Schedule I (PARENT COMPANY ONLY)

12 Months Ended

Nov. 30, 2019

Condensed Financial Information Disclosure [Abstract]

Schedule I (PARENT COMPANY ONLY)

JEFFERIES GROUP LLC

(PARENT COMPANY ONLY)

CONDENSED STATEMENTS OF FINANCIAL CONDITION

(In thousands)

	November 30,
	2019			2018
ASSETS
Cash and cash equivalents	$	128,535		$	921,603
Cash and securities segregated and on deposited for regulatory purposes or deposited with clearing and depository organizations	38,817			57,817
Financial instruments owned, at fair value	72,736			99,491
Loans to and investments in related parties	643,720			696,774
Investment in subsidiaries	5,639,208			5,850,168
Advances to subsidiaries	3,979,139			2,488,026
Subordinated notes receivable	2,442,625			2,434,411
Other assets	333,798			483,770
Total assets	$	13,278,578		$	13,032,060
LIABILITIES AND EQUITY
Short-term borrowings	$	20,989		$	56,555
Financial instruments sold, not yet purchased, at fair value	2,307			797
Accrued expenses and other liabilities	365,540			431,471
Long-term debt	6,764,270			6,362,744
Total liabilities	7,153,106			6,851,567
EQUITY
Member’s paid-in capital	6,329,677			6,376,662
Accumulated other comprehensive income (loss):
Currency translation adjustments	(179,378		)	(185,804		)
Changes in instrument specific credit risk	(18,889		)	(5,728		)
Cash flow hedges	—			470
Additional minimum pension liability	(6,079		)	(4,761		)
Available-for-sale securities	141			(346		)
Total accumulated other comprehensive loss	(204,205		)	(196,169		)
Total member’s equity	6,125,472			6,180,493
Total liabilities and equity	$	13,278,578		$	13,032,060

See accompanying notes to condensed financial statements.

JEFFERIES GROUP LLC

(PARENT COMPANY ONLY)

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(In thousands)

	Year Ended November 30,
	2019			2018			2017
Revenues:
Principal transactions	$	13,746		$	20,875		$	576
Asset management fees	—			—			1,266
Investment banking	103			—			—
Interest	271,369			262,042			241,357
Other	19,346			101,284			78,812
Total revenues	304,564			384,201			322,011
Interest expense	297,927			316,050			276,727
Net revenues	6,637			68,151			45,284
Non-interest expenses:
Total non-interest expenses	6,482			5,016			13,598
Earnings before income taxes	155			63,135			31,686
Income tax expense (benefit)	(3,316		)	104,649			(21,292		)
Net earnings (loss) before undistributed earnings of subsidiaries	3,471			(41,514		)	52,978
Undistributed earnings of subsidiaries	242,558			200,275			304,520
Net earnings	246,029			158,761			357,498
Other comprehensive income (loss), net of tax:
Currency translation and other adjustments	6,426			(85,554		)	53,396
Change in instrument specific credit risk	(13,161		)	22,160			(21,394		)
Cash flow hedges	(470		)	1,406			(936		)
Minimum pension liability adjustments, net of tax	(1,318		)	4,285			312
Unrealized gain on available-for-sale securities	487			311			—
Total other comprehensive income (loss), net of tax	(8,036		)	(57,392		)	31,378
Comprehensive income	$	237,993		$	101,369		$	388,876

See accompanying notes to condensed financial statements.

JEFFERIES GROUP LLC

(PARENT COMPANY ONLY)

CONDENSED STATEMENTS OF CASH FLOWS

(In thousands)

	Year Ended November 30,
	2019			2018			2017
Cash flows from operating activities:
Net earnings	$	246,029		$	158,761		$	357,498
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Amortization	(38,812		)	(53,296		)	(61,634		)
Undistributed earnings of subsidiaries	(242,558		)	(200,275		)	(304,520		)
(Income) loss on loans to and investments in related parties	(21,946		)	(98,223		)	(90,724		)
Distributions received on investments in related parties	75,000			40,000			—
Other adjustments	60,106			(116,307		)	39,513
Net change in assets and liabilities:
Financial instruments owned	26,755			(25,604		)	90,399
Other assets	154,940			119,293			(29,031		)
Financial instruments sold, not yet purchased	1,510			(17,264		)	10,776
Accrued expenses and other liabilities	(51,821		)	(200,970		)	324,446
Net cash provided by (used in) operating activities	209,203			(393,885		)	336,723
Cash flows from investing activities:
Investments in, advances to and subordinated notes receivable from subsidiaries	(1,035,619		)	(473,436		)	(415,100		)
Loans to and investments in related parties	—			—			(73,915		)
Cash received from contingent consideration	—			—			1,342
Net cash used in investing activities	(1,035,619		)	(473,436		)	(487,673		)
Cash flows from financing activities:
Proceeds from short-term borrowings	20,236			70,482			55,652
Payments on short-term borrowings	(55,773		)	(140,664		)	(32,326		)
Proceeds from issuance of long-term debt, net of issuance costs	1,184,891			1,183,954			1,116,798
Repayment of long-term debt	(823,875		)	(1,035,700		)	(186,444		)
Distribution to Jefferies Financial Group Inc.	(311,131		)	(248,684		)	—
Net cash provided by (used in) financing activities	14,348			(170,612		)	953,680
Net increase (decrease) in cash and cash equivalents	(812,068		)	(1,037,933		)	802,730
Cash, cash equivalents and restricted cash at beginning of period	979,420			2,017,353			1,214,623
Cash, cash equivalents and restricted cash at end of period	$	167,352		$	979,420		$	2,017,353
Supplemental disclosures of cash flow information:
Cash paid (received) during the period for:
Interest	$	291,298		$	385,410		$	332,135
Income taxes, net	73,151			186,236			2,494

Noncash financing activities:

On October 1, 2018, Jefferies Financial Group Inc. (“Jefferies”) transferred to the Parent Company its 50% interest in Berkadia Commercial Mortgage Holding LLC (“Berkadia”) and its capital investments in certain separately managed accounts and funds. The transfer of its interest in Berkadia and a portion of the transfer of its capital investments in certain separately managed accounts and funds were recorded as a capital contribution and increased member’s equity by $598.2 million. Refer to Note 1, Organization and Basis of Presentation, in the Company’s consolidated financial statements included in the Annual Report on Form 10-K for the year ended November 30, 2019 for further details.

The following presents the Parent Company’s cash, cash equivalents and restricted cash by category within the Condensed Statements of Financial Condition (in thousands):

	November 30,
	2019		2018
Cash and cash equivalents	$	128,535	$	921,603
Cash and securities segregated and on deposit for regulatory purposes with clearing and depository organizations	38,817		57,817
Total cash, cash equivalents and restricted cash	$	167,352	$	979,420

See accompanying notes to condensed financial statements.

Note 1. Introduction and Basis of Presentation

The accompanying condensed financial statements (the “Parent Company Financial Statements”), including the notes thereto, should be read in conjunction with the consolidated financial statements of Jefferies Group LLC (the “Company”) and the notes thereto found in the Company’s Annual Report on Form 10-K for the year ended November 30, 2019. For purposes of these condensed non-consolidated financial statements, the Company’s wholly owned and majority owned subsidiaries are accounted for using the equity method of accounting (“equity method subsidiaries”).

The Parent Company is an indirect wholly owned subsidiary of Jefferies. Jefferies does not guarantee any of our outstanding debt securities.

The Parent Company Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for financial information. The significant accounting policies of the Parent Company Financial Statements are those used by the Company on a consolidated basis, to the extent applicable. For further information regarding the significant accounting policies refer to Note 2, Summary of Significant Accounting Policies, in the Company’s consolidated financial statements included in the Annual Report on Form 10-K for the year ended November 30, 2019.

The Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with U.S. GAAP. The most important of these estimates and assumptions relate to fair value measurements, compensation and benefits, goodwill and intangible assets, the ability to realize deferred tax assets and the recognition and measurement of uncertain tax positions. Although these and other estimates and assumptions are based on the best available information, actual results could be materially different from these estimates.

Note 2. Transactions with Subsidiaries

The Parent Company has transactions with its consolidated subsidiaries, Jefferies and certain other affiliated entities determined on an agreed upon basis and has guaranteed certain unsecured lines of credit and contractual obligations of certain equity method subsidiaries.

Note 3. Guarantees

In the normal course of its business, the Parent Company issues guarantees in respect of obligations of certain of its wholly owned subsidiaries under trading and other financial arrangements, including guarantees to various trading counterparties and banks. The Parent Company records all derivative contracts and Financial instruments owned and Financial instruments sold, not yet purchased at fair value in its Consolidated Statements of Financial Condition.

Certain of the Parent Company’s equity method subsidiaries are members of various exchanges and clearing houses. In the normal course of business, the Parent Company provides guarantees to securities clearinghouses and exchanges. These guarantees generally are required under the standard membership agreements, such that members are required to guarantee the performance of other members. Additionally, if a member becomes unable to satisfy its obligations to the clearinghouse, other members would be required to meet these shortfalls. To mitigate these performance risks, the exchanges and clearinghouses often require members to post collateral. The Parent Company’s obligations under such guarantees could exceed the collateral amounts posted. The maximum potential liability under these arrangements cannot be quantified; however, the potential for the Parent Company to be required to make payments under such guarantees is deemed remote. Accordingly, no liability has been recognized for these arrangements.

The Parent Company guarantees certain financing arrangements of subsidiaries. The maximum amount payable under these guarantees is $375.0 million at November 30, 2019. For further information, refer to Note 11, Short-Term Borrowings, and Note 12, Long-Term Debt, in the Company’s consolidated financial statements included in the Annual Report on Form 10-K for the year ended November 30, 2019.

Structured Notes. Structured notes of $1,215.3 million at November 30, 2019 were jointly and severally co-issued by our wholly-owned subsidiary Jefferies Group Capital Finance Inc.