
Depreciation and amortization
|
17,330
|
|
|
455
|
|
|
15,294
|
|
|
855
|
|
|
—
|
|
|
—
|
|
|
33,934
|
|
|||||||
Selling, general and other expenses
|
177,350
|
|
|
7,740
|
|
|
29,022
|
|
|
7,160
|
|
|
—
|
|
|
(166
|
)
|
|
221,106
|
|
|||||||
Total expenses
|
603,130
|
|
|
29,781
|
|
|
133,396
|
|
|
25,536
|
|
|
14,762
|
|
|
(166
|
)
|
|
806,439
|
|
|||||||
Income (loss) before income taxes and income related to associated companies
|
55,117
|
|
|
964
|
|
|
(704
|
)
|
|
(21,343
|
)
|
|
(14,762
|
)
|
|
2,732
|
|
|
22,004
|
|
|||||||
Income related to associated companies
|
—
|
|
|
220
|
|
|
27,093
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27,313
|
|
|||||||
Income (loss) before income taxes
|
$
|
55,117
|
|
|
$
|
1,184
|
|
|
$
|
26,389
|
|
|
$
|
(21,343
|
)
|
|
$
|
(14,762
|
)
|
|
$
|
2,732
|
|
|
49,317
|
|
|
Income tax provision
|
|
|
|
|
|
|
|
|
|
|
|
|
2,302
|
|
|||||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
47,015
|
|
(1)
|
Includes Floor brokerage and clearing fees.
|
(2)
|
Interest expense within Merchant Banking of $8.3 million for the first quarter of 2019, primarily includes $7.0 million for Foursight Capital and $1.1 million for Vitesse Energy Finance.
|
•
|
Pre-tax income of $235.4 million from the Jefferies Group reflecting record total net revenues of $1,170.7 million; and
|
•
|
Pre-tax loss of $53.6 million related to our Merchant Banking businesses reflecting:
|
◦
|
Non-cash charge of $55.6 million to write-off the value of HomeFed LLC's ("HomeFed") RedSky JZ Fulton Mall joint venture investment related to a softening of the Brooklyn real estate market;
|
◦
|
Non-cash charge of $33.0 million to write-down the value of our investment in JETX Energy, LLC ("JETX Energy") to reflect the impact of oil price declines during the quarter; and
|
◦
|
A gain of $61.5 million from effective short-term hedges against mark-to-market and fair value decreases in some of our other investments within Merchant Banking.
|
•
|
Pre-tax income of $62.6 million from the Jefferies Group reflecting an extremely challenging environment throughout December 2018 and the government shutdown during December 2018 and January 2019;
|
•
|
A $36.0 million mark-to-market increase in the value of our investment in Spectrum Brands Holdings, Inc. ("Spectrum Brands"); and
|
•
|
$27.1 million of income from associated companies in respect of our 31% investment in National Beef Packing Company, LLC ("National Beef").
|
|
|
For the Three Months Ended
|
||||||
|
|
February 29, 2020
|
|
February 28, 2019
|
||||
|
|
|
|
|
||||
Net revenues
|
|
$
|
1,148,829
|
|
|
$
|
658,247
|
|
|
|
|
|
|
||||
Expenses:
|
|
|
|
|
|
|
||
Compensation and benefits
|
|
620,924
|
|
|
361,314
|
|
||
Floor brokerage and clearing fees
|
|
52,874
|
|
|
47,136
|
|
||
Depreciation and amortization
|
|
19,116
|
|
|
17,330
|
|
||
Selling, general and other expenses
|
|
205,958
|
|
|
177,350
|
|
||
Total expenses
|
|
898,872
|
|
|
603,130
|
|
||
|
|
|
|
|
||||
Income before income taxes
|
|
$
|
249,957
|
|
|
$
|
55,117
|
|
|
|
For the Three Months Ended
|
||||||
|
|
February 29, 2020
|
|
February 28, 2019
|
||||
|
|
|
|
|
||||
Advisory
|
|
$
|
343,158
|
|
|
$
|
180,482
|
|
|
|
|
|
|
||||
Equity underwriting
|
|
131,692
|
|
|
51,337
|
|
||
Debt underwriting
|
|
117,152
|
|
|
53,777
|
|
||
Total underwriting
|
|
248,844
|
|
|
105,114
|
|
||
|
|
|
|
|
||||
Other investment banking
|
|
(14,529
|
)
|
|
(7,642
|
)
|
||
Total investment banking
|
|
577,473
|
|
|
277,954
|
|
||
|
|
|
|
|
||||
Equities
|
|
245,641
|
|
|
174,539
|
|
||
Fixed income
|
|
248,182
|
|
|
196,759
|
|
||
Total capital markets
|
|
493,823
|
|
|
371,298
|
|
||
|
|
|
|
|
|
|
||
Other
|
|
77,533
|
|
|
8,995
|
|
||
|
|
|
|
|
||||
Total Investment Banking and Capital Markets (1) (2)
|
|
$
|
1,148,829
|
|
|
$
|
658,247
|
|
(1)
|
Includes net interest revenues of $2.9 million and $4.6 million for the first quarter of 2020 and 2019, respectively.
|
(2)
|
Allocated net interest is not separately disaggregated in presenting our Investment Banking and Capital Markets reportable segment within our Net Revenues by Source. This presentation is aligned to our Investment Banking and Capital Markets internal performance measurement.
|
•
|
advisory services with respect to mergers and acquisitions and restructurings and recapitalizations;
|
•
|
underwriting services, which include underwriting and placement services related to corporate debt, municipal bonds, mortgage-backed and asset-backed securities and equity and equity-linked securities and loan syndication;
|
•
|
our share of net earnings from Jefferies Group's corporate lending joint venture, Jefferies Finance LLC ("Jefferies Finance"); and
|
•
|
securities and loans received or acquired in connection with our investment banking activities.
|
|
Deals Completed
|
|
Aggregate Value
|
||||||||||
|
For the Three Months Ended
|
|
For the Three Months Ended
|
||||||||||
|
February 29, 2020
|
|
February 28, 2019
|
|
February 29, 2020
|
|
February 28, 2019
|
||||||
|
|
|
|
|
|
|
|
||||||
Advisory transactions (1)
|
66
|
|
|
44
|
|
|
$
|
57.7
|
|
|
$
|
52.2
|
|
Public and private debt financings
|
152
|
|
|
114
|
|
|
$
|
69.6
|
|
|
$
|
27.3
|
|
Public and private equity and convertible offerings (2)
|
56
|
|
|
21
|
|
|
$
|
11.8
|
|
|
$
|
3.0
|
|
(1)
|
The number of advisory deals completed includes three and four restructuring and recapitalization transactions during the first quarter of 2020 and 2019, respectively.
|
(2)
|
We acted as sole or joint bookrunner on 56 and 21 offerings during the first quarter of 2020 and 2019, respectively.
|
•
|
services provided to our clients from which we earn 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 include providing clients access to all of our 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, as well as foreign exchange execution on behalf of clients; and
|
•
|
interest rate derivatives and credit derivatives.
|
•
|
Berkadia Commercial Mortgage Holding LLC ("Berkadia") and other investments (other than Jefferies Finance);
|
•
|
principal investments in private equity and hedge funds managed by third parties or related parties and that are not part of our Leucadia Asset Management ("LAM") platform; and
|
•
|
investments held as part of employee benefit plans, including deferred compensation plans (for which we incur an equal and offsetting compensation expenses).
|
|
For the Three Months Ended
|
||||||
|
February 29, 2020
|
|
February 28, 2019
|
||||
|
|
|
|
||||
Net revenues
|
$
|
20,329
|
|
|
$
|
30,745
|
|
|
|
|
|
||||
Expenses:
|
|
|
|
||||
Compensation and benefits
|
22,221
|
|
|
16,854
|
|
||
Floor brokerage and clearing fees
|
6,307
|
|
|
4,732
|
|
||
Depreciation and amortization
|
625
|
|
|
455
|
|
||
Selling, general and other expenses
|
12,105
|
|
|
7,740
|
|
||
Total expenses
|
41,258
|
|
|
29,781
|
|
||
|
|
|
|
||||
Income (loss) before income taxes and income related to associated companies
|
(20,929
|
)
|
|
964
|
|
||
Income related to associated companies
|
—
|
|
|
220
|
|
||
|
|
|
|
||||
Income (loss) before income taxes
|
$
|
(20,929
|
)
|
|
$
|
1,184
|
|
•
|
management and performance fees from funds and accounts managed by us;
|
•
|
revenue from strategic partners pursuant to agreements which entitle us to portions of our partners’ revenues and/or profits; and
|
•
|
investment income from our investments managed by our asset management business and other strategic partners.
|
|
For the Three Months Ended
|
||||||
|
February 29, 2020
|
|
February 28, 2019
|
||||
|
|
|
|
||||
Asset management fees:
|
|
|
|
||||
Equities
|
$
|
2,938
|
|
|
$
|
2,740
|
|
Multi-asset
|
3,153
|
|
|
5,578
|
|
||
Total asset management fees
|
6,091
|
|
|
8,318
|
|
||
|
|
|
|
||||
Revenues from arrangements with strategic partners (1)
|
7,316
|
|
|
362
|
|
||
Total asset management fees and revenues
|
13,407
|
|
|
8,680
|
|
||
|
|
|
|
||||
Investment return (2) (3)
|
17,614
|
|
|
33,675
|
|
||
Allocated net interest (2) (4)
|
(10,692
|
)
|
|
(11,610
|
)
|
||
|
|
|
|
||||
Total Asset Management
|
$
|
20,329
|
|
|
$
|
30,745
|
|
(1)
|
These amounts include our share of fees received by third party asset management companies with which we have revenue and profit share arrangements.
|
(2)
|
Net revenues attributed to the Investment return in our Asset Management segment have been disaggregated to separately present Investment return and Allocated net interest (see footnote 4 below). This disaggregation is intended to increase transparency and to make clearer actual Investment return. We believe that aggregating Investment return and Allocated net
|
(3)
|
Includes net interest expense of $6.4 million and $1.2 million for the first quarter of 2020 and 2019, respectively.
|
(4)
|
Allocated net interest represents the allocation of long-term debt interest expense to our Asset Management reportable segment, net of interest income on Cash and cash equivalents and other sources of liquidity. For discussion of sources of liquidity, refer to the "Liquidity and Capital Resources" section herein.
|
|
|
February 29,
2020 |
|
November 30, 2019
|
||||
Assets under management (1):
|
|
|
|
|
||||
Equities
|
|
$
|
518
|
|
|
$
|
228
|
|
Multi-asset
|
|
622
|
|
|
988
|
|
||
Total
|
|
$
|
1,140
|
|
|
$
|
1,216
|
|
(1)
|
Assets under management include third-party net assets actively managed by us, including hedge funds and certain managed accounts. The amounts at February 29, 2020 and November 30, 2019 also include $147 million and $150 million, respectively, of assets under management in a strategy, which represents a net asset value equivalent of an asset management strategy where we earn performance fees. We may consolidate certain funds and for such consolidated funds, assets under management includes the pro-rata portion of third-party net assets in consolidated funds based on the percentage ownership of third-party investors in the consolidated fund. The above amounts do not include assets under management at non-consolidated strategic partners or investments.
|
|
For the Three Months Ended
|
||||||
|
February 29, 2020
|
|
February 28, 2019
|
||||
|
|
|
|
||||
Assets under management:
|
|
|
|
||||
Balance, beginning of period
|
$
|
1,216
|
|
|
$
|
2,197
|
|
Net cash flow in (out)
|
(21
|
)
|
|
(294
|
)
|
||
Net market appreciation (depreciation)
|
(55
|
)
|
|
(8
|
)
|
||
|
|
|
|
||||
Balance, end of period
|
$
|
1,140
|
|
|
$
|
1,895
|
|
|
|
February 29,
2020 |
|
November 30, 2019
|
||||
|
|
|
|
|
||||
Jefferies Financial Group Inc., as manager:
|
|
|
|
|
||||
Fund investments (1)
|
|
$
|
244,158
|
|
|
$
|
240,804
|
|
Separately managed accounts (2)
|
|
438,904
|
|
|
489,617
|
|
||
Total
|
|
683,062
|
|
|
730,421
|
|
||
|
|
|
|
|
||||
Third-party, as manager:
|
|
|
|
|
||||
Fund investments
|
|
615,919
|
|
|
306,554
|
|
||
Separately managed accounts (2)
|
|
262,100
|
|
|
266,484
|
|
||
Investments in asset managers
|
|
115,064
|
|
|
114,161
|
|
||
Total
|
|
993,083
|
|
|
687,199
|
|
||
|
|
|
|
|
||||
Total asset management investments (3)
|
|
$
|
1,676,145
|
|
|
$
|
1,417,620
|
|
(1)
|
Due to the level or nature of an investment in a fund, we may consolidate that fund; and accordingly, the assets and liabilities of the fund are included in the representative line items in our consolidated financial statements. At February 29, 2020 and November 30, 2019, $22.1 million and $22.6 million, respectively, represents net investments in funds that have been consolidated in our financial statements.
|
(2)
|
Where we have investments in a separately managed account, the assets and liabilities of such account are presented on our balance sheet within each respective line item.
|
(3)
|
Of the $1,676.1 million total invested in the funds at February 29, 2020, $1,380.1 million was sourced from the proceeds of long-term and permanent capital. At February 29, 2020 and November 30, 2019, Jefferies Group has borrowed $296.0 million and $135.0 million, respectively, under a credit facility agreement ("Jefferies Group Credit Facility") with JPMorgan Chase Bank, N.A., which is secured by our investment in a fund managed by us, with a carrying value of $221.9 million and $218.1 million at February 29, 2020 and November 30, 2019, respectively.
|
|
|
Three Months Ended February 29, 2020
|
|
Three Months Ended February 28, 2019
|
|
|
|
|
|
Consolidated Businesses
|
|
Oil and Gas
|
|
Oil and Gas
|
|
|
HomeFed
|
|
-
|
|
|
Idaho Timber
|
|
Idaho Timber
|
|
|
|
|
|
Associated Companies
|
|
Linkem
|
|
Linkem
|
|
|
FXCM Equity Investment
|
|
FXCM Equity Investment
|
|
|
-
|
|
National Beef
|
|
|
-
|
|
HomeFed
|
|
|
|
|
|
Other Investments
|
|
The We Company
|
|
The We Company
|
|
|
FXCM Term Loan
|
|
FXCM Term Loan
|
|
|
-
|
|
Spectrum Brands
|
|
For the Three Months Ended
|
||||||
|
February 29, 2020
|
|
February 28, 2019
|
||||
|
|
|
|
||||
Net revenues
|
$
|
204,559
|
|
|
$
|
132,692
|
|
|
|
|
|
||||
Expenses:
|
|
|
|
|
|
||
Compensation and benefits
|
17,190
|
|
|
13,903
|
|
||
Cost of sales
|
72,443
|
|
|
66,921
|
|
||
Interest expense
|
8,773
|
|
|
8,256
|
|
||
Depreciation and amortization
|
18,841
|
|
|
15,294
|
|
||
Selling, general and other expenses
|
73,080
|
|
|
29,022
|
|
||
Total expenses
|
190,327
|
|
|
133,396
|
|
||
|
|
|
|
||||
Income (loss) before income taxes and income (loss) related to associated companies
|
14,232
|
|
|
(704
|
)
|
||
Income (loss) related to associated companies
|
(67,855
|
)
|
|
27,093
|
|
||
|
|
|
|
||||
Income (loss) before income taxes
|
$
|
(53,623
|
)
|
|
$
|
26,389
|
|
|
For the Three Months Ended
|
||||||
|
February 29, 2020
|
|
February 28, 2019
|
||||
|
|
|
|
||||
Oil and gas
|
$
|
62,856
|
|
|
$
|
5,471
|
|
Idaho Timber
|
77,639
|
|
|
75,446
|
|
||
Real estate
|
12,230
|
|
|
51
|
|
||
FXCM
|
2,508
|
|
|
450
|
|
||
Spectrum Brands
|
—
|
|
|
39,150
|
|
||
Other
|
49,326
|
|
|
12,124
|
|
||
|
|
|
|
||||
Total net revenues
|
$
|
204,559
|
|
|
$
|
132,692
|
|
|
For the Three Months Ended
|
||||||
|
February 29, 2020
|
|
February 28, 2019
|
||||
|
|
|
|
||||
Oil and gas
|
$
|
71,594
|
|
|
$
|
31,791
|
|
Idaho Timber
|
72,930
|
|
|
70,864
|
|
||
Real estate
|
10,780
|
|
|
—
|
|
||
Other
|
35,023
|
|
|
30,741
|
|
||
|
|
|
|
||||
Total expenses
|
$
|
190,327
|
|
|
$
|
133,396
|
|
|
For the Three Months Ended
|
||||||
|
February 29, 2020
|
|
February 28, 2019
|
||||
|
|
|
|
||||
National Beef
|
$
|
—
|
|
|
$
|
27,105
|
|
FXCM
|
(1,638
|
)
|
|
(2,716
|
)
|
||
Linkem
|
(13,185
|
)
|
|
(1,621
|
)
|
||
Real estate associated companies
|
(53,014
|
)
|
|
2,596
|
|
||
Other
|
(18
|
)
|
|
1,729
|
|
||
|
|
|
|
||||
Total income (loss) related to associated companies
|
$
|
(67,855
|
)
|
|
$
|
27,093
|
|
|
For the Three Months Ended
|
||||||
|
February 29, 2020
|
|
February 28, 2019
|
||||
|
|
|
|
||||
Oil and gas
|
$
|
(8,738
|
)
|
|
$
|
(26,320
|
)
|
Idaho Timber
|
4,709
|
|
|
4,582
|
|
||
Real estate
|
1,450
|
|
|
51
|
|
||
FXCM
|
2,508
|
|
|
450
|
|
||
Spectrum Brands
|
—
|
|
|
39,150
|
|
||
Other
|
14,303
|
|
|
(18,617
|
)
|
||
Income (loss) before income taxes and income (loss) related to associated companies
|
14,232
|
|
|
(704
|
)
|
||
Income (loss) related to associated companies
|
(67,855
|
)
|
|
27,093
|
|
||
|
|
|
|
||||
Income (loss) before income taxes
|
$
|
(53,623
|
)
|
|
$
|
26,389
|
|
|
For the Three Months Ended
|
||||||
|
February 29, 2020
|
|
February 28, 2019
|
||||
|
|
|
|
||||
Net revenues
|
$
|
9,792
|
|
|
$
|
4,193
|
|
|
|
|
|
||||
Expenses:
|
|
|
|
|
|
||
Compensation and benefits
|
9,858
|
|
|
17,521
|
|
||
Depreciation and amortization
|
888
|
|
|
855
|
|
||
Selling, general and other expenses
|
6,800
|
|
|
7,160
|
|
||
Total expenses
|
17,546
|
|
|
25,536
|
|
||
|
|
|
|
||||
Loss before income taxes
|
$
|
(7,754
|
)
|
|
$
|
(21,343
|
)
|
|
February 29, 2020
|
||||||||||||||||||||||
|
Investment Banking and Capital Markets
|
|
Asset Management
|
|
Merchant Banking
|
|
Corporate
|
|
Consolidation Adjustments
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
4,891,465
|
|
|
$
|
23,382
|
|
|
$
|
163,793
|
|
|
$
|
1,632,019
|
|
|
$
|
—
|
|
|
$
|
6,710,659
|
|
Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations
|
742,134
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
742,134
|
|
||||||
Financial instruments owned, at fair value
|
15,212,184
|
|
|
2,771,424
|
|
|
373,379
|
|
|
39,994
|
|
|
—
|
|
|
18,396,981
|
|
||||||
Loans to and investments in associated companies
|
940,442
|
|
|
92,113
|
|
|
530,073
|
|
|
—
|
|
|
—
|
|
|
1,562,628
|
|
||||||
Securities borrowed
|
6,708,788
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,708,788
|
|
||||||
Securities purchased under agreements to resell
|
4,907,031
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,907,031
|
|
||||||
Securities received as collateral
|
15,004
|
|
|
|
|
|
|
|
|
|
|
15,004
|
|
||||||||||
Receivables
|
5,830,927
|
|
|
490,488
|
|
|
848,288
|
|
|
64,326
|
|
|
—
|
|
|
7,234,029
|
|
||||||
Property, equipment and leasehold improvements, net
|
869,831
|
|
|
4,977
|
|
|
34,743
|
|
|
19,092
|
|
|
—
|
|
|
928,643
|
|
||||||
Intangible assets, net and goodwill
|
1,722,872
|
|
|
143,609
|
|
|
51,587
|
|
|
—
|
|
|
—
|
|
|
1,918,068
|
|
||||||
Other assets
|
1,151,019
|
|
|
15,935
|
|
|
1,291,516
|
|
|
311,553
|
|
|
(115,865
|
)
|
|
2,654,158
|
|
||||||
Total Assets
|
42,991,697
|
|
|
3,541,928
|
|
|
3,293,379
|
|
|
2,066,984
|
|
|
(115,865
|
)
|
|
51,778,123
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt (1) (2)
|
6,332,633
|
|
|
830,979
|
|
|
296,187
|
|
|
991,705
|
|
|
—
|
|
|
8,451,504
|
|
||||||
Other liabilities
|
31,082,086
|
|
|
1,651,030
|
|
|
940,820
|
|
|
232,884
|
|
|
(115,865
|
)
|
|
33,790,955
|
|
||||||
Total liabilities
|
37,414,719
|
|
|
2,482,009
|
|
|
1,237,007
|
|
|
1,224,589
|
|
|
(115,865
|
)
|
|
42,242,459
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
24,759
|
|
|
—
|
|
|
—
|
|
|
24,759
|
|
||||||
Mandatorily redeemable convertible preferred shares
|
—
|
|
|
—
|
|
|
—
|
|
|
125,000
|
|
|
—
|
|
|
125,000
|
|
||||||
Noncontrolling interests
|
19,351
|
|
|
—
|
|
|
17,599
|
|
|
—
|
|
|
—
|
|
|
36,950
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total Jefferies Financial Group Inc. shareholders' equity
|
$
|
5,557,627
|
|
|
$
|
1,059,919
|
|
|
$
|
2,014,014
|
|
|
$
|
717,395
|
|
|
$
|
—
|
|
|
$
|
9,348,955
|
|
(1)
|
Jefferies Group long-term debt of $7.2 billion at February 29, 2020, is allocated to Investment Banking and Capital Markets and Asset Management segments based on an internal management view only and may not be reflective of what long-term debt would be on a stand-alone segment basis.
|
(2)
|
Long-term debt within Merchant Banking of $296.2 million at February 29, 2020, primarily includes $183.4 million for real estate businesses and $113.1 million for Vitesse Energy Finance. At February 29, 2020, Vitesse Energy Finance had $114.0 million drawn out of the maximum $170.0 million borrowing base on its credit facility and Foursight Capital had $0.0 million drawn out of the maximum $175.0 million credit commitment on its credit facilities. See Note 11 in our consolidated financial statements for additional information.
|
|
November 30, 2019
|
||||||||||||||||||||||
|
Investment Banking and Capital Markets
|
|
Asset Management
|
|
Merchant Banking
|
|
Corporate
|
|
Consolidation Adjustments
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
5,561,281
|
|
|
$
|
25,255
|
|
|
$
|
111,552
|
|
|
$
|
1,980,733
|
|
|
$
|
—
|
|
|
$
|
7,678,821
|
|
Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations
|
796,797
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
796,797
|
|
||||||
Financial instruments owned, at fair value
|
13,735,641
|
|
|
2,681,034
|
|
|
363,237
|
|
|
115,829
|
|
|
—
|
|
|
16,895,741
|
|
||||||
Loans to and investments in associated companies
|
944,509
|
|
|
83,258
|
|
|
625,190
|
|
|
—
|
|
|
—
|
|
|
1,652,957
|
|
||||||
Securities borrowed
|
7,624,642
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,624,642
|
|
||||||
Securities purchased under agreements to resell
|
4,299,598
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,299,598
|
|
||||||
Securities received as collateral
|
9,500
|
|
|
|
|
|
|
|
|
|
|
9,500
|
|
||||||||||
Receivables
|
4,560,760
|
|
|
369,410
|
|
|
813,675
|
|
|
261
|
|
|
—
|
|
|
5,744,106
|
|
||||||
Property, equipment and leasehold improvements, net
|
350,071
|
|
|
796
|
|
|
20,632
|
|
|
13,530
|
|
|
—
|
|
|
385,029
|
|
||||||
Intangible assets, net and goodwill
|
1,726,736
|
|
|
143,616
|
|
|
52,582
|
|
|
—
|
|
|
—
|
|
|
1,922,934
|
|
||||||
Other assets
|
913,688
|
|
|
10,347
|
|
|
1,298,803
|
|
|
321,766
|
|
|
(94,495
|
)
|
|
2,450,109
|
|
||||||
Total Assets
|
40,523,223
|
|
|
3,313,716
|
|
|
3,285,671
|
|
|
2,432,119
|
|
|
(94,495
|
)
|
|
49,460,234
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt (1) (2)
|
6,289,015
|
|
|
714,343
|
|
|
342,325
|
|
|
991,378
|
|
|
—
|
|
|
8,337,061
|
|
||||||
Other liabilities
|
28,658,041
|
|
|
1,761,674
|
|
|
754,560
|
|
|
290,104
|
|
|
(94,495
|
)
|
|
31,369,884
|
|
||||||
Total liabilities
|
34,947,056
|
|
|
2,476,017
|
|
|
1,096,885
|
|
|
1,281,482
|
|
|
(94,495
|
)
|
|
39,706,945
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
26,605
|
|
|
—
|
|
|
—
|
|
|
26,605
|
|
||||||
Mandatorily redeemable convertible preferred shares
|
—
|
|
|
—
|
|
|
—
|
|
|
125,000
|
|
|
—
|
|
|
125,000
|
|
||||||
Noncontrolling interests
|
4,275
|
|
|
—
|
|
|
17,704
|
|
|
—
|
|
|
—
|
|
|
21,979
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total Jefferies Financial Group Inc. shareholders' equity
|
$
|
5,571,892
|
|
|
$
|
837,699
|
|
|
$
|
2,144,477
|
|
|
$
|
1,025,637
|
|
|
$
|
—
|
|
|
$
|
9,579,705
|
|
(2)
|
Long-term debt within Merchant Banking of $342.3 million at November 30, 2019, primarily includes $140.7 million for real estate businesses, $103.1 million for Vitesse Energy Finance and $98.3 million for Foursight Capital. At November 30, 2019, Vitesse Energy Finance had $104.0 million drawn out of the maximum $170.0 million borrowing base on its credit facility and Foursight Capital had $98.7 million drawn out of the maximum $175.0 million credit commitment on its credit facilities. See Note 11 in our consolidated financial statements for additional information.
|
|
February 29,
2020 |
|
November 30, 2019
|
||||
|
|
|
|
||||
Jefferies Group
|
$
|
6,369,309
|
|
|
$
|
6,181,683
|
|
|
|
|
|
||||
Assets held on behalf of Asset Management (excluding Jefferies Group)
|
248,237
|
|
|
227,908
|
|
||
|
|
|
|
||||
Merchant Banking:
|
|
|
|
||||
Oil and gas
|
576,863
|
|
|
585,493
|
|
||
Real estate
|
571,843
|
|
|
645,328
|
|
||
Linkem
|
181,190
|
|
|
194,847
|
|
||
FXCM
|
130,069
|
|
|
129,343
|
|
||
Idaho Timber
|
79,301
|
|
|
77,914
|
|
||
The We Company
|
53,798
|
|
|
53,798
|
|
||
Investments in other public companies
|
161,697
|
|
|
178,593
|
|
||
Other
|
259,253
|
|
|
279,161
|
|
||
Total Merchant Banking
|
2,014,014
|
|
|
2,144,477
|
|
||
|
|
|
|
||||
Corporate liquidity and other assets, net of Corporate liabilities including long-term debt
|
717,395
|
|
|
1,025,637
|
|
||
|
|
|
|
||||
Total Capital
|
$
|
9,348,955
|
|
|
$
|
9,579,705
|
|
•
|
Investment Banking and Capital Markets includes our investment banking, capital markets and other related services. Investment banking provides underwriting and financial advisory services to our clients across most industry sectors in the Americas, Europe and Asia. Our capital markets businesses operate across the spectrum of equities and fixed income products. Related services include, among other things, prime brokerage and equity finance, research and strategy, corporate lending and real estate finance. Our Investment Banking and Capital Markets businesses are conducted by Jefferies Group, our wholly-owned subsidiary, which is the largest independent U.S. headquartered global full-service, integrated investment banking and securities firm.
|
•
|
Asset Management provides investment management services to investors in the U.S. and overseas and invests capital in hedge funds, separately managed accounts and third-party asset managers. Under the Leucadia Asset Management ("LAM") umbrella, we manage, invest in and provide services to a diverse group of alternative asset management platforms across a spectrum of investment strategies and asset classes. LAM offers institutional clients an innovative range of investment strategies through its affiliated managers.
|
•
|
Merchant Banking:
|
◦
|
Our oil and gas business consists of Vitesse Energy Finance and JETX Energy. Vitesse Energy Finance is our 97% owned consolidated subsidiary that acquires and invests in non-operated oil and gas working interests and royalties predominantly in the Bakken Shale oil field in North Dakota. JETX Energy is our 98% owned consolidated subsidiary that currently has non-operated working interests and acreage in east Texas.
|
◦
|
Our real estate assets primarily consist of our 100% ownership of HomeFed, a developer and owner of residential and mixed-use real estate properties in California, New York, Florida, Virginia and South Carolina. HomeFed's key assets include Otay Ranch, a master planned community that is under development in Chula Vista, CA, made up of approximately 4,450 acres of land entitled for 13,050 total units; and Renaissance Plaza, a mixed-use asset in Brooklyn, NY, comprised of an office building, hotel and garage.
|
◦
|
We own approximately 42% of the common shares of Linkem, as well as convertible preferred shares which, if converted, would increase our ownership to approximately 54% of Linkem’s common equity at February 29, 2020. Linkem provides residential broadband services in Italy using LTE technologies deployed over the 3.5 GHz spectrum band. Linkem is accounted for under the equity method.
|
◦
|
Our investment in FXCM and associated companies consist of a senior secured term loan due February 15, 2021, ($71.6 million principal outstanding at February 29, 2020); a 50% voting interest in FXCM and rights to a majority of all distributions in respect of the equity in FXCM. FXCM is a provider of online foreign exchange trading, contract for difference trading, spread betting and related services.
|
◦
|
Idaho Timber is our consolidated subsidiary engaged in the manufacture and distribution of various wood products.
|
◦
|
We invested $9.0 million in 2013 in The We Company, which creates collaborative office communities. Currently we own less than 1% of the company. Our interest in The We Company is reflected in Financial instruments owned, at fair value in our financial statements.
|
•
|
Corporate liquidity and other assets, net of Corporate liabilities, primarily consist of cash and cash equivalents, financial instruments owned and the deferred tax asset (exclusive of Jefferies Group's deferred tax asset), net of long-term debt, trade payables and accruals, as well as our outstanding mandatorily redeemable convertible preferred shares.
|
|
Rating
|
Outlook
|
Moody’s Investors Service
|
Baa3
|
Stable
|
Standard and Poor’s
|
BBB
|
Stable
|
Fitch Ratings
|
BBB
|
Stable
|
Leverage target (dollars in thousands):
|
February 29,
2020 |
|
||
Total Jefferies Financial Group Inc. shareholders' equity
|
$
|
9,348,955
|
|
|
Less, investment in Jefferies Group
|
(6,369,309
|
)
|
|
|
Equity excluding Jefferies Group
|
2,979,646
|
|
|
|
Less, our two largest investments:
|
|
|
|
|
Vitesse Energy Finance
|
(556,402
|
)
|
|
|
HomeFed
|
(491,236
|
)
|
|
|
Equity in a stressed scenario
|
1,932,008
|
|
|
|
Less, net deferred tax asset excluding Jefferies Group's amount
|
(217,693
|
)
|
|
|
Equity in a stressed scenario less net deferred tax asset
|
$
|
1,714,315
|
|
|
|
|
|
||
Parent company debt, net of cash in excess of liquidity reserve
|
$
|
(302,317
|
)
|
|
|
|
|
||
Parent company debt (see Note 11 to the consolidated financial statements)
|
$
|
991,705
|
|
|
|
|
|
||
Ratio of parent company debt to stressed equity:
|
|
|
|
|
Maximum
|
0.50
|
|
x
|
|
Actual debt, net of excess liquidity
|
(0.16
|
)
|
x
|
|
Actual debt, net of excess liquidity and excluding net deferred tax asset
|
(0.18
|
)
|
x
|
|
Actual debt (gross)
|
0.51
|
|
x
|
|
Actual debt, gross and excluding net deferred tax asset
|
0.58
|
|
x
|
Liquidity reserve (in thousands):
|
February 29,
2020 |
||
Minimum reserve under liquidity target
|
$
|
592,500
|
|
Additional reserve under parent company debt to stressed equity
|
$
|
25,701
|
|
Actual liquidity
|
$
|
1,886,522
|
|
|
Three Months Ended February 29, 2020
|
|
Three Months Ended February 28, 2019
|
||||
|
|
|
|
||||
Cash, cash equivalents and restricted cash at beginning of period
|
$
|
8,480,435
|
|
|
$
|
6,012,662
|
|
Net cash used for operating activities
|
(918,083
|
)
|
|
(783,955
|
)
|
||
Net cash provided by (used for) investing activities
|
(49,310
|
)
|
|
1,074,852
|
|
||
Net cash used for financing activities
|
(316,165
|
)
|
|
(38,337
|
)
|
||
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash
|
(2,927
|
)
|
|
13,194
|
|
||
|
|
|
|
||||
Cash, cash equivalents and restricted cash at end of period
|
$
|
7,193,950
|
|
|
$
|
6,278,416
|
|
|
Three Months Ended February 29, 2020
|
|
Year Ended
November 30, 2019
|
||||
Securities purchased under agreements to resell:
|
|
|
|
||||
Period end
|
$
|
4,907
|
|
|
$
|
4,300
|
|
Month end average
|
9,541
|
|
|
7,762
|
|
||
Maximum month end
|
12,061
|
|
|
11,589
|
|
||
|
|
|
|
||||
Securities sold under agreements to repurchase:
|
|
|
|
|
|
||
Period end
|
$
|
8,406
|
|
|
$
|
7,505
|
|
Month end average
|
15,148
|
|
|
14,686
|
|
||
Maximum month end
|
18,979
|
|
|
19,654
|
|
•
|
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.
|
|
February 29,
2020 |
|
Average Balance
First Quarter 2020 (1)
|
|
November 30, 2019
|
||||||
Cash and cash equivalents:
|
|
|
|
|
|
||||||
Cash in banks
|
$
|
1,380,410
|
|
|
$
|
2,309,925
|
|
|
$
|
983,816
|
|
Money market investments (2)
|
3,520,382
|
|
|
2,364,585
|
|
|
4,584,087
|
|
|||
Total cash and cash equivalents
|
4,900,792
|
|
|
4,674,510
|
|
|
5,567,903
|
|
|||
|
|
|
|
|
|
||||||
Other sources of liquidity:
|
|
|
|
|
|
|
|
|
|||
Debt securities owned and securities purchased under agreements to resell (3)
|
638,442
|
|
|
788,292
|
|
|
972,624
|
|
|||
Other (4)
|
831,700
|
|
|
721,180
|
|
|
377,296
|
|
|||
Total other sources
|
1,470,142
|
|
|
1,509,472
|
|
|
1,349,920
|
|
|||
|
|
|
|
|
|
||||||
Total cash and cash equivalents and other liquidity sources
|
$
|
6,370,934
|
|
|
$
|
6,183,982
|
|
|
$
|
6,917,823
|
|
(1)
|
Average balances are calculated based on weekly balances.
|
(2)
|
At February 29, 2020 and November 30, 2019, $3,423.0 million and $4,496.7 million, respectively, was invested in U.S. government money funds that invest at least 99.5% of its total assets in cash, securities issued by the U.S. government and U.S. government-sponsored entities, and repurchase agreements that are fully collateralized by cash or government securities. The remaining $97.4 million and $87.4 million at February 29, 2020 and November 30, 2019, respectively, are invested in AAA rated prime money funds. The average balance of U.S. government money funds for the quarter ended February 29, 2020 was $2,035.4 million.
|
(3)
|
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.
|
(4)
|
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.
|
|
February 29, 2020
|
|
November 30, 2019
|
||||||||||||
|
Liquid Financial
Instruments
|
|
Unencumbered
Liquid Financial
Instruments (2)
|
|
Liquid Financial
Instruments
|
|
Unencumbered
Liquid Financial
Instruments (2)
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Corporate equity securities
|
$
|
3,451,826
|
|
|
$
|
301,520
|
|
|
$
|
2,403,589
|
|
|
$
|
256,624
|
|
Corporate debt securities
|
2,071,179
|
|
|
47,331
|
|
|
1,893,605
|
|
|
29,412
|
|
||||
U.S. government, agency and municipal securities
|
2,335,187
|
|
|
137,400
|
|
|
2,894,264
|
|
|
151,414
|
|
||||
Other sovereign obligations
|
2,751,554
|
|
|
1,075,977
|
|
|
2,633,636
|
|
|
969,800
|
|
||||
Agency mortgage-backed securities (1)
|
1,581,852
|
|
|
—
|
|
|
1,757,077
|
|
|
—
|
|
||||
Loans and other receivables
|
497,702
|
|
|
—
|
|
|
655,120
|
|
|
—
|
|
||||
Total
|
$
|
12,689,300
|
|
|
$
|
1,562,228
|
|
|
$
|
12,237,291
|
|
|
$
|
1,407,250
|
|
(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.
|
•
|
Credit Facility. One of Jefferies Group's subsidiaries has the Jefferies Group Credit Facility with JPMorgan Chase Bank, N.A. for a committed amount of $296.0 million. Interest is based on an annual alternative base rate or an adjusted London Interbank Offered Rate ("LIBOR"), as defined in the Jefferies Group Credit Facility. The Jefferies Group Credit Facility contains certain covenants that, among other things, require Jefferies Group LLC to maintain a specified level of tangible net worth. The covenants also require the borrower to maintain specified leverage amounts and impose certain restrictions on the borrower’s future indebtedness. At February 29, 2020, we were in compliance with all debt covenants under the Jefferies Group Credit Facility.
|
•
|
Intraday Credit Facility. The Bank of New York Mellon has agreed to make revolving intraday credit advances ("Jefferies Group Intraday Credit Facility") for an aggregate committed amount of $150.0 million. The Jefferies Group Intraday Credit Facility is structured so that advances are generally repaid before the end of each business day. However, if an advance is not repaid by the end of any business day, the advance is converted to an overnight loan. Intraday loans accrue interest at a rate of 0.12%. Interest is charged based on the number of minutes in a day the advance is outstanding. Overnight loans are charged interest at the base rate plus 3% on a daily basis. The base rate is the higher of the federal funds rate plus 0.50% or the prime rate in effect at that time. The Jefferies Group Intraday Credit Facility contains financial covenants, which include a minimum regulatory net capital requirement for Jefferies Group's U.S. broker-dealer, Jefferies LLC. At February 29, 2020, we were in compliance with all debt covenants under the Jefferies Group Intraday Credit Facility.
|
|
Rating
|
Outlook
|
Moody’s Investors Service
|
Baa3
|
Stable
|
Standard and Poor’s
|
BBB
|
Stable
|
Fitch Ratings
|
BBB
|
Stable
|
•
|
The description of our business and risk factors contained in our Annual Report on Form 10-K for the fiscal year ended November 30, 2019 and filed with the SEC on January 29, 2020 (the "2019 10-K") and in Part II, Item 1A herein;
|
•
|
The discussion and analysis of financial condition and result of operations contained in this report under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" herein;
|
•
|
The notes to the consolidated financial statements in this report; and
|
•
|
Cautionary statements we make in our public documents, reports and announcements.
|
|
|
Daily VaR (1)
Value-at-Risk in Trading Portfolios
|
||||||||||||||||||||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||||||||||
Risk Categories
|
|
VaR at
February 29, 2020
|
|
Daily VaR for the
Three Months Ended
February 29, 2020
|
|
VaR at
November 30,
2019
|
|
Daily VaR for the
Three Months Ended
November 30, 2019
|
||||||||||||||||||||||||
|
|
|
|
Average
|
|
High
|
|
Low
|
|
|
|
Average
|
|
High
|
|
Low
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest Rates
|
|
$
|
5.91
|
|
|
$
|
4.81
|
|
|
$
|
7.01
|
|
|
$
|
3.93
|
|
|
$
|
4.81
|
|
|
$
|
4.76
|
|
|
$
|
5.85
|
|
|
$
|
3.76
|
|
Equity Prices
|
|
6.13
|
|
|
6.79
|
|
|
8.54
|
|
|
4.34
|
|
|
5.07
|
|
|
6.71
|
|
|
10.33
|
|
|
4.86
|
|
||||||||
Currency Rates
|
|
0.39
|
|
|
0.29
|
|
|
0.69
|
|
|
0.13
|
|
|
0.32
|
|
|
0.29
|
|
|
0.48
|
|
|
0.15
|
|
||||||||
Commodity Prices
|
|
0.66
|
|
|
0.84
|
|
|
1.30
|
|
|
0.49
|
|
|
0.64
|
|
|
0.96
|
|
|
2.43
|
|
|
0.64
|
|
||||||||
Diversification Effect (2)
|
|
(6.44
|
)
|
|
(5.34
|
)
|
|
N/A
|
|
|
N/A
|
|
|
(6.14
|
)
|
|
(5.01
|
)
|
|
N/A
|
|
|
N/A
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Firmwide
|
|
$
|
6.65
|
|
|
$
|
7.39
|
|
|
$
|
10.51
|
|
|
$
|
5.02
|
|
|
$
|
4.70
|
|
|
$
|
7.71
|
|
|
$
|
12.17
|
|
|
$
|
4.70
|
|
(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 Jefferies Group's firmwide VaR and VaR values for the four risk categories might have occurred on different days during the period.
|
|
10% Sensitivity
|
||
Investments in funds (1)
|
$
|
89,014
|
|
Private investments
|
25,070
|
|
|
Corporate debt securities in default
|
10,820
|
|
|
Trade claims
|
2,863
|
|
(1)
|
Includes investments in hedge funds, fund of funds and private equity funds. For additional information on these investments, see Note 3 in our consolidated financial statements.
|
•
|
Loans and lending arising in connection with our investment banking and capital markets activities, which reflects our 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. Loans and lending also arise in connection with our portion of Jefferies Group's Secured Revolving Credit Facility that is with Jefferies Group and Massachusetts Mutual Life Insurance Company, to be funded equally, to support loan underwritings by Jefferies Finance. See Note 8 for additional information on this facility. In addition, Jefferies Group has loans outstanding to certain of its officers and employees (none of whom are executive officers or directors). See Note 22 for additional information on these employee loans.
|
•
|
Securities and margin financing transactions, which reflect our 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.
|
•
|
Over-the-counter derivatives, which are reported net by counterparty when a legal right of setoff exists under an enforceable master netting agreement. Over-the-counter 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 our 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
|
||||||||||||||||||||||||||||||||||||
|
February 29, 2020
|
|
November 30, 2019
|
|
February 29, 2020
|
|
November 30, 2019
|
|
February 29, 2020
|
|
November 30, 2019
|
|
February 29, 2020
|
|
November 30, 2019
|
|
February 29, 2020
|
|
November 30, 2019
|
|
February 29, 2020
|
|
November 30, 2019
|
||||||||||||||||||||||||
Asia/Latin America/Other
|
$
|
15.0
|
|
|
$
|
15.0
|
|
|
$
|
50.6
|
|
|
$
|
50.5
|
|
|
$
|
0.7
|
|
|
$
|
0.3
|
|
|
$
|
66.3
|
|
|
$
|
65.8
|
|
|
$
|
142.9
|
|
|
$
|
100.4
|
|
|
$
|
209.2
|
|
|
$
|
166.2
|
|
Europe
|
0.1
|
|
|
—
|
|
|
379.1
|
|
|
324.1
|
|
|
72.0
|
|
|
101.1
|
|
|
451.2
|
|
|
425.2
|
|
|
170.0
|
|
|
74.1
|
|
|
621.2
|
|
|
499.3
|
|
||||||||||||
North America
|
386.5
|
|
|
390.7
|
|
|
369.4
|
|
|
349.3
|
|
|
376.3
|
|
|
263.9
|
|
|
1,132.2
|
|
|
1,003.9
|
|
|
4,587.9
|
|
|
5,393.4
|
|
|
5,720.1
|
|
|
6,397.3
|
|
||||||||||||
Total
|
$
|
401.6
|
|
|
$
|
405.7
|
|
|
$
|
799.1
|
|
|
$
|
723.9
|
|
|
$
|
449.0
|
|
|
$
|
365.3
|
|
|
$
|
1,649.7
|
|
|
$
|
1,494.9
|
|
|
$
|
4,900.8
|
|
|
$
|
5,567.9
|
|
|
$
|
6,550.5
|
|
|
$
|
7,062.8
|
|
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
|
||||||||||||||||||||||||||||||||||||
|
February 29, 2020
|
|
November 30, 2019
|
|
February 29, 2020
|
|
November 30, 2019
|
|
February 29, 2020
|
|
November 30, 2019
|
|
February 29, 2020
|
|
November 30, 2019
|
|
February 29, 2020
|
|
November 30, 2019
|
|
February 29, 2020
|
|
November 30, 2019
|
||||||||||||||||||||||||
Asset Managers
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
1.5
|
|
|
$
|
1.7
|
|
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
2.0
|
|
|
$
|
1.7
|
|
|
$
|
3,520.4
|
|
|
$
|
4,584.1
|
|
|
$
|
3,522.4
|
|
|
$
|
4,585.8
|
|
Banks, Broker-dealers
|
250.4
|
|
|
250.7
|
|
|
589.9
|
|
|
526.7
|
|
|
215.0
|
|
|
206.8
|
|
|
1,055.3
|
|
|
984.2
|
|
|
1,380.4
|
|
|
983.8
|
|
|
2,435.7
|
|
|
1,968.0
|
|
||||||||||||
Corporates
|
81.6
|
|
|
81.3
|
|
|
—
|
|
|
—
|
|
|
212.4
|
|
|
154.4
|
|
|
294.0
|
|
|
235.7
|
|
|
—
|
|
|
—
|
|
|
294.0
|
|
|
235.7
|
|
||||||||||||
Other
|
69.5
|
|
|
73.7
|
|
|
207.7
|
|
|
195.5
|
|
|
21.2
|
|
|
4.1
|
|
|
298.4
|
|
|
273.3
|
|
|
—
|
|
|
—
|
|
|
298.4
|
|
|
273.3
|
|
||||||||||||
Total
|
$
|
401.6
|
|
|
$
|
405.7
|
|
|
$
|
799.1
|
|
|
$
|
723.9
|
|
|
$
|
449.0
|
|
|
$
|
365.3
|
|
|
$
|
1,649.7
|
|
|
$
|
1,494.9
|
|
|
$
|
4,900.8
|
|
|
$
|
5,567.9
|
|
|
$
|
6,550.5
|
|
|
$
|
7,062.8
|
|
|
February 29, 2020
|
||||||||||||||||||||||||||||||||||
|
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
|
||||||||||||||||||
United Kingdom
|
$
|
703.8
|
|
|
$
|
(388.6
|
)
|
|
$
|
(60.9
|
)
|
|
$
|
0.1
|
|
|
$
|
76.8
|
|
|
$
|
25.3
|
|
|
$
|
146.8
|
|
|
$
|
356.5
|
|
|
$
|
503.3
|
|
Italy
|
1,281.6
|
|
|
(840.5
|
)
|
|
(52.8
|
)
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
388.7
|
|
|
388.7
|
|
|||||||||
Japan
|
358.4
|
|
|
(275.1
|
)
|
|
138.4
|
|
|
—
|
|
|
22.9
|
|
|
—
|
|
|
16.0
|
|
|
244.6
|
|
|
260.6
|
|
|||||||||
Australia
|
33.8
|
|
|
(29.0
|
)
|
|
194.3
|
|
|
—
|
|
|
9.2
|
|
|
0.6
|
|
|
11.6
|
|
|
208.9
|
|
|
220.5
|
|
|||||||||
Netherlands
|
371.2
|
|
|
(207.0
|
)
|
|
2.4
|
|
|
—
|
|
|
34.2
|
|
|
0.4
|
|
|
—
|
|
|
201.2
|
|
|
201.2
|
|
|||||||||
Canada
|
516.2
|
|
|
(463.9
|
)
|
|
(13.1
|
)
|
|
—
|
|
|
7.4
|
|
|
109.5
|
|
|
1.6
|
|
|
156.1
|
|
|
157.7
|
|
|||||||||
Hong Kong
|
53.6
|
|
|
(12.2
|
)
|
|
—
|
|
|
—
|
|
|
1.4
|
|
|
—
|
|
|
84.6
|
|
|
42.8
|
|
|
127.4
|
|
|||||||||
Belgium
|
246.8
|
|
|
(138.5
|
)
|
|
3.2
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
111.7
|
|
|
111.7
|
|
|||||||||
China
|
463.3
|
|
|
(339.2
|
)
|
|
(22.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
101.6
|
|
|
101.6
|
|
|||||||||
Spain
|
292.5
|
|
|
(201.2
|
)
|
|
0.6
|
|
|
—
|
|
|
3.1
|
|
|
—
|
|
|
—
|
|
|
95.0
|
|
|
95.0
|
|
|||||||||
Total
|
$
|
4,321.2
|
|
|
$
|
(2,895.2
|
)
|
|
$
|
189.6
|
|
|
$
|
0.1
|
|
|
$
|
155.2
|
|
|
$
|
136.2
|
|
|
$
|
260.6
|
|
|
$
|
1,907.1
|
|
|
$
|
2,167.7
|
|
|
November 30, 2019
|
||||||||||||||||||||||||||||||||||
|
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
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Netherlands
|
$
|
946.0
|
|
|
$
|
(329.7
|
)
|
|
$
|
(100.1
|
)
|
|
$
|
—
|
|
|
$
|
42.6
|
|
|
$
|
0.5
|
|
|
$
|
—
|
|
|
$
|
559.3
|
|
|
$
|
559.3
|
|
United Kingdom
|
416.1
|
|
|
(199.9
|
)
|
|
(124.4
|
)
|
|
—
|
|
|
60.7
|
|
|
37.6
|
|
|
54.1
|
|
|
190.1
|
|
|
244.2
|
|
|||||||||
Italy
|
1,262.3
|
|
|
(1,192.4
|
)
|
|
105.4
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
175.7
|
|
|
175.7
|
|
|||||||||
France
|
423.4
|
|
|
(296.2
|
)
|
|
(93.1
|
)
|
|
—
|
|
|
94.2
|
|
|
40.9
|
|
|
—
|
|
|
169.2
|
|
|
169.2
|
|
|||||||||
Canada
|
380.4
|
|
|
(362.2
|
)
|
|
7.4
|
|
|
—
|
|
|
0.3
|
|
|
81.2
|
|
|
1.9
|
|
|
107.1
|
|
|
109.0
|
|
|||||||||
Spain
|
249.2
|
|
|
(137.3
|
)
|
|
(25.7
|
)
|
|
—
|
|
|
3.3
|
|
|
—
|
|
|
—
|
|
|
89.5
|
|
|
89.5
|
|
|||||||||
Japan
|
76.0
|
|
|
(171.6
|
)
|
|
133.8
|
|
|
—
|
|
|
24.7
|
|
|
—
|
|
|
13.2
|
|
|
62.9
|
|
|
76.1
|
|
|||||||||
China
|
283.3
|
|
|
(236.9
|
)
|
|
25.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
72.0
|
|
|
72.0
|
|
|||||||||
Mexico
|
112.0
|
|
|
(68.3
|
)
|
|
13.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56.7
|
|
|
56.7
|
|
|||||||||
Germany
|
238.2
|
|
|
(321.3
|
)
|
|
19.3
|
|
|
—
|
|
|
88.3
|
|
|
14.4
|
|
|
13.6
|
|
|
38.9
|
|
|
52.5
|
|
|||||||||
Total
|
$
|
4,386.9
|
|
|
$
|
(3,315.8
|
)
|
|
$
|
(38.8
|
)
|
|
$
|
—
|
|
|
$
|
314.1
|
|
|
$
|
175.0
|
|
|
$
|
82.8
|
|
|
$
|
1,521.4
|
|
|
$
|
1,604.2
|
|
•
|
Employees contracting COVID-19
|
•
|
Reductions in our operating effectiveness as our employees work from home or disaster-recovery locations
|
•
|
Unavailability of key personnel necessary to conduct our business activities
|
•
|
Unprecedented volatility in global financial markets
|
•
|
Reductions in revenue across our operating businesses
|
•
|
Delay in planned entry into, or expansion of, investments or projects in China and surrounding areas
|
•
|
Closure of our offices or the offices of our clients
|
•
|
De-globalization
|
|
(a) Total
Number of
Shares
Purchased (1)
|
|
(b) Average
Price Paid
per Share
|
|
(c) Total Number of
Shares Purchased as
Part of Publicly
Announced Plans
or Programs (2)
|
|
(d) Approximate Dollar Value of Shares
that May Yet Be
Purchased Under the
Plans or Programs (2)
|
||||||
December 1, 2019 to December 31, 2019
|
1,709,367
|
|
|
$
|
20.95
|
|
|
1,660,650
|
|
|
$
|
172,724
|
|
January 1, 2020 to January 31, 2020
|
5,358,558
|
|
|
$
|
21.95
|
|
|
5,324,521
|
|
|
$
|
309,684
|
|
February 1, 2020 to February 29, 2020 (3)
|
7,670,046
|
|
|
$
|
22.67
|
|
|
7,670,046
|
|
|
$
|
139,711
|
|
Total
|
14,737,971
|
|
|
|
|
|
14,655,217
|
|
|
|
(1)
|
Includes an aggregate 82,754 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)
|
In January 2020, the Board of Directors approved an additional $250.0 million share repurchase authorization. At February 29, 2020, $139.7 million remains available for future purchases. The approximate dollar value of shares that may be purchased under the plans or programs in the table above related to these shares is based on the month end closing price of Jefferies common shares. In March 2020, having completed the repurchase of shares under the previous authorization, the Board of Directors approved an additional share repurchase authorization of $100 million. Subsequent to February 29, 2020, we purchased a total of 8,358,899 of our common shares for $144.3 million, or an average price per share of $17.26.
|
(3)
|
Includes 931,200 shares that settled in March 2020.
|
Item 6.
|
Exhibits.
|
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32.1
|
|
|
|
32.2
|
|
|
|
101
|
Financial statements from the Quarterly Report on Form 10-Q of Jefferies Financial Group Inc. for the quarter ended February 29, 2020, 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 and (vi) the Notes to Consolidated Financial Statements.
|
104
|
Cover Page Interactive Data File, formatted in iXBRL (included in Exhibit 101)
|
|
JEFFERIES FINANCIAL GROUP INC.
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
Date: April 8, 2020
|
By:
|
/s/ John M. Dalton
|
|
|
|
Name: John M. Dalton
|
|
|
|
Title: Vice President and Controller
|
|
|
|
(Duly Authorized Officer and Chief Accounting Officer)
|
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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: April 8, 2020
|
By:
|
/s/ Richard B. Handler
|
|
|
Richard B. Handler
|
|
|
Chief Executive Officer
|
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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: April 8, 2020
|
By:
|
/s/ Teresa S. Gendron
|
|
|
|
Teresa S. Gendron
|
|
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
Date: April 8, 2020
|
By:
|
/s/ Richard B. Handler
|
|
|
|
Richard B. Handler
|
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
Date: April 8, 2020
|
By:
|
/s/ Teresa S. Gendron
|
|
|
|
Teresa S. Gendron
|
|
|
|
Chief Financial Officer
|
|
|