XML 39 R26.htm IDEA: XBRL DOCUMENT

Related Party Transactions

9 Months Ended

Aug. 31, 2017

Jefferies Capital Partners Related Funds. We have equity investments in the JCP Manager and in private equity funds which are managed by a team led by Brian P. Friedman, one of our directors and our Chairman of the Executive Committee (“Private Equity Related Funds”). At August 31, 2017 and November 30, 2016, our equity investments in Private Equity Related Funds were in aggregate $28.1 million and $37.7 million, respectively. We also charge the JCP Manager for certain services under a service agreement. The following table presents revenues and service charges related to our investment in Private Equity Related Funds (in thousands):



	Three Months Ended August 31,					Nine Months Ended August 31,
	2017			2016		2017			2016
Other revenues and investment income (loss)	$	(373	)	$	6,048	$	(9,793	)	$	(1,664	)
Service charges	200			201		523			537

For further information regarding our commitments and funded amounts to the Private Equity Related Funds, see Note 15, Commitments, Contingencies and Guarantees.

Berkadia Commercial Mortgage, LLC. At August 31, 2017 and November 30, 2016, we had commitments to purchase $722.9 million and $817.0 million, respectively, in agency CMBS from Berkadia Commercial Mortgage, LLC, which is partially owned by Leucadia.

Officers, Directors and Employees. The following sets forth information regarding related party transactions with our officers, directors and employees:


•	At August 31, 2017 and November 30, 2016, we had $49.3 million and $38.4 million, respectively, of loans outstanding to certain of our officers and employees (none of whom are executive officers or directors) that are included in Other assets in our Consolidated Statements of Financial Condition.


•	Receivables from and payables to customers include balances arising from officers, directors and employees’ individual security transactions. These transactions are subject to the same regulations as all customer transactions and are provided on substantially the same terms.


•	At November 30, 2016, we had provided a guarantee of a credit agreement for a private equity fund owned by our employees and in April 2017 this guarantee was terminated.


•	One of our directors has investments in a hedge fund managed by us of approximately $5.0 million at both August 31, 2017 and November 30, 2016.

See Note 8, Variable Interest Entities, and Note 15, Commitments, Contingencies and Guarantees, for further information regarding related party transactions with our officers, directors and employees.

Leucadia. The following is a description of related party transactions with Leucadia and its affiliates:


•	Under a service agreement, we provide services to and receive services from Leucadia (in millions):



	Three Months Ended August 31,				Nine Months Ended August 31,
	2017		2016		2017		2016
Charges to Leucadia for services provided	$	13.0	$	8.7	$	34.8	$	28.8
Charges from Leucadia for services received	4.9		3.6		13.8		9.2


•	Receivables from and payables to Leucadia, included in Other assets and Accrued Expenses and other liabilities in our Consolidated Statements of Financial Condition, respectively, are as follows (in millions):



	August 31, 2017		November 30, 2016
Receivable from Leucadia	$	1.9	$	2.8
Payable to Leucadia	2.0		1.9

•

Pursuant to a tax sharing agreement entered into between us and Leucadia, payments are made between us and Leucadia to settle current tax assets and liabilities. At August 31, 2017 and November 30, 2016, a net current tax payable to Leucadia of $18.0 million and a net current tax receivable from Leucadia of $80.1 million, respectively, is included in Accrued expenses and other liabilities and Other assets, respectively, in our Consolidated Statements of Financial Condition.


•	Two of our directors made capital contributions totaling $3.6 million in June 2017 to a hedge fund managed by Leucadia.

•

We made a capital contribution of $0.5 million in June 2017 to a hedge fund managed by Leucadia. We also made a capital contribution of $114.0 million in March 2016 to another hedge fund managed by Leucadia, and in December 2016 we redeemed $17.0 million from this hedge fund. Net gains on our investment in these hedge funds were $1.9 million and $5.1 million for the three and nine months ended August 31, 2017, respectively, and $1.5 million and $2.4 million for the three and nine months ended August 31, 2016, respectively, which are included in Principal Transactions in our Consolidated Statements of Earnings.

•

As a result of a public offering by Landcadia Holdings Inc., an affiliate of Leucadia, we own 638,561 public units (each unit consisting of one share of Class A common stock and one public warrant) at both August 31, 2017 and November 30, 2016, with fair values of $6.9 million and $6.6 million, respectively, included in Financial instruments owned in our Consolidated Statements of Financial Condition.


•	In July 2016, a subsidiary of Leucadia made a capital contribution of $30.0 million to a hedge fund managed by us.


•	We sold securities to Leucadia during the periods presented below at fair value for cash. There was no gain or loss on these transactions.



Date	Amount (in millions)
February 2017	$	25.6
April 2017	21.9
August 2017	7.1


•	We received investment banking and advisory fees of $1.8 million from Leucadia for the nine months ended August 31, 2016. Additionally, periodically Jefferies provides brokerage services to Leucadia.

•

In connection with our sales and trading activities, from time to time we make a market in long-term debt securities of Leucadia (i.e., we buy and sell debt securities issued by Leucadia). At August 31, 2017, approximately $2.1 million and $1.1 million, of debt securities issued by Leucadia are included in Financial instruments owned and Financial instruments sold, respectively, in our Consolidated Statements of Financial Condition. At November 30, 2016, approximately $1.0 million is included in Financial instruments owned in our Consolidated Statements of Financial Condition.

For information on transactions with our equity method investees, see Note 9, Investments.