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 | |||||||||||||||
6.200% Senior Notes Due 2034 | JEF 34 | New York Stock Exchange |
Exhibit No. | Description |
||||
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 |
$ in thousands, except per share amounts | Three Months Ended May 31, |
Six Months Ended May 31, |
|||||||||||||||||||||||||||
2024 | 202313 |
% Change |
2024 | 202313 |
% Change |
||||||||||||||||||||||||
Net revenues: | |||||||||||||||||||||||||||||
Investment Banking and Capital Markets | $ | 1,494,447 | $ | 1,061,019 | 41% | $ | 2,945,735 | $ | 2,278,151 | 29% | |||||||||||||||||||
Asset Management | 156,524 | (30,899) | N/M | 429,907 | 37,556 | N/M | |||||||||||||||||||||||
Other | 5,474 | 7,490 | (27)% | 19,006 | 5,395 | 252% | |||||||||||||||||||||||
Net revenues | 1,656,445 | 1,037,610 | 60% | 3,394,648 | 2,321,102 | 46% | |||||||||||||||||||||||
Net earnings from continuing operations before income taxes | 227,754 | 17,919 | N/M | 447,996 | 175,937 | 155% | |||||||||||||||||||||||
Income tax expense | 73,107 | 9,235 | 692% | 129,066 | 37,929 | 240% | |||||||||||||||||||||||
Net earnings from continuing operations | 154,647 | 8,684 | N/M | 318,930 | 138,008 | 131% | |||||||||||||||||||||||
Net income (losses) from discontinued operations, net of income taxes | 40 | — | N/M | (7,851) | — | N/M | |||||||||||||||||||||||
Net earnings | 154,687 | 8,684 | N/M | 311,079 | 138,008 | 125% | |||||||||||||||||||||||
Net losses attributable to noncontrolling interests | (4,790) | (3,513) | 36% | (12,228) | (9,568) | 28% | |||||||||||||||||||||||
Net losses attributable to redeemable noncontrolling interests | — | (198) | (100)% | — | (454) | (100)% | |||||||||||||||||||||||
Preferred stock dividends | 13,741 | — | N/M | 27,930 | 2,016 | N/M | |||||||||||||||||||||||
Net earnings attributable to common shareholders | $ | 145,736 | $ | 12,395 | N/M | $ | 295,377 | $ | 146,014 | 102% | |||||||||||||||||||
Earnings (losses) per common share: | |||||||||||||||||||||||||||||
Basic from continuing operations | $ | 0.66 | $ | 0.05 | N/M | $ | 1.37 | $ | 0.60 | 128% | |||||||||||||||||||
Basic from discontinued operations | — | — | N/M | (0.03) | — | N/M | |||||||||||||||||||||||
Basic | $ | 0.66 | $ | 0.05 | N/M | $ | 1.34 | $ | 0.60 | 124% | |||||||||||||||||||
Diluted from continuing operations | $ | 0.64 | $ | 0.05 | N/M | $ | 1.34 | $ | 0.60 | 123% | |||||||||||||||||||
Diluted from discontinued operations | — | — | N/M | (0.03) | — | N/M | |||||||||||||||||||||||
Diluted | $ | 0.64 | $ | 0.05 | N/M | $ | 1.31 | $ | 0.60 | 118% | |||||||||||||||||||
Weighted average common shares | 219,971 | 242,568 | 219,935 | 240,825 | |||||||||||||||||||||||||
Weighted average diluted common shares | 226,146 | 245,413 | 225,587 | 246,870 | |||||||||||||||||||||||||
3 Jefferies Financial Group |
Three Months Ended May 31, 2024 |
Six Months Ended May 31, 2024 |
|||||||
•Net earnings attributable to common shareholders of:
◦$146 million, or $0.64 per diluted common share
◦$145 million, or $0.64 per diluted common share, from continuing operations
•Annualized return on adjusted tangible shareholders' equity1 of 9.2%
•We had 212.1 million common shares outstanding and 253.7 million common shares outstanding on a fully diluted basis2 at May 31, 2024. Our book value per common share was $46.57 and tangible book value per fully diluted share3 was $31.27 at May 31, 2024.
•Effective tax rate of 32.1%. The lower tax rate compared to the same quarter last year of 51.5% is primarily due to the higher amount of pre-tax income in the current quarter.
|
•Net earnings attributable to common shareholders of:
◦$295 million, or $1.31 per diluted common share
◦$301 million, or $1.34 per diluted common share, from continuing operations
•Annualized return on adjusted tangible shareholders' equity1 of 9.4%.
•Repurchased 1.1 million shares of common stock for $44 million, at an average price of $40.66 per share in connection with net-share settlements related to our equity compensation plans.
•Effective tax rate of 28.8%. The higher tax rate compared to the prior year of 21.6% is primarily due to the recognition of a smaller excess tax benefit on restricted stock distributed during the current year.
|
Investment Banking and Capital Markets |
Investment Banking and Capital Markets |
|||||||
•Investment Banking net revenues of $803 million were higher than the prior year comparable period, with strength across all lines of business.
•Advisory net revenues of $284 million and equity and debt underwriting net revenues of $455 million were higher than the same quarter last year, attributable primarily to market share gains.
•Underwriting net revenues of $455 million increased from the same quarter last year, due to increased equity underwriting as equity markets remained robust driving increased overall market volumes, as well as due to our expanded capabilities and enhanced market position. Debt underwriting activity improved as interest rates and inflationary concerns continued to stabilize.
•Capital Markets net revenues of $691 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 flat with the comparable prior year.
|
•Investment Banking net revenues were $1.54 billion, a 45% increase, with strength in all lines of business attributable primarily to increased market share.
•Advisory net revenues of $622 million and equity and debt underwriting net revenues of $793 million were higher than last year, attributable primarily to market share gains.
•Underwriting net revenues of $793 million increased from the prior year period, due to increased activity from both equity and debt underwriting as momentum from equity and leveraged finance markets benefited from continued market share gains.
•Capital Markets net revenues of $1.40 billion were higher compared to the prior year period primarily driven by stronger Equities net revenues attributable to continued market share gains during the period. Fixed Income net revenues remained consistent from the comparable prior year.
|
Asset Management |
Asset Management |
|||||||
•Asset Management net revenues of $157 million were substantially higher than the prior year largely due to the consolidation of Stratos and Tessellis, which resulted in increased revenues, as well as the absence this year of losses in OpNet incurred in the prior year. |
•Asset Management net revenues were $430 million, 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 investments14 net revenues 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 |
5 Jefferies Financial Group |
$ in thousands (unaudited) | Quarter Ended | ||||||||||||||||
May 31, 2024 |
February 29, 2024 |
May 31, 202313 |
|||||||||||||||
Net revenues by source: |
|||||||||||||||||
Advisory | $ | 283,898 | $ | 338,567 | $ | 254,157 | |||||||||||
Equity underwriting | 249,187 | 209,303 | 148,429 | ||||||||||||||
Debt underwriting | 205,499 | 129,194 | 89,889 | ||||||||||||||
Total underwriting | 454,686 | 338,497 | 238,318 | ||||||||||||||
Other investment banking | 64,594 | 62,608 | 11,458 | ||||||||||||||
Total Investment Banking |
803,178 | 739,672 | 503,933 | ||||||||||||||
Equities | 407,092 | 359,138 | 278,691 | ||||||||||||||
Fixed income | 284,177 | 352,478 | 278,395 | ||||||||||||||
Total Capital Markets |
691,269 | 711,616 | 557,086 | ||||||||||||||
Total Investment Banking and Capital Markets Net revenues5 |
1,494,447 | 1,451,288 | 1,061,019 | ||||||||||||||
Asset management fees and revenues6 |
16,818 | 59,657 | 15,929 | ||||||||||||||
Investment return | 32,942 | 117,640 | 32,477 | ||||||||||||||
Other investments, inclusive of net interest14 |
122,767 | 111,098 | (66,180) | ||||||||||||||
Allocated net interest4 |
(16,003) | (15,012) | (13,125) | ||||||||||||||
Total Asset Management Net revenues |
156,524 | 273,383 | (30,899) | ||||||||||||||
Other | 5,474 | 13,532 | 7,490 | ||||||||||||||
Total Net revenues by source | $ | 1,656,445 | $ | 1,738,203 | $ | 1,037,610 | |||||||||||
Non-interest expenses: | |||||||||||||||||
Compensation and benefits | $ | 861,993 | $ | 926,871 | $ | 575,868 | |||||||||||
Brokerage and clearing fees | 110,536 | 109,670 | 96,592 | ||||||||||||||
Underwriting costs | 18,552 | 18,484 | 13,169 | ||||||||||||||
Technology and communications | 135,238 | 137,512 | 118,936 | ||||||||||||||
Occupancy and equipment rental | 29,327 | 28,153 | 24,395 | ||||||||||||||
Business development | 68,630 | 57,651 | 43,587 | ||||||||||||||
Professional services | 75,493 | 77,844 | 68,514 | ||||||||||||||
Depreciation and amortization |
49,946 | 43,202 | 25,310 | ||||||||||||||
Cost of sales | 37,462 | 34,671 | 2,362 | ||||||||||||||
Other | 41,514 | 83,903 | 50,958 | ||||||||||||||
Total Non-interest expenses |
$ | 1,428,691 | $ | 1,517,961 | $ | 1,019,691 | |||||||||||
6 Jefferies Financial Group |
$ in thousands (unaudited) | Six Months Ended May 31, | ||||||||||
2024 | 202313 |
||||||||||
Net revenues by source: |
|||||||||||
Advisory | $ | 622,465 | $ | 551,335 | |||||||
Equity underwriting | 458,490 | 273,874 | |||||||||
Debt underwriting | 334,693 | 170,064 | |||||||||
Total underwriting | 793,183 | 443,938 | |||||||||
Other investment banking | 127,202 | 71,504 | |||||||||
Total Investment Banking |
1,542,850 | 1,066,777 | |||||||||
Equities | 766,230 | 583,985 | |||||||||
Fixed income | 636,655 | 627,389 | |||||||||
Total Capital Markets |
1,402,885 | 1,211,374 | |||||||||
Total Investment Banking and Capital Markets Net revenues5 |
2,945,735 | 2,278,151 | |||||||||
Asset management fees and revenues6 |
76,475 | 58,625 | |||||||||
Investment return | 150,582 | 59,911 | |||||||||
Other investments, inclusive of net interest14 |
233,865 | (58,757) | |||||||||
Allocated net interest4 |
(31,015) | (22,223) | |||||||||
Total Asset Management Net revenues |
429,907 | 37,556 | |||||||||
Other | 19,006 | 5,395 | |||||||||
Total Net revenues by source | $ | 3,394,648 | $ | 2,321,102 | |||||||
Non-interest expenses: | |||||||||||
Compensation and benefits | $ | 1,788,864 | $ | 1,278,926 | |||||||
Brokerage and clearing fees | 220,206 | 177,066 | |||||||||
Underwriting costs | 37,036 | 26,376 | |||||||||
Technology and communications | 272,750 | 232,321 | |||||||||
Occupancy and equipment rental | 57,480 | 51,710 | |||||||||
Business development | 126,281 | 80,425 | |||||||||
Professional services | 153,337 | 130,675 | |||||||||
Depreciation and amortization |
93,148 | 58,602 | |||||||||
Cost of sales | 72,133 | 4,530 | |||||||||
Other | 125,417 | 104,534 | |||||||||
Total Non-interest expenses |
$ | 2,946,652 | $ | 2,145,165 | |||||||
7 Jefferies Financial Group |
Unaudited | Quarter Ended | ||||||||||||||||
May 31, 2024
|
February 29, 2024
|
May 31, 2023
|
|||||||||||||||
Other Data: | |||||||||||||||||
Number of trading days | 64 | 61 | 64 | ||||||||||||||
Number of trading loss days7 |
1 | 3 | 10 | ||||||||||||||
Average VaR (in millions)8 |
$ | 13.36 | $ | 15.13 | $ | 15.14 | |||||||||||
Six Months Ended May 31, | |||||||||||||||||
2024 | 2023 | ||||||||||||||||
Other Data: | |||||||||||||||||
Number of trading days | 125 | 124 | |||||||||||||||
Number of trading loss days7 |
4 | 13 | |||||||||||||||
Average VaR (in millions)8 |
$ | 14.22 | $ | 14.03 |
In millions, except other data (unaudited) | Quarter Ended | ||||||||||||||||
May 31, 2024
|
February 29, 2024
|
May 31, 2023
|
|||||||||||||||
Financial position: | |||||||||||||||||
Total assets | $ | 63,001 | $ | 60,933 | $ | 53,740 | |||||||||||
Cash and cash equivalents | 10,842 | 7,616 | 8,005 | ||||||||||||||
Financial instruments owned | 22,787 | 23,212 | 21,002 | ||||||||||||||
Level 3 financial instruments owned9 |
691 | 589 | 860 | ||||||||||||||
Goodwill and intangible assets | 2,057 | 2,064 | 1,873 | ||||||||||||||
Total equity | 9,952 | 9,867 | 9,765 | ||||||||||||||
Total shareholders' equity | 9,875 | 9,780 | 9,696 | ||||||||||||||
Tangible shareholders' equity10 |
7,818 | 7,716 | 7,823 | ||||||||||||||
Other data and financial ratios: | |||||||||||||||||
Leverage ratio11 |
6.3 | 6.2 | 5.5 | ||||||||||||||
Tangible gross leverage ratio12 |
7.8 | 7.6 | 6.6 | ||||||||||||||
Number of employees at period end | 7,611 | 7,745 | 5,335 | ||||||||||||||
Number of employees excluding OpNet and Stratos at period end | 5,635 | 5,790 | 5,335 |
8 Jefferies Financial Group |
Three Months Ended May 31, |
Six Months Ended May 31, |
|||||||||||||||||||||||||
In thousands, except per share amounts | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||||
Numerator for earnings per common share from continuing operations: | ||||||||||||||||||||||||||
Net earnings from continuing operations | $ | 154,647 | $ | 8,684 | $ | 318,930 | $ | 138,008 | ||||||||||||||||||
Less: Net losses attributable to noncontrolling interests | (3,785) | (3,711) | (10,237) | (10,022) | ||||||||||||||||||||||
Mandatorily redeemable convertible preferred share dividends | — | — | — | (2,016) | ||||||||||||||||||||||
Allocation of earnings to participating securities | (13,741) | (4) | (27,930) | (830) | ||||||||||||||||||||||
Net earnings from continuing operations attributable to common shareholders for basic earnings per share | $ | 144,691 | $ | 12,391 | $ | 301,237 | $ | 145,184 | ||||||||||||||||||
Adjustment to allocation of earnings to participating securities related to diluted shares | — | (1) | — | (31) | ||||||||||||||||||||||
Mandatorily redeemable convertible preferred share dividends | — | — | — | 2,016 | ||||||||||||||||||||||
Net earnings from continuing operations attributable to common shareholders for diluted earnings per share | $ | 144,691 | $ | 12,390 | $ | 301,237 | $ | 147,169 | ||||||||||||||||||
Numerator for earnings per common share from discontinued operations: | ||||||||||||||||||||||||||
Net earnings (losses) from discontinued operations, net of taxes | $ | 40 | $ | — | $ | (7,851) | $ | — | ||||||||||||||||||
Less: Net losses attributable to noncontrolling interests | (1,005) | — | (1,991) | — | ||||||||||||||||||||||
Net earnings (losses) from discontinued operations attributable to common shareholders for basic and diluted earnings per share | $ | 1,045 | $ | — | $ | (5,860) | $ | — | ||||||||||||||||||
Net earnings attributable to common shareholders for basic earnings per share | $ | 145,736 | $ | 12,391 | $ | 295,377 | $ | 145,184 | ||||||||||||||||||
Net earnings attributable to common shareholders for diluted earnings per share | $ | 145,736 | $ | 12,390 | $ | 295,377 | $ | 147,169 | ||||||||||||||||||
Denominator for earnings per common share: | ||||||||||||||||||||||||||
Weighted average common shares outstanding | 212,039 | 232,842 | 211,787 | 230,193 | ||||||||||||||||||||||
Weighted average shares of restricted stock outstanding with future service required | (2,329) | (1,853) | (2,366) | (1,989) | ||||||||||||||||||||||
Weighted average restricted stock units outstanding with no future service required | 10,261 | 11,579 | 10,514 | 12,621 | ||||||||||||||||||||||
Weighted average common shares | 219,971 | 242,568 | 219,935 | 240,825 | ||||||||||||||||||||||
Stock options and other share-based awards | 3,470 | 1,618 | 3,124 | 2,086 | ||||||||||||||||||||||
Senior executive compensation plan restricted stock unit awards | 2,705 | 1,227 | 2,528 | 2,072 | ||||||||||||||||||||||
Mandatorily redeemable convertible preferred shares | — | — | — | 1,887 | ||||||||||||||||||||||
Weighted average diluted common shares | 226,146 | 245,413 | 225,587 | 246,870 | ||||||||||||||||||||||
Earnings (losses) per common share: | ||||||||||||||||||||||||||
Basic from continuing operations | $ | 0.66 | $ | 0.05 | $ | 1.37 | $ | 0.60 | ||||||||||||||||||
Basic from discontinued operations | — | — | (0.03) | — | ||||||||||||||||||||||
Basic | $ | 0.66 | $ | 0.05 | $ | 1.34 | $ | 0.60 | ||||||||||||||||||
Diluted from continuing operations | $ | 0.64 | $ | 0.05 | $ | 1.34 | $ | 0.60 | ||||||||||||||||||
Diluted from discontinued operations | — | — | (0.03) | — | ||||||||||||||||||||||
Diluted | $ | 0.64 | $ | 0.05 | $ | 1.31 | $ | 0.60 |
9 Jefferies Financial Group |
10 Jefferies Financial Group |
Three Months Ended May 31, |
Six Months Ended May 31, |
|||||||||||||||||||||||||
$ in thousands | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||||
Net earnings attributable to common shareholders (GAAP) | $ | 145,736 | $ | 12,395 | $ | 295,377 | $ | 146,014 | ||||||||||||||||||
Intangible amortization and impairment expense, net of tax | 5,799 | 1,193 | 9,946 | 3,220 | ||||||||||||||||||||||
Adjusted net earnings to common shareholders (non-GAAP) | 151,535 | 13,588 | 305,323 | 149,234 | ||||||||||||||||||||||
Preferred stock dividends | 13,741 | — | 27,930 | 2,016 | ||||||||||||||||||||||
Adjusted net earnings to total shareholders (non-GAAP) | $ | 165,276 | $ | 13,588 | $ | 333,253 | $ | 151,250 | ||||||||||||||||||
Annualized adjusted net earnings to total shareholders (non-GAAP) | $ | 661,104 | $ | 54,352 | $ | 666,506 | $ | 302,500 | ||||||||||||||||||
Net earnings impact for net (earnings) losses from discontinued operations, net of noncontrolling interests | (1,045) | — | 5,861 | — | ||||||||||||||||||||||
Adjusted net earnings to total shareholders from continuing operations (non-GAAP) | 164,231 | 13,588 | 339,114 | 151,250 | ||||||||||||||||||||||
Annualized adjusted net earnings to total shareholders from continuing operations (non-GAAP) | 656,924 | 54,352 | 678,228 | 302,500 | ||||||||||||||||||||||
February 29, | November 30, | |||||||||||||||||||||||||
2024 | 2023 | 2023 | 2022 | |||||||||||||||||||||||
Shareholders' equity (GAAP) | $ | 9,780,097 | $ | 9,755,243 | $ | 9,709,827 | $ | 10,232,845 | ||||||||||||||||||
Less: Intangible assets, net and goodwill | (2,063,956) | (1,872,850) | (2,044,776) | (1,875,576) | ||||||||||||||||||||||
Less: Deferred tax asset, net | (466,468) | (486,012) | (458,343) | (387,862) | ||||||||||||||||||||||
Less: Weighted average impact of dividends and share repurchases |
(49,053) | (70,895) | (115,344) | (195,393) | ||||||||||||||||||||||
Adjusted tangible shareholders' equity (non-GAAP) | $ | 7,200,620 | $ | 7,325,486 | $ | 7,091,364 | $ | 7,774,014 | ||||||||||||||||||
Annualized return on adjusted tangible shareholders' equity (non-GAAP) | 9.2 | % | 0.7 | % | 9.4 | % | 3.9 | % | ||||||||||||||||||
Annualized adjusted net earnings to shareholders on adjusted tangible shareholders' equity from continuing operations (non-GAAP) | 9.1 | % | 0.7 | % | 9.6 | % | 3.9 | % | ||||||||||||||||||
11 Jefferies Financial Group |
$ in thousands, except per share amounts | May 31, 2024 | ||||||||||
Book value (GAAP) | $ | 9,875,056 | |||||||||
Stock options(1) |
114,939 | ||||||||||
Intangible assets, net and goodwill | (2,057,302) | ||||||||||
Adjusted tangible book value (non-GAAP) | $ | 7,932,693 | |||||||||
Common shares outstanding (GAAP) | 212,053 | ||||||||||
Preferred shares | 21,000 | ||||||||||
Restricted stock units ("RSUs") | 14,180 | ||||||||||
Stock options(1) |
5,065 | ||||||||||
Other | 1,365 | ||||||||||
Adjusted fully diluted shares outstanding (non-GAAP)(2) |
253,663 | ||||||||||
Book value per common share outstanding | $ | 46.57 | |||||||||
Adjusted tangible book value per fully diluted share outstanding (non-GAAP) | $ | 31.27 | |||||||||
(1) |
Stock options added to book value are equal to the total number of stock options outstanding as of May 31, 2024 of 5.1 million multiplied by the weighted average exercise price of $22.69 on May 31, 2024. |
||||||||||
(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. |
||||||||||
12 Jefferies Financial Group |