New York | 001-05721 | 13-2615557 | ||||||||||||||||||
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||||||||
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 | |||||||||||||||
4.850% Senior Notes Due 2027 | JEF 27A | New York Stock Exchange | |||||||||||||||
5.875% Senior Notes Due 2028 | JEF 28 | New York Stock Exchange | |||||||||||||||
2.750% Senior Notes Due 2032 | JEF 32A | New York Stock Exchange |
Exhibit No. | Description |
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99 | |||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
JEFFERIES FINANCIAL GROUP INC. | ||||||||
By: | /s/ Michael J. Sharp | |||||||
Name: | Michael J. Sharp | |||||||
Title: | Executive Vice President and General Counsel |
FOR MORE INFORMATION
Jonathan Freedman 212.778.8913
|
1 Jefferies Financial Group |
2 Jefferies Financial Group |
(Dollars in thousands, except per share amounts) | Three Months Ended | |||||||||||||
February 29, 2024 | February 28, 202314 |
% Change |
||||||||||||
Net revenues: | ||||||||||||||
Investment Banking and Capital Markets | $ | 1,451,288 | $ | 1,217,132 | 19% | |||||||||
Asset Management | 273,383 | 68,455 | 299% | |||||||||||
Other | 13,532 | (2,095) | N/M | |||||||||||
Net revenues | 1,738,203 | 1,283,492 | 35% | |||||||||||
Net earnings from continuing operations before income taxes | 220,242 | 158,018 | 39% | |||||||||||
Income tax expense | 55,959 | 28,694 | 95% | |||||||||||
Net earnings from continuing operations | 164,283 | 129,324 | 27% | |||||||||||
Net losses from discontinued operations, net of income tax benefit | (7,891) | — | N/M | |||||||||||
Net earnings | 156,392 | 129,324 | 21% | |||||||||||
Net losses attributable to noncontrolling interests | (7,438) | (6,055) | 23% | |||||||||||
Net losses attributable to redeemable noncontrolling interests | — | (256) | (100)% | |||||||||||
Preferred stock dividends | 14,189 | 2,016 | 604% | |||||||||||
Net earnings attributable to common shareholders | $ | 149,641 | $ | 133,619 | 12% | |||||||||
Earnings (losses) per common share: | ||||||||||||||
Basic from continuing operations | $ | 0.71 | $ | 0.56 | 27% | |||||||||
Basic from discontinued operations | (0.03) | — | N/M | |||||||||||
Basic | $ | 0.68 | $ | 0.56 | 22% | |||||||||
Diluted from continuing operations | $ | 0.69 | $ | 0.54 | 28% | |||||||||
Diluted from discontinued operations | (0.03) | — | N/M | |||||||||||
Diluted | $ | 0.66 | $ | 0.54 | 23% | |||||||||
Weighted average common shares | 219,902 | 239,101 | ||||||||||||
Weighted average diluted common shares | 225,168 | 248,095 | ||||||||||||
Three Months Ended February 29, 2024 |
||
•Net earnings attributable to common shareholders of:
◦$150 million, or $0.66 per diluted common share
◦$164 million, or $0.69 per diluted common share, from continuing operations
◦$196 million, or $0.87 per diluted common share, from continuing operations excluding Weiss net loss16
•Repurchased 1.1 million common shares for $43 million, an average price of $40.63 per share, in connection with net-share settlements related to distributions under our equity compensation plans.
•We had 212.0 million common shares outstanding and 253.5 million common shares outstanding on a fully diluted basis2 at February 29, 2024. Our book value per common share was $46.13 and tangible book value per fully diluted share3 was $30.89 at February 29, 2024.
•Effective tax rate of 25.4%
|
3 Jefferies Financial Group |
Three Months Ended February 29, 2024 |
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Investment Banking and Capital Markets |
||
•Investment Banking net revenues of $740 million were higher than the prior year comparable period driven by improved performance across advisory, and equity and debt underwriting.
•Advisory net revenues were higher than the same quarter last year, attributable to increased mergers and acquisitions volume and continued market share gains.
•Underwriting net revenues of $338 million increased from the same quarter last year, as equity underwriting experienced periods of increased activity, as equity markets remained robust, as well as our expanded capabilities and enhanced market position. Debt underwriting activity improved as interest rates and inflationary concerns have stabilized.
•Capital Markets net revenues of $712 million were higher compared to the prior year quarter primarily due to stronger performance in Equities attributable to increased volumes and more favorable trading opportunities, while Fixed Income net revenues remained consistent from the comparable prior year.
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Asset Management |
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•Asset Management net revenues of $273 million were substantially higher than the prior year period as Investment return net revenues improved due to strong performance across multiple investment strategies and funds. In addition, Other investments15 net revenues for the quarter were meaningfully higher than the prior year largely due to the consolidation of Stratos and Tessellis (which resulted in increased revenues offset by an increase in expenses). |
4 Jefferies Financial Group |
(Amounts in Thousands) (Unaudited) | Quarter Ended | ||||||||||||||||
February 29, 2024 |
November 30, 2023 |
February 28, 202314 |
|||||||||||||||
Net revenues by source: |
|||||||||||||||||
Advisory | $ | 338,567 | $ | 312,310 | $ | 297,178 | |||||||||||
Equity underwriting | 209,303 | 132,158 | 125,445 | ||||||||||||||
Debt underwriting | 129,194 | 129,436 | 80,175 | ||||||||||||||
Total underwriting | 338,497 | 261,594 | 205,620 | ||||||||||||||
Other investment banking | 62,608 | 2,842 | 60,046 | ||||||||||||||
Total Investment Banking |
739,672 | 576,746 | 562,844 | ||||||||||||||
Equities | 359,138 | 271,477 | 305,294 | ||||||||||||||
Fixed income | 352,478 | 209,774 | 348,994 | ||||||||||||||
Total Capital Markets |
711,616 | 481,251 | 654,288 | ||||||||||||||
Total Investment Banking and Capital Markets Net revenues5 |
1,451,288 | 1,057,997 | 1,217,132 | ||||||||||||||
Asset management fees and revenues6 |
59,657 | 18,695 | 42,696 | ||||||||||||||
Investment return | 117,640 | 62,892 | 27,434 | ||||||||||||||
Other investments, inclusive of net interest15 |
111,098 | 73,627 | 7,423 | ||||||||||||||
Allocated net interest4 |
(15,012) | (14,568) | (9,098) | ||||||||||||||
Total Asset Management Net revenues |
273,383 | 140,646 | 68,455 | ||||||||||||||
Other | 13,532 | (1,437) | (2,095) | ||||||||||||||
Total Net revenues by source | $ | 1,738,203 | $ | 1,197,206 | $ | 1,283,492 | |||||||||||
Non-interest expenses: | |||||||||||||||||
Compensation and benefits | $ | 926,871 | $ | 612,287 | $ | 703,058 | |||||||||||
Floor brokerage and clearing fees | 109,670 | 98,410 | 80,474 | ||||||||||||||
Underwriting costs | 18,484 | 19,829 | 13,207 | ||||||||||||||
Technology and communications | 137,512 | 122,128 | 113,385 | ||||||||||||||
Occupancy and equipment rental | 28,153 | 26,630 | 27,315 | ||||||||||||||
Business development | 57,651 | 55,649 | 36,838 | ||||||||||||||
Professional services | 77,844 | 70,875 | 62,161 | ||||||||||||||
Depreciation and amortization |
43,202 | 28,311 | 33,292 | ||||||||||||||
Cost of sales | 34,671 | 23,287 | 2,168 | ||||||||||||||
Other | 83,903 | 52,539 | 53,576 | ||||||||||||||
Total Non-interest expenses |
$ | 1,517,961 | $ | 1,109,945 | $ | 1,125,474 | |||||||||||
5 Jefferies Financial Group |
(Unaudited) | Quarter Ended | ||||||||||||||||
February 29, 2024
|
November 30, 2023
|
February 28, 2023 |
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Other Data: | |||||||||||||||||
Number of trading days | 61 | 63 | 60 | ||||||||||||||
Number of trading loss days7 |
3 | 7 | 3 | ||||||||||||||
Average VaR (in millions)8 |
$ | 15.13 | $ | 12.36 | $ | 12.85 | |||||||||||
(Amounts in Millions, Except Other Data) (Unaudited) | Quarter Ended | ||||||||||||||||
February 29, 2024
|
November 30, 2023
|
February 28, 2023 |
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Financial position:9 |
|||||||||||||||||
Total assets | $ | 60,933 | $ | 57,905 | $ | 52,033 | |||||||||||
Cash and cash equivalents | 7,616 | 8,526 | 7,509 | ||||||||||||||
Financial instruments owned | 23,212 | 21,747 | 21,083 | ||||||||||||||
Level 3 financial instruments owned10 |
589 | 681 | 819 | ||||||||||||||
Goodwill and intangible assets | 2,064 | 2,045 | 1,873 | ||||||||||||||
Total equity | 9,867 | 9,802 | 9,811 | ||||||||||||||
Total shareholders' equity | 9,780 | 9,710 | 9,755 | ||||||||||||||
Tangible shareholders' equity11 |
7,716 | 7,665 | 7,882 | ||||||||||||||
Other data and financial ratios: | |||||||||||||||||
Leverage ratio9, 12 |
6.2 | 5.9 | 5.3 | ||||||||||||||
Tangible gross leverage ratio9, 13 |
7.6 | 7.3 | 6.4 | ||||||||||||||
Number of employees at period end | 7,745 | 7,564 | 5,401 | ||||||||||||||
Number of employees excluding OpNet and Stratos at period end | 5,790 | 5,661 | 5,401 |
6 Jefferies Financial Group |
Three Months Ended | ||||||||||||||
February 29, 2024 |
February 28, 2023 |
|||||||||||||
Numerator for earnings per common share from continuing operations: | ||||||||||||||
Net earnings from continuing operations | $ | 164,283 | $ | 129,324 | ||||||||||
Less: Net losses attributable to noncontrolling interests | (6,452) | (6,311) | ||||||||||||
Mandatorily redeemable convertible preferred share dividends | — | (2,016) | ||||||||||||
Allocation of earnings to participating securities | (14,189) | (528) | ||||||||||||
Net earnings from continuing operations attributable to common shareholders for basic earnings per share | $ | 156,546 | $ | 133,091 | ||||||||||
Adjustment to allocation of earnings to participating securities related to diluted shares | — | (54) | ||||||||||||
Mandatorily redeemable convertible preferred share dividends | — | 2,016 | ||||||||||||
Net earnings from continuing operations attributable to common shareholders for diluted earnings per share | $ | 156,546 | $ | 135,053 | ||||||||||
Numerator for earnings per common share from discontinued operations: | ||||||||||||||
Net losses from discontinued operations, net of income tax benefit | $ | (7,891) | $ | — | ||||||||||
Less: Net losses attributable to noncontrolling interests | (986) | — | ||||||||||||
Net losses from discontinued operations attributable to common shareholders for basic and diluted earnings per share | $ | (6,905) | $ | — | ||||||||||
Net earnings attributable to common shareholders for basic earnings per share | $ | 149,641 | $ | 133,091 | ||||||||||
Net earnings attributable to common shareholders for diluted earnings per share | $ | 149,641 | $ | 135,053 | ||||||||||
Denominator for earnings per common share: | ||||||||||||||
Weighted average common shares outstanding | 211,535 | 227,543 | ||||||||||||
Weighted average shares of restricted stock outstanding with future service required | (2,402) | (2,128) | ||||||||||||
Weighted average restricted stock units outstanding with no future service required | 10,769 | 13,686 | ||||||||||||
Weighted average common shares | 219,902 | 239,101 | ||||||||||||
Stock options and other share-based awards | 2,915 | 2,303 | ||||||||||||
Senior executive compensation plan restricted stock unit awards | 2,351 | 2,917 | ||||||||||||
Mandatorily redeemable convertible preferred shares | — | 3,774 | ||||||||||||
Weighted average diluted common shares | 225,168 | 248,095 | ||||||||||||
Earnings (losses) per common share: | ||||||||||||||
Basic from continuing operations | $ | 0.71 | $ | 0.56 | ||||||||||
Basic from discontinued operations | (0.03) | — | ||||||||||||
Basic | $ | 0.68 | $ | 0.56 | ||||||||||
Diluted from continuing operations | $ | 0.69 | $ | 0.54 | ||||||||||
Diluted from discontinued operations | (0.03) | — | ||||||||||||
Diluted | $ | 0.66 | $ | 0.54 |
7 Jefferies Financial Group |
8 Jefferies Financial Group |
Three Months Ended | ||||||||||||||
(in thousands) | February 29, 2024 | February 28, 2023 | ||||||||||||
Net earnings attributable to common shareholders (GAAP) | $ | 149,641 | $ | 133,619 | ||||||||||
Intangible amortization and impairment expense, net of tax | 4,147 | 2,027 | ||||||||||||
Adjusted net earnings to common shareholders (non-GAAP) | 153,788 | 135,646 | ||||||||||||
Preferred stock dividends | 14,189 | 2,016 | ||||||||||||
Adjusted net earnings to total shareholders (non-GAAP) | $ | 167,977 | $ | 137,662 | ||||||||||
Annualized adjusted net earnings to total shareholders (non-GAAP) | $ | 671,908 | $ | 550,648 | ||||||||||
Net earnings impact for net losses from discontinued operations, net of noncontrolling interests | 6,905 | — | ||||||||||||
Adjusted net earnings to total shareholders from continuing operations (non-GAAP) | 174,882 | 137,662 | ||||||||||||
Annualized adjusted net earnings to total shareholders from continuing operations (non-GAAP) | 699,528 | 550,648 | ||||||||||||
Net earnings impact for Weiss losses | 39,393 | — | ||||||||||||
Adjusted net earnings to total shareholders from continuing operations excluding Weiss losses (non-GAAP) | 214,275 | 137,662 | ||||||||||||
Annualized adjusted net earnings to total shareholders from continuing operations excluding Weiss losses (non-GAAP) | 857,100 | 550,648 | ||||||||||||
November 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
Shareholders' equity (GAAP) | $ | 9,709,827 | $ | 10,232,846 | ||||||||||
Less: Intangible assets, net and goodwill | (2,044,776) | (1,875,576) | ||||||||||||
Less: Deferred tax asset, net | (458,343) | (387,862) | ||||||||||||
Less: Weighted average impact of dividends and share repurchases |
(67,475) | (327,445) | ||||||||||||
Adjusted tangible shareholders' equity (non-GAAP) | $ | 7,139,233 | $ | 7,641,963 | ||||||||||
Annualized return on adjusted tangible total equity (non-GAAP) | 9.4 | % | 7.2 | % | ||||||||||
Annualized adjusted net earnings to shareholders on adjusted tangible shareholders' equity from continuing operations (non-GAAP) | 9.8 | % | 7.2 | % | ||||||||||
Annualized adjusted net earnings to shareholders on adjusted tangible shareholders' equity from continuing operations excluding Weiss losses (non-GAAP) | 12.0 | % | 7.2 | % |
9 Jefferies Financial Group |
Three Months Ended | ||||||||
(in thousands, except per share amounts) | February 29, 2024 |
|||||||
Net earnings attributable to common shareholders (GAAP) | $ | 149,641 | ||||||
Net earnings impact for discontinued operations | 6,905 | |||||||
Net earnings impact for Weiss losses | 39,393 | |||||||
Adjusted net earnings (non-GAAP) | $ | 195,939 | ||||||
Weighted average diluted common shares | 225,168 | |||||||
Earnings per diluted common share (GAAP) | $ | 0.66 | ||||||
Adjusted earnings per diluted common share from continuing operations excluding Weiss losses (non-GAAP) | $ | 0.87 |
February 29, 2024 | |||||||||||
Book value (GAAP) | $ | 9,780,097 | |||||||||
Stock options(1) |
114,939 | ||||||||||
Intangible assets, net and goodwill | (2,063,956) | ||||||||||
Adjusted tangible book value (non-GAAP) | $ | 7,831,080 | |||||||||
Common shares outstanding (GAAP) | 212,001 | ||||||||||
Preferred shares | 21,000 | ||||||||||
Restricted stock units ("RSUs") | 14,062 | ||||||||||
Stock options(1) |
5,065 | ||||||||||
Other | 1,386 | ||||||||||
Fully diluted shares outstanding (non-GAAP)(2) |
253,514 | ||||||||||
Book value per common share outstanding | $ | 46.13 | |||||||||
Tangible book value per fully diluted share outstanding (non-GAAP) | $ | 30.89 | |||||||||
(1) |
Stock options added to book value are equal to the total number of stock options outstanding as of February 29, 2024 of 5.1 million multiplied by the weighted average exercise price of $22.69 on February 29, 2024. Stock options added to fully diluted shares are equal to the total stock options outstanding on February 29, 2024. |
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(2) |
Fully diluted shares outstanding include vested and unvested RSUs as well as the target number of RSUs issuable under the senior executive compensation plans until the performance period is complete. Fully diluted shares outstanding also include all stock options and the impact of mandatorily convertible preferred shares if-converted to common shares. |
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10 Jefferies Financial Group |