x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2015 |
¨ | 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 No.) |
Title of Each Class | Name of Each Exchange on Which Registered | |
Common Shares, par value $1 per share | New York Stock Exchange | |
Large accelerated filer x | Accelerated filer ¨ |
Non-accelerated filer ¨ | Smaller reporting company ¨ |
Item 1. | Business. |
• | Jefferies, 100% (investment banking & capital markets); |
• | Leucadia Asset Management, various (asset management); |
• | FXCM, variable (online foreign exchange trading); |
• | HomeFed, 65% (45% voting) (real estate); |
• | Berkadia, 50% (commercial mortgage banking and servicing); and |
• | Foursight Capital (100%) and Chrome Capital (83%) (vehicle finance). |
• | National Beef, 79% (beef processing); |
• | HRG, 23% (diversified holding company); |
• | Vitesse Energy, 96% (oil and gas exploration and development); |
• | Juneau Energy, 98% (oil and gas exploration and development); |
• | Garcadia, about 75% (automobile dealerships); |
• | Linkem, 56% fully-diluted (42% voting) (fixed wireless broadband services); |
• | Conwed Plastics, 100% (manufacturing); |
• | Golden Queen, 35% (a gold and silver mining project); and |
• | Idaho Timber, 100% (manufacturing). |
• | Code of Business Practice; |
• | Reportable waivers, if any, from our Code of Business Practice by our executive officers; |
• | Board of Directors Corporate Governance Guidelines; |
• | Charter of the Audit Committee of the Board of Directors; |
• | Charter of the Nominating and Corporate Governance Committee of the Board of Directors; |
• | Charter of the Compensation Committee of the Board of Directors; |
• | Annual reports on Form 10-K; |
• | Quarterly reports on Form 10-Q; |
• | Current reports on Form 8-K; |
• | Beneficial ownership reports on Forms 3, 4 and 5; and |
• | Any amendments to the above-mentioned documents and reports. |
Item 1A. | Risk Factors. |
• | A market downturn could lead to a decline in the volume of transactions executed for customers and, therefore, to a decline in the revenues Jefferies receives from commissions and spreads. |
• | Unfavorable financial or economic conditions could reduce the number and size of transactions in which Jefferies provides underwriting, financial advisory and other services. Jefferies investment banking revenues, in the form of financial advisory and sales and trading or placement fees, are directly related to the number and size of the transactions in which Jefferies participates and could therefore be adversely affected by unfavorable financial or economic conditions. |
• | Adverse changes in the market could lead to losses from principal transactions on Jefferies inventory positions. |
• | Adverse changes in the market could also lead to a reduction in revenues from asset management fees and investment income from managed funds and losses on Jefferies own capital invested in managed funds. Even in the absence of a market downturn, below-market investment performance by Jefferies funds and portfolio managers could reduce asset management revenues and assets under management and result in reputational damage that might make it more difficult to attract new investors. |
• | Limitations on the availability of credit, such as occurred during 2008, can affect Jefferies ability to borrow on a secured or unsecured basis, which may adversely affect Jefferies liquidity and results of operations. Global market and economic conditions have been particularly disrupted and volatile in the last several years and may be in the future. Jefferies cost and availability of funding could be affected by illiquid credit markets and wider credit spreads. |
• | New or increased taxes on compensation payments such as bonuses or on balance sheet items may adversely affect Jefferies profits. |
• | Should one of Jefferies customers or competitors fail, Jefferies business prospects and revenue could be negatively impacted due to negative market sentiment causing customers to cease doing business with Jefferies and Jefferies lenders to cease extending credit to Jefferies, which could adversely affect its business, funding and liquidity. |
Item 1B. | Unresolved Staff Comments. |
Item 2. | Properties. |
Item 3. | Legal Proceedings. |
Item 4. | Mine Safety Disclosures. |
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. |
Common Share | |||||||
High | Low | ||||||
2014 | |||||||
First Quarter | $ | 28.72 | $ | 26.04 | |||
Second Quarter | 28.09 | 24.52 | |||||
Third Quarter | 26.50 | 23.74 | |||||
Fourth Quarter | 24.72 | 20.96 | |||||
2015 | |||||||
First Quarter | $ | 24.80 | $ | 21.28 | |||
Second Quarter | 25.09 | 22.22 | |||||
Third Quarter | 25.39 | 19.64 | |||||
Fourth Quarter | 21.29 | 15.93 | |||||
2016 | |||||||
First Quarter (through February 11, 2016) | $ | 17.39 | $ | 14.33 |
Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs | |||||||||
October 2015 | 11,349 | $ | 20.26 | — | 20,000,000 | |||||||
November 2015 | 11,522 | $ | 19.30 | — | 20,000,000 | |||||||
December 2015 | 216,810 | $ | 16.99 | — | 20,000,000 | |||||||
Total | 239,681 | — |
Item 6. | Selected Financial Data. |
Year Ended December 31, | |||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||
SELECTED INCOME STATEMENT DATA: (a) | |||||||||||||||||||
Net revenues (b) | $ | 10,886,458 | $ | 11,486,485 | $ | 10,425,746 | $ | 9,404,584 | $ | 637,265 | |||||||||
Expenses | 10,640,203 | 11,243,790 | 9,999,202 | 8,051,204 | 578,701 | ||||||||||||||
Income from continuing operations before income taxes | 356,536 | 381,222 | 545,585 | 1,442,029 | 120,577 | ||||||||||||||
Income tax provision | 109,947 | 165,971 | 136,481 | 539,464 | 71,237 | ||||||||||||||
Income from continuing operations | 246,589 | 215,251 | 409,104 | 902,565 | 49,340 | ||||||||||||||
Income (loss) from discontinued operations, including gain (loss) on disposal, net of taxes | 5,522 | (16,226 | ) | (46,911 | ) | (37,924 | ) | (24,384 | ) | ||||||||||
Net income attributable to Leucadia National Corporation common shareholders | 279,587 | 204,306 | 369,240 | 854,466 | 25,231 | ||||||||||||||
Per share: | |||||||||||||||||||
Basic earnings (loss) per common share attributable to Leucadia National Corporation common shareholders: | |||||||||||||||||||
Income from continuing operations | $ | 0.73 | $ | 0.58 | $ | 1.20 | $ | 3.64 | $ | 0.20 | |||||||||
Income (loss) from discontinued operations, including gain (loss) on disposal | 0.01 | (0.04 | ) | (0.13 | ) | (0.15 | ) | (0.10 | ) | ||||||||||
Net income | $ | 0.74 | $ | 0.54 | $ | 1.07 | $ | 3.49 | $ | 0.10 | |||||||||
Diluted earnings (loss) per common share attributable to Leucadia National Corporation common shareholders: | |||||||||||||||||||
Income from continuing operations | $ | 0.73 | $ | 0.58 | $ | 1.20 | $ | 3.59 | $ | 0.20 | |||||||||
Income (loss) from discontinued operations, including gain (loss) on disposal | 0.01 | (0.04 | ) | (0.14 | ) | (0.15 | ) | (0.10 | ) | ||||||||||
Net income | $ | 0.74 | $ | 0.54 | $ | 1.06 | $ | 3.44 | $ | 0.10 |
At December 31, | |||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||
SELECTED BALANCE SHEET DATA: (a) | |||||||||||||||||||
Total assets | $ | 46,339,812 | $ | 52,623,908 | $ | 47,866,781 | $ | 9,349,118 | $ | 9,263,189 | |||||||||
Long-term debt | 7,407,594 | 8,527,929 | 8,180,865 | 1,358,695 | 1,903,653 | ||||||||||||||
Mezzanine equity | 316,633 | 311,686 | 366,075 | 241,649 | 235,909 | ||||||||||||||
Shareholders’ equity | 10,401,211 | 10,302,158 | 10,102,462 | 6,767,268 | 6,174,396 | ||||||||||||||
Book value per common share | $ | 28.68 | $ | 28.03 | $ | 27.71 | $ | 27.67 | $ | 25.24 | |||||||||
Cash dividends per common share | $ | 0.25 | $ | 0.25 | $ | 0.25 | $ | 0.25 | $ | 0.25 |
(a) | Subsidiaries are reflected above as consolidated entities from the date of acquisition. Jefferies was acquired on March 1, 2013. National Beef was acquired on December 30, 2011; however, since its operating activities subsequent to the acquisition during 2011 were not significant they were not included in the 2011 consolidated statement of operations. |
(b) | Includes net realized securities gains of $63.0 million, $30.4 million, $244.0 million, $590.6 million and $641.5 million for the years ended December 31, 2015, 2014, 2013, 2012 and 2011, respectively. |
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
Jefferies | National Beef | Other Financial Services Businesses and Investments | Other Merchant Banking Businesses and Investments | Corporate and Other | Parent Company Interest | Inter-company Eliminations | Total | ||||||||||||||||||||||||
Net revenues | $ | 2,476,133 | $ | 7,402,419 | $ | 524,053 | $ | 426,731 | $ | 78,122 | $ | — | $ | (21,000 | ) | $ | 10,886,458 | ||||||||||||||
Expenses: | |||||||||||||||||||||||||||||||
Cost of sales | — | 7,347,874 | — | 329,359 | — | — | — | 7,677,233 | |||||||||||||||||||||||
Compensation and benefits | 1,467,752 | 34,781 | 35,054 | 24,657 | 103,221 | — | — | 1,665,465 | |||||||||||||||||||||||
Floor brokerage and clearing fees | 199,780 | — | — | — | — | — | — | 199,780 | |||||||||||||||||||||||
Interest | — | 15,962 | 7,059 | 2,507 | — | 85,884 | — | 111,412 | |||||||||||||||||||||||
Depreciation and amortization | 92,165 | 89,317 | 8,176 | 30,731 | 3,744 | — | — | 224,133 | |||||||||||||||||||||||
Selling, general and other expenses (including provision for doubtful accounts) | 597,271 | 38,400 | 50,624 | 79,500 | 17,385 | — | (21,000 | ) | 762,180 | ||||||||||||||||||||||
Total expenses | 2,356,968 | 7,526,334 | 100,913 | 466,754 | 124,350 | 85,884 | (21,000 | ) | 10,640,203 | ||||||||||||||||||||||
Income (loss) from continuing operations before income taxes and income related to associated companies | 119,165 | (123,915 | ) | 423,140 | (40,023 | ) | (46,228 | ) | (85,884 | ) | — | 246,255 | |||||||||||||||||||
Income related to associated companies | — | — | 81,688 | 27,957 | 636 | — | — | 110,281 | |||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | $ | 119,165 | $ | (123,915 | ) | $ | 504,828 | $ | (12,066 | ) | $ | (45,592 | ) | $ | (85,884 | ) | $ | — | $ | 356,536 |
Jefferies | National Beef | Other Financial Services Businesses and Investments | Other Merchant Banking Businesses and Investments | Corporate and Other | Parent Company Interest | Inter-company Eliminations | Total | ||||||||||||||||||||||||
Net revenues | $ | 2,986,325 | $ | 7,832,424 | $ | 68,241 | $ | 538,775 | $ | 60,720 | $ | — | $ | — | $ | 11,486,485 | |||||||||||||||
Expenses: | |||||||||||||||||||||||||||||||
Cost of sales | — | 7,708,007 | — | 316,279 | — | — | — | 8,024,286 | |||||||||||||||||||||||
Compensation and benefits | 1,697,533 | 38,660 | 12,530 | 21,917 | 71,034 | — | — | 1,841,674 | |||||||||||||||||||||||
Floor brokerage and clearing fees | 215,329 | — | — | — | — | — | — | 215,329 | |||||||||||||||||||||||
Interest | — | 14,503 | 3,012 | 1,544 | — | 98,115 | — | 117,174 | |||||||||||||||||||||||
Depreciation and amortization | 78,566 | 85,305 | 4,266 | 12,229 | 5,627 | — | — | 185,993 | |||||||||||||||||||||||
Selling, general and other expenses (including provision for doubtful accounts) | 636,501 | 26,252 | 13,715 | 53,470 | 129,396 | — | — | 859,334 | |||||||||||||||||||||||
Total expenses | 2,627,929 | 7,872,727 | 33,523 | 405,439 | 206,057 | 98,115 | — | 11,243,790 | |||||||||||||||||||||||
Income (loss) from continuing operations before income taxes and income related to associated companies | 358,396 | (40,303 | ) | 34,718 | 133,336 | (145,337 | ) | (98,115 | ) | — | 242,695 | ||||||||||||||||||||
Income related to associated companies | — | — | 104,337 | 33,361 | 829 | — | — | 138,527 | |||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | $ | 358,396 | $ | (40,303 | ) | $ | 139,055 | $ | 166,697 | $ | (144,508 | ) | $ | (98,115 | ) | $ | — | $ | 381,222 |
Jefferies | National Beef | Other Financial Services Businesses and Investments | Other Merchant Banking Businesses and Investments | Corporate and Other | Parent Company Interest | Inter-company Eliminations | Total | ||||||||||||||||||||||||
Net revenues | $ | 2,134,002 | $ | 7,487,724 | $ | 186,148 | $ | 567,682 | $ | 50,190 | $ | — | $ | — | $ | 10,425,746 | |||||||||||||||
Expenses: | |||||||||||||||||||||||||||||||
Cost of sales | — | 7,308,580 | — | 259,127 | — | — | — | 7,567,707 | |||||||||||||||||||||||
Compensation and benefits | 1,213,908 | 33,447 | 2,370 | 19,924 | 83,005 | — | — | 1,352,654 | |||||||||||||||||||||||
Floor brokerage and clearing fees | 150,774 | — | — | — | — | — | — | 150,774 | |||||||||||||||||||||||
Interest | — | 12,272 | 475 | — | — | 72,217 | — | 84,964 | |||||||||||||||||||||||
Depreciation and amortization | 59,631 | 88,484 | 117 | 9,269 | 9,924 | — | — | 167,425 | |||||||||||||||||||||||
Selling, general and other expenses (including provision for doubtful accounts) | 448,705 | 87,299 | 3,151 | 83,950 | 52,573 | — | — | 675,678 | |||||||||||||||||||||||
Total expenses | 1,873,018 | 7,530,082 | 6,113 | 372,270 | 145,502 | 72,217 | — | 9,999,202 | |||||||||||||||||||||||
Income (loss) from continuing operations before income taxes and income related to associated companies | 260,984 | (42,358 | ) | 180,035 | 195,412 | (95,312 | ) | (72,217 | ) | — | 426,544 | ||||||||||||||||||||
Income related to associated companies | — | — | 95,395 | 20,251 | 3,395 | — | — | 119,041 | |||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | $ | 260,984 | $ | (42,358 | ) | $ | 275,430 | $ | 215,663 | $ | (91,917 | ) | $ | (72,217 | ) | $ | — | $ | 545,585 |
Year Ended December 31, 2015 | Year Ended December 31, 2014 | For the Period From the Jefferies Acquisition Through December 31, 2013 | |||||||||
Net revenues | $ | 2,476,133 | $ | 2,986,325 | $ | 2,134,002 | |||||
Expenses: | |||||||||||
Compensation and benefits | 1,467,752 | 1,697,533 | 1,213,908 | ||||||||
Floor brokerage and clearing fees | 199,780 | 215,329 | 150,774 | ||||||||
Depreciation and amortization | 92,165 | 78,566 | 59,631 | ||||||||
Provision for doubtful accounts | (396 | ) | 55,355 | 179 | |||||||
Selling, general and other expenses | 597,667 | 581,146 | 448,526 | ||||||||
Total expenses | 2,356,968 | 2,627,929 | 1,873,018 | ||||||||
Income before income taxes | $ | 119,165 | $ | 358,396 | $ | 260,984 |
Year Ended December 31, 2015 | Year Ended December 31, 2014 | For the Period From the Jefferies Acquisition Through December 31, 2013 | |||||||||
Equities | $ | 757,764 | $ | 690,793 | $ | 578,045 | |||||
Fixed income | 271,947 | 751,848 | 507,285 | ||||||||
Total sales and trading | 1,029,711 | 1,442,641 | 1,085,330 | ||||||||
Investment banking: | |||||||||||
Capital markets: | |||||||||||
Equities | 408,474 | 339,683 | 228,394 | ||||||||
Debt | 397,979 | 627,536 | 410,370 | ||||||||
Advisory | 632,354 | 559,418 | 369,191 | ||||||||
Total investment banking | 1,438,807 | 1,526,637 | 1,007,955 | ||||||||
Other | 7,615 | 17,047 | 40,717 | ||||||||
Total net revenues | $ | 2,476,133 | $ | 2,986,325 | $ | 2,134,002 |
2015 | 2014 | 2013 | |||||||||
Net revenues | $ | 7,402,419 | $ | 7,832,424 | $ | 7,487,724 | |||||
Expenses: | |||||||||||
Cost of sales | 7,347,874 | 7,708,007 | 7,308,580 | ||||||||
Compensation and benefits | 34,781 | 38,660 | 33,447 | ||||||||
Interest | 15,962 | 14,503 | 12,272 | ||||||||
Depreciation and amortization | 89,317 | 85,305 | 88,484 | ||||||||
Selling, general and other expenses | 38,400 | 26,252 | 87,299 | ||||||||
Total expenses | 7,526,334 | 7,872,727 | 7,530,082 | ||||||||
Income (loss) before income taxes | $ | (123,915 | ) | $ | (40,303 | ) | $ | (42,358 | ) |
2015 | 2014 | 2013 | |||||||||
Net revenues | $ | 78,122 | $ | 60,720 | $ | 50,190 | |||||
Expenses: | |||||||||||
Corporate compensation and benefits | 52,385 | 61,736 | 72,800 | ||||||||
WilTel pension | 50,836 | 9,298 | 10,205 | ||||||||
Depreciation and amortization | 3,744 | 5,627 | 9,924 | ||||||||
Selling, general and other expenses | 17,385 | 129,396 | 52,573 | ||||||||
Total expenses | 124,350 | 206,057 | 145,502 | ||||||||
Income (loss) before income taxes and income related to associated companies | (46,228 | ) | (145,337 | ) | (95,312 | ) | |||||
Income related to associated companies | 636 | 829 | 3,395 | ||||||||
Pre-tax income (loss) from continuing operations | $ | (45,592 | ) | $ | (144,508 | ) | $ | (91,917 | ) |
2015 | 2014 | 2013 | |||||||||
Revenues: | |||||||||||
Principal transactions | $ | 498,869 | $ | 39,548 | $ | 182,719 | |||||
Interest income | 21,207 | 8,987 | 2,456 | ||||||||
Net realized securities gains | — | — | 426 | ||||||||
Other | 3,977 | 19,706 | 547 | ||||||||
Total net revenues | 524,053 | 68,241 | 186,148 | ||||||||
Expenses: | |||||||||||
Compensation and benefits | 35,054 | 12,530 | 2,370 | ||||||||
Interest | 7,059 | 3,012 | 475 | ||||||||
Depreciation and amortization | 8,176 | 4,266 | 117 | ||||||||
Selling, general and other expenses | 50,624 | 13,715 | 3,151 | ||||||||
Total expenses | 100,913 | 33,523 | 6,113 | ||||||||
Income before income taxes and income related to associated companies | 423,140 | 34,718 | 180,035 | ||||||||
Income related to associated companies | 81,688 | 104,337 | 95,395 | ||||||||
Pre-tax income from continuing operations | $ | 504,828 | $ | 139,055 | $ | 275,430 |
2015 | 2014 | 2013 | |||||||||
Revenues: | |||||||||||
Principal transactions | $ | (27,960 | ) | $ | 99,254 | $ | — | ||||
Interest income | 903 | 604 | 917 | ||||||||
Net realized securities gains | — | — | 227,581 | ||||||||
Other | 453,788 | 438,917 | 339,184 | ||||||||
Net revenues | 426,731 | 538,775 | 567,682 | ||||||||
Expenses: | |||||||||||
Cost of sales | 329,359 | 316,279 | 259,127 | ||||||||
Compensation and benefits | 24,657 | 21,917 | 19,924 | ||||||||
Interest | 2,507 | 1,544 | — | ||||||||
Depreciation and amortization | 30,731 | 12,229 | 9,269 | ||||||||
Selling, general and other expenses | 79,500 | 53,470 | 83,950 | ||||||||
Total expenses | 466,754 | 405,439 | 372,270 | ||||||||
Income (loss) before income taxes and income related to associated companies | (40,023 | ) | 133,336 | 195,412 | |||||||
Income related to associated companies | 27,957 | 33,361 | 20,251 | ||||||||
Pre-tax income (loss) from continuing operations | $ | (12,066 | ) | $ | 166,697 | $ | 215,663 |
Tangible Capital as of | |||||||
December 31, 2015 | December 31, 2014 | ||||||
Jefferies | $ | 3,592,801 | $ | 3,513,905 | |||
National Beef | 45,625 | 106,143 | |||||
Other Financial Services Businesses and Investments: | |||||||
Leucadia Asset Management (1) | 560,251 | 155,155 | |||||
FXCM | 625,689 | — | |||||
HomeFed | 241,368 | 236,572 | |||||
Berkadia | 190,986 | 208,511 | |||||
Foursight and Chrome | 81,275 | 60,737 | |||||
Total Other Financial Services Businesses and Investments | 1,699,569 | 660,975 | |||||
Other Merchant Banking Businesses and Investments: | |||||||
HRG | 631,896 | 659,856 | |||||
Vitesse Energy | 278,833 | 246,456 | |||||
Juneau Energy | 179,972 | 175,846 | |||||
Garcadia | 189,356 | 183,477 | |||||
Linkem | 150,149 | 159,054 | |||||
Golden Queen | 80,604 | 69,929 | |||||
Idaho Timber | 73,057 | 70,335 | |||||
Conwed | 42,915 | 41,140 | |||||
Other | 21,868 | (21,373 | ) | ||||
Total Other Merchant Banking Businesses and Investments | 1,648,650 | 1,584,720 | |||||
Corporate liquidity and other assets, net of all Corporate liabilities including long-term debt | 766,204 | 1,715,652 | |||||
Total Tangible Capital | $ | 7,752,849 | $ | 7,581,395 | |||
(1) Leucadia Asset Management excludes $366.3 million and $399.5 million at December 31, 2015 and 2014 of liquid marketable securities that are available for sale immediately. These liquid marketable securities are included in Corporate liquidity and other assets, net of all Corporate liabilities including long-term debt. |
• | National Beef is our approximately 79% owned consolidated subsidiary that processes and markets fresh boxed beef, consumer-ready beef, beef by-products and wet blue leather for domestic and international markets. |
• | Other Financial Services Businesses and Investments include: |
◦ | Leucadia Asset Management platform seeds and develops focused alternative asset management businesses led by distinct management teams. |
◦ | Our investment in FXCM consists of a two-year senior secured term loan ($192.7 million outstanding at December 31, 2015), with rights to a variable proportion of certain distributions in connection with an FXCM sale of assets or certain other events, and our right to require a sale of FXCM beginning in January 2018. FXCM is a leading, global online provider of foreign exchange trading and related services, including contract for difference trading and spread betting, to retail and institutional customers world-wide. FXCM is a public company traded on the NYSE. |
◦ | Our approximately 65% equity method interest in HomeFed, is a developer and owner of residential and mixed-use real estate properties. HomeFed is a public company traded on the NASD OTC Bulletin Board. |
◦ | Berkadia, our 50-50 equity method joint venture with Berkshire Hathaway, is a commercial real estate company providing capital solutions, investment sales advisory, research and servicing for multifamily and commercial properties. |
◦ | Foursight Capital purchases automobile installment contracts originated by franchised and independent dealerships in conjunction with the sale of new and used automobiles and services these loans throughout their life cycle. Chrome Capital is a lessor of used Harley-Davidson motorcycles in the U.S. We consolidate both of these subsidiaries. |
• | Other Merchant Banking Businesses and Investments include: |
◦ | We own approximately 23% of HRG, a diversified holding company that operates in four business segments: consumer products, insurance, energy and asset management. Its consumer products segment contains an approximate 58% ownership stake in Spectrum Brands, a global consumer products company. HRG is a public company traded on the NYSE and we reflect this investment at fair value. |
◦ | Vitesse Energy, LLC is our 96% owned consolidated subsidiary that acquires producing and undeveloped leasehold properties in North Dakota and Montana, and converts the undeveloped leasehold into cash flow producing assets. |
◦ | Juneau Energy, LLC, a 98% owned consolidated subsidiary, engages in the exploration, development and production of oil and gas from onshore, unconventional resource areas. Juneau currently has interests in acreage in the Oklahoma and Texas Gulf Coast regions. |
◦ | Garcadia is an equity method joint venture that owns and operates 27 automobile dealerships in the U.S. We own approximately 75%. |
◦ | We own approximately 42% of the common shares of Linkem and convertible preferred equity which, if converted, would increase our ownership to approximately 56% of Linkem’s common shares. Linkem provides residential broadband services using WiMAX and LTE technologies deployed over the 3.5 GHz spectrum band. Linkem operates in Italy, which has few cable television systems and poor broadband alternatives. Linkem is accounted for under the equity method. |
◦ | Conwed Plastics is our consolidated subsidiary that manufactures and markets lightweight plastic netting used for building and construction, erosion and sediment control, packaging, agricultural purposes, carpet padding, filtration, consumer products and other purposes. In 2014, Conwed acquired 80% of Filtrexx, a manufacturer and marketer of a knitted sock product with numerous applications in sediment control and storm water management, and 100% of Weaver Express, the leading installer of Filtrexx's knitted sock projects. |
◦ | Golden Queen Mining Company, LLC owns the Soledad Mountain project, a fully-permitted, open pit, heap leach gold and silver project in Kern County, California. We and the Clay family have formed and made contributions to a limited liability company, controlled by us, through which we invested in Golden Queen Mining Company, LLC for the development and operation of the project. Our effective ownership of Golden Queen Mining Company, LLC is approximately 35% and is accounted for under the equity method. |
◦ | Idaho Timber is our consolidated subsidiary that manufactures and distributes an extensive range of quality wood products, including: remanufacturing dimension lumber; remanufacturing, bundling and bar coding of home center boards for large retailers; and production of pine dimension lumber and 5/4” radius-edge, pine decking. |
• | Corporate liquidity and other assets, net of Corporate liabilities primarily consist of financial instruments owned, the deferred tax asset (exclusive of Jefferies deferred tax asset) and cash and cash equivalents, net of long-term debt, trade payables and accruals, as well as our outstanding mandatorily redeemable convertible preferred shares. |
December 31, 2015 | |||||||||||||||||||||||||||
Jefferies | National Beef | Other Financial Services Businesses and Investments (1) | Other Merchant Banking Businesses and Investments | Corporate liquidity and other assets, net of Corporate liabilities | Inter-company Eliminations | Total | |||||||||||||||||||||
Assets | |||||||||||||||||||||||||||
Cash and cash equivalents | $ | 3,510,163 | $ | 17,814 | $ | 22,203 | $ | 30,940 | $ | 57,528 | $ | — | $ | 3,638,648 | |||||||||||||
Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations | 751,084 | — | — | — | — | — | 751,084 | ||||||||||||||||||||
Financial instruments owned | 16,559,116 | 891 | 647,936 | 639,253 | 653,249 | — | 18,500,445 | ||||||||||||||||||||
Investments in managed funds | 85,775 | — | 488,940 | — | 55,317 | (26,312 | ) | 603,720 | |||||||||||||||||||
Loans to and investments in associated companies | 825,908 | — | 466,364 | 441,970 | 23,127 | — | 1,757,369 | ||||||||||||||||||||
Securities borrowed | 6,975,136 | — | — | — | — | — | 6,975,136 | ||||||||||||||||||||
Securities purchased under agreements to resell | 3,854,746 | — | — | — | — | — | 3,854,746 | ||||||||||||||||||||
Receivables | 3,023,899 | 208,107 | 463,545 | 51,558 | 83,858 | — | 3,830,967 | ||||||||||||||||||||
Property, equipment and leasehold improvements, net | 243,486 | 394,506 | 11,479 | 46,894 | 25,510 | — | 721,875 | ||||||||||||||||||||
Intangible assets, net and goodwill | 1,938,582 | 645,049 | 2,336 | 62,395 | — | — | 2,648,362 | ||||||||||||||||||||
Deferred tax asset, net | 320,198 | — | — | — | 1,255,170 | — | 1,575,368 | ||||||||||||||||||||
Other assets | 520,863 | 249,763 | 92,172 | 681,530 | 61,175 | (123,411 | ) | 1,482,092 | |||||||||||||||||||
Total Assets | 38,608,956 | 1,516,130 | 2,194,975 | 1,954,540 | 2,214,934 | (149,723 | ) | 46,339,812 | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||
Long-term debt (2) | 5,641,892 | 441,180 | 259,919 | 75,993 | 988,610 | — | 7,407,594 | ||||||||||||||||||||
Other liabilities | 27,408,213 | 194,918 | 218,153 | 116,702 | 335,120 | (123,411 | ) | 28,149,695 | |||||||||||||||||||
Total liabilities | 33,050,105 | 636,098 | 478,072 | 192,695 | 1,323,730 | (123,411 | ) | 35,557,289 | |||||||||||||||||||
Redeemable noncontrolling interests | — | 189,358 | — | 2,275 | — | — | 191,633 | ||||||||||||||||||||
Mandatorily redeemable convertible preferred shares | — | — | — | — | 125,000 | — | 125,000 | ||||||||||||||||||||
Noncontrolling interests | 27,468 | — | 14,998 | 48,525 | — | (26,312 | ) | 64,679 | |||||||||||||||||||
Total Leucadia National Corporation shareholders' equity | $ | 5,531,383 | $ | 690,674 | $ | 1,701,905 | $ | 1,711,045 | $ | 766,204 | $ | — | $ | 10,401,211 | |||||||||||||
Reconciliation to Tangible Capital | |||||||||||||||||||||||||||
Total Leucadia National Corporation shareholders' equity | $ | 5,531,383 | $ | 690,674 | $ | 1,701,905 | $ | 1,711,045 | $ | 766,204 | $ | — | 10,401,211 | ||||||||||||||
Less: Intangible assets, net and goodwill | (1,938,582 | ) | (645,049 | ) | (2,336 | ) | (62,395 | ) | — | — | (2,648,362 | ) | |||||||||||||||
Tangible Capital | $ | 3,592,801 | $ | 45,625 | $ | 1,699,569 | $ | 1,648,650 | $ | 766,204 | $ | — | $ | 7,752,849 |
December 31, 2014 | |||||||||||||||||||||||||||
Jefferies | National Beef | Other Financial Services Businesses and Investments (1) | Other Merchant Banking Businesses and Investments | Corporate liquidity and other assets, net of Corporate liabilities | Inter-company Eliminations | Total | |||||||||||||||||||||
Assets | |||||||||||||||||||||||||||
Cash and cash equivalents | $ | 4,079,710 | $ | 15,627 | $ | 8,974 | $ | 33,100 | $ | 139,364 | $ | — | $ | 4,276,775 | |||||||||||||
Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations | 3,444,674 | — | — | — | — | — | 3,444,674 | ||||||||||||||||||||
Financial instruments owned | 18,636,612 | — | 47,609 | 659,856 | 1,877,182 | — | 21,221,259 | ||||||||||||||||||||
Investments in managed funds | 74,365 | — | 105,954 | — | 126,571 | (25,420 | ) | 281,470 | |||||||||||||||||||
Loans to and investments in associated companies | 773,141 | — | 480,293 | 443,302 | 15,832 | — | 1,712,568 | ||||||||||||||||||||
Securities borrowed | 6,853,103 | — | — | — | — | — | 6,853,103 | ||||||||||||||||||||
Securities purchased under agreements to resell | 3,926,858 | — | — | — | — | — | 3,926,858 | ||||||||||||||||||||
Securities received as collateral | 5,418 | — | — | — | — | — | 5,418 | ||||||||||||||||||||
Receivables | 3,414,526 | 225,340 | 183,582 | 54,006 | 57,371 | — | 3,934,825 | ||||||||||||||||||||
Property, equipment and leasehold improvements, net | 251,957 | 394,984 | 10,164 | 48,547 | 20,724 | — | 726,376 | ||||||||||||||||||||
Intangible assets, net and goodwill | 1,960,628 | 690,303 | 400 | 69,432 | — | — | 2,720,763 | ||||||||||||||||||||
Deferred tax asset, net | 399,597 | — | — | — | 1,312,938 | — | 1,712,535 | ||||||||||||||||||||
Other assets | 743,219 | 392,267 | 37,116 | 571,502 | 91,165 | (27,985 | ) | 1,807,284 | |||||||||||||||||||
Total Assets | 44,563,808 | 1,718,521 | 874,092 | 1,879,745 | 3,641,147 | (53,405 | ) | 52,623,908 | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||
Long-term debt (3) | 6,482,924 | 492,539 | 44,185 | 62,819 | 1,445,462 | — | 8,527,929 | ||||||||||||||||||||
Other liabilities | 32,567,503 | 245,203 | 161,449 | 113,068 | 355,033 | (27,985 | ) | 33,414,271 | |||||||||||||||||||
Total liabilities | 39,050,427 | 737,742 | 205,634 | 175,887 | 1,800,495 | (27,985 | ) | 41,942,200 | |||||||||||||||||||
Redeemable noncontrolling interests | — | 184,333 | — | 2,353 | — | — | 186,686 | ||||||||||||||||||||
Mandatorily redeemable convertible preferred shares | — | — | — | — | 125,000 | — | 125,000 | ||||||||||||||||||||
Noncontrolling interests | 38,848 | — | 7,083 | 47,353 | — | (25,420 | ) | 67,864 | |||||||||||||||||||
Total Leucadia National Corporation shareholders' equity | $ | 5,474,533 | $ | 796,446 | $ | 661,375 | $ | 1,654,152 | $ | 1,715,652 | $ | — | $ | 10,302,158 | |||||||||||||
Reconciliation to Tangible Capital | |||||||||||||||||||||||||||
Total Leucadia National Corporation shareholders' equity | $ | 5,474,533 | $ | 796,446 | $ | 661,375 | $ | 1,654,152 | $ | 1,715,652 | $ | — | 10,302,158 | ||||||||||||||
Less: Intangible assets, net and goodwill | (1,960,628 | ) | (690,303 | ) | (400 | ) | (69,432 | ) | — | — | (2,720,763 | ) | |||||||||||||||
Tangible Capital | $ | 3,513,905 | $ | 106,143 | $ | 660,975 | $ | 1,584,720 | $ | 1,715,652 | $ | — | $ | 7,581,395 |
Total equity | $ | 10,401,211 | ||
Less, investment in Jefferies | (5,531,383 | ) | ||
Equity excluding Jefferies | 4,869,828 | |||
Less, our two largest investments: | ||||
National Beef | (690,674 | ) | ||
HRG, at cost | (475,600 | ) | ||
Equity in a stressed scenario | 3,703,554 | |||
Less, net deferred tax asset excluding Jefferies amount | (1,255,170 | ) | ||
Equity in a stressed scenario less net deferred tax asset | $ | 2,448,384 | ||
Balance sheet amounts: | ||||
Available liquidity | $ | 613,775 | ||
Parent company debt (see Note 17 to our Consolidated financial statements) | $ | 988,610 | ||
Ratio of parent company debt to stressed equity: | ||||
Maximum | 0.50 | x | ||
Actual, equity in a stressed scenario | 0.27 | x | ||
Actual, equity in a stressed scenario excluding net deferred tax asset | 0.40 | x | ||
Liquidity reserve: | ||||
Minimum | $ | 426,100 | ||
Actual | $ | 613,775 |
• | Jefferies used funds of $294.5 million and $276.6 million during 2015 and 2014 and generated funds of $750.1 million during 2013. Included in these amounts are distributions received from associated companies of $76.7 million during 2015, $54.0 million during 2014 and $37.7 million during 2013. |
• | National Beef generated funds of $76.5 million and $85.4 million during 2015 and 2013, and used funds of $55.0 million during 2014. Net losses related to real estate, property and equipment, and other assets in 2013 include National Beef's impairment loss of $63.3 million with respect to its Brawley facility. |
• | Within our Other Financial Services Businesses and Investments, cash of $325.0 million and $345.1 million was used during 2015 and 2014 to make additional investments in the Leucadia Asset Management platform. We received distributions from Berkadia, an associated company, of $89.4 million during 2015, $72.9 million during 2014 and $69.0 million during 2013. Cash used for operating activities also includes net cash used of $140.2 million in 2015, $110.1 million in 2014 and $50.2 million in 2013 relating to automobile installment contracts, which is reflected in the net change in other receivables. |
• | Within our Other Merchant Banking Businesses and Investments, manufacturing generated funds of $31.2 million in 2015, $27.1 million in 2014 and $30.0 million in 2013. In 2014, $317.5 million was used to acquire our investment in HRG. We received distributions from Garcadia, an associated company, of $57.3 million during 2015, $46.0 million during 2014 and $26.0 million during 2013. Net losses related to real estate, property and equipment, and other assets in 2015 include impairment charges of $27.7 million, primarily related to Juneau Energy. |
• | Our cash used for operating activities also reflects the use of $7.3 million during 2015, $40.7 million during 2014 and $77.4 million during 2013 by our discontinued operations. Additionally, during 2015, we paid $80.4 million in connection with legal settlements. The change in operating cash flows also reflects greater interest payments in 2015 and 2014 as compared to 2013. |
• | Acquisitions of property, equipment and leasehold improvements, and other assets related to Jefferies include $68.8 million in 2015, $113.0 million during 2014 and $53.9 million during 2013. Jefferies made loans to and investments in associated companies of $1,438.7 million during 2015, $2,786.4 million during 2014 and $2,241.2 million during 2013. Jefferies received capital distributions and loan repayment from its associated companies of $1,384.9 million in 2015, $2,750.6 million during 2014, and $2,360.7 million in 2013. Cash acquired upon acquisition of Jefferies was $3,018.0 million in 2013. |
• | Acquisitions of property, equipment and leasehold improvements, and other assets related to National Beef include $48.6 million in 2015, $48.2 million in 2014 and $44.4 million in 2013. |
• | Within our Other Financial Services Businesses and Investments, acquisitions of property, equipment and leasehold improvements, and other assets were $53.0 million in 2015 and $19.8 million in 2014. Advances on notes, loans and other receivables in 2015 include the investment in FXCM ($279.0 million). Collections on notes, loans and other receivables in 2015 primarily relate to FXCM. |
• | Within our Other Merchant Banking Businesses and Investments, acquisitions of property, equipment and leasehold improvements, and other assets reflect primarily activity in our oil and gas exploration and production businesses in 2015 and 2014 and real estate in 2013. They totaled $113.4 million in 2015, $408.8 million in 2014 and $40.0 million in 2013. Loans to and investments in associated companies during 2015 include $12.5 million, including $0.4 million contributed from the noncontrolling interest, to Golden Queen and $21.2 million to Linkem. During 2014 payments included those to Golden Queen of $105.0 million, including $34.1 million contributed from the noncontrolling interest, Garcadia of $48.3 million and Linkem of $18.4 million. During 2013 these amounts were $38.4 million for Garcadia and $107.4 million for Linkem. We also received capital distributions and loan repayments from Garcadia of $2.8 million in 2015, $3.8 million in 2014 and $14.2 million in 2013. |
• | Our net cash provided by investing activities also includes the impact of acquisitions of property, equipment and leasehold improvements, and other assets within our discontinued operations of $0.0 million during 2015, $9.4 million during 2014 and $25.8 million in 2013. Proceeds from disposal of discontinued operations, net of expenses and cash of operations sold in 2015 relates to additional consideration received related to the 2012 sale of our small Caribbean-based telecommunications provider and, in 2014, relates to the sale of Premier. |
• | Issuance of debt includes $681.2 million in 2014 and $1,034.7 million in 2013 related to Jefferies. Reduction in debt for Jefferies includes $670.0 million in 2015, $280.0 million in 2014 and $980 million in 2013. Distributions to noncontrolling interests in 2013 principally represent the redemption of third-party investors in JHYH. |
• | Issuance of debt for National Beef includes $135.1 million in 2014, and $106.8 million in 2013 of borrowings under its bank credit facility. National Beef reflects a reduction in debt of $51.7 million in 2015, $32.8 million in 2014 and $120.6 million in 2013. |
• | Within our Other Financial Services Businesses and Investments, borrowings include $341.8 million in 2015 and $125.5 million in 2014. Their reduction of debt includes $127.3 million in 2015 and $117.8 million in 2014. Contributions from noncontrolling interests include $13.9 million in 2015 and $37.5 million in 2013 related to Leucadia Asset Management. |
• | Borrowings by our Other Merchant Banking Businesses and Investments include $21.5 million in 2015 and $60.8 million in 2014. Their reduction of debt includes $8.8 million in 2015. Contributions from noncontrolling interests include $34.1 million related to Golden Queen in 2014. |
• | At the holding company level, we reflect issuance of long-term debt during 2013 of $750.0 million principal amount of our 5.50% Senior Notes due 2023 and $250.0 million principal amount of our 6.625% Senior Notes due 2043. We include a reduction in debt during 2015 of $458.6 million on the maturity of our 8.125% Senior Notes, and during 2013 of $94.5 million on the maturity of our 7.75% Senior Notes and of $307.4 million on our 7% Senior Notes. The reduction in debt in 2013 also includes the decrease in repurchase agreements (exclusive of Jefferies) of $391.7 million. Purchases of common shares for treasury relate to shares received from participants in our stock compensation plans and the buyback of our common shares in the open market of $89.2 million in 2015 and $15.2 million in 2014. |
Expected Maturity Date (in millions) | ||||||||||||||||||||||||
Contractual Obligations | Total | 2016 | 2017 | 2018 and 2019 | 2020 and 2021 | After 2021 | ||||||||||||||||||
Indebtedness | $ | 7,407.6 | $ | 485.1 | $ | 468.4 | $ | 2,091.5 | $ | 1,389.5 | $ | 2,973.1 | ||||||||||||
Estimated interest expense on debt | 3,353.3 | 379.2 | 365.9 | 593.9 | 416.7 | 1,597.6 | ||||||||||||||||||
Cattle commitments | 68.5 | 68.5 | — | — | — | — | ||||||||||||||||||
Operating leases, net of sublease income | 761.3 | 78.0 | 77.8 | 140.8 | 110.2 | 354.5 | ||||||||||||||||||
Other | 311.4 | 83.8 | 60.8 | 83.6 | 55.7 | 27.5 | ||||||||||||||||||
Total Contractual Obligations | $ | 11,902.1 | $ | 1,094.6 | $ | 972.9 | $ | 2,909.8 | $ | 1,972.1 | $ | 4,952.7 |
Year Ended December 31, 2015 | Year Ended December 31, 2014 | ||||||
Securities purchased under agreements to resell: | |||||||
Period end | $ | 3,855 | $ | 3,927 | |||
Month end average | 5,719 | 5,788 | |||||
Maximum month end | 7,577 | 8,081 | |||||
Securities sold under agreements to repurchase: | |||||||
Period end | $ | 9,967 | $ | 10,672 | |||
Month end average | 14,011 | 13,291 | |||||
Maximum month end | 18,629 | 16,586 |
December 31, 2015 | Average Balance Fourth Quarter 2015 (1) | December 31, 2014 | |||||||||
Cash and cash equivalents: | |||||||||||
Cash in banks | $ | 973,796 | $ | 811,034 | $ | 1,083,605 | |||||
Certificate of deposit | 75,000 | 75,000 | 75,000 | ||||||||
Money market investments | 2,461,367 | 2,001,419 | 2,921,363 | ||||||||
Total cash and cash equivalents | 3,510,163 | 2,887,453 | 4,079,968 | ||||||||
Other sources of liquidity: | |||||||||||
Debt securities owned and securities purchased under agreements to resell (2) | 1,265,840 | 1,138,614 | 1,056,766 | ||||||||
Other (3) | 305,123 | 522,514 | 363,713 | ||||||||
Total other sources | 1,570,963 | 1,661,128 | 1,420,479 | ||||||||
Total cash and cash equivalents and other liquidity sources | $ | 5,081,126 | $ | 4,548,581 | $ | 5,500,447 |
(1) | Average balances are calculated based on weekly balances. |
(2) | 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. |
(3) | 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 and additional funds available under the committed senior secured revolving credit facility available for working capital needs of Jefferies LLC. |
December 31, 2015 | December 31, 2014 | ||||||||||||||
Liquid Financial Instruments | Unencumbered Liquid Financial Instruments (2) | Liquid Financial Instruments | Unencumbered Liquid Financial Instruments (2) | ||||||||||||
Corporate equity securities | $ | 1,881,419 | $ | 268,664 | $ | 2,191,288 | $ | 297,628 | |||||||
Corporate debt securities | 1,999,162 | 89,230 | 2,583,779 | 11,389 | |||||||||||
U.S. Government, agency and municipal securities | 2,987,784 | 317,518 | 3,124,780 | 250,278 | |||||||||||
Other sovereign obligations | 2,444,339 | 1,026,842 | 2,671,807 | 877,366 | |||||||||||
Agency mortgage-backed securities (1) | 3,371,680 | — | 3,395,771 | — | |||||||||||
Physical commodities | — | — | 62,234 | — | |||||||||||
$ | 12,684,384 | $ | 1,702,254 | $ | 14,029,659 | $ | 1,436,661 |
(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 (“ARMs”), 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. |
Rating | Outlook | |
Moody’s Investors Service | Baa3 | Stable |
Standard and Poor’s | BBB- | Stable |
Fitch Ratings | BBB- | Stable |
Net Capital | Excess Net Capital | ||||||
Jefferies LLC | $ | 1,556,602 | $ | 1,471,663 | |||
Jefferies Execution | 9,647 | 9,397 |
Expected Maturity Date (in millions) | ||||||||||||||||||||||||
Commitments and Guarantees | Total | 2016 | 2017 | 2018 and 2019 | 2020 and 2021 | After 2021 | ||||||||||||||||||
Equity commitments | $ | 401.4 | $ | 106.8 | $ | 25.3 | $ | 43.9 | $ | 35.9 | $ | 189.5 | ||||||||||||
Loan commitments | 499.4 | 247.3 | 170.7 | 81.4 | — | — | ||||||||||||||||||
Mortgage-related and other purchase commitments | 2,897.6 | 1,571.4 | 312.5 | 1,013.7 | — | — | ||||||||||||||||||
Forward starting reverse repos and repos | 1,635.0 | 1,635.0 | — | — | — | — | ||||||||||||||||||
Other unfunded commitments | 335.4 | 87.0 | 186.9 | 20.2 | 5.7 | 35.6 | ||||||||||||||||||
Derivative contracts (1): | ||||||||||||||||||||||||
Non credit related | 12,982.4 | 11,840.6 | 584.6 | 142.8 | — | 414.4 | ||||||||||||||||||
Credit related | 1,080.8 | — | — | 115.4 | 955.4 | 10.0 | ||||||||||||||||||
Standby letters of credit | 56.2 | 55.4 | — | — | — | 0.8 | ||||||||||||||||||
Total Commitments and Guarantees | $ | 19,888.2 | $ | 15,543.5 | $ | 1,280.0 | $ | 1,417.4 | $ | 997.0 | $ | 650.3 |
(1) | Certain of Jefferies derivative contracts meet the definition of a guarantee and are therefore included in the above table. For additional information on commitments, see Note 26 in our consolidated financial statements. |
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk. |
Daily VaR (1) Value-at-Risk In Trading Portfolios | Daily VaR (1) Value-at-Risk In Trading Portfolios | |||||||||||||||||||||||||||||||
(In millions) Risk Categories | VaR at November 30, 2015 | Daily VaR for the Year Ended November 30, 2015 | VaR at November 30, 2014 | Daily VaR for the Year Ended November 30, 2014 | ||||||||||||||||||||||||||||
Average | High | Low | Average | High | Low | |||||||||||||||||||||||||||
Interest Rates | $ | 5.01 | $ | 5.84 | $ | 8.06 | $ | 4.19 | $ | 5.56 | $ | 5.77 | $ | 8.69 | $ | 3.16 | ||||||||||||||||
Equity Prices | 6.69 | 9.79 | 13.61 | 5.39 | 10.53 | 11.08 | 14.68 | 7.85 | ||||||||||||||||||||||||
Currency Rates | 0.30 | 0.46 | 3.32 | 0.12 | 0.87 | 1.33 | 6.59 | 0.15 | ||||||||||||||||||||||||
Commodity Prices | 0.82 | 0.57 | 1.62 | 0.04 | 0.19 | 0.70 | 2.14 | 0.07 | ||||||||||||||||||||||||
Diversification Effect (2) | (5.09 | ) | (4.27 | ) | N/A | N/A | (3.87 | ) | (4.53 | ) | N/A | N/A | ||||||||||||||||||||
Firmwide | $ | 7.73 | $ | 12.39 | $ | 17.75 | $ | 6.35 | $ | 13.28 | $ | 14.35 | $ | 19.68 | $ | 10.31 |
(1) | VaR is the potential loss in value of Jefferies trading positions due to adverse market movements over a defined time horizon with a specific confidence level. 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 the Jefferies VaR and VaR values for the four risk categories might have occurred on different days during the period. |
10% Sensitivity | |||
Private investments | $ | 24,889 | |
Corporate debt securities in default | 7,223 | ||
Trade claims | 1,435 |
• | defining credit limit guidelines and credit limit approval processes; |
• | providing a consistent and integrated credit risk framework across the enterprise; |
• | approving counterparties and counterparty limits with parameters set by its Risk Management Committee; |
• | negotiating, approving and monitoring credit terms in legal and master documentation; |
• | delivering credit limits to all relevant sales and trading desks; |
• | maintaining credit reviews for all active and new counterparties; |
• | operating a control function for exposure analytics and exception management and reporting; |
• | determining the analytical standards and risk parameters for on-going management and monitoring of global credit risk books; |
• | actively managing daily exposure, exceptions, and breaches; |
• | monitoring daily margin call activity and counterparty performance (in concert with the Margin Department); and |
• | setting the minimum global requirements for systems, reports, and technology. |
• | Loans and lending arise in connection with our capital markets activities and represents the notional value of loans that have been drawn by the borrower and lending commitments outstanding. In addition, credit exposures on forward settling traded loans are included within Jefferies loans and lending exposures for consistency with the balance sheet categorization of these items. |
• | Securities and margin finance includes credit exposure arising on securities financing transactions (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. |
• | Derivatives represent over-the-counter ("OTC") derivatives, which are reported net by counterparty when a legal right of setoff exists under an enforceable master netting agreement. Derivatives are accounted for 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 Jefferies derivative credit exposures. |
• | Cash and cash equivalents include both interest-bearing and non-interest bearing deposits at banks. |
Counterparty Credit Exposure by Credit Rating | |||||||||||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||||
December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | ||||||||||||||||||||||||||||||||||||
AAA Range | $ | — | $ | — | $ | 11.8 | $ | 1.9 | $ | — | $ | — | $ | 11.8 | $ | 1.9 | $ | 2,461.4 | $ | 2,921.4 | $ | 2,473.2 | $ | 2,923.3 | |||||||||||||||||||||||
AA Range | — | 2.7 | 152.3 | 134.6 | 4.4 | 7.1 | 156.7 | 144.4 | 175.0 | 412.9 | 331.7 | 557.3 | |||||||||||||||||||||||||||||||||||
A Range | 1.0 | 7.6 | 556.4 | 586.9 | 95.9 | 218.1 | 653.3 | 812.6 | 846.3 | 731.3 | 1,499.6 | 1,543.9 | |||||||||||||||||||||||||||||||||||
BBB Range | 86.6 | 132.3 | 107.9 | 73.6 | 31.7 | 34.8 | 226.2 | 240.7 | 25.8 | 2.8 | 252.0 | 243.5 | |||||||||||||||||||||||||||||||||||
BB or Lower | 197.5 | 189.9 | 14.8 | 127.9 | 30.1 | 45.2 | 242.4 | 363.0 | — | — | 242.4 | 363.0 | |||||||||||||||||||||||||||||||||||
Unrated | 85.1 | 139.6 | — | — | 0.1 | — | 85.2 | 139.6 | 1.7 | 11.5 | 86.9 | 151.1 | |||||||||||||||||||||||||||||||||||
Total | $ | 370.2 | $ | 472.1 | $ | 843.2 | $ | 924.9 | $ | 162.2 | $ | 305.2 | $ | 1,375.6 | $ | 1,702.2 | $ | 3,510.2 | $ | 4,079.9 | $ | 4,885.8 | $ | 5,782.1 |
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 | ||||||||||||||||||||||||||||||||||||||||||
December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | ||||||||||||||||||||||||||||||||||||
Asia/Latin America/ Other | $ | 37.4 | $ | 48.8 | $ | 15.3 | $ | 55.7 | $ | 40.6 | $ | 24.6 | $ | 93.3 | $ | 129.1 | $ | 159.6 | $ | 221.0 | $ | 252.9 | $ | 350.1 | |||||||||||||||||||||||
Europe | 0.4 | 8.5 | 212.2 | 218.2 | 43.4 | 76.1 | 256.0 | 302.8 | 341.8 | 617.5 | 597.8 | 920.3 | |||||||||||||||||||||||||||||||||||
North America | 332.4 | 414.8 | 615.7 | 651.0 | 78.2 | 204.5 | 1,026.3 | 1,270.3 | 3,008.8 | 3,241.4 | 4,035.1 | 4,511.7 | |||||||||||||||||||||||||||||||||||
Total | $ | 370.2 | $ | 472.1 | $ | 843.2 | $ | 924.9 | $ | 162.2 | $ | 305.2 | $ | 1,375.6 | $ | 1,702.2 | $ | 3,510.2 | $ | 4,079.9 | $ | 4,885.8 | $ | 5,782.1 |
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 | ||||||||||||||||||||||||||||||||||||||||||
December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | ||||||||||||||||||||||||||||||||||||
Asset Managers | $ | — | $ | — | $ | 69.8 | $ | 91.8 | $ | — | $ | — | $ | 69.8 | $ | 91.8 | $ | 2,461.3 | $ | 2,921.4 | $ | 2,531.1 | $ | 3,013.2 | |||||||||||||||||||||||
Banks, Broker-dealers | 0.9 | 10.7 | 464.9 | 482.2 | 95.1 | 251.4 | 560.9 | 744.3 | 1,048.9 | 1,158.5 | 1,609.8 | 1,902.8 | |||||||||||||||||||||||||||||||||||
Commodities | — | — | — | 59.9 | 16.7 | 24.8 | 16.7 | 84.7 | — | — | 16.7 | 84.7 | |||||||||||||||||||||||||||||||||||
Corporates/Loans | 237.4 | 320.8 | — | — | 11.3 | 0.8 | 248.7 | 321.6 | — | — | 248.7 | 321.6 | |||||||||||||||||||||||||||||||||||
Other | 131.9 | 140.6 | 308.5 | 291.0 | 39.1 | 28.2 | 479.5 | 459.8 | — | — | 479.5 | 459.8 | |||||||||||||||||||||||||||||||||||
Total | $ | 370.2 | $ | 472.1 | $ | 843.2 | $ | 924.9 | $ | 162.2 | $ | 305.2 | $ | 1,375.6 | $ | 1,702.2 | $ | 3,510.2 | $ | 4,079.9 | $ | 4,885.8 | $ | 5,782.1 |
December 31, 2015 | |||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||
Belgium | $ | 413.8 | $ | (48.8 | ) | $ | 6.2 | $ | — | $ | — | $ | — | $ | 157.8 | $ | 371.2 | $ | 529.0 | ||||||||||||||||
United Kingdom | 711.6 | (359.3 | ) | 52.4 | 0.4 | 31.6 | 25.4 | 26.3 | 462.1 | 488.4 | |||||||||||||||||||||||||
Netherlands | 543.5 | (139.6 | ) | (23.4 | ) | — | 36.2 | 2.0 | — | 418.7 | 418.7 | ||||||||||||||||||||||||
Italy | 1,112.2 | (662.4 | ) | (105.6 | ) | — | — | 0.2 | — | 344.4 | 344.4 | ||||||||||||||||||||||||
Ireland | 164.3 | (27.4 | ) | 3.3 | — | 3.5 | — | — | 143.7 | 143.7 | |||||||||||||||||||||||||
Spain | 394.0 | (291.9 | ) | (1.6 | ) | — | — | 0.2 | 26.6 | 100.7 | 127.3 | ||||||||||||||||||||||||
Australia | 86.6 | (24.9 | ) | 9.6 | 37.4 | — | 0.3 | 0.8 | 109.0 | 109.8 | |||||||||||||||||||||||||
Hong Kong | 38.1 | (22.3 | ) | (2.9 | ) | — | 0.4 | — | 74.8 | 13.3 | 88.1 | ||||||||||||||||||||||||
Switzerland | 79.5 | (28.9 | ) | (6.6 | ) | — | 34.5 | 5.2 | 3.7 | 83.7 | 87.4 | ||||||||||||||||||||||||
Portugal | 111.9 | (38.2 | ) | — | — | — | — | — | 73.7 | 73.7 | |||||||||||||||||||||||||
Total | $ | 3,655.5 | $ | (1,643.7 | ) | $ | (68.6 | ) | $ | 37.8 | $ | 106.2 | $ | 33.3 | $ | 290.0 | $ | 2,120.5 | $ | 2,410.5 |
December 31, 2014 | |||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||
Germany | $ | 357.6 | $ | (153.7 | ) | $ | 196.1 | $ | — | $ | 97.8 | $ | 16.8 | $ | 59.5 | $ | 514.6 | $ | 574.1 | ||||||||||||||||
Spain | 587.2 | (171.0 | ) | — | 0.2 | 1.2 | — | — | 417.6 | 417.6 | |||||||||||||||||||||||||
United Kingdom | 441.0 | (252.5 | ) | (25.4 | ) | 6.5 | 29.8 | 25.2 | 138.9 | 224.6 | 363.5 | ||||||||||||||||||||||||
Belgium | 137.6 | (65.9 | ) | (8.4 | ) | — | 2.5 | — | 278.7 | 65.8 | 344.5 | ||||||||||||||||||||||||
Canada | 123.1 | (28.8 | ) | (27.3 | ) | — | 120.2 | 79.6 | 5.3 | 266.8 | 272.1 | ||||||||||||||||||||||||
Netherlands | 341.4 | (121.0 | ) | (13.5 | ) | — | 5.4 | — | — | 212.3 | 212.3 | ||||||||||||||||||||||||
Italy | 1,467.9 | (880.1 | ) | (427.7 | ) | — | — | 0.3 | — | 160.4 | 160.4 | ||||||||||||||||||||||||
Hong Kong | 18.4 | (8.5 | ) | — | — | 0.6 | — | 145.1 | 10.5 | 155.6 | |||||||||||||||||||||||||
Luxembourg | 5.6 | (6.9 | ) | 2.9 | — | 0.4 | — | 127.2 | 2.0 | 129.2 | |||||||||||||||||||||||||
Puerto Rico | 108.2 | — | — | — | — | 0.8 | — | 109.0 | 109.0 | ||||||||||||||||||||||||||
Total | $ | 3,588.0 | $ | (1,688.4 | ) | $ | (303.3 | ) | $ | 6.7 | $ | 257.9 | $ | 122.7 | $ | 754.7 | $ | 1,983.6 | $ | 2,738.3 |
Expected Maturity Date | |||||||||||||||||||||||||||||||
2016 | 2017 | 2018 | 2019 | 2020 | Thereafter | Total | Fair Value | ||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||
Rate Sensitive Assets: | |||||||||||||||||||||||||||||||
Available for Sale Fixed Income Securities: | |||||||||||||||||||||||||||||||
U.S. Government | $ | 63,945 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 63,945 | $ | 63,945 | |||||||||||||||
Weighted-Average Interest Rate | 0.05 | % | |||||||||||||||||||||||||||||
Residential mortgage-backed: Rated Investment Grade | $ | 2,422 | $ | 818 | $ | 532 | $ | 320 | $ | 263 | $ | 1,637 | $ | 5,992 | $ | 5,992 | |||||||||||||||
Weighted-Average Interest Rate | 2.62 | % | 2.73 | % | 2.51 | % | 2.20 | % | 2.09 | % | 2.03 | % | |||||||||||||||||||
Rated Less Than Investment Grade/Not Rated | $ | 6,740 | $ | 3,628 | $ | 2,268 | $ | 1,257 | $ | 786 | $ | 2,569 | $ | 17,248 | $ | 17,248 | |||||||||||||||
Weighted-Average Interest Rate | 3.51 | % | 3.61 | % | 3.56 | % | 4.38 | % | 5.16 | % | 5.08 | % | |||||||||||||||||||
Commercial mortgage-backed: | |||||||||||||||||||||||||||||||
Rated Investment Grade | $ | — | $ | — | $ | 295 | $ | — | $ | — | $ | — | $ | 295 | $ | 295 | |||||||||||||||
Weighted-Average Interest Rate | 4.18 | % | |||||||||||||||||||||||||||||
Rated Less Than Investment Grade/Not Rated | $ | — | $ | 1,186 | $ | 893 | $ | — | $ | — | $ | — | $ | 2,079 | $ | 2,079 | |||||||||||||||
Weighted-Average Interest Rate | 5.80 | % | 3.49 | % | |||||||||||||||||||||||||||
Other asset-backed: | |||||||||||||||||||||||||||||||
Rated Investment Grade | $ | 13,667 | $ | 25,806 | $ | — | $ | — | $ | — | $ | — | $ | 39,473 | $ | 39,473 | |||||||||||||||
Weighted-Average Interest Rate | 4.38 | % | 3.46 | % | |||||||||||||||||||||||||||
All other corporates: | |||||||||||||||||||||||||||||||
Rated Investment Grade | $ | 1,504 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1,504 | $ | 1,504 | |||||||||||||||
Weighted-Average Interest Rate | 2.75 | % | |||||||||||||||||||||||||||||
Rated Less Than Investment Grade/Not Rated | $ | 2,729 | $ | — | $ | — | $ | 511 | $ | — | $ | — | $ | 3,240 | $ | 3,240 | |||||||||||||||
Weighted-Average Interest Rate | 4.30 | % | 6.75 | % |
Expected Maturity Date | |||||||||||||||||||||||||||||||
2016 | 2017 | 2018 | 2019 | 2020 | Thereafter | Total | Fair Value | ||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||
Rate Sensitive Liabilities: | |||||||||||||||||||||||||||||||
Fixed Interest Rate Borrowings | $ | 350,000 | $ | 433,724 | $ | 830,234 | $ | 700,500 | $ | — | $ | 3,600,000 | $ | 5,914,458 | $ | 6,119,397 | |||||||||||||||
Weighted-Average Interest Rate | 4.32 | % | 5.16 | % | 8.50 | % | 6.11 | % | |||||||||||||||||||||||
Variable Interest Rate Borrowings | $ | 132,097 | $ | 32,385 | $ | 421,899 | $ | 2,436 | $ | 20,530 | $ | 48,287 | $ | 657,634 | $ | 658,323 | |||||||||||||||
Weighted-Average Interest Rate | 2.84 | % | 4.44 | % | 4.87 | % | 3.96 | % | 2.62 | % | 4.00 | % | |||||||||||||||||||
Borrowings with Foreign Currency Exposure | $ | — | $ | — | $ | — | $ | — | $ | 528,625 | $ | 4,229 | $ | 532,854 | $ | 521,685 | |||||||||||||||
Weighted-Average Interest Rate | 2.37 | % | 2.25 | % |
Item 8. | Financial Statements and Supplementary Data. |
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. |
Item 9A. | Controls and Procedures. |
• | Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company; |
• | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and |
• | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the consolidated financial statements. |
Item 9B. | Other Information. |
Item 10. | Directors, Executive Officers of the Registrant and Corporate Governance. |
Item 11. | Executive Compensation. |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters. |
Item 13. | Certain Relationships and Related Transactions, and Director Independence. |
Item 14. | Principal Accountant Fees and Services. |
Item 15. | Exhibits and Financial Statement Schedules. |
(a)(1) | Financial Statements. |
Report of Independent Registered Public Accounting Firm | F-1 |
Financial Statements: | |
Consolidated Statements of Financial Condition at December 31, 2015 and 2014 | F-2 |
Consolidated Statements of Operations for the years ended December 31, 2015, 2014 and 2013 | F-3 |
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2015, 2014 and 2013 | F-5 |
Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013 | F-6 |
Consolidated Statements of Changes in Equity for the years ended December 31, 2015, 2014 and 2013 | F-8 |
Notes to Consolidated Financial Statements | F-9 |
(2) | Financial Statement Schedules. |
(3) | See Item 15(b) below for a complete list of Exhibits to this report, including Executive Compensation Plans and Arrangements. |
(b) | Exhibits. |
3.1 | Restated Certificate of Incorporation (filed as Exhibit 5.1 to the Company’s Current Report on Form 8-K dated July 14, 1993).* |
3.2 | Certificate of Amendment of the Certificate of Incorporation dated as of May 14, 2002 (filed as Exhibit 3.2 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003 (the “2003 10-K”)).* |
3.3 | Certificate of Amendment of the Certificate of Incorporation dated as of December 23, 2002 (filed as Exhibit 3.2 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002).* |
3.4 | Certificate of Amendment of the Certificate of Incorporation dated as of May 13, 2004 (filed as Exhibit 3.2 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004).* |
3.5 | Certificate of Amendment of the Certificate of Incorporation dated as of May 17, 2005 (filed as Exhibit 3.5 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005 (the “2005 10-K”)).* |
3.6 | Certificate of Amendment of the Certificate of Incorporation dated as of May 23, 2007 (filed as Exhibit 4.7 to the Company’s Registration Statement on Form S-8 (No. 333-143770)).* |
3.7 | Certificate of Amendment to the Certificate of Incorporation dated as of February 26, 2013 (filed as Exhibit 3.7 to the Company’s Current Report on Form 8-K on March 1, 2013 (the “March 1, 2013 Form 8-K”).* |
3.8 | Certificate of Amendment to the Certificate of Incorporation dated as of February 26, 2013 (filed as Exhibit 3.8 to the March 1, 2013 Form 8-K).* |
3.9 | Amended and Restated By-laws of Leucadia National Corporation (filed as Exhibit 3.9 to the March 1, 2013 Form 8-K).* |
4.1 | The Company undertakes to furnish the Securities and Exchange Commission, upon written request, a copy of all instruments with respect to long-term debt not filed herewith. |
10.31 | 1999 Stock Option Plan as Amended and Restated (filed as Exhibit 99.1 to the Company’s Registration Statement on Form S-8 (No. 333-169377)).* + |
10.32 | Form of Grant Letter for the 1999 Stock Option Plan (filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on February 24, 2012 (the “February 24, 2012 8-K”)).* + |
10.33 | Leucadia National Corporation 2003 Incentive Compensation Plan (filed as Appendix II to the Company’s Proxy Statement dated June 27, 2013 (the “2013 Proxy Statement”)).* + |
10.34 | Form of Restricted Stock Units Agreement (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated July 31, 2013).* + |
10.35 | Form of Restricted Stock Agreement (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K dated July 31, 2013).* + |
10.36 | Leucadia National Corporation 1999 Directors’ Stock Compensation Plan (filed as Appendix II to the 2013 Proxy Statement).* + |
10.37 | Leucadia National Corporation 2011 Senior Executive Warrant Plan (filed as Annex A to the Company’s Proxy Statement dated April 13, 2011).* + |
10.38 | Form of Common Share Purchase Warrant (filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011 (the “2nd Quarter 2011 10-Q”)).* + |
10.39 | Amended and Restated Shareholders Agreement dated as of June 30, 2003 among the Company, Ian M. Cumming and Joseph S. Steinberg (filed as Exhibit 10.5 to the 2003 10-K).* + |
10.40 | Amendment No. 1, dated as of May 16, 2006, to the Amended and Restated Shareholders Agreement dated as of June 30, 2003, by and among Ian M. Cumming, Joseph S. Steinberg and the Company (filed as Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2006). * + |
10.41 | Services Agreement, dated as of January 1, 2004, between the Company and Joseph S. Steinberg (filed as Exhibit 10.38 to the 2005 10-K).* + |
10.42 | Employment Agreement made as of June 30, 2005 by and between the Company and Joseph S. Steinberg (filed as Exhibit 99.2 to the Company’s Current Report on Form 8-K dated July 13, 2005 8-K).* + |
10.43 | Compensation Information Concerning Non-Employee Directors (incorporated by reference to page 19 of the Company’s Proxy Statement dated April 7, 2015).* + |
10.44 | First Amended and Restated Limited Liability Company Agreement of National Beef Packing Company, dated as of December 30, 2011 (filed as Exhibit 10.1 to the December 30, 2011 8-K).* |
10.45 | Cattle Purchase and Sale Agreement by and between National Beef Packing Company, LLC and U.S. Premium Beef, LLC, dated as of December 30, 2011 (filed as Exhibit 10.6 to the December 30, 2011 8-K).* |
10.46 | Summary of executive bonus compensation (filed in the Company’s Current Report on Form 8-K dated January 20, 2016).* + |
10.47 | Summary of executive compensation for Richard B. Handler, Brian P. Friedman and Michael J. Sharp (filed in the Company’s Current Report on Form 8-K dated February 28, 2014).* + |
10.48 | Agreement of Terms dated as of December 31, 2011 between Leucadia National Corporation and Berkshire Hathaway Inc. (filed as Exhibit 10.1 to the February 24, 2012 8-K).* |
10.49 | Acknowledgement to Registration Rights Agreement, dated as of March 18, 2014, by and among Harbinger Group Inc., Harbinger Capital Partners Master Fund, Ltd., Global Opportunities Breakaway Ltd., Harbinger Capital Partners Special Situations Fund, L.P. and Leucadia National Corporation (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K/A dated March 18, 2014).* |
10.50 | Letter Agreement, dated as of March 18, 2014, by and between Harbinger Group Inc. and Leucadia National Corporation (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K/A dated March 18, 2014).* |
10.51 | Exchange Agreement by and among Harbinger Capital Group Partners Master Fund I, Ltd., Global Opportunities Breakaway Ltd., Harbinger Capital Partners Special Situations Fund, L.P., and Leucadia National Corporation (filed as Exhibit 99.5 to Schedule 13D filed March 28, 2014).* |
10.52 | Joinder Agreement to Registration Rights Agreement by and among Harbinger Capital Group Partners Master Fund I, Ltd., Global Opportunities Breakaway Ltd., Harbinger Capital Partners Special Situations Fund, L.P., and Leucadia National Corporation (filed as Exhibit 99.8 to Schedule 13D filed on March 28, 2014).* |
10.53 | Stockholders Agreement, dated as of March 28, 2014, by and between HomeFed Corporation and Leucadia National Corporation (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated April 3, 2014).* |
10.54 | Employment Agreement between Leucadia National Corporation and Teresa S. Gendron dated July 2, 2014 (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q dated November 7, 2014). *+ |
21 | Subsidiaries of the registrant. |
23.1 | Consent of PricewaterhouseCoopers LLP, with respect to the incorporation by reference into the Company’s Registration Statements on Form S-8 (No. 333-169377), Form S-8 (No. 333-51494), Form S-8 (No. 333-143770), Form S-8 (No. 333-185318) and Form S-3 (No. 333-191533). |
23.2 | Consent of PricewaterhouseCoopers LLP, with respect to the inclusion in this Annual Report on Form 10-K of the financial statements of Jefferies Group LLC and with respect to the incorporation by reference in the Company’s Registration Statements on Form S-8 (No. 333-169377), Form S-8 (No. 333-51494), Form S-8 (No. 333-143770), Form S-8 (No. 333-185318) and Form S-3 (No. 333-191533). |
31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1 | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.** |
32.2 | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.** |
101 | Financial statements from the Annual Report on Form 10-K of Leucadia National Corporation for the year ended December 31, 2015, formatted in Extensible Business Reporting Language (XBRL): (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. |
(c) | Financial statement schedules. |
(1) | Jefferies Group LLC financial statements for the three months ended February 28, 2013. |
+ | Management/Employment Contract or Compensatory Plan or Arrangement. |
* | Incorporated by reference. |
** | Furnished herewith pursuant to item 601(b) (32) of Regulation S-K. |
LEUCADIA NATIONAL CORPORATION | |||
Date: February 19, 2016 | By: | /s/ John M. Dalton | |
Name: John M. Dalton | |||
Title: Controller | |||
Date | Signature | Title | |
February 19, 2016 | By: | /s/ Joseph S. Steinberg | Chairman of the Board |
Joseph S. Steinberg | |||
February 19, 2016 | By: | /s/ Richard B. Handler | Chief Executive Officer and Director |
Richard B. Handler | (Principal Executive Officer) | ||
February 19, 2016 | By: | /s/ Brian P. Friedman | President and Director |
Brian P. Friedman | |||
February 19, 2016 | By: | /s/ Teresa S. Gendron | Vice President and Chief Financial Officer |
Teresa S. Gendron | (Principal Financial Officer) | ||
February 19, 2016 | By: | /s/ John M. Dalton | Controller |
John M. Dalton | (Principal Accounting Officer) | ||
February 19, 2016 | By: | /s/ Linda L. Adamany | Director |
Linda L. Adamany | |||
February 19, 2016 | By: | /s/ Robert D. Beyer | Director |
Robert D. Beyer | |||
February 19, 2016 | By: | /s/ Francisco L. Borges | Director |
Francisco L. Borges | |||
February 19, 2016 | By: | /s/ W. Patrick Campbell | Director |
W. Patrick Campbell | |||
February 19, 2016 | By: | /s/ Robert E. Joyal | Director |
Robert E. Joyal | |||
February 19, 2016 | By: | /s/ Jeffrey C. Keil | Director |
Jeffrey C. Keil | |||
February 19, 2016 | By: | /s/ Michael T. O’Kane | Director |
Michael T. O’Kane | |||
February 19, 2016 | By: | /s/ Stuart H. Reese | Director |
Stuart H. Reese |
2015 | 2014 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 3,638,648 | $ | 4,276,775 | |||
Cash and securities segregated and on deposit for regulatory purposes | |||||||
or deposited with clearing and depository organizations | 751,084 | 3,444,674 | |||||
Financial instruments owned, including securities pledged of $12,207,123 and $14,794,488: | |||||||
Trading assets, at fair value | 18,293,090 | 19,612,490 | |||||
Available for sale securities | 207,355 | 1,608,769 | |||||
Total financial instruments owned | 18,500,445 | 21,221,259 | |||||
Investments in managed funds | 603,720 | 281,470 | |||||
Loans to and investments in associated companies | 1,757,369 | 1,712,568 | |||||
Securities borrowed | 6,975,136 | 6,853,103 | |||||
Securities purchased under agreements to resell | 3,854,746 | 3,926,858 | |||||
Securities received as collateral | — | 5,418 | |||||
Receivables | 3,830,967 | 3,934,825 | |||||
Property, equipment and leasehold improvements, net | 721,875 | 726,376 | |||||
Intangible assets, net and goodwill | 2,648,362 | 2,720,763 | |||||
Deferred tax asset, net | 1,575,368 | 1,712,535 | |||||
Other assets | 1,482,092 | 1,807,284 | |||||
Total | $ | 46,339,812 | $ | 52,623,908 | |||
LIABILITIES | |||||||
Short-term borrowings | $ | 310,659 | $ | 12,000 | |||
Trading liabilities, at fair value | 6,840,430 | 8,904,592 | |||||
Securities loaned | 3,014,300 | 2,598,487 | |||||
Securities sold under agreements to repurchase | 9,966,868 | 10,672,157 | |||||
Other secured financings | 910,357 | 705,126 | |||||
Obligation to return securities received as collateral | — | 5,418 | |||||
Payables, expense accruals and other liabilities | 7,107,081 | 10,516,491 | |||||
Long-term debt | 7,407,594 | 8,527,929 | |||||
Total liabilities | 35,557,289 | 41,942,200 | |||||
Commitments and contingencies | |||||||
MEZZANINE EQUITY | |||||||
Redeemable noncontrolling interests | 191,633 | 186,686 | |||||
Mandatorily redeemable convertible preferred shares | 125,000 | 125,000 | |||||
EQUITY | |||||||
Common shares, par value $1 per share, authorized 600,000,000 shares; | |||||||
362,617,423 and 367,498,615 shares issued and outstanding, after deducting | |||||||
53,755,292 and 48,447,573 shares held in treasury | 362,617 | 367,499 | |||||
Additional paid-in capital | 4,986,819 | 5,059,508 | |||||
Accumulated other comprehensive income | 438,793 | 447,082 | |||||
Retained earnings | 4,612,982 | 4,428,069 | |||||
Total Leucadia National Corporation shareholders’ equity | 10,401,211 | 10,302,158 | |||||
Noncontrolling interests | 64,679 | 67,864 | |||||
Total equity | 10,465,890 | 10,370,022 | |||||
Total | $ | 46,339,812 | $ | 52,623,908 |
2015 | 2014 | 2013 | |||||||||
Revenues: | |||||||||||
Beef processing services | $ | 7,396,869 | $ | 7,824,246 | $ | 7,486,332 | |||||
Commissions | 659,002 | 668,801 | 472,596 | ||||||||
Principal transactions | 642,824 | 662,213 | 574,895 | ||||||||
Investment banking | 1,417,807 | 1,526,637 | 997,955 | ||||||||
Interest income | 955,240 | 1,052,151 | 737,780 | ||||||||
Net realized securities gains | 62,957 | 30,394 | 243,957 | ||||||||
Other | 549,228 | 570,465 | 485,492 | ||||||||
Total revenues | 11,683,927 | 12,334,907 | 10,999,007 | ||||||||
Interest expense | 797,469 | 848,422 | 573,261 | ||||||||
Net revenues | 10,886,458 | 11,486,485 | 10,425,746 | ||||||||
Expenses: | |||||||||||
Cost of sales | 7,677,233 | 8,024,286 | 7,567,707 | ||||||||
Compensation and benefits | 1,665,465 | 1,841,674 | 1,352,654 | ||||||||
Floor brokerage and clearing fees | 199,780 | 215,329 | 150,774 | ||||||||
Interest | 111,412 | 117,174 | 84,964 | ||||||||
Depreciation and amortization | 224,133 | 185,993 | 167,425 | ||||||||
Provision for doubtful accounts | 7,353 | 59,695 | 1,490 | ||||||||
Selling, general and other expenses | 754,827 | 799,639 | 674,188 | ||||||||
10,640,203 | 11,243,790 | 9,999,202 | |||||||||
Income from continuing operations before income taxes and income related to associated companies | 246,255 | 242,695 | 426,544 | ||||||||
Income related to associated companies | 110,281 | 138,527 | 119,041 | ||||||||
Income from continuing operations before income taxes | 356,536 | 381,222 | 545,585 | ||||||||
Income tax provision | 109,947 | 165,971 | 136,481 | ||||||||
Income from continuing operations | 246,589 | 215,251 | 409,104 | ||||||||
Income (loss) from discontinued operations, net of income tax provision (benefit) of $231, $(9,634) and $(32,303) | 429 | (17,893 | ) | (60,026 | ) | ||||||
Gain on disposal of discontinued operations, net of income tax provision (benefit) of $2,743, $899 and $(3,009) | 5,093 | 1,667 | 13,115 | ||||||||
Net income | 252,111 | 199,025 | 362,193 | ||||||||
Net loss attributable to the noncontrolling interests | 4,996 | 727 | 1,162 | ||||||||
Net loss attributable to the redeemable noncontrolling interests | 26,543 | 8,616 | 9,282 | ||||||||
Preferred stock dividends | (4,063 | ) | (4,062 | ) | (3,397 | ) | |||||
Net income attributable to Leucadia National Corporation common shareholders | $ | 279,587 | $ | 204,306 | $ | 369,240 |
2015 | 2014 | 2013 | |||||||||
Basic earnings (loss) per common share attributable to Leucadia National Corporation common shareholders: | |||||||||||
Income from continuing operations | $ | 0.73 | $ | 0.58 | $ | 1.20 | |||||
Income (loss) from discontinued operations | — | (0.05 | ) | (0.17 | ) | ||||||
Gain on disposal of discontinued operations | 0.01 | 0.01 | 0.04 | ||||||||
Net income | $ | 0.74 | $ | 0.54 | $ | 1.07 | |||||
Diluted earnings (loss) per common share attributable to Leucadia National Corporation common shareholders: | |||||||||||
Income from continuing operations | $ | 0.73 | $ | 0.58 | $ | 1.20 | |||||
Income (loss) from discontinued operations | — | (0.05 | ) | (0.17 | ) | ||||||
Gain on disposal of discontinued operations | 0.01 | 0.01 | 0.03 | ||||||||
Net income | $ | 0.74 | $ | 0.54 | $ | 1.06 | |||||
Amounts attributable to Leucadia National Corporation common shareholders: | |||||||||||
Income from continuing operations, net of taxes | $ | 274,065 | $ | 220,584 | $ | 415,093 | |||||
Income (loss) from discontinued operations, net of taxes | 429 | (17,945 | ) | (58,968 | ) | ||||||
Gain on disposal of discontinued operations, net of taxes | 5,093 | 1,667 | 13,115 | ||||||||
Net income | $ | 279,587 | $ | 204,306 | $ | 369,240 |
2015 | 2014 | 2013 | |||||||||
Net income | $ | 252,111 | $ | 199,025 | $ | 362,193 | |||||
Other comprehensive income (loss): | |||||||||||
Net unrealized holding gains (losses) on investments arising during the period, net of income tax provision (benefit) of $(5,029), $(4,923) and $(543) | (9,057 | ) | (8,866 | ) | (979 | ) | |||||
Less: reclassification adjustment for net (gains) losses included in net income (loss), net of income tax provision (benefit) of $6,068, $1,631 and $118,292 | (10,930 | ) | (2,939 | ) | (213,058 | ) | |||||
Net change in unrealized holding gains (losses) on investments, net of income tax provision (benefit) of $(11,097), $(6,554) and $(118,835) | (19,987 | ) | (11,805 | ) | (214,037 | ) | |||||
Net unrealized foreign exchange gains (losses) arising during the period, net of income tax provision (benefit) of $(5,174), $(6,837) and $865 | (36,477 | ) | (43,307 | ) | 22,900 | ||||||
Less: reclassification adjustment for foreign exchange (gains) losses included in net income (loss), net of income tax provision (benefit) of $0, $149 and $0 | — | (267 | ) | — | |||||||
Net change in unrealized foreign exchange gains (losses), net of income tax provision (benefit) of $(5,174), $(6,986) and $865 | (36,477 | ) | (43,574 | ) | 22,900 | ||||||
Net unrealized gains (losses) on derivatives arising during the period, net of income tax provision (benefit) of $0, $0 and $(9) | — | — | (15 | ) | |||||||
Less: reclassification adjustment for derivative (gains) losses included in net income (loss), net of income tax provision (benefit) of $0, $(95) and $0 | — | 169 | — | ||||||||
Net change in unrealized derivative gains (losses), net of income tax provision (benefit) of $0, $95 and $(9) | — | 169 | (15 | ) | |||||||
Net pension gains (losses) arising during the period, net of income tax provision (benefit) of $7,152, $(17,698) and $11,685 | 17,073 | (38,959 | ) | 19,274 | |||||||
Less: reclassification adjustment for pension (gains) losses included in net income (loss), net of income tax provision (benefit) of $(17,159), $(1,676) and $(2,665) | 31,102 | 3,201 | 4,799 | ||||||||
Net change in pension liability benefits, net of income tax provision (benefit) of $24,311, $(16,022) and $14,350 | 48,175 | (35,758 | ) | 24,073 | |||||||
Other comprehensive loss, net of income taxes | (8,289 | ) | (90,968 | ) | (167,079 | ) | |||||
Comprehensive income | 243,822 | 108,057 | 195,114 | ||||||||
Comprehensive loss attributable to the noncontrolling interests | 4,996 | 727 | 1,162 | ||||||||
Comprehensive loss attributable to the redeemable noncontrolling interests | 26,543 | 8,616 | 9,282 | ||||||||
Preferred stock dividends | (4,063 | ) | (4,062 | ) | (3,397 | ) | |||||
Comprehensive income attributable to Leucadia National Corporation common shareholders | $ | 271,298 | $ | 113,338 | $ | 202,161 |
2015 | 2014 | 2013 | |||||||||
Net cash flows from operating activities: | |||||||||||
Net income | $ | 252,111 | $ | 199,025 | $ | 362,193 | |||||
Adjustments to reconcile net income to net cash provided by (used for) operations: | |||||||||||
Deferred income tax provision | 134,016 | 126,885 | 70,047 | ||||||||
Depreciation and amortization of property, equipment and leasehold improvements | 164,067 | 124,977 | 111,175 | ||||||||
Other amortization | 8,006 | 14,767 | 27,789 | ||||||||
Share-based compensation | 74,087 | 109,838 | 87,309 | ||||||||
Provision for doubtful accounts | 20,168 | 69,907 | 13,945 | ||||||||
Net securities gains | (62,957 | ) | (30,394 | ) | (243,957 | ) | |||||
Income related to associated companies | (185,998 | ) | (228,769 | ) | (211,221 | ) | |||||
Distributions from associated companies | 223,658 | 176,491 | 137,098 | ||||||||
Net (gains) losses related to property and equipment, and other assets | 29,776 | (27,784 | ) | 94,074 | |||||||
Gain on disposal of discontinued operations | (7,836 | ) | (12,566 | ) | (10,106 | ) | |||||
Change in estimated litigation reserve | (96,500 | ) | 101,710 | — | |||||||
Net change in: | |||||||||||
Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations | 2,691,028 | 166,108 | 113,754 | ||||||||
Trading assets | 1,380,230 | (3,223,327 | ) | (383,682 | ) | ||||||
Investments in managed funds | (295,342 | ) | (80,247 | ) | 2,674 | ||||||
Securities borrowed | (127,060 | ) | (1,497,438 | ) | (41,678 | ) | |||||
Securities purchased under agreements to resell | 56,377 | (200,568 | ) | (156,197 | ) | ||||||
Receivables from brokers, dealers and clearing organizations | 551,021 | 11,872 | 336,263 | ||||||||
Receivables from customers of securities operations | 58,233 | (349,767 | ) | 225 | |||||||
Other receivables | (145,634 | ) | (161,415 | ) | (93,690 | ) | |||||
Other assets | 83,414 | (107,028 | ) | 23,488 | |||||||
Trading liabilities | (2,011,277 | ) | 1,832,930 | (2,511,777 | ) | ||||||
Securities loaned | 420,929 | 95,607 | 600,539 | ||||||||
Securities sold under agreements to repurchase | (688,355 | ) | (84,303 | ) | 2,794,412 | ||||||
Payables to brokers, dealers and clearing organizations | 486,841 | 968,615 | (507,722 | ) | |||||||
Payables to customers of securities operations | (3,455,080 | ) | 1,089,423 | (249,305 | ) | ||||||
Trade payables, expense accruals and other liabilities | (225,711 | ) | (3,546 | ) | 345,345 | ||||||
Other | (93,967 | ) | (68,163 | ) | (8,655 | ) | |||||
Net cash provided by (used for) operating activities | (761,755 | ) | (987,160 | ) | 702,340 | ||||||
Net cash flows from investing activities: | |||||||||||
Acquisitions of property, equipment and leasehold improvements, and other assets | (295,894 | ) | (600,837 | ) | (166,129 | ) | |||||
Proceeds from disposals of property and equipment, and other assets | 22,820 | 52,011 | 24,400 | ||||||||
Proceeds from disposal of discontinued operations, net of expenses and cash of operations sold | 5,842 | 223,217 | 20,997 | ||||||||
Cash acquired upon acquisition of Jefferies Group LLC | — | — | 3,017,958 | ||||||||
Acquisitions, net of cash acquired | — | (61,493 | ) | — | |||||||
Cash paid and cash of real estate operations sold to HomeFed Corporation | — | (19,730 | ) | — | |||||||
Advances on notes, loans and other receivables | (420,219 | ) | (8,500 | ) | (1,934 | ) | |||||
Collections on notes, loans and other receivables | 153,004 | 22,002 | 18,852 | ||||||||
Loans to and investments in associated companies | (1,492,060 | ) | (2,959,689 | ) | (2,388,540 | ) | |||||
Capital distributions and loan repayment from associated companies | 1,389,262 | 2,756,320 | 2,381,145 | ||||||||
Deconsolidation of asset management entities | (16,512 | ) | (207,965 | ) | — | ||||||
Purchases of investments (other than short-term) | (873,831 | ) | (1,821,635 | ) | (3,789,166 | ) | |||||
Proceeds from maturities of investments | 379,629 | 1,191,349 | 2,368,734 | ||||||||
Proceeds from sales of investments | 1,931,656 | 1,878,427 | 1,838,029 | ||||||||
Other | (2,532 | ) | 5,606 | (724 | ) | ||||||
Net cash provided by investing activities | 781,165 | 449,083 | 3,323,622 |
2015 | 2014 | 2013 | |||||||||
Net cash flows from financing activities: | |||||||||||
Issuance of debt, net of issuance costs | $ | 363,595 | $ | 1,002,636 | $ | 2,038,226 | |||||
Change in short-term borrowings | 298,659 | — | (88,000 | ) | |||||||
Reduction of debt | (1,316,494 | ) | (434,278 | ) | (1,894,301 | ) | |||||
Net proceeds from other secured financings | 205,231 | 470,415 | 114,711 | ||||||||
Issuance of common shares | 1,223 | 2,190 | 5,557 | ||||||||
Cash and cash equivalents of Crimson Wine Group, Ltd., which was spun off | — | — | (21,042 | ) | |||||||
Net contributions from (distributions to) redeemable noncontrolling interests | 5,165 | (2,765 | ) | (8,073 | ) | ||||||
Distributions to noncontrolling interests | (7,277 | ) | (7,797 | ) | (355,086 | ) | |||||
Contributions from noncontrolling interests | 15,469 | 54,259 | 65,870 | ||||||||
Purchase of common shares for treasury | (125,754 | ) | (75,728 | ) | (40,024 | ) | |||||
Dividends paid | (92,550 | ) | (93,071 | ) | (91,335 | ) | |||||
Other | 750 | 1,921 | 2,990 | ||||||||
Net cash provided by (used for) financing activities | (651,983 | ) | 917,782 | (270,507 | ) | ||||||
Effect of foreign exchange rate changes on cash | (5,554 | ) | (10,525 | ) | 6,180 | ||||||
Net increase (decrease) in cash and cash equivalents | (638,127 | ) | 369,180 | 3,761,635 | |||||||
Cash and cash equivalents at January 1, including cash classified as assets of discontinued operations | 4,276,775 | 3,907,595 | 145,960 | ||||||||
Cash and cash equivalents at December 31, including cash classified as assets of discontinued operations | $ | 3,638,648 | $ | 4,276,775 | $ | 3,907,595 | |||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash paid during the year for: | |||||||||||
Interest | $ | 980,266 | $ | 1,038,201 | $ | 722,695 | |||||
Income tax payments, net | $ | 510 | $ | 9,880 | $ | 75,925 | |||||
Non-cash investing activities: | |||||||||||
Common stock issued for acquisition of Jefferies Group LLC | $ | — | $ | — | $ | 3,385,699 | |||||
Issuance of mandatorily redeemable convertible preferred shares for acquisition of Jefferies Group LLC | $ | — | $ | — | $ | 125,000 | |||||
Non-cash financing activities: | |||||||||||
Net assets excluding cash and cash equivalents of Crimson Wine Group, Ltd., which was spun off | $ | — | $ | — | $ | 175,958 | |||||
Issuance of common shares for debt conversion | $ | — | $ | 97,546 | $ | — |
Leucadia National Corporation Common Shareholders | |||||||||||||||||||||||||||
Common Shares $1 Par Value | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Subtotal | Non-controlling Interests | Total | |||||||||||||||||||||
Balance, January 1, 2013 | $ | 244,583 | $ | 1,577,528 | $ | 705,129 | $ | 4,240,028 | $ | 6,767,268 | $ | 367 | $ | 6,767,635 | |||||||||||||
Net income | 369,240 | 369,240 | (1,162 | ) | 368,078 | ||||||||||||||||||||||
Other comprehensive loss, net of taxes | (167,079 | ) | (167,079 | ) | (167,079 | ) | |||||||||||||||||||||
Acquisition of Jefferies Group LLC | 119,363 | 3,266,336 | 3,385,699 | 356,180 | 3,741,879 | ||||||||||||||||||||||
Distribution of common shares of Crimson Wine Group, Ltd. to shareholders | (197,000 | ) | (197,000 | ) | (197,000 | ) | |||||||||||||||||||||
Contributions from noncontrolling interests | — | 65,870 | 65,870 | ||||||||||||||||||||||||
Distributions to noncontrolling interests | — | (355,086 | ) | (355,086 | ) | ||||||||||||||||||||||
Change in interest in consolidated subsidiary | (4,422 | ) | (4,422 | ) | 4,422 | — | |||||||||||||||||||||
Share-based compensation expense | 87,309 | 87,309 | 87,309 | ||||||||||||||||||||||||
Change in fair value of redeemable noncontrolling interests | (16,781 | ) | (16,781 | ) | (16,781 | ) | |||||||||||||||||||||
Exercise of options to purchase common shares, including excess tax benefit | 184 | 4,361 | 4,545 | 4,545 | |||||||||||||||||||||||
Purchase of common shares for treasury | (1,423 | ) | (38,601 | ) | (40,024 | ) | (40,024 | ) | |||||||||||||||||||
Dividends ($.25 per common share) | (93,428 | ) | (93,428 | ) | (93,428 | ) | |||||||||||||||||||||
Other | 1,834 | 5,301 | 7,135 | 7,135 | |||||||||||||||||||||||
Balance, December 31, 2013 | 364,541 | 4,881,031 | 538,050 | 4,318,840 | 10,102,462 | 70,591 | 10,173,053 | ||||||||||||||||||||
Net income | 204,306 | 204,306 | (727 | ) | 203,579 | ||||||||||||||||||||||
Other comprehensive loss, net of taxes | (90,968 | ) | (90,968 | ) | (90,968 | ) | |||||||||||||||||||||
Contributions from noncontrolling interests | — | 72,221 | 72,221 | ||||||||||||||||||||||||
Distributions to noncontrolling interests | — | (8,977 | ) | (8,977 | ) | ||||||||||||||||||||||
Deconsolidation of asset management entities | — | (77,475 | ) | (77,475 | ) | ||||||||||||||||||||||
Change in interest in consolidated subsidiary | (3,654 | ) | (3,654 | ) | 3,654 | — | |||||||||||||||||||||
Share-based compensation expense | 109,838 | 109,838 | 109,838 | ||||||||||||||||||||||||
Change in fair value of redeemable noncontrolling interests | 45,401 | 45,401 | 45,401 | ||||||||||||||||||||||||
Issuance of common shares for debt conversion | 4,606 | 92,940 | 97,546 | 97,546 | |||||||||||||||||||||||
Exercise of options to purchase common shares, including excess tax benefit | 36 | 777 | 813 | 813 | |||||||||||||||||||||||
Purchase of common shares for treasury | (2,990 | ) | (72,738 | ) | (75,728 | ) | (75,728 | ) | |||||||||||||||||||
Dividends ($.25 per common share) | (95,077 | ) | (95,077 | ) | (95,077 | ) | |||||||||||||||||||||
Other | 1,306 | 5,913 | 7,219 | 8,577 | 15,796 | ||||||||||||||||||||||
Balance, December 31, 2014 | 367,499 | 5,059,508 | 447,082 | 4,428,069 | 10,302,158 | 67,864 | 10,370,022 | ||||||||||||||||||||
Net income | 279,587 | 279,587 | (4,996 | ) | 274,591 | ||||||||||||||||||||||
Other comprehensive loss, net of taxes | (8,289 | ) | (8,289 | ) | (8,289 | ) | |||||||||||||||||||||
Contributions from noncontrolling interests | — | 16,189 | 16,189 | ||||||||||||||||||||||||
Distributions to noncontrolling interests | — | (7,277 | ) | (7,277 | ) | ||||||||||||||||||||||
Deconsolidation of asset management entities | — | (8,193 | ) | (8,193 | ) | ||||||||||||||||||||||
Change in interest in consolidated subsidiary | (1,092 | ) | (1,092 | ) | 1,092 | — | |||||||||||||||||||||
Share-based compensation expense | 74,087 | 74,087 | 74,087 | ||||||||||||||||||||||||
Change in fair value of redeemable noncontrolling interests | (26,325 | ) | (26,325 | ) | (26,325 | ) | |||||||||||||||||||||
Exercise of options to purchase common shares, including excess tax benefit | 2 | 42 | 44 | 44 | |||||||||||||||||||||||
Purchase of common shares for treasury | (5,953 | ) | (119,801 | ) | (125,754 | ) | (125,754 | ) | |||||||||||||||||||
Dividends ($.25 per common share) | (94,674 | ) | (94,674 | ) | (94,674 | ) | |||||||||||||||||||||
Other | 1,069 | 400 | 1,469 | — | 1,469 | ||||||||||||||||||||||
Balance, December 31, 2015 | $ | 362,617 | $ | 4,986,819 | $ | 438,793 | $ | 4,612,982 | $ | 10,401,211 | $ | 64,679 | $ | 10,465,890 |
Level 1: | Quoted prices are available in active markets for identical assets or liabilities as of the reported date. |
Level 2: | Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these financial instruments include cash instruments for which quoted prices are available but traded less frequently, derivative instruments whose fair value have been derived using a model where inputs to the model are directly observable in the market, or can be derived principally from or corroborated by observable market data, and instruments that are fair valued using other financial instruments, the parameters of which can be directly observed. |
Level 3: | Instruments that have little to no pricing observability as of the reported date. These financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation. |
Net revenues | $ | 11,083,248 | |
Net income attributable to Leucadia National Corporation | |||
common shareholders | $ | 267,160 | |
Basic income per common share attributable to Leucadia | |||
National Corporation common shareholders | $ | 0.70 | |
Diluted income per common share attributable to Leucadia | |||
National Corporation common shareholders | $ | 0.70 |
December 31, 2015 | |||||||||||||||||||
Level 1 (1) | Level 2 (1) | Level 3 | Counterparty and Cash Collateral Netting (2) | Total | |||||||||||||||
Assets: | |||||||||||||||||||
Trading assets, at fair value: | |||||||||||||||||||
Corporate equity securities | $ | 2,803,243 | $ | 133,732 | $ | 40,906 | $ | — | $ | 2,977,881 | |||||||||
Corporate debt securities | — | 2,867,165 | 25,876 | — | 2,893,041 | ||||||||||||||
Collateralized debt obligations | — | 89,144 | 85,092 | — | 174,236 | ||||||||||||||
U.S. government and federal agency securities | 2,555,018 | 90,633 | — | — | 2,645,651 | ||||||||||||||
Municipal securities | — | 487,141 | — | — | 487,141 | ||||||||||||||
Sovereign obligations | 1,251,366 | 1,407,955 | 120 | — | 2,659,441 | ||||||||||||||
Residential mortgage-backed securities | — | 2,731,070 | 70,263 | — | 2,801,333 | ||||||||||||||
Commercial mortgage-backed securities | — | 1,014,913 | 14,326 | — | 1,029,239 | ||||||||||||||
Other asset-backed securities | — | 118,629 | 42,925 | — | 161,554 | ||||||||||||||
Loans and other receivables | — | 1,123,044 | 189,289 | — | 1,312,333 | ||||||||||||||
Derivatives | 2,253 | 4,406,207 | 19,785 | (4,165,446 | ) | 262,799 | |||||||||||||
Investments at fair value | — | 26,224 | 199,794 | — | 226,018 | ||||||||||||||
Investment in FXCM | — | — | 625,689 | — | 625,689 | ||||||||||||||
Total trading assets, excluding investments at fair value based on NAV | $ | 6,611,880 | $ | 14,495,857 | $ | 1,314,065 | $ | (4,165,446 | ) | $ | 18,256,356 | ||||||||
Available for sale securities: | |||||||||||||||||||
Corporate equity securities | $ | 73,579 | $ | — | $ | — | $ | — | $ | 73,579 | |||||||||
Corporate debt securities | — | 4,744 | — | — | 4,744 | ||||||||||||||
U.S. government securities | 63,945 | — | — | — | 63,945 | ||||||||||||||
Residential mortgage-backed securities | — | 23,240 | — | — | 23,240 | ||||||||||||||
Commercial mortgage-backed securities | — | 2,374 | — | — | 2,374 | ||||||||||||||
Other asset-backed securities | — | 39,473 | — | — | 39,473 | ||||||||||||||
Total available for sale securities | $ | 137,524 | $ | 69,831 | $ | — | $ | — | $ | 207,355 | |||||||||
Cash and cash equivalents | $ | 3,638,648 | $ | — | $ | — | $ | — | $ | 3,638,648 | |||||||||
Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations | $ | 751,084 | $ | — | $ | — | $ | — | $ | 751,084 | |||||||||
Liabilities: | |||||||||||||||||||
Trading liabilities: | |||||||||||||||||||
Corporate equity securities | $ | 1,428,048 | $ | 36,518 | $ | 38 | $ | — | $ | 1,464,604 | |||||||||
Corporate debt securities | — | 1,556,941 | — | — | 1,556,941 | ||||||||||||||
Collateralized debt obligations | 1,488,121 | — | — | — | 1,488,121 | ||||||||||||||
U.S. government and federal agency securities | 837,614 | 505,382 | — | — | 1,342,996 | ||||||||||||||
Sovereign obligations | — | 117 | — | — | 117 | ||||||||||||||
Loans | — | 758,939 | 10,469 | — | 769,408 | ||||||||||||||
Derivatives | 364 | 4,456,334 | 19,543 | (4,257,998 | ) | 218,243 | |||||||||||||
Total trading liabilities | $ | 3,754,147 | $ | 7,314,231 | $ | 30,050 | $ | (4,257,998 | ) | $ | 6,840,430 | ||||||||
Other secured financings | $ | — | $ | — | $ | 544 | $ | — | $ | 544 |
December 31, 2014 | |||||||||||||||||||
Level 1 (1) | Level 2 (1) | Level 3 | Counterparty and Cash Collateral Netting (2) | Total | |||||||||||||||
Assets: | |||||||||||||||||||
Trading assets, at fair value: | |||||||||||||||||||
Corporate equity securities | $ | 3,130,892 | $ | 226,441 | $ | 20,964 | $ | — | $ | 3,378,297 | |||||||||
Corporate debt securities (3) | — | 3,342,276 | 22,766 | — | 3,365,042 | ||||||||||||||
Collateralized debt obligations (3) | — | 306,218 | 124,650 | — | 430,868 | ||||||||||||||
U.S. government and federal agency securities | 2,694,268 | 81,273 | — | — | 2,775,541 | ||||||||||||||
Municipal securities | — | 590,849 | — | — | 590,849 | ||||||||||||||
Sovereign obligations | 1,968,747 | 790,764 | — | — | 2,759,511 | ||||||||||||||
Residential mortgage-backed securities | — | 2,879,954 | 82,557 | — | 2,962,511 | ||||||||||||||
Commercial mortgage-backed securities | — | 966,651 | 26,655 | — | 993,306 | ||||||||||||||
Other asset-backed securities | — | 137,387 | 2,294 | — | 139,681 | ||||||||||||||
Loans and other receivables | — | 1,458,760 | 97,258 | — | 1,556,018 | ||||||||||||||
Derivatives | 65,145 | 5,046,278 | 54,190 | (4,759,345 | ) | 406,268 | |||||||||||||
Investments at fair value | — | 73,148 | 77,047 | — | 150,195 | ||||||||||||||
Physical commodities | — | 62,234 | — | — | 62,234 | ||||||||||||||
Total trading assets, excluding investments at fair value based on NAV | $ | 7,859,052 | $ | 15,962,233 | $ | 508,381 | $ | (4,759,345 | ) | $ | 19,570,321 | ||||||||
Available for sale securities: | |||||||||||||||||||
Corporate equity securities | $ | 89,353 | $ | — | $ | — | $ | — | $ | 89,353 | |||||||||
Corporate debt securities | — | 30,403 | — | — | 30,403 | ||||||||||||||
U.S. government securities | 593,773 | — | — | — | 593,773 | ||||||||||||||
Residential mortgage-backed securities | — | 606,683 | — | — | 606,683 | ||||||||||||||
Commercial mortgage-backed securities | — | 43,401 | — | — | 43,401 | ||||||||||||||
Other asset-backed securities | — | 245,156 | — | — | 245,156 | ||||||||||||||
Total available for sale securities | $ | 683,126 | $ | 925,643 | $ | — | $ | — | $ | 1,608,769 | |||||||||
Cash and cash equivalents | $ | 4,276,775 | $ | — | $ | — | $ | — | $ | 4,276,775 | |||||||||
Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations (4) | $ | 3,444,674 | $ | — | $ | — | $ | — | $ | 3,444,674 | |||||||||
Securities received as collateral | $ | 5,418 | $ | — | $ | — | $ | — | $ | 5,418 | |||||||||
Liabilities: | |||||||||||||||||||
Trading liabilities: | |||||||||||||||||||
Corporate equity securities | $ | 1,934,469 | $ | 74,681 | $ | 38 | $ | — | $ | 2,009,188 | |||||||||
Corporate debt securities | — | 1,611,994 | 223 | — | 1,612,217 | ||||||||||||||
Collateralized debt obligations | — | 4,557 | — | — | 4,557 | ||||||||||||||
U.S. government and federal agency securities | 2,253,055 | — | — | — | 2,253,055 | ||||||||||||||
Sovereign obligations | 1,217,075 | 574,010 | — | — | 1,791,085 | ||||||||||||||
Loans | — | 856,525 | 14,450 | — | 870,975 | ||||||||||||||
Derivatives | 52,778 | 5,117,803 | 49,552 | (4,856,618 | ) | 363,515 | |||||||||||||
Total trading liabilities | $ | 5,457,377 | $ | 8,239,570 | $ | 64,263 | $ | (4,856,618 | ) | $ | 8,904,592 | ||||||||
Other secured financings | $ | — | $ | — | $ | 30,825 | $ | — | $ | 30,825 | |||||||||
Obligation to return securities received as collateral | $ | 5,418 | $ | — | $ | — | $ | — | $ | 5,418 |
(1) | There were no material transfers between Level 1 and Level 2 during the year ended December 31, 2015. During 2014, equity options presented within Trading assets and Trading liabilities of $6.1 million and $6.6 million, respectively, were |
(2) | Represents counterparty and cash collateral netting across the levels of the fair value hierarchy for positions with the same counterparty. |
(3) | Level 3 Collateralized debt obligations increased by $33.2 million with a corresponding decrease in Level 3 Corporate debt securities from those previously reported to correct for the classification of certain positions. The total amount of Level 3 assets remained unchanged. |
(4) | Securities comprise U.S. government securities segregated for regulatory purposes with a fair value of $453.7 million at December 31, 2014 and CFTC approved money market funds with a fair value of $545.0 million at December 31, 2014. |
• | 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 or Level 3 of the fair value hierarchy. |
• | 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 for recently executed market transactions and are categorized within Level 2 of the fair value hierarchy. Where such information is not available, non-exchange traded equity securities are categorized within Level 3 of the fair value hierarchy and measured using valuation techniques involving quoted prices of or market data for comparable companies, similar company ratios and multiples (e.g., price/EBITDA, price/book value), discounted cash flow analyses and transaction prices observed for subsequent financing or capital issuance by the company. When using pricing data of comparable companies, judgment must be applied to adjust the pricing data to account for differences between the measured security and the comparable security (e.g., issuer market capitalization, yield, dividend rate, geographical concentration). |
• | Equity Warrants: 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. |
• | Corporate Bonds: Corporate bonds are measured primarily using pricing data from external pricing services and broker quotations, where available, prices observed for recently executed market transactions of comparable size, and bond spreads or credit default swap spreads of the issuer adjusted for basis differences between the swap curve and the bond curve. 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. Corporate bonds measured using alternative valuation techniques are categorized within Level 3 of the fair value hierarchy and comprise a limited portion of our 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 for recently executed market transactions of comparable size. Where pricing data is less observable, valuations are categorized within Level 3 and are based on pending transactions involving the issuer or comparable issuers, prices implied from an issuer’s subsequent financings or recapitalizations, 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 and categorized within Level 1 of the fair value hierarchy. |
• | U.S. Agency Issued Debt Securities: Callable and non-callable U.S. agency issued debt securities are measured primarily based on quoted market prices obtained from external pricing services. Non-callable U.S. agency securities are generally categorized within Level 1 and callable U.S. agency securities are categorized within 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 interest-only and principal-only securities and are generally measured using market price quotations from external pricing services and categorized within Level 2 of the fair value hierarchy. |
• | Agency Residential Interest-Only and Inverse Interest-Only Securities ("Agency Inverse IOs"): The fair value of Agency Inverse IOs is estimated using expected future cash flow techniques that incorporate prepayment models and other prepayment assumptions to amortize the underlying mortgage loan collateral. We use prices observed for recently executed transactions to develop market-clearing spread and yield curve assumptions. Valuation inputs with regard to the underlying collateral incorporate weighted average coupon, loan-to-value, credit scores, geographic location, maximum and average loan size, originator, servicer, and weighted average loan age. Agency Inverse IOs are categorized within Level 2 or Level 3 of the fair value hierarchy. We also use vendor data in developing our assumptions, as appropriate. |
• | Non-Agency Residential Mortgage-Backed Securities: Fair values are 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. |
• | Agency Commercial Mortgage-Backed Securities: Government National Mortgage Association (“GNMA”) project loans are measured based on inputs corroborated from and benchmarked to observed prices of recent securitization transactions of similar securities with adjustments incorporating an evaluation for 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 for 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 and prices observed for recently executed market transactions and are categorized within Level 2 and Level 3 of the fair value hierarchy. |
• | Corporate Loans: Corporate loans categorized within Level 2 of the fair value hierarchy are measured based on market price quotations where market price quotations from external pricing services are supported by market transaction data. Corporate loans categorized within Level 3 of the fair value hierarchy are measured based on market price quotations that are considered to be less transparent, market prices for debt securities of the same creditor, and estimates of future cash flow 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. 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 of assets with similar underlying loan collateral to derive an implied spread. Securitization prices are adjusted to estimate the fair value of the loans incorporating an evaluation for various factors, including prepayment speeds, default rates, and cash flow structures as well as the likelihood of pricing levels in the current market environment. 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 incorporating additional 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 Trade Claim Receivables: Escrow and trade 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 trade claim receivables are categorized within Level 2 of the fair value hierarchy where fair value is based on recent trade activity in the same security. |
• | Listed Derivative Contracts: Listed derivative contracts that are actively traded are measured based on quoted exchange prices, which are generally obtained from external pricing services, and are categorized within Level 1 of the fair value hierarchy. Listed derivatives for which there is limited trading activity are measured based on incorporating the closing auction price of the underlying equity security, use similar valuation approaches as those applied to over-the-counter derivative contracts and are categorized within Level 2 of the fair value hierarchy. |
• | OTC Derivative Contracts: Over-the-counter ("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 period transaction. Inputs to valuation models are appropriately calibrated to 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. |
• | National Beef Derivatives: National Beef uses futures contracts in order to reduce its exposure associated with entering into firm commitments to purchase live cattle at prices determined prior to the delivery of the cattle as well as firm commitments to sell certain beef products at sales prices determined prior to shipment. The futures contracts and their related firm purchase commitments are accounted for at fair value, which are classified as Level 1 or Level 2 within the fair value hierarchy. Certain firm commitments for live cattle purchases and all firm commitments for sales are treated as normal purchases and sales and therefore not marked to market. Fair values classified as Level 1 are calculated based on the quoted market prices of identical assets or liabilities compared to National Beef's cost of those same assets or liabilities. Fair values classified as Level 2 are calculated based on the difference between the contracted price for live cattle and the relevant quoted market price for live cattle futures. |
• | Oil Futures Derivatives: Vitesse uses call and put options in order to reduce exposure to future oil price fluctuations. Vitesse accounts for the derivative instruments at fair value, which are classified as Level 2 within the fair value hierarchy. Fair values classified as Level 2 are determined under the income valuation technique using an option-pricing model that is based on directly or indirectly observable inputs. |
Fair Value (1) | Unfunded Commitments | Redemption Frequency (if currently eligible) | |||||||
December 31, 2015 | |||||||||
Equity Long/Short Hedge Funds (2) | $ | 482,570 | $ | — | (2) | ||||
Fixed Income and High Yield Hedge Funds (3) | 1,703 | — | — | ||||||
Fund of Funds (4) | 287 | 94 | — | ||||||
Equity Funds (5) | 42,111 | 20,791 | — | ||||||
Convertible Bond Funds (6) | 326 | — | At Will | ||||||
Multi-strategy Fund (7) | 113,458 | — | — | ||||||
Total | $ | 640,455 | $ | 20,885 | |||||
December 31, 2014 | |||||||||
Equity Long/Short Hedge Funds (2) | $ | 146,134 | $ | — | Monthly/Quarterly | ||||
Fixed Income and High Yield Hedge Funds (3) | 2,704 | — | — | ||||||
Fund of Funds (4) | 323 | 94 | — | ||||||
Equity Funds (5) | 65,216 | 26,023 | — | ||||||
Convertible Bond Funds (6) | 3,355 | — | At Will | ||||||
Multi-strategy Fund (7) | 105,954 | — | — | ||||||
Total | $ | 323,686 | $ | 26,117 | |||||
(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, in equity securities in domestic and international markets in both the public and private sectors. At December 31, 2015, investments with a fair value of $107.1 million and at December 31, 2014 substantially all of the investments in this category are redeemable with 30 to 90 days prior written notice, and includes an investment in a private asset management fund managed by us with a fair value of $52.4 million and $117.2 million at December 31, 2015 and 2014, respectively. At December 31, 2015, this category also includes investments in two Folger Hill feeder funds that invest solely in a Folger Hill master fund that makes long/short equity investments, with broad industry and geographic diversification. Investment in these funds is subject to a lock-up until August 15, 2019, subject to certain release events and other withdrawal rights. Following this date, investments can be redeemed as of any calendar quarter-end with no less than 45 calendar days’ notice, subject to |
(3) | Includes investments in funds that invest 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. There are no redemption provisions. At December 31, 2015 and 2014, the underlying assets of 8% and 8%, respectively, of these funds are being liquidated and we are unable to estimate when the underlying assets will be fully liquidated. |
(4) | Includes investments in fund of funds that invest in various private equity funds. At December 31, 2015 and 2014, approximately 95% and 95%, respectively, of the fair value of investments in this category is managed by us and have no redemption provisions, instead distributions are received through the liquidation of the underlying assets of the fund of funds, which are estimated to be liquidated in the next twelve months. For the remaining investments, we have requested redemption; however, we are unable to estimate when these funds will be received. |
(5) | At December 31, 2015 and 2014, investments representing approximately 100% and 99%, respectively, of the fair value of investments in this category include investments in equity funds that invest in the equity of various U.S. and foreign private companies in the energy, technology, internet service and telecommunication service industries. These investments cannot be redeemed, instead distributions are received through the liquidation of the underlying assets of the funds which are expected to liquidate in one to eight years. |
(6) | Investment in the Jefferies Umbrella Fund, an open-ended investment company managed by Jefferies that invests primarily in convertible bonds. The remaining investments are in liquidation and we are unable to estimate when the underlying assets will be fully liquidated. |
(7) | Investment in private asset management fund managed by us that employs a variety of investment strategies and can invest in U.S. and non-U.S. equity and equity related securities, futures, exchange traded funds, fixed income securities, preferred securities, options, forward contracts and swaps. Withdrawals from the fund prior to the first year anniversary of the investment are subject to a 5% withdrawal fee and withdrawals during any calendar quarter are limited to 25% of the fund’s net asset value. Both of these restrictions can be waived by us, in our sole discretion. |
Year Ended December 31, 2015 | |||||||||||||||||||||||||||||||||||
Balance, December 31, 2014 | Total gains (losses) (realized and unrealized) (1) | Purchases | Sales | Settlements | Issuances | Net transfers into (out of) Level 3 | Balance at December 31, 2015 | Changes in unrealized gains (losses) relating to instruments still held at December 31, 2015 (1) | |||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||
Trading assets: | |||||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 20,964 | $ | 11,154 | $ | 21,385 | $ | (6,391 | ) | $ | — | $ | — | $ | (6,206 | ) | $ | 40,906 | $ | 11,424 | |||||||||||||||
Corporate debt securities | 22,766 | (11,013 | ) | 21,534 | (14,636 | ) | — | — | 7,225 | 25,876 | (9,443 | ) | |||||||||||||||||||||||
Collateralized debt obligations | 124,650 | (66,332 | ) | 104,998 | (107,381 | ) | (5,754 | ) | — | 34,911 | 85,092 | (48,514 | ) | ||||||||||||||||||||||
Municipal securities | — | 10 | — | — | (21,551 | ) | — | 21,541 | — | — | |||||||||||||||||||||||||
Sovereign obligations | — | 47 | 1,032 | (1,031 | ) | — | — | 72 | 120 | 39 | |||||||||||||||||||||||||
Residential mortgage-backed securities | 82,557 | (12,951 | ) | 18,961 | (31,762 | ) | (597 | ) | — | 14,055 | 70,263 | (4,498 | ) | ||||||||||||||||||||||
Commercial mortgage-backed securities | 26,655 | (3,813 | ) | 3,480 | (10,146 | ) | (6,861 | ) | — | 5,011 | 14,326 | (3,205 | ) | ||||||||||||||||||||||
Other asset-backed securities | 2,294 | (990 | ) | 42,922 | (1,299 | ) | (2 | ) | — | — | 42,925 | (254 | ) | ||||||||||||||||||||||
Loans and other receivables | 97,258 | (14,755 | ) | 792,345 | (576,536 | ) | (124,365 | ) | — | 15,342 | 189,289 | (16,802 | ) | ||||||||||||||||||||||
Investments at fair value | 77,047 | 62,804 | 5,510 | (425 | ) | (4,093 | ) | — | 58,951 | 199,794 | (1,964 | ) | |||||||||||||||||||||||
Investment in FXCM | — | 491,341 | 279,000 | — | (144,652 | ) | — | — | 625,689 | 491,341 | |||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||
Trading liabilities: | |||||||||||||||||||||||||||||||||||
Corporate equity securities | 38 | — | — | — | — | — | — | 38 | — | ||||||||||||||||||||||||||
Corporate debt securities | 223 | (110 | ) | (6,804 | ) | 6,691 | — | — | — | — | — | ||||||||||||||||||||||||
Net derivatives (2) | (4,638 | ) | (7,310 | ) | (6,705 | ) | 13,522 | 37 | 2,437 | 2,415 | (242 | ) | 4,754 | ||||||||||||||||||||||
Loans | 14,450 | (163 | ) | (2,059 | ) | 229 | — | — | (1,988 | ) | 10,469 | 104 | |||||||||||||||||||||||
Other secured financings | 30,825 | — | — | — | (15,704 | ) | 36,995 | (51,572 | ) | 544 | — |
(1) | Realized and unrealized gains (losses) are reported in Principal transactions in the Consolidated Statements of Operations. |
(2) | Net derivatives represent Trading assets - Derivatives and Trading liabilities - Derivatives. |
• | Collateralized debt obligations of $69.8 million, non-agency residential mortgage-backed securities of $30.4 million and commercial mortgage-backed securities of $11.3 million for which no recent trade activity was observed for purposes of determining observable inputs; |
• | Municipal securities of $21.5 million and loans and other receivables of $20.1 million due to a lower number of contributors comprising vendor quotes to support classification within Level 2; |
• | Corporate debt securities of $7.4 million and investments at fair value of $74.7 million due to a lack of observable market transactions. |
• | Non-agency residential mortgage-backed securities of $16.3 million and commercial mortgage-backed securities of $6.3 million for which market trades were observed in the period for either identical or similar securities; |
• | Collateralized debt obligations of $34.9 million and loans and other receivables of $4.7 million due to a greater number of contributors for certain vendor quotes supporting classification into Level 2; |
• | Investments at fair value of $15.8 million due to an increase in observable market transactions; |
• | Corporate equity securities of $7.7 million due to an increase in observable market transactions. |
Year Ended December 31, 2014 | |||||||||||||||||||||||||||||||||||
Balance, December 31, 2013 | Total gains (losses) (realized and unrealized) (1) | Purchases | Sales | Settlements | Issuances | Net transfers into (out of) Level 3 | Balance, December 31, 2014 | Changes in unrealized gains (losses) relating to instruments still held at December 31, 2014 (1) | |||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||
Trading assets: | |||||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 9,884 | $ | 957 | $ | 18,138 | $ | (12,826 | ) | $ | — | $ | — | $ | 4,811 | $ | 20,964 | $ | 2,324 | ||||||||||||||||
Corporate debt securities | 25,666 | 6,629 | 38,316 | (40,328 | ) | — | — | (7,517 | ) | $ | 22,766 | 8,982 | |||||||||||||||||||||||
Collateralized debt obligations | 37,216 | (6,386 | ) | 204,337 | (181,757 | ) | (1,297 | ) | — | 72,537 | $ | 124,650 | (1,141 | ) | |||||||||||||||||||||
U.S. government and federal agency securities | — | 13 | 2,505 | (2,518 | ) | — | — | — | $ | — | — | ||||||||||||||||||||||||
Residential mortgage backed securities | 105,492 | (9,870 | ) | 42,632 | (61,689 | ) | (1,847 | ) | — | 7,839 | $ | 82,557 | (4,679 | ) | |||||||||||||||||||||
Commercial mortgage-backed securities | 17,568 | (4,237 | ) | 49,159 | (51,360 | ) | (782 | ) | — | 16,307 | $ | 26,655 | (2,384 | ) | |||||||||||||||||||||
Other asset-backed securities | 12,611 | 1,784 | 4,987 | (18,002 | ) | — | — | 914 | $ | 2,294 | 1,484 | ||||||||||||||||||||||||
Loans and other receivables | 145,890 | (31,311 | ) | 130,169 | (92,140 | ) | (60,390 | ) | — | 5,040 | $ | 97,258 | (26,864 | ) | |||||||||||||||||||||
Investments at fair value | 66,931 | 17,642 | 32,493 | (23,324 | ) | (1,243 | ) | — | (15,452 | ) | $ | 77,047 | 1,985 | ||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||
Trading liabilities: | |||||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 38 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 38 | $ | — | |||||||||||||||||
Corporate debt securities | — | (149 | ) | (565 | ) | 960 | — | — | (23 | ) | $ | 223 | (8 | ) | |||||||||||||||||||||
Net derivatives (2) | 6,905 | 15,055 | (24,682 | ) | 1,094 | 322 | — | (3,332 | ) | $ | (4,638 | ) | (15,615 | ) | |||||||||||||||||||||
Loans | 22,462 | — | (18,332 | ) | 11,338 | — | — | (1,018 | ) | $ | 14,450 | — | |||||||||||||||||||||||
Other secured financings | 8,711 | — | — | — | (17,525 | ) | 39,639 | — | $ | 30,825 | — |
(1) | Realized and unrealized gains (losses) are reported in Principal transactions in the Consolidated Statements of Operations. |
(2) | Net derivatives represent Trading assets - Derivatives and Trading liabilities - Derivatives. |
• | Non-agency residential mortgage-backed securities of $30.3 million and commercial mortgage-backed securities of $16.6 million for which no recent trade activity was observed for purposes of determining observable inputs; |
• | Loans and other receivables of $8.5 million due to a lower number of contributors comprising vendor quotes to support classification within Level 2; |
• | Collateralized debt obligations of $73.0 million which have little to no transparency related to trade activity; |
• | Corporate equity securities of $9.7 million due to a lack of observable market transactions. |
• | Non-agency residential mortgage-backed securities of $22.4 million for which market trades were observed in the period for either identical or similar securities; |
• | Loans and other receivables of $3.5 million and investments at fair value of $15.5 million due to a greater number of contributors for certain vendor quotes supporting classification into Level 2; |
• | Corporate equity securities of $4.9 million and corporate debt securities of $7.5 million due to an increase in observable market transactions. |
Period from the Jefferies Acquisition through December 31, 2013 (3) | |||||||||||||||||||||||||||||||
Beginning Balance | Total gains (losses) (realized and unrealized) (1) | Purchases | Sales | Settlements | Net transfers into (out of) Level 3 | Balance at December 31, 2013 | Changes in unrealized gains (losses) relating to instruments still held at December 31, 2013 (1) | ||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||
Trading assets: | |||||||||||||||||||||||||||||||
Corporate equity securities | $ | 13,234 | $ | 1,551 | $ | 3,583 | $ | (7,141 | ) | $ | — | $ | (1,343 | ) | $ | 9,884 | $ | (419 | ) | ||||||||||||
Corporate debt securities | 31,820 | (2,454 | ) | 31,014 | (34,125 | ) | — | (589 | ) | $ | 25,666 | (2,749 | ) | ||||||||||||||||||
Collateralized debt obligations | 24,736 | (2,309 | ) | 45,437 | (32,874 | ) | — | 2,226 | $ | 37,216 | (8,384 | ) | |||||||||||||||||||
Residential mortgage-backed securities | 169,426 | (4,897 | ) | 89,792 | (150,807 | ) | (11,007 | ) | 12,985 | $ | 105,492 | (6,932 | ) | ||||||||||||||||||
Commercial mortgage-backed securities | 17,794 | (4,469 | ) | 20,130 | (13,538 | ) | (100 | ) | (2,249 | ) | $ | 17,568 | (3,794 | ) | |||||||||||||||||
Other asset-backed securities | 1,292 | (4,535 | ) | 105,291 | (104,711 | ) | — | 15,274 | $ | 12,611 | (3,497 | ) | |||||||||||||||||||
Loans and other receivables | 170,986 | 15,008 | 287,757 | (115,231 | ) | (211,805 | ) | (825 | ) | $ | 145,890 | 13,402 | |||||||||||||||||||
Investments at fair value | 39,693 | (1,317 | ) | 28,515 | (102 | ) | (875 | ) | 1,017 | $ | 66,931 | (1,290 | ) | ||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||
Trading liabilities: | |||||||||||||||||||||||||||||||
Corporate equity securities | $ | 38 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 38 | $ | — | |||||||||||||||
Residential mortgage-backed securities | 1,542 | (1,542 | ) | — | — | — | — | $ | — | — | |||||||||||||||||||||
Net derivatives (2) | 11,185 | 4,408 | — | (300 | ) | (8,515 | ) | 127 | $ | 6,905 | 1,609 | ||||||||||||||||||||
Loans | 7,398 | 2,959 | (16,027 | ) | 28,065 | 67 | — | $ | 22,462 | (2,970 | ) |
(1) | Realized and unrealized gains (losses) are reported in Principal transactions in the Consolidated Statements of Operations. |
(2) | Net derivatives represent Trading assets - Derivatives and Trading liabilities - Derivatives. |
(3) | In addition to the above changes in the fair value of our financial assets and liabilities that have been categorized within Level 3 of the fair value hierarchy, during the period from the Jefferies acquisition through December 31, 2013, secured financings of $8.7 million were issued. |
• | Non-agency residential mortgage-backed securities of $58.8 million and other asset-backed securities of $16.4 million for which no recent trade activity was observed for purposes of determining observable inputs; |
• | Loans and other receivables of $0.8 million due to a lower number of contributors comprising vendor quotes to support classification within Level 2; |
• | Corporate equity securities of $2.3 million, corporate debt securities of $0.2 million and investments at fair value of $1.0 million due to lack of observable market transactions; |
• | Collateralized debt obligations of $2.8 million which have little to no transparency in trade activity. |
• | Non-agency residential mortgage-backed securities of $45.9 million, commercial mortgage-backed securities of $2.2 million and other asset-backed securities of $1.1 million for which market trades were observed in the period for either identical or similar securities; |
• | Collateralized debt obligations of $0.6 million and loans and other receivables of $1.7 million due to a greater number of contributors for certain vendor quotes supporting classification into Level 2; |
• | Corporate equity securities of $3.6 million and corporate debt securities of $0.8 million due to an increase in observable market transactions. |
December 31, 2015 | |||||||||||||
Financial Instruments Owned | Fair Value (in thousands) | Valuation Technique | Significant Unobservable Input(s) | Input/Range | Weighted Average | ||||||||
Corporate equity securities | $ | 20,285 | |||||||||||
Non-exchange traded securities | Market approach | EBITDA (a) multiple | 4.4 | — | |||||||||
Transaction level | $1 | — | |||||||||||
Underlying stock price | $5 to $102 | $19.0 | |||||||||||
Corporate debt securities | $ | 20,257 | Convertible bond model | Discount rate/yield | 86% | — | |||||||
Market approach | Transaction level | $59 | — | ||||||||||
Collateralized debt obligations | $ | 49,923 | Discounted cash flows | Constant prepayment rate | 5% to 20% | 13 | % | ||||||
Constant default rate | 2% to 8% | 2 | % | ||||||||||
Loss severity | 25% to 90% | 52 | % | ||||||||||
Yield | 6% to 13% | 10 | % | ||||||||||
Residential mortgage-backed securities | $ | 70,263 | Discounted cash flows | Constant prepayment rate | 0% to 50% | 13 | % | ||||||
Constant default rate | 1% to 9% | 3 | % | ||||||||||
Loss severity | 25% to 70% | 39 | % | ||||||||||
Yield | 1% to 9% | 6 | % | ||||||||||
Commercial mortgage-backed securities | $ | 14,326 | Discounted cash flows | Yield | 7% to 30% | 16 | % | ||||||
Cumulative loss rate | 2% to 63% | 23 | % | ||||||||||
Other asset-backed securities | $ | 21,463 | Discounted cash flows | Constant prepayment rate | 6% to 8% | 7 | % | ||||||
Constant default rate | 3% to 5% | 4 | % | ||||||||||
Loss severity | 55% to 75% | 62 | % | ||||||||||
Yield | 7% to 22% | 18 | % | ||||||||||
Over-collateralization | Over-collateralization percentage | 117% to 125% | 118 | % | |||||||||
Loans and other receivables | $ | 161,470 | Comparable pricing | Comparable loan price | $99 to $100 | $99.7 | |||||||
Market approach | Discount rate/yield | 2% to 17% | 12 | % | |||||||||
EBITDA (a) multiple | 10.0 | — | |||||||||||
Scenario analysis | Estimated recovery percentage | 6% to 100% | 83 | % | |||||||||
Derivatives | $ | 19,785 | |||||||||||
Commodity forwards | Market approach | Discount rate/yield | 47% | — | |||||||||
Transaction level | $9,500,000 | — | |||||||||||
Unfunded commitment | Comparable pricing | Comparable loan price | $100 | — | |||||||||
Market approach | Credit spread | 298 bps | — | ||||||||||
Total return swap | Comparable pricing | Comparable loan price | $91.7 to $92.4 | $92.1 | |||||||||
Investments at fair value | |||||||||||||
Private equity securities | $ | 29,940 | Market approach | Transaction Level | $64 | — | |||||||
Enterprise value | $5,200,000 | ||||||||||||
Discount rate | 15% to 30% | 23 | % | ||||||||||
Investment in FXCM | |||||||||||||
Term loan | $ | 203,700 | Discounted cash flows | Term based on the pay off | 0 months to 1.0 year | 0.4 years | |||||||
Rights | 422,000 | Option pricing model | Volatility | 110% | — | ||||||||
$ | 625,700 | ||||||||||||
Trading Liabilities | Fair Value (in thousands) | Valuation Technique | Significant Unobservable Input(s) | Input/Range | Weighted Average | ||||||||
Derivatives | $ | 19,543 | |||||||||||
Equity options | Option model | Volatility | 45% | — | |||||||||
Default rate | Default probability | 0% | — | ||||||||||
Unfunded commitments | Comparable pricing | Comparable loan price | $79 to $100 | $82.6 | |||||||||
Market approach | Discount rate/yield | 3% to 10% | 10 | % | |||||||||
Discounted cash flows | Constant prepayment rate | 20% | — | ||||||||||
Constant default rate | 2% | — | |||||||||||
Loss severity | 25% | — | |||||||||||
Yield | 11% | — | |||||||||||
Total return swaps | Comparable pricing | Comparable loan price | $91.7 to $92.4 | $92.1 | |||||||||
Loans | $ | 10,469 | Comparable pricing | Comparable loan price | $100 | — |
December 31, 2014 | |||||||||||||
Financial Instruments Owned | Fair Value (in thousands) | Valuation Technique | Significant Unobservable Input(s) | Input/Range | Weighted Average | ||||||||
Corporate equity securities | $ | 19,814 | |||||||||||
Non-exchange traded securities | Market approach | EBITDA (a) multiple | 3.4 to 4.7 | 3.6 | |||||||||
Scenario analysis | Estimated recovery percentage | 24% | — | ||||||||||
Corporate debt securities | $ | 22,766 | Convertible bond model | Discount rate/yield | 32% | — | |||||||
Collateralized debt obligations | $ | 41,784 | Discounted cash flows | Constant prepayment rate | 0% to 20% | 13 | % | ||||||
Constant default rate | 0% to 2% | 2 | % | ||||||||||
Loss severity | 0% to 70% | 39 | % | ||||||||||
Yield | 2% to 51% | 16 | % | ||||||||||
Residential mortgage-backed securities | $ | 82,557 | Discounted cash flows | Constant prepayment rate | 1% to 50% | 13 | % | ||||||
Constant default rate | 1% to 100% | 14 | % | ||||||||||
Loss severity | 20% to 80% | 50 | % | ||||||||||
Yield | 3% to 13% | 7 | % | ||||||||||
Commercial mortgage-backed securities | $ | 26,655 | Discounted cash flows | Yield | 8% to 12% | 11 | % | ||||||
Cumulative loss rate | 4% to 72% | 15 | % | ||||||||||
Scenario analysis | Estimated recovery percentage | 90% | — | ||||||||||
Other asset-backed securities | $ | 2,294 | Discounted cash flows | Constant prepayment rate | 8% | — | |||||||
Constant default rate | 3% | — | |||||||||||
Loss severity | 70% | — | |||||||||||
Yield | 7% | — | |||||||||||
Loans and other receivables | $ | 88,154 | Comparable pricing | Comparable loan price | $100 to $101 | $100.3 | |||||||
Market approach | Yield | 3% to 5% | 4 | % | |||||||||
EBITDA (a) multiple | 3.4 to 8.2 | 7.6 | |||||||||||
Scenario analysis | Estimated recovery percentage | 10% to 41% | 36 | % | |||||||||
Derivatives | $ | 54,190 | |||||||||||
Foreign exchange options | Option model | Volatility | 13% to 23% | 17 | % | ||||||||
Commodity forwards | Discounted cash flows | Discount rate | 17% | — | |||||||||
Loan commitments | Comparable pricing | Comparable loan price | $100 | — | |||||||||
Investments at fair value | |||||||||||||
Private equity securities | $ | 32,323 | Market approach | Transaction Level | $50 | — | |||||||
Market approach | Discount rate | 15% to 30% | 23 | % | |||||||||
Trading Liabilities | Fair Value (in thousands) | Valuation Technique | Significant Unobservable Input(s) | Input/Range | Weighted Average | ||||||||
Derivatives | $ | 49,552 | |||||||||||
FX options | Option model | Volatility | 13% to 23% | 17 | % | ||||||||
Unfunded commitments | Comparable pricing | Comparable loan price | $89 to $100 | $92.0 | |||||||||
Credit spread | 45 bps | — | |||||||||||
Market approach | Yield | 5% | — | ||||||||||
Loans | $ | 14,450 | Comparable pricing | Comparable loan price | $100 | — | |||||||
Other secured financings | $ | 30,825 | Comparable pricing | Comparable loan price | $81 to $100 | $98.7 |
(a) | Earnings before interest, taxes, depreciation and amortization (“EBITDA”). |
• | Loans and other receivables, loan and unfunded commitments, total return swaps and other secured financings using comparable pricing valuation techniques. A significant increase (decrease) in the comparable loan price in isolation would result in a significantly higher (lower) fair value measurement. |
• | Corporate debt securities using a convertible bond model. A significant increase (decrease) in the bond discount rate/yield would result in a significantly higher (lower) fair value measurement. |
• | Non-exchange traded securities, corporate debt securities, loans and other receivables, unfunded commitments, commodity forwards and private equity securities using a market approach valuation technique. A significant increase (decrease) in the EBITDA or other multiples in isolation would result in a significantly higher (lower) fair value measurement. A significant increase (decrease) in the yield of a corporate debt security, loan and other receivable or unfunded commitment would result in a significantly lower (higher) fair value measurement. A significant increase (decrease) in the transaction level of a private equity security would result in a significantly higher (lower) fair value measurement. |
• | Non-exchange traded securities, commercial mortgage-backed securities and loans and other receivables using scenario analysis. A significant increase (decrease) in the possible recovery rates of the cash flow outcomes underlying the investment would result in a significantly higher (lower) fair value measurement for the financial instrument. |
• | Collateralized debt obligations, certain corporate debt securities, residential and commercial mortgage-backed securities, other asset-backed securities, commodity forwards and unfunded commitments using a discounted cash flow valuation technique. A significant increase (decrease) in isolation in the constant default rate and loss severities or cumulative loss rate would result in a significantly lower (higher) fair value measurement. The impact of changes in the constant prepayment rate would have differing impacts depending on the capital structure of the security. A significant increase (decrease) in the loan or bond yield would result in a significantly lower (higher) fair value measurement. |
• | Certain other asset-backed securities using an over-collateralization model. A significant increase (decrease) in the over-collateralization percentage would result in a significantly higher (lower) fair value measurement. |
• | Derivative foreign exchange and equity options using an option model. A significant increase (decrease) in volatility would result in a significantly higher (lower) fair value measurement. |
• | Derivative equity options using a default rate model. A significant increase (decrease) in default probability would result in a significantly higher (lower) fair value measurement. |
• | Investment in FXCM using a discounted cash flow valuation technique and an option pricing model. A significant increase in term based on the time to pay off the loan would result in a significantly higher fair value measurement. A significant increase (decrease) in volatility or time to liquidity event would result in a significantly lower (higher) fair value measurement. |
For the year ended December 31, 2015 | For the year ended December 31, 2014 | For the period from the Jefferies acquisition through December 31, 2013 | |||||||||
Financial Instruments Owned: | |||||||||||
Loans and other receivables | $ | (17,389 | ) | $ | (24,785 | ) | $ | (15,327 | ) | ||
Financial Instruments Sold: | |||||||||||
Loans | $ | (162 | ) | $ | (585 | ) | $ | (32 | ) | ||
Loan commitments | $ | 7,502 | $ | (15,459 | ) | $ | (1,007 | ) |
Balance at December 31, 2015 | Balance at December 31, 2014 | ||||||
Loans and other receivables (1) | $ | 408,369 | $ | 403,119 | |||
Loans and other receivables greater than 90 days past due (1) | $ | 29,720 | $ | 5,594 | |||
Loans and other receivables on nonaccrual status (1) (2) | $ | 54,652 | $ | (22,360 | ) |
(1) | Interest income is recognized separately from other changes in fair value and is included within Interest income in the Consolidated Statements of Operations. |
(2) | Amount includes all loans and other receivables greater than 90 or more days past due. |
Assets | Liabilities | ||||||||||||
Fair Value | Number of Contracts | Fair Value | Number of Contracts | ||||||||||
December 31, 2015 | |||||||||||||
Interest rate contracts | $ | 2,910,093 | 56,748 | $ | 2,849,958 | 74,904 | |||||||
Foreign exchange contracts | 472,869 | 8,118 | 470,649 | 7,404 | |||||||||
Equity contracts | 1,017,611 | 3,057,754 | 1,094,597 | 2,947,416 | |||||||||
Commodity contracts | 8,248 | 2,867 | 882 | 1,973 | |||||||||
Credit contracts: centrally cleared swaps | 2,447 | 299 | 841 | 44 | |||||||||
Credit contracts: other credit derivatives | 16,977 | 100 | 59,314 | 135 | |||||||||
Total | 4,428,245 | 4,476,241 | |||||||||||
Counterparty/cash-collateral netting | (4,165,446 | ) | (4,257,998 | ) | |||||||||
Total | $ | 262,799 | $ | 218,243 | |||||||||
December 31, 2014 | |||||||||||||
Interest rate contracts | $ | 2,299,807 | 71,505 | $ | 2,292,691 | 89,861 | |||||||
Foreign exchange contracts | 1,514,881 | 12,861 | 1,519,349 | 12,752 | |||||||||
Equity contracts | 1,050,990 | 2,271,507 | 1,058,015 | 2,051,469 | |||||||||
Commodity contracts | 276,726 | 1,031,568 | 303,206 | 1,020,418 | |||||||||
Credit contracts: centrally cleared swaps | 17,831 | 27 | 23,264 | 22 | |||||||||
Credit contracts: other credit derivatives | 5,378 | 18 | 23,608 | 27 | |||||||||
Total | 5,165,613 | 5,220,133 | |||||||||||
Counterparty/cash-collateral netting | (4,759,345 | ) | (4,856,618 | ) | |||||||||
Total | $ | 406,268 | $ | 363,515 |
For the year ended December 31, 2015 | For the year ended December 31, 2014 | For the period from the Jefferies acquisition through December 31, 2013 | |||||||||
Interest rate contracts | $ | (36,792 | ) | $ | (149,587 | ) | $ | 132,397 | |||
Foreign exchange contracts | 36,233 | 39,872 | 5,514 | ||||||||
Equity contracts | (137,219 | ) | (327,978 | ) | (21,216 | ) | |||||
Commodity contracts | (13,625 | ) | 58,746 | 45,546 | |||||||
Credit contracts | (16,223 | ) | (23,934 | ) | (18,098 | ) | |||||
Total | $ | (167,626 | ) | $ | (402,881 | ) | $ | 144,143 |
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 | $ | 7,743 | $ | 18,955 | $ | — | $ | — | $ | 26,698 | |||||||||
Credit default swaps | — | 6,022 | — | (2,839 | ) | 3,183 | |||||||||||||
Equity swaps and options | 26,278 | 7,112 | — | (3,782 | ) | 29,608 | |||||||||||||
Total return swaps | 8,648 | 252 | — | (1 | ) | 8,899 | |||||||||||||
Foreign currency forwards, swaps and options | 82,707 | 15,780 | — | (7,462 | ) | 91,025 | |||||||||||||
Interest rate swaps, options and forwards | 57,655 | 158,874 | 63,816 | (43,881 | ) | 236,464 | |||||||||||||
Total | $ | 183,031 | $ | 206,995 | $ | 63,816 | $ | (57,965 | ) | 395,877 | |||||||||
Cross product counterparty netting | (13,063 | ) | |||||||||||||||||
Total OTC derivative assets included in | |||||||||||||||||||
Trading assets | $ | 382,814 |
(1) | At December 31, 2015, we held exchange traded derivative assets and other credit agreements with a fair value of $24.4 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 December 31, 2015 cash collateral received was $144.4 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 | ||||||||||||||||
Commodity swaps, options and forwards | $ | 5,510 | $ | — | $ | — | $ | — | $ | 5,510 | ||||||||||
Credit default swaps | — | 2,628 | 31,982 | (2,839 | ) | 31,771 | ||||||||||||||
Equity swaps and options | 4,880 | 28,516 | 3,046 | (3,782 | ) | 32,660 | ||||||||||||||
Total return swaps | 22,644 | 774 | 2,540 | (1 | ) | 25,957 | ||||||||||||||
Foreign currency forwards, swaps and options | 98,726 | 12,255 | — | (7,462 | ) | 103,519 | ||||||||||||||
Fixed income forwards | 2,522 | — | — | — | 2,522 | |||||||||||||||
Interest rate swaps, options and forwards | 41,938 | 91,139 | 89,934 | (43,881 | ) | 179,130 | ||||||||||||||
Total | $ | 176,220 | $ | 135,312 | $ | 127,502 | $ | (57,965 | ) | 381,069 | ||||||||||
Cross product counterparty netting | (13,063 | ) | ||||||||||||||||||
Total OTC derivative liabilities included in | ||||||||||||||||||||
Trading liabilities | $ | 368,006 |
(1) | At December 31, 2015, we held exchange traded derivative liabilities and other credit agreements with a fair value of $87.2 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 December 31, 2015, cash collateral pledged was $237.0 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. |
Counterparty credit quality (1): | |||
A- or higher | $ | 195,503 | |
BBB- to BBB+ | 76,796 | ||
BB+ or lower | 50,581 | ||
Unrated | 59,934 | ||
Total | $ | 382,814 |
(1) | We utilize internal credit ratings determined by Jefferies Risk Management. Credit ratings determined by Risk Management use methodologies that produce ratings generally consistent with those produced by external rating agencies. |
Collateral Pledged | Securities Lending Arrangements | Repurchase Agreements | Total | |||||||||
Corporate equity securities | $ | 2,200,273 | $ | 271,519 | $ | 2,471,792 | ||||||
Corporate debt securities | 779,044 | 1,721,583 | 2,500,627 | |||||||||
Mortgage- and asset-backed securities | — | 3,537,812 | 3,537,812 | |||||||||
U.S. government and federal agency securities | 34,983 | 12,003,521 | 12,038,504 | |||||||||
Municipal securities | — | 357,350 | 357,350 | |||||||||
Sovereign securities | — | 1,804,103 | 1,804,103 | |||||||||
Loans and other receivables | — | 462,534 | 462,534 | |||||||||
Total | $ | 3,014,300 | $ | 20,158,422 | $ | 23,172,722 |
Contractual Maturity | ||||||||||||||||||||
Overnight and Continuous | Up to 30 Days | 30 to 90 Days | Greater than 90 Days | Total | ||||||||||||||||
Securities lending arrangements | $ | 1,522,475 | $ | — | $ | 973,201 | $ | 518,624 | $ | 3,014,300 | ||||||||||
Repurchase agreements | 7,848,231 | 5,218,059 | 5,291,729 | 1,800,403 | 20,158,422 | |||||||||||||||
Total | $ | 9,370,706 | $ | 5,218,059 | $ | 6,264,930 | $ | 2,319,027 | $ | 23,172,722 |
For the year ended December 31, 2015 | For the year ended December 31, 2014 | For the period from the Jefferies acquisition through December 31, 2013 | |||||||||
Transferred assets | $ | 5,770.5 | $ | 6,112.6 | $ | 4,592.5 | |||||
Proceeds on new securitizations | 5,811.3 | 6,221.1 | 4,609.0 | ||||||||
Cash flows received on retained interests | 31.2 | 46.3 | 35.6 |
December 31, 2015 | December 31, 2014 | ||||||||||||||
Securitization Type | Total Assets | Retained Interests | Total Assets | Retained Interests | |||||||||||
U.S. government agency residential mortgage-backed securities | $ | 10,901.9 | $ | 203.6 | $ | 19,196.9 | $ | 226.9 | |||||||
U.S. government agency commercial mortgage-backed securities | 2,313.4 | 87.2 | 5,848.5 | 204.7 | |||||||||||
Collateralized loan obligations | 4,538.4 | 51.5 | 4,511.8 | 108.4 | |||||||||||
Consumer and other loans | 655.0 | 31.0 | — | — |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||
2015 | |||||||||||||||
Bonds and notes: | |||||||||||||||
U.S. government securities | $ | 63,968 | $ | 2 | $ | 25 | $ | 63,945 | |||||||
Residential mortgage-backed securities | 23,033 | 308 | 101 | 23,240 | |||||||||||
Commercial mortgage-backed securities | 2,392 | — | 18 | 2,374 | |||||||||||
Other asset-backed securities | 39,633 | — | 160 | 39,473 | |||||||||||
All other corporates | 4,794 | 7 | 57 | 4,744 | |||||||||||
Total fixed maturities | 133,820 | 317 | 361 | 133,776 | |||||||||||
Equity securities: | |||||||||||||||
Common stocks: | |||||||||||||||
Banks, trusts and insurance companies | 35,071 | 10,201 | — | 45,272 | |||||||||||
Industrial, miscellaneous and all other | 17,946 | 10,361 | — | 28,307 | |||||||||||
Total equity securities | 53,017 | 20,562 | — | 73,579 | |||||||||||
$ | 186,837 | $ | 20,879 | $ | 361 | $ | 207,355 | ||||||||
2014 | |||||||||||||||
Bonds and notes: | |||||||||||||||
U.S. government securities | $ | 593,803 | $ | 33 | $ | 63 | $ | 593,773 | |||||||
Residential mortgage-backed securities | 597,402 | 10,959 | 1,678 | 606,683 | |||||||||||
Commercial mortgage-backed securities | 42,991 | 484 | 74 | 43,401 | |||||||||||
Other asset-backed securities | 245,533 | 619 | 996 | 245,156 | |||||||||||
All other corporates | 30,519 | 60 | 176 | 30,403 | |||||||||||
Total fixed maturities | 1,510,248 | 12,155 | 2,987 | 1,519,416 | |||||||||||
Equity securities: | |||||||||||||||
Common stocks: | |||||||||||||||
Banks, trusts and insurance companies | 31,853 | 18,740 | — | 50,593 | |||||||||||
Industrial, miscellaneous and all other | 20,355 | 18,405 | — | 38,760 | |||||||||||
Total equity securities | 52,208 | 37,145 | — | 89,353 | |||||||||||
$ | 1,562,456 | $ | 49,300 | $ | 2,987 | $ | 1,608,769 |
Amortized Cost | Estimated Fair Value | ||||||
(In thousands) | |||||||
Due within one year | $ | 68,250 | $ | 68,178 | |||
Due after one year through five years | 512 | 511 | |||||
Due after five years through ten years | — | — | |||||
Due after ten years | — | — | |||||
68,762 | 68,689 | ||||||
Mortgage-backed and asset-backed securities | 65,058 | 65,087 | |||||
$ | 133,820 | $ | 133,776 |
• | 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- and other asset-backed securities and the securitization of commercial 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- and other asset-backed securities, |
• | Warehousing funding arrangements for client-sponsored consumer loan vehicles and collateralized loan obligations (“CLOs”) through participation certificates and revolving loan commitments, and |
• | Loans to, investments in and fees from various investment fund vehicles. |
Securitization Vehicles | |||||||
2015 | 2014 | ||||||
(In millions) | |||||||
Cash | $ | 1.1 | $ | 0.5 | |||
Financial instruments owned | 68.3 | 62.7 | |||||
Securities purchased under agreement to resell (1) | 717.3 | 575.2 | |||||
Other | 160.2 | 107.1 | |||||
Total assets | $ | 946.9 | $ | 745.5 | |||
Other secured financings (2) | $ | 932.4 | $ | 737.0 | |||
Other | 14.5 | 8.5 | |||||
Total liabilities | $ | 946.9 | $ | 745.5 |
(1) | Securities purchased under agreement to resell represent an amount due under a collateralized transaction on a related consolidated entity, which is eliminated in consolidation. |
(2) | Approximately $22.1 million and $39.7 million of the secured financing represents an amount held by Jefferies in inventory and eliminated in consolidation at December 31, 2015 and 2014, respectively. |
Variable Interests | |||||||||||
Financial Statement Carrying Amount (1) Assets | Maximum Exposure to Loss | VIE Assets | |||||||||
(In millions) | |||||||||||
December 31, 2015 | |||||||||||
Collateralized loan obligations | $ | 73.6 | $ | 458.1 | $ | 6,368.7 | |||||
Consumer loan vehicles | 188.3 | 845.8 | 1,133.0 | ||||||||
Asset management vehicles | 0.5 | 0.5 | 45.5 | ||||||||
Private equity vehicles | 27.3 | 40.7 | 80.8 | ||||||||
Total | $ | 289.7 | $ | 1,345.1 | $ | 7,628.0 | |||||
December 31, 2014 | |||||||||||
Collateralized loan obligations | $ | 134.0 | $ | 926.9 | $ | 7,737.1 | |||||
Consumer loan vehicles | 170.6 | 797.8 | 485.2 | ||||||||
Asset management vehicles | 11.3 | 11.3 | 432.3 | ||||||||
Private equity vehicles | 44.3 | 59.2 | 92.8 | ||||||||
Total | $ | 360.2 | $ | 1,795.2 | $ | 8,747.4 |
(1) | There were no significant liabilities at December 31, 2015 or December 31, 2014. |
• | 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 |
• | Investments in variable funding notes issued by CLOs |
• | A guarantee to a CLO managed by Jefferies Finance, whereby we guarantee certain of the obligations of Jefferies Finance to the CLO |
Jefferies Finance | Jefferies LoanCore | Berkadia | Garcadia Companies | Linkem | HomeFed | Golden Queen Mining Company, LLC (1) | Other | Total | |||||||||||||||||||||||||||
Loans to and investments in associated companies as of December 31, 2012 | $ | — | $ | — | $ | 172,942 | $ | 82,425 | $ | 86,424 | $ | 49,384 | $ | — | $ | 416,299 | $ | 807,474 | |||||||||||||||||
2013 Activity: | |||||||||||||||||||||||||||||||||||
Amounts at date of Jefferies acquisition | 510,684 | 217,299 | — | — | — | — | — | 38,911 | 766,894 | ||||||||||||||||||||||||||
Income (losses) related to associated companies | — | — | 84,678 | 39,399 | (22,719 | ) | 3,539 | — | 14,144 | 119,041 | |||||||||||||||||||||||||
Income (losses) related to associated companies classified as other revenues | 57,795 | 35,300 | — | — | — | — | — | (915 | ) | 92,180 | |||||||||||||||||||||||||
Contributions to (distributions from) associated companies, net | (97,942 | ) | (28,562 | ) | (69,016 | ) | (1,807 | ) | 107,385 | — | — | (39,761 | ) | (129,703 | ) | ||||||||||||||||||||
Other, including foreign exchange and unrealized gain (losses) | — | — | (6,031 | ) | — | 2,487 | — | — | (394,001 | ) | (397,545 | ) | |||||||||||||||||||||||
Loans to and investments in associated companies as of December 31, 2013 | 470,537 | 224,037 | 182,573 | 120,017 | 173,577 | 52,923 | — | 34,677 | 1,258,341 | ||||||||||||||||||||||||||
2014 Activity: | |||||||||||||||||||||||||||||||||||
Income (losses) related to associated companies | — | — | 101,187 | 49,416 | (14,633 | ) | 3,150 | (1,402 | ) | 809 | 138,527 | ||||||||||||||||||||||||
Income (losses) related to associated companies classified as other revenues | 72,701 | 18,793 | — | — | — | — | — | (1,252 | ) | 90,242 | |||||||||||||||||||||||||
Contributions to (distributions from) associated companies, net | (34,347 | ) | 16,117 | (72,721 | ) | (1,494 | ) | 18,390 | — | 105,000 | (4,067 | ) | 26,878 | ||||||||||||||||||||||
Other, including foreign exchange and unrealized gain (losses) | — | — | (2,528 | ) | — | (18,280 | ) | 215,709 | — | 3,679 | 198,580 | ||||||||||||||||||||||||
Loans to and investments in associated companies as of December 31, 2014 | 508,891 | 258,947 | 208,511 | 167,939 | 159,054 | 271,782 | 103,598 | 33,846 | 1,712,568 | ||||||||||||||||||||||||||
2015 Activity: | |||||||||||||||||||||||||||||||||||
Income (losses) related to associated companies | — | — | 78,092 | 53,182 | (15,577 | ) | 3,596 | (1,775 | ) | (7,237 | ) | 110,281 | |||||||||||||||||||||||
Income (losses) related to associated companies classified as other revenues | 40,884 | 36,554 | — | — | — | — | — | (1,721 | ) | 75,717 | |||||||||||||||||||||||||
Contributions to (distributions from) associated companies, net | (21,200 | ) | (6,760 | ) | (89,560 | ) | (48,461 | ) | 21,138 | — | 12,500 | 11,483 | (120,860 | ) | |||||||||||||||||||||
Other, including foreign exchange and unrealized gain (losses) | — | — | (6,057 | ) | — | (14,466 | ) | — | — | 186 | (20,337 | ) | |||||||||||||||||||||||
Loans to and investments in associated companies as of December 31, 2015 | $ | 528,575 | $ | 288,741 | $ | 190,986 | $ | 172,660 | $ | 150,149 | $ | 275,378 | $ | 114,323 | $ | 36,557 | $ | 1,757,369 |
(1) | At December 31, 2015 and 2014, the balance reflects $33.7 million and $33.7 million, respectively, related to a noncontrolling interest. |
2015 | 2014 | ||||||||||
Assets | $ | 18,489,684 | $ | 12,683,212 | |||||||
Liabilities | 14,990,876 | 9,350,034 | |||||||||
Noncontrolling interest | 39,038 | 12,718 | |||||||||
2015 | 2014 | 2013 | |||||||||
Revenues | $ | 3,946,252 | $ | 3,201,823 | $ | 2,710,205 | |||||
Income from continuing operations before extraordinary items | $ | 398,369 | $ | 431,654 | $ | 428,509 | |||||
Net income | $ | 398,369 | $ | 431,654 | $ | 434,969 | |||||
The Company’s income related to associated companies | $ | 185,998 | $ | 228,769 | $ | 211,221 |
(In thousands) | Gross Amounts | Netting in Consolidated Statement of Financial Condition | Net Amounts in Consolidated Statement of Financial Condition | Additional Amounts Available for Setoff (1) | Available Collateral (2) | Net Amount (3) | |||||||||||||||||
Assets at December 31, 2015 | |||||||||||||||||||||||
Derivative contracts | $ | 4,428,245 | $ | (4,165,446 | ) | $ | 262,799 | $ | — | $ | — | $ | 262,799 | ||||||||||
Securities borrowing arrangements | $ | 6,975,136 | $ | — | $ | 6,975,136 | $ | (478,991 | ) | $ | (667,099 | ) | $ | 5,829,046 | |||||||||
Reverse repurchase agreements | $ | 14,046,300 | $ | (10,191,554 | ) | $ | 3,854,746 | $ | (83,452 | ) | $ | (3,745,215 | ) | $ | 26,079 | ||||||||
Liabilities at December 31, 2015 | |||||||||||||||||||||||
Derivative contracts | $ | 4,476,241 | $ | (4,257,998 | ) | $ | 218,243 | $ | — | $ | — | $ | 218,243 | ||||||||||
Securities lending arrangements | $ | 3,014,300 | $ | — | $ | 3,014,300 | $ | (478,991 | ) | $ | (2,499,395 | ) | $ | 35,914 | |||||||||
Repurchase agreements | $ | 20,158,422 | $ | (10,191,554 | ) | $ | 9,966,868 | $ | (83,452 | ) | $ | (8,068,468 | ) | $ | 1,814,948 | ||||||||
Assets at December 31, 2014 | |||||||||||||||||||||||
Derivative contracts | $ | 5,165,613 | $ | (4,759,345 | ) | $ | 406,268 | $ | — | $ | — | $ | 406,268 | ||||||||||
Securities borrowing arrangements | $ | 6,853,103 | $ | — | $ | 6,853,103 | $ | (680,222 | ) | $ | (1,274,196 | ) | $ | 4,898,685 | |||||||||
Reverse repurchase agreements | $ | 14,059,133 | $ | (10,132,275 | ) | $ | 3,926,858 | $ | (634,568 | ) | $ | (3,248,817 | ) | $ | 43,473 | ||||||||
Liabilities at December 31, 2014 | |||||||||||||||||||||||
Derivative contracts | $ | 5,220,133 | $ | (4,856,618 | ) | $ | 363,515 | $ | — | $ | — | $ | 363,515 | ||||||||||
Securities lending arrangements | $ | 2,598,487 | $ | — | $ | 2,598,487 | $ | (680,222 | ) | $ | (1,883,140 | ) | $ | 35,125 | |||||||||
Repurchase agreements | $ | 20,804,432 | $ | (10,132,275 | ) | $ | 10,672,157 | $ | (634,568 | ) | $ | (8,810,770 | ) | $ | 1,226,819 |
(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 balance sheet because other provisions of GAAP are not met. Further, for derivative assets and liabilities, amounts netted include cash collateral paid or received. |
(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 December 31, 2015, amounts include $5,796.1 million of securities borrowing arrangements, for which we have received securities collateral of $5,613.3 million, and $1,807.2 million of repurchase agreements, for which we have pledged securities collateral of $1,875.3 million, which are subject to master netting agreements but we have not yet determined the agreements to be legally enforceable. At December 31, 2014, amounts include $4,847.4 million of securities borrowing arrangements, for which we have received securities collateral of $4,694.0 million, and $1,201.9 million of repurchase agreements, for which we have pledged securities collateral of $1,238.4 million, which are subject to master netting agreements but we have not yet determined the agreements to be legally enforceable. |
2015 | 2014 | ||||||
Indefinite lived intangibles: | |||||||
Exchange and clearing organization membership interests and registrations | $ | 11,897 | $ | 14,528 | |||
Amortizable intangibles: | |||||||
Customer and other relationships, net of accumulated amortization of $191,761 and $155,548 | 456,222 | 493,501 | |||||
Trademarks and tradename, net of accumulated amortization of $64,052 and $47,101 | 330,172 | 347,883 | |||||
Supply contracts, net of accumulated amortization of $40,684 and $30,433 | 109,311 | 119,562 | |||||
Other, net of accumulated amortization of $5,216 and $4,703 | 4,419 | 2,900 | |||||
Total intangible assets, net | 912,021 | 978,374 | |||||
Goodwill: | |||||||
National Beef | 14,991 | 14,991 | |||||
Jefferies | 1,712,799 | 1,718,847 | |||||
Other operations | 8,551 | 8,551 | |||||
Total goodwill | 1,736,341 | 1,742,389 | |||||
Total intangible assets, net and goodwill | $ | 2,648,362 | $ | 2,720,763 |
2015 | 2014 | ||||||
Finished goods | $ | 211,426 | $ | 343,959 | |||
Work in process | 34,091 | 40,951 | |||||
Raw materials, supplies and other | 42,556 | 37,993 | |||||
$ | 288,073 | $ | 422,903 |
Depreciable Lives (in years) | 2015 | 2014 | |||||||
Land, buildings and leasehold improvements | 5-45 | $ | 371,383 | $ | 321,098 | ||||
Beef processing machinery and equipment | 2-15 | 315,238 | 283,360 | ||||||
Other machinery and equipment | 3-15 | 113,412 | 110,075 | ||||||
Corporate aircraft | 10 | 104,862 | 104,780 | ||||||
Furniture, fixtures and office equipment | 2-10 | 311,845 | 283,436 | ||||||
Construction in progress | N/A | 38,903 | 40,788 | ||||||
Other | 3-10 | 4,909 | 4,598 | ||||||
1,260,552 | 1,148,135 | ||||||||
Accumulated depreciation and amortization | (538,677 | ) | (421,759 | ) | |||||
$ | 721,875 | $ | 726,376 |
2015 | 2014 | ||||||
Parent Company Debt: | |||||||
Senior Notes: | |||||||
8.125% Senior Notes due September 15, 2015, $0 and $458,641 principal | $ | — | $ | 457,723 | |||
5.50% Senior Notes due October 18, 2023, $750,000 principal | 741,583 | 740,748 | |||||
6.625% Senior Notes due October 23, 2043, $250,000 principal | 247,027 | 246,991 | |||||
Total long-term debt – Parent Company | 988,610 | 1,445,462 | |||||
Subsidiary Debt (non-recourse to Parent Company): | |||||||
Jefferies: | |||||||
3.875% Senior Notes, due November 9, 2015, $0 and $500,000 principal | — | 507,944 | |||||
5.5% Senior Notes, due March 15, 2016, $350,000 principal | 353,025 | 363,229 | |||||
5.125% Senior Notes, due April 13, 2018, $800,000 principal | 830,298 | 842,359 | |||||
8.5% Senior Notes, due July 15, 2019, $700,000 principal | 806,125 | 832,797 | |||||
2.375% Euro Senior Notes, due May 20, 2020, $528,625 and $622,175 principal | 527,606 | 620,725 | |||||
6.875% Senior Notes, due April 15, 2021, $750,000 principal | 838,765 | 853,091 | |||||
2.25% Euro Medium Term Notes, due July 13, 2022, $4,229 and $4,977 principal | 3,779 | 4,379 | |||||
5.125% Senior Notes, due January 20, 2023, $600,000 principal | 620,890 | 623,311 | |||||
6.45% Senior Debentures, due June 8, 2027, $350,000 principal | 379,711 | 381,515 | |||||
3.875% Convertible Senior Debentures, due November 1, 2029, $345,000 principal | 347,307 | 348,568 | |||||
6.25% Senior Debentures, due January 15, 2036, $500,000 principal | 512,730 | 513,046 | |||||
6.50% Senior Notes, due January 20, 2043, $400,000 principal | 421,656 | 421,960 | |||||
Secured credit facility | — | 170,000 | |||||
National Beef Term Loan | 310,000 | 345,000 | |||||
National Beef Revolving Credit Facility | 121,961 | 135,144 | |||||
54 Madison debt | 116,211 | — | |||||
Foursight Credit Facilities | 110,253 | 27,000 | |||||
Other | 118,667 | 92,399 | |||||
Total long-term debt – subsidiaries | 6,418,984 | 7,082,467 | |||||
Long-term debt | $ | 7,407,594 | $ | 8,527,929 |
2015 | 2014 | ||||||
As of January 1, | $ | 184,333 | $ | 241,075 | |||
Loss allocated to redeemable noncontrolling interests | (26,465 | ) | (8,576 | ) | |||
Contributions from redeemable noncontrolling interests | 5,263 | — | |||||
Distributions to redeemable noncontrolling interests | — | (2,765 | ) | ||||
Increase (decrease) in fair value of redeemable noncontrolling interests charged to additional paid-in capital | 26,227 | (45,401 | ) | ||||
Balance, December 31, | $ | 189,358 | $ | 184,333 |
Discount Rates | |||||||||||||
Terminal Growth Rates | 12.25% | 12.50% | 12.75% | ||||||||||
1.75 | % | $ | 191.2 | $ | 188.1 | $ | 185.0 | ||||||
2.00 | % | $ | 192.6 | $ | 189.4 | $ | 186.3 | ||||||
2.25 | % | $ | 194.1 | $ | 190.7 | $ | 187.6 |
Common Shares Subject to Option | Weighted- Average Exercise Prices | Weighted- Average Remaining Contractual Term | Aggregate Intrinsic Value | |||||||||
Balance at December 31, 2012 | 2,577,500 | $ | 26.10 | |||||||||
Granted | 51,432 | $ | 26.06 | |||||||||
Exercised | (184,276 | ) | $ | 24.65 | $ | 603,000 | ||||||
Cancelled | (27,408 | ) | $ | 38.68 | ||||||||
Balance at December 31, 2013 | 2,417,248 | $ | 25.64 | |||||||||
Granted | — | $ | — | |||||||||
Exercised | (35,536 | ) | $ | 22.87 | $ | 58,000 | ||||||
Cancelled | (741,678 | ) | $ | 27.39 | ||||||||
Balance at December 31, 2014 | 1,640,034 | $ | 24.91 | |||||||||
Granted | — | $ | — | |||||||||
Exercised | (2,030 | ) | $ | 21.66 | $ | 6,000 | ||||||
Cancelled | (976,732 | ) | $ | 24.88 | ||||||||
Balance at December 31, 2015 | 661,272 | $ | 24.97 | 2.1 years | $ | — | ||||||
Exercisable at December 31, 2015 | 391,274 | $ | 25.75 | 1.7 years | $ | — |
Risk free interest rate | 1.26 | % | |
Expected volatility | 39.17 | % | |
Expected dividend yield | 0.85 | % | |
Expected life | 4.0 years | ||
Weighted-average fair value per grant | $ | 7.67 |
Weighted Average Grant Date Fair Value | ||||||
Balance at January 1, 2013 | — | $ | — | |||
Converted in connection with the Jefferies acquisition | 6,895 | $ | 26.90 | |||
Grants | 462 | $ | 27.38 | |||
Forfeited | (144 | ) | $ | 26.90 | ||
Fulfillment of service requirement | (1,971 | ) | $ | 26.90 | ||
Balance at December 31, 2013 | 5,242 | $ | 26.94 | |||
Grants | 864 | $ | 27.03 | |||
Forfeited | (202 | ) | $ | 26.90 | ||
Fulfillment of service requirement | (2,521 | ) | $ | 26.89 | ||
Balance at December 31, 2014 | 3,383 | $ | 27.00 | |||
Grants | 602 | $ | 18.63 | |||
Forfeited | (94 | ) | $ | 28.12 | ||
Fulfillment of service requirement | (1,887 | ) | $ | 26.87 | ||
Balance at December 31, 2015 | 2,004 | $ | 24.56 |
Future Service Required | No Future Service Required | Future Service Required | No Future Service Required | ||||||||||
Balance at January 1, 2013 | — | — | $ | — | $ | — | |||||||
Converted in connection with the Jefferies acquisition | 5,167 | 9,527 | $ | 26.90 | $ | 26.90 | |||||||
Grants | — | 145 | $ | — | $ | 24.32 | |||||||
Distributions of underlying shares | — | (1,603 | ) | $ | — | $ | 26.90 | ||||||
Forfeited | (106 | ) | (21 | ) | $ | 26.90 | $ | 26.83 | |||||
Fulfillment of service requirement | (268 | ) | 268 | $ | 26.90 | $ | 26.90 | ||||||
Balance at December 31, 2013 | 4,793 | 8,316 | $ | 26.90 | $ | 26.86 | |||||||
Grants | — | 97 | $ | — | $ | 20.89 | |||||||
Distributions of underlying shares | — | (366 | ) | $ | — | $ | 26.85 | ||||||
Forfeited | (135 | ) | — | $ | 26.90 | $ | — | ||||||
Fulfillment of service requirement | (420 | ) | 420 | $ | 26.90 | $ | 26.90 | ||||||
Balance at December 31, 2014 | 4,238 | 8,467 | $ | 26.90 | $ | 26.79 | |||||||
Grants | — | 121 | $ | — | $ | 18.95 | |||||||
Distributions of underlying shares | — | (229 | ) | $ | — | $ | 22.34 | ||||||
Forfeited | (626 | ) | — | $ | 26.90 | $ | — | ||||||
Fulfillment of service requirement | (224 | ) | 224 | $ | 26.90 | $ | 26.90 | ||||||
Balance at December 31, 2015 | 3,388 | 8,583 | $ | 26.90 | $ | 26.68 |
2015 | 2014 | 2013 | |||||||||
Net unrealized gains on available for sale securities | $ | 557,601 | $ | 577,588 | $ | 589,393 | |||||
Net unrealized foreign exchange gains (losses) | (63,248 | ) | (26,771 | ) | 16,803 | ||||||
Net unrealized losses on derivative instruments | — | — | (169 | ) | |||||||
Net minimum pension liability | (55,560 | ) | (103,735 | ) | (67,977 | ) | |||||
$ | 438,793 | $ | 447,082 | $ | 538,050 |
Details about Accumulated Other Comprehensive Income Components | Amount Reclassified from Accumulated Other Comprehensive Income | Affected Line Item in the Consolidated Statement of Operations | ||||||||
2015 | 2014 | |||||||||
Net unrealized gains (losses) on available for sale securities, net of income tax provision of $6,068 and $1,631 | $ | 10,930 | $ | 2,939 | Net realized securities gains | |||||
Net unrealized foreign exchange gains, net of income tax provision of $0 and $149 | — | 267 | Loss from discontinued operations, net of income tax (benefit) | |||||||
Net unrealized losses on derivatives, net of income tax (benefit) of $0 and $(95) | — | (169 | ) | Income related to associated companies | ||||||
Amortization of defined benefit pension plan actuarial gains (losses), net of income tax (benefit) of $(17,159) and $(1,676) | (31,102 | ) | (3,201 | ) | Compensation and benefits, which includes pension expense. See Note 21 for information on this component. | |||||
Total reclassifications for the period, net of tax | $ | (20,172 | ) | $ | (164 | ) |
2015 | 2014 | ||||||
Change in projected benefit obligation: | |||||||
Projected benefit obligation, beginning of year | $ | 352,126 | $ | 295,044 | |||
Interest cost | 12,958 | 14,239 | |||||
Actuarial (gains) losses | (35,799 | ) | 52,125 | ||||
Benefits paid | (122,260 | ) | (9,282 | ) | |||
Projected benefit obligation, end of year | $ | 207,025 | $ | 352,126 | |||
Change in plan assets: | |||||||
Fair value of plan assets, beginning of year | $ | 240,010 | $ | 239,080 | |||
Actual return on plan assets | (250 | ) | 11,175 | ||||
Employer contributions | 1,000 | — | |||||
Benefits paid | (122,260 | ) | (9,282 | ) | |||
Administrative expenses | (781 | ) | (963 | ) | |||
Fair value of plan assets, end of year | $ | 117,719 | $ | 240,010 | |||
Funded status at end of year | $ | (89,306 | ) | $ | (112,116 | ) |
2015 | 2014 | 2013 | |||||||||
Components of net periodic pension cost: | |||||||||||
Interest cost | $ | 12,958 | $ | 14,239 | $ | 12,286 | |||||
Expected return on plan assets | (10,581 | ) | (10,115 | ) | (9,746 | ) | |||||
Settlement charge | 40,973 | — | — | ||||||||
Actuarial losses | 6,963 | 4,634 | 7,464 | ||||||||
Net periodic pension cost | $ | 50,313 | $ | 8,758 | $ | 10,004 | |||||
Amounts recognized in other comprehensive income (loss): | |||||||||||
Net (gain) loss arising during the period | $ | (24,186 | ) | $ | 52,027 | $ | (31,952 | ) | |||
Settlement charge | (40,973 | ) | — | — | |||||||
Amortization of net loss | (6,963 | ) | (4,634 | ) | (7,464 | ) | |||||
Total recognized in other comprehensive income (loss) | $ | (72,122 | ) | $ | 47,393 | $ | (39,416 | ) | |||
Net amount recognized in net periodic benefit cost and other | |||||||||||
comprehensive income (loss) | $ | (21,809 | ) | $ | 56,151 | $ | (29,412 | ) |
2015 | 2014 | ||||
WilTel Plan | |||||
Discount rate used to determine benefit obligation | 4.00 | % | 3.76 | % | |
Weighted-average assumptions used to determine | |||||
net pension cost: | |||||
Discount rate | 3.76 | % | 4.71 | % | |
Expected long-term return on plan assets | 4.00 | % | 4.00 | % | |
Jefferies Plan | |||||
Discount rate used to determine benefit obligation | 4.10 | % | 4.30 | % | |
Weighted-average assumptions used to determine | |||||
net pension cost: | |||||
Discount rate | 4.30 | % | 5.10 | % | |
Expected long-term return on plan assets | 6.75 | % | 6.75 | % |
2016 | $ | 10,503 | |
2017 | 8,818 | ||
2018 | 9,962 | ||
2019 | 10,001 | ||
2020 | 10,506 | ||
2021 – 2025 | 65,960 |
Fair Value Measurements Using | |||||||||||
Total | Level 1 | Level 2 | |||||||||
2015 | |||||||||||
Cash and cash equivalents | $ | 3,026 | $ | 3,026 | $ | — | |||||
Fixed income securities: | |||||||||||
U.S. government and agencies | 5,988 | 5,988 | — | ||||||||
Public utilities | 8,978 | — | 8,978 | ||||||||
All other corporates | 52,696 | — | 52,696 | ||||||||
Total | $ | 70,688 | $ | 9,014 | $ | 61,674 | |||||
2014 | |||||||||||
Cash and cash equivalents | $ | 14,669 | $ | 14,669 | $ | — | |||||
Fixed income securities: | |||||||||||
U.S. government and agencies | 3,719 | 3,719 | — | ||||||||
Public utilities | 15,669 | — | 15,669 | ||||||||
All other corporates | 154,868 | — | 154,868 | ||||||||
Total | $ | 188,925 | $ | 18,388 | $ | 170,537 | |||||
• | Plan assets are split into three separate portfolios, each with different duration and asset mixes. The Investment Grade (“IG”) portfolio consists of investment grade fixed income corporate bonds with a maximum portfolio duration of 5 years. The Fixed Income (“FI”) portfolio consists of short and medium term investment grade bonds, government instruments, and cash and cash equivalents with a maximum portfolio duration of 2 years. The High Yield (“HY”) portfolio consists of below investment grade corporate bonds with a maximum portfolio duration of 5 years. |
• | Fixed income securities held within the IG and FI portfolios will all be rated BBB- or better at the time of purchase, there will be no more than 5% at market in any one security (U.S. government and agency positions excluded), no more than a 30-year maturity in any one security and investments in standard collateralized mortgage obligations are limited to securities that are currently paying interest, receiving principal, do not contain leverage and are limited to 10% of the market value of the portfolio. Securities purchased or held within the HY portfolio will all be rated B- or higher. However, the portfolio can hold up to 10% in CCC rated bonds that may result from credit downgrades. |
Fair Value Measurements Using | |||||||||||
Total | Level 1 | Level 2 | |||||||||
2015 | |||||||||||
Cash and cash equivalents | $ | 487 | $ | 487 | $ | — | |||||
Listed equity securities | 29,156 | 29,156 | — | ||||||||
Fixed income securities: | |||||||||||
Corporate debt securities | 6,598 | — | 6,598 | ||||||||
Foreign corporate debt securities | 2,140 | — | 2,140 | ||||||||
U.S. government securities | 3,975 | 3,975 | — | ||||||||
Agency mortgage-backed securities | 3,504 | — | 3,504 | ||||||||
Commercial mortgage-backed securities | 425 | — | 425 | ||||||||
Asset-backed securities | 746 | — | 746 | ||||||||
Total | $ | 47,031 | $ | 33,618 | $ | 13,413 | |||||
2014 | |||||||||||
Cash and cash equivalents | $ | 373 | $ | 373 | $ | — | |||||
Listed equity securities | 31,327 | 31,327 | — | ||||||||
Fixed income securities: | |||||||||||
Corporate debt securities | 6,482 | — | 6,482 | ||||||||
Foreign corporate debt securities | 1,321 | — | 1,321 | ||||||||
U.S. government securities | 5,929 | 5,929 | — | ||||||||
Agency mortgage-backed securities | 3,883 | — | 3,883 | ||||||||
Commercial mortgage-backed securities | 1,080 | — | 1,080 | ||||||||
Asset-backed securities | 690 | — | 690 | ||||||||
Total | $ | 51,085 | $ | 37,629 | $ | 13,456 |
2015 | 2014 | ||||||
Change in projected benefit obligation: | |||||||
Projected benefit obligation, beginning of year | $ | 28,434 | $ | 26,368 | |||
Service cost | — | 40 | |||||
Interest cost | 523 | 801 | |||||
Actuarial losses | (40 | ) | 4,630 | ||||
Currency adjustment | (4,303 | ) | (2,212 | ) | |||
Benefits paid | (1,069 | ) | (1,193 | ) | |||
Projected benefit obligation, end of year | $ | 23,545 | $ | 28,434 |
2015 | 2014 | 2013 | |||||||||
Components of net periodic pension cost: | |||||||||||
Service cost | $ | — | $ | 40 | $ | 51 | |||||
Interest cost | 523 | 801 | 685 | ||||||||
Net amortization | 325 | 244 | 179 | ||||||||
Net periodic pension cost | $ | 848 | $ | 1,085 | $ | 915 |
2015 | 2014 | ||||
Projected benefit obligation | |||||
Discount rate | 2.20 | % | 2.10 | % | |
Rate of compensation increase (1) | N/A | 3.00 | % | ||
Net periodic pension benefit cost | |||||
Discount rate | 2.10 | % | 3.40 | % | |
Rate of compensation increase (1) | N/A | 3.00 | % |
2016 | $ | 1,143 | |
2017 | 1,124 | ||
2018 | 1,133 | ||
2019 | 1,110 | ||
2020 | 1,159 | ||
2021 – 2025 | 5,831 |
2015 | 2014 | ||||||
Deferred tax asset: | |||||||
NOL carryover | $ | 1,375,759 | $ | 1,266,972 | |||
Compensation | 284,761 | 334,576 | |||||
Long-term debt | 89,160 | 134,079 | |||||
Other assets | 162,393 | 160,586 | |||||
Securities valuation reserves | 32,141 | 25,499 | |||||
Intangible assets, net and goodwill | 6,855 | 13,842 | |||||
Other liabilities | 40,393 | 57,006 | |||||
1,991,462 | 1,992,560 | ||||||
Valuation allowance | (97,177 | ) | (110,404 | ) | |||
1,894,285 | 1,882,156 | ||||||
Deferred tax liability: | |||||||
Unrealized gains on investments | (153,035 | ) | (10,406 | ) | |||
Amortization of intangible assets | (103,561 | ) | (97,268 | ) | |||
Property and equipment | (4,151 | ) | (866 | ) | |||
Other | (58,170 | ) | (61,081 | ) | |||
(318,917 | ) | (169,621 | ) | ||||
Net deferred tax asset | $ | 1,575,368 | $ | 1,712,535 |
2015 | 2014 | 2013 | |||||||||
Current taxes: | |||||||||||
Federal | $ | 709 | $ | 746 | $ | 2,900 | |||||
State and local | (25,308 | ) | 17,232 | 22,006 | |||||||
Foreign | 3,504 | 12,375 | 9,050 | ||||||||
Total current income taxes | (21,095 | ) | 30,353 | 33,956 | |||||||
Deferred taxes: | |||||||||||
Federal | 134,590 | 97,190 | 82,173 | ||||||||
State and local | 4,552 | 30,707 | 23,198 | ||||||||
Foreign | (8,100 | ) | 7,721 | (2,846 | ) | ||||||
Total deferred income taxes | 131,042 | 135,618 | 102,525 | ||||||||
Provision for income taxes | $ | 109,947 | $ | 165,971 | $ | 136,481 |
2015 | 2014 | 2013 | |||||||||
Expected federal income tax | $ | 124,788 | $ | 133,428 | $ | 190,955 | |||||
State income taxes, net of federal income tax benefit | (6,928 | ) | 31,160 | 21,396 | |||||||
Increase (decrease) in valuation allowance | (13,227 | ) | (22,203 | ) | 12,287 | ||||||
Tax expense not provided on income recorded on the Jefferies investment prior to the acquisition | — | — | (63,952 | ) | |||||||
Reversal of prior years’ deferred tax liability related to Jefferies investment | — | — | (33,972 | ) | |||||||
Foreign rate differential | (10,130 | ) | (14,305 | ) | (4,750 | ) | |||||
Permanent differences | 8,064 | 6,181 | 13,210 | ||||||||
Tax exempt income | (6,789 | ) | (6,812 | ) | (4,033 | ) | |||||
Income allocated to noncontrolling interest, not subject to tax | 11,039 | 3,270 | 3,655 | ||||||||
Nondeductible settlements | — | 24,500 | — | ||||||||
Foreign taxes | (2,989 | ) | 2,542 | 4,033 | |||||||
Other | 6,119 | 8,210 | (2,348 | ) | |||||||
Actual income tax provision | $ | 109,947 | $ | 165,971 | $ | 136,481 |
Gross Unrecognized Tax Benefits | Interest | Total | |||||||||
As of January 1, 2013 | $ | 11,590 | $ | 4,180 | $ | 15,770 | |||||
Jefferies amounts at date of acquisition | 129,010 | 17,100 | 146,110 | ||||||||
Increases based on tax positions related to current period | 8,750 | — | 8,750 | ||||||||
Increases based on tax positions related to prior periods | 14,780 | — | 14,780 | ||||||||
Decreases based on tax positions related to prior periods | (18,300 | ) | — | (18,300 | ) | ||||||
Interest expense recognized | — | 7,000 | 7,000 | ||||||||
Audit payments | (310 | ) | (110 | ) | (420 | ) | |||||
Reductions as a result of the lapse of the statute of limitations | — | — | — | ||||||||
Balance, December 31, 2013 | 145,520 | 28,170 | 173,690 | ||||||||
Increases based on tax positions related to current period | 5,630 | — | 5,630 | ||||||||
Increases based on tax positions related to prior periods | 4,340 | — | 4,340 | ||||||||
Decreases based on tax positions related to prior periods | (3,940 | ) | — | (3,940 | ) | ||||||
Interest expense recognized | — | 9,200 | 9,200 | ||||||||
Audit payments | (2,960 | ) | (100 | ) | (3,060 | ) | |||||
Reductions as a result of the lapse of the statute of limitations | — | — | — | ||||||||
Balance, December 31, 2014 | 148,590 | 37,270 | 185,860 | ||||||||
Increases based on tax positions related to current period | 3,475 | — | 3,475 | ||||||||
Increases based on tax positions related to prior periods | 22,030 | — | 22,030 | ||||||||
Decreases based on tax positions related to prior periods | (15,349 | ) | (4,884 | ) | (20,233 | ) | |||||
Interest expense recognized | — | 10,336 | 10,336 | ||||||||
Audit payments | — | — | — | ||||||||
Reductions as a result of the lapse of the statute of limitations | (7,879 | ) | (3,641 | ) | (11,520 | ) | |||||
Balance, December 31, 2015 | $ | 150,867 | $ | 39,081 | $ | 189,948 |
2015 | 2014 | 2013 | |||||||||
Net realized gains on securities | $ | 14,112 | $ | 30,686 | $ | 245,262 | |||||
Write-down of investments (a) | — | (111 | ) | (1,621 | ) | ||||||
Other (b) | 48,845 | (181 | ) | 316 | |||||||
$ | 62,957 | $ | 30,394 | $ | 243,957 |
(a) | Consists of provisions to write down investments resulting from declines in fair values believed to be other than temporary. |
(b) | In 2015, primarily relates to a recovery of $35.0 million of an investment in a non-public security written off in prior years. |
2015 | 2014 | 2013 | |||||||||
Manufacturing revenues | $ | 391,920 | $ | 379,274 | $ | 310,624 | |||||
Dividend income | 5,482 | 7,379 | 5,553 | ||||||||
Income from associated companies classified as other revenues | 75,717 | 90,242 | 92,180 | ||||||||
Revenues of oil and gas exploration and production businesses | 45,939 | 19,373 | — | ||||||||
Gain on sale of equity interest | — | 22,714 | — | ||||||||
Rental income | 1,872 | 5,877 | 13,158 | ||||||||
Winery revenues | — | — | 8,301 | ||||||||
Other | 28,298 | 45,606 | 55,676 | ||||||||
$ | 549,228 | $ | 570,465 | $ | 485,492 |
2015 | 2014 | 2013 | |||||||||
Numerator for earnings (loss) per share: | |||||||||||
Net income attributable to Leucadia National Corporation common shareholders | $ | 279,587 | $ | 204,306 | $ | 369,240 | |||||
Less: Allocation of earnings to participating securities (1) | (4,711 | ) | (4,761 | ) | (4,919 | ) | |||||
Net income attributable to Leucadia National Corporation common shareholders for basic earnings (loss) per share | 274,876 | 199,545 | 364,321 | ||||||||
Less: Adjustment to allocation of earnings to participating securities related to diluted shares (1) | (34 | ) | (75 | ) | (110 | ) | |||||
Mandatorily redeemable convertible preferred share dividends | — | — | 3,397 | ||||||||
Interest on 3.75% Convertible Notes | — | 739 | 2,635 | ||||||||
Net income attributable to Leucadia National Corporation common shareholders for diluted earnings (loss) per share | $ | 274,842 | $ | 200,209 | $ | 370,243 | |||||
Denominator for earnings (loss) per share: | |||||||||||
Denominator for basic earnings (loss) per share – weighted average shares | 372,430 | 371,889 | 339,673 | ||||||||
Stock options | 1 | 29 | 55 | ||||||||
Warrants | — | — | — | ||||||||
Mandatorily redeemable convertible preferred shares | — | — | 3,468 | ||||||||
3.875% Convertible Senior Debentures | — | — | — | ||||||||
3.75% Convertible Notes | — | 1,415 | 4,538 | ||||||||
Denominator for diluted earnings (loss) per share | 372,431 | 373,333 | 347,734 |
(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 6,500,000, 9,040,900 and 9,353,400 for the years ended December 31, 2015, 2014 and 2013, respectively. Dividends declared on participating securities during the years ended December 31, 2015, 2014 and 2013 were $1.5 million, $2.2 million and $2.8 million, respectively. Undistributed earnings are allocated to participating securities based upon their right to share in earnings if all earnings for the period had been distributed. |
2016 | $ | 83,230 | |
2017 | 80,167 | ||
2018 | 75,785 | ||
2019 | 66,339 | ||
2020 | 57,198 | ||
Thereafter | 409,417 | ||
772,136 | |||
Less: sublease income | (10,854 | ) | |
$ | 761,282 |
Expected Maturity Date | |||||||||||||||||||||||
2016 | 2017 | 2018 and 2019 | 2020 and 2021 | 2022 and Later | Maximum Payout | ||||||||||||||||||
Equity commitments (1) | $ | 106.8 | $ | 25.3 | $ | 43.9 | $ | 35.9 | $ | 189.5 | $ | 401.4 | |||||||||||
Loan commitments (1) | 247.3 | 170.7 | 81.4 | — | — | 499.4 | |||||||||||||||||
Mortgage-related and other purchase commitments | 1,571.4 | 312.5 | 1,013.7 | — | — | 2,897.6 | |||||||||||||||||
Forward starting reverse repos and repos | 1,635.0 | — | — | — | — | 1,635.0 | |||||||||||||||||
Other unfunded commitments (1) | 87.0 | 186.9 | 20.2 | 5.7 | 35.6 | 335.4 | |||||||||||||||||
$ | 3,647.5 | $ | 695.4 | $ | 1,159.2 | $ | 41.6 | $ | 225.1 | $ | 5,768.8 |
(1) | Equity commitments, loan commitments and other unfunded commitments are presented by contractual maturity date. The amounts are however mostly available on demand. |
Expected Maturity Date | |||||||||||||||||||||||
Guarantee Type | 2016 | 2017 | 2018 and 2019 | 2020 and 2021 | 2022 and Later | Notional/ Maximum Payout | |||||||||||||||||
Derivative contracts – non-credit related | $ | 11,840.6 | $ | 584.6 | $ | 142.8 | $ | — | $ | 414.4 | $ | 12,982.4 | |||||||||||
Written derivative contracts – credit related | — | — | 115.4 | 955.4 | 10.0 | 1,080.8 | |||||||||||||||||
Total derivative contracts | $ | 11,840.6 | $ | 584.6 | $ | 258.2 | $ | 955.4 | $ | 424.4 | $ | 14,063.2 |
External Credit Rating | |||||||||||||||||||||||||||
AAA/ Aaa | AA/ Aa | A | BBB/Baa | Below Investment Grade | Unrated | Notional/ Maximum Payout | |||||||||||||||||||||
Credit related derivative contracts: | |||||||||||||||||||||||||||
Index credit default swaps | $ | 698.4 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 698.4 | |||||||||||||
Single name credit default swaps | $ | — | $ | — | $ | 10.0 | $ | 57.5 | $ | 264.3 | $ | 50.6 | 382.4 |
Net Capital | Excess Net Capital | ||||||
Jefferies LLC | $ | 1,556,602 | $ | 1,471,663 | |||
Jefferies Execution | 9,647 | 9,397 |
December 31, 2015 | December 31, 2014 | ||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Other Assets: | |||||||||||||||
Notes and loans receivable (a) | $ | 488,690 | $ | 490,208 | $ | 213,174 | $ | 217,171 | |||||||
Financial Liabilities: | |||||||||||||||
Short-term borrowings (b) | 310,659 | 310,659 | 12,000 | 12,000 | |||||||||||
Long-term debt (b) | 7,407,594 | 7,299,405 | 8,527,929 | 8,806,700 |
(a) | Notes and loans receivable: The fair values are primarily measured using Level 2 and 3 inputs principally based on discounted future cash flows using market interest rates for similar instruments. |
(b) | Short-term borrowings and long-term debt: The fair values of short term borrowings are estimated to be the carrying amount. The fair values of non-variable rate debt are estimated using quoted prices and estimated rates that would be available for debt with similar terms. The fair value of variable rate debt is estimated to be the carrying amount. |
2014 | 2013 | ||||||
Revenues and other income: | |||||||
Gaming entertainment | $ | 67,739 | $ | 114,844 | |||
Investment and other income | 4,700 | 4,691 | |||||
72,439 | 119,535 | ||||||
Expenses: | |||||||
Direct operating expenses - Gaming entertainment | 48,877 | 85,233 | |||||
Compensation and benefits | 4,503 | 19,534 | |||||
Depreciation and amortization | 5,208 | 8,919 | |||||
Selling, general and other expenses | 41,378 | 98,178 | |||||
99,966 | 211,864 | ||||||
Loss from discontinued operations before income taxes | (27,527 | ) | (92,329 | ) | |||
Income tax (benefit) | (9,634 | ) | (32,303 | ) | |||
Loss from discontinued operations after income taxes | $ | (17,893 | ) | $ | (60,026 | ) |
2015 | 2014 | 2013 | |||||||||
(In thousands) | |||||||||||
Net Revenues: | |||||||||||
Reportable Segments: | |||||||||||
Jefferies | $ | 2,476,133 | $ | 2,986,325 | $ | 2,134,002 | |||||
National Beef | 7,402,419 | 7,832,424 | 7,487,724 | ||||||||
Corporate and other | 78,122 | 60,720 | 50,190 | ||||||||
Total net revenues related to reportable segments | $ | 9,956,674 | $ | 10,879,469 | $ | 9,671,916 | |||||
All other (1) | 950,784 | 607,016 | 753,830 | ||||||||
Intercompany eliminations (2) | (21,000 | ) | — | — | |||||||
Total consolidated net revenues | $ | 10,886,458 | $ | 11,486,485 | $ | 10,425,746 | |||||
Pre-tax income (loss) from continuing operations: | |||||||||||
Reportable Segments: | |||||||||||
Jefferies | $ | 119,165 | $ | 358,396 | $ | 260,984 | |||||
National Beef | (123,915 | ) | (40,303 | ) | (42,358 | ) | |||||
Corporate and other | (45,592 | ) | (144,508 | ) | (91,917 | ) | |||||
Pre-tax income (loss) from continuing operations related to reportable segments | (50,342 | ) | 173,585 | 126,709 | |||||||
All other (1) | 492,762 | 305,752 | 491,093 | ||||||||
Parent Company interest | (85,884 | ) | (98,115 | ) | (72,217 | ) | |||||
Total consolidated pre-tax income from continuing operations | $ | 356,536 | $ | 381,222 | $ | 545,585 | |||||
Depreciation and amortization expenses: | |||||||||||
Reportable Segments: | |||||||||||
Jefferies | $ | 92,165 | $ | 78,566 | $ | 59,631 | |||||
National Beef | 89,317 | 85,305 | 88,484 | ||||||||
Corporate and other | 3,744 | 5,627 | 9,924 | ||||||||
Total depreciation and amortization expenses related to reportable segments | $ | 185,226 | $ | 169,498 | $ | 158,039 | |||||
All other | 38,907 | 16,495 | 9,386 | ||||||||
Total consolidated depreciation and amortization expenses | $ | 224,133 | $ | 185,993 | $ | 167,425 | |||||
Identifiable assets employed: | |||||||||||
Reportable Segments: | |||||||||||
Jefferies (3) | $ | 38,608,956 | $ | 44,563,808 | $ | 40,168,572 | |||||
National Beef | 1,516,130 | 1,718,521 | 1,703,662 | ||||||||
Corporate and other | 1,778,987 | 3,240,561 | 4,515,768 | ||||||||
Identifiable assets employed related to reportable segments | 41,904,073 | 49,522,890 | 46,388,002 | ||||||||
All other | 4,585,462 | 3,154,423 | 1,561,997 | ||||||||
Intercompany eliminations | (149,723 | ) | (53,405 | ) | (83,218 | ) | |||||
Total consolidated assets | $ | 46,339,812 | $ | 52,623,908 | $ | 47,866,781 |
(1) | All other revenue and pre-tax income from continuing operations include $491.3 million of realized and unrealized gains relating to our investment in in FXCM for the year ended December 31, 2015. |
(2) | Revenue intercompany elimination relates to investment banking and advisory fee paid to Jefferies in connection with our entering into the agreement with FXCM. |
(3) | At December 31, 2015, 2014 and 2013, includes $320.2 million, $399.6 million and $524.8 million, respectively, of Jefferies deferred tax asset, net. |
For the year ended December 31, 2015 | For the year ended December 31, 2014 | For the period from the Jefferies acquisition through December 31, 2013 | |||||||||
Americas (1) | $ | 1,887,899 | $ | 2,257,870 | $ | 1,645,110 | |||||
Europe (2) | 510,044 | 634,358 | 441,795 | ||||||||
Asia | 78,190 | 94,097 | 47,097 | ||||||||
$ | 2,476,133 | $ | 2,986,325 | $ | 2,134,002 |
(1) | Substantially all relates to United States results. |
(2) | Substantially all relates to United Kingdom results. |
Severance costs | $ | 30,327 | ||
Accelerated amortization of restricted stock and restricted cash awards | 7,922 | |||
Accelerated amortization of capitalized software | 19,745 | |||
Contract termination costs | 11,247 | |||
Selling, general and other expenses | 3,853 | |||
Total | $ | 73,094 |
Severance costs | Other costs | Contract termination costs | Total restructuring costs | Accelerated amortization of restricted stock and restricted cash awards | Accelerated amortization of capitalized software | Impairments | Total | |||||||||||||||||||||||
Balance at March 31, 2015 | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||
Expenses | 30,327 | 2,774 | 11,247 | 44,348 | $ | 7,922 | $ | 19,745 | 1,079 | $ | 73,094 | |||||||||||||||||||
Payments | (25,522 | ) | (2,774 | ) | (11,247 | ) | (39,543 | ) | ||||||||||||||||||||||
Liability at December 31, 2015 | $ | 4,805 | $ | — | $ | — | $ | 4,805 |
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
(In thousands, except per share amounts) | |||||||||||||||
2015 | |||||||||||||||
Net revenues | $ | 3,184,683 | $ | 2,839,463 | $ | 2,366,096 | $ | 2,496,216 | |||||||
Income (loss) from continuing operations | $ | 374,429 | $ | 15,034 | $ | (181,912 | ) | $ | 39,038 | ||||||
Income from discontinued operations, net of taxes | $ | — | $ | — | $ | 429 | $ | — | |||||||
Gain on disposal of discontinued operations, net of taxes | $ | — | $ | — | $ | 1,300 | $ | 3,793 | |||||||
Net loss attributable to the noncontrolling interest | $ | 234 | $ | 356 | $ | 1,238 | $ | 3,168 | |||||||
Net loss attributable to the redeemable noncontrolling interests | $ | 7,112 | $ | 2,031 | $ | 6,788 | $ | 10,612 | |||||||
Preferred stock dividends | $ | (1,016 | ) | $ | (1,015 | ) | $ | (1,016 | ) | $ | (1,016 | ) | |||
Net income (loss) attributable to Leucadia National Corporation common shareholders | $ | 380,759 | $ | 16,406 | $ | (173,173 | ) | $ | 55,595 | ||||||
Basic earnings (loss) per common share attributable to | |||||||||||||||
Leucadia National Corporation common shareholders: | |||||||||||||||
Income (loss) from continuing operations | $ | 1.00 | $ | 0.04 | $ | (0.47 | ) | $ | 0.14 | ||||||
Income from discontinued operations | — | — | — | — | |||||||||||
Gain on disposal of discontinued operations | — | — | — | 0.01 | |||||||||||
Net income (loss) | $ | 1.00 | $ | 0.04 | $ | (0.47 | ) | $ | 0.15 | ||||||
Number of shares used in calculation | 373,541 | 373,654 | 372,547 | 369,840 | |||||||||||
Diluted earnings (loss) per common share attributable to | |||||||||||||||
Leucadia National Corporation common shareholders: | |||||||||||||||
Income (loss) from continuing operations | $ | 0.99 | $ | 0.04 | $ | (0.47 | ) | $ | 0.14 | ||||||
Income from discontinued operations | — | — | — | — | |||||||||||
Gain on disposal of discontinued operations | — | — | — | 0.01 | |||||||||||
Net income (loss) | $ | 0.99 | $ | 0.04 | $ | (0.47 | ) | $ | 0.15 | ||||||
Number of shares used in calculation | 377,713 | 373,662 | 372,547 | 369,840 | |||||||||||
2014 | |||||||||||||||
Net revenues | $ | 2,942,524 | $ | 2,851,963 | $ | 3,003,643 | $ | 2,688,355 | |||||||
Income (loss) from continuing operations | $ | 100,846 | $ | 70,190 | $ | 58,253 | $ | (14,038 | ) | ||||||
Income (loss) from discontinued operations, net of taxes | $ | (8,909 | ) | $ | (4,240 | ) | $ | (5,676 | ) | $ | 932 | ||||
Gain (loss) on disposal of discontinued operations, net of taxes | $ | — | $ | 500 | $ | 7,685 | $ | (6,518 | ) | ||||||
Net (income) loss attributable to the noncontrolling interest | $ | (2,537 | ) | $ | 912 | $ | 1,058 | $ | 1,294 | ||||||
Net (income) loss attributable to the redeemable noncontrolling interests | $ | 5,932 | $ | (1,273 | ) | $ | (5,625 | ) | $ | 9,582 | |||||
Preferred stock dividends | $ | (1,016 | ) | $ | (1,015 | ) | $ | (1,016 | ) | $ | (1,015 | ) | |||
Net income (loss) attributable to Leucadia National Corporation common shareholders | $ | 94,316 | $ | 65,074 | $ | 54,679 | $ | (9,763 | ) | ||||||
Basic earnings (loss) per common share attributable to | |||||||||||||||
Leucadia National Corporation common shareholders: | |||||||||||||||
Income (loss) from continuing operations | $ | 0.27 | $ | 0.18 | $ | 0.14 | $ | (0.01 | ) | ||||||
Income (loss) from discontinued operations | (0.02 | ) | (0.01 | ) | (0.02 | ) | — | ||||||||
Gain (loss) on disposal of discontinued operations | — | — | 0.02 | (0.02 | ) | ||||||||||
Net income (loss) | $ | 0.25 | $ | 0.17 | $ | 0.14 | $ | (0.03 | ) | ||||||
Number of shares used in calculation | 368,487 | 371,979 | 373,347 | 373,617 | |||||||||||
Diluted earnings (loss) per common share attributable to | |||||||||||||||
Leucadia National Corporation common shareholders: | |||||||||||||||
Income (loss) from continuing operations | $ | 0.27 | $ | 0.18 | $ | 0.14 | $ | (0.01 | ) | ||||||
Income (loss) from discontinued operations | (0.02 | ) | (0.01 | ) | (0.02 | ) | — | ||||||||
Gain (loss) on disposal of discontinued operations | — | — | 0.02 | (0.02 | ) | ||||||||||
Net income (loss) | $ | 0.25 | $ | 0.17 | $ | 0.14 | $ | (0.03 | ) | ||||||
Number of shares used in calculation | 377,348 | 373,179 | 373,375 | 373,617 |
November 30, 2015 | November 30, 2014 | ||||||
ASSETS | |||||||
Cash and cash equivalents ($669 and $178 at November 30, 2015 and November 30, 2014, respectively, related to consolidated VIEs) | $ | 3,510,163 | $ | 4,079,968 | |||
Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations | 751,084 | 3,444,674 | |||||
Financial instruments owned, at fair value, (including securities pledged of $12,207,123 and $14,794,488 at November 30, 2015 and November 30, 2014, respectively; and $68,679 and $62,990 at November 30, 2015 and November 30, 2014, respectively, related to consolidated VIEs) | 16,559,116 | 18,636,612 | |||||
Investments in managed funds | 85,775 | 74,365 | |||||
Loans to and investments in related parties | 825,908 | 773,141 | |||||
Securities borrowed | 6,975,136 | 6,853,103 | |||||
Securities purchased under agreements to resell | 3,857,306 | 3,926,858 | |||||
Securities received as collateral | — | 5,418 | |||||
Receivables: | |||||||
Brokers, dealers and clearing organizations | 1,574,759 | 2,164,006 | |||||
Customers | 1,191,316 | 1,250,520 | |||||
Fees, interest and other ($329 and $363 at November 30, 2015 and November 30, 2014, respectively, related to consolidated VIEs) | 260,924 | 262,437 | |||||
Premises and equipment | 243,486 | 251,957 | |||||
Goodwill | 1,656,588 | 1,662,636 | |||||
Other assets | 1,073,581 | 1,131,953 | |||||
Total assets | $ | 38,565,142 | $ | 44,517,648 | |||
LIABILITIES AND EQUITY | |||||||
Short-term borrowings | $ | 310,659 | $ | 12,000 | |||
Financial instruments sold, not yet purchased, at fair value | 6,785,064 | 8,881,268 | |||||
Collateralized financings: | |||||||
Securities loaned | 2,979,300 | 2,598,487 | |||||
Securities sold under agreements to repurchase | 10,004,428 | 10,672,157 | |||||
Other secured financings ($762,909 and $597,999 at November 30, 2015 and November 30, 2014, respectively, related to consolidated VIEs) | 762,909 | 605,824 | |||||
Obligation to return securities received as collateral | — | 5,418 | |||||
Payables: | |||||||
Brokers, dealers and clearing organizations | 2,742,001 | 2,280,103 | |||||
Customers | 2,780,493 | 6,241,965 | |||||
Accrued expenses and other liabilities ($859 and $589 at November 30, 2015 and November 30, 2014, respectively, related to consolidated VIEs) | 1,049,019 | 1,273,378 | |||||
Long-term debt | 5,641,892 | 6,483,617 | |||||
Total liabilities | 33,055,765 | 39,054,217 | |||||
EQUITY | |||||||
Member’s paid-in capital | 5,526,855 | 5,439,256 | |||||
Accumulated other comprehensive loss: | |||||||
Currency translation adjustments | (36,811 | ) | (9,654 | ) | |||
Additional minimum pension liability | (8,135 | ) | (5,019 | ) | |||
Total accumulated other comprehensive loss | (44,946 | ) | (14,673 | ) | |||
Total member’s equity | 5,481,909 | 5,424,583 | |||||
Noncontrolling interests | 27,468 | 38,848 | |||||
Total equity | 5,509,377 | 5,463,431 | |||||
Total liabilities and equity | $ | 38,565,142 | $ | 44,517,648 |
Successor | Predecessor | |||||||||||||||
Year Ended November 30, 2015 | Year Ended November 30, 2014 | Nine Months Ended November 30, 2013 | Three Months Ended February 28, 2013 | |||||||||||||
Revenues: | ||||||||||||||||
Commissions and other fees | $ | 659,002 | $ | 668,801 | $ | 472,596 | $ | 146,240 | ||||||||
Principal transactions | 172,608 | 532,292 | 399,091 | 300,278 | ||||||||||||
Investment banking | 1,439,007 | 1,529,274 | 1,003,517 | 288,278 | ||||||||||||
Asset management fees and investment income from managed funds | 8,015 | 17,047 | 36,093 | 10,883 | ||||||||||||
Interest | 922,189 | 1,019,970 | 714,248 | 249,277 | ||||||||||||
Other | 74,074 | 78,881 | 94,195 | 27,004 | ||||||||||||
Total revenues | 3,274,895 | 3,846,265 | 2,719,740 | 1,021,960 | ||||||||||||
Interest expense | 799,654 | 856,127 | 579,059 | 203,416 | ||||||||||||
Net revenues | 2,475,241 | 2,990,138 | 2,140,681 | 818,544 | ||||||||||||
Interest on mandatorily redeemable preferred interests of consolidated subsidiaries | — | — | 3,368 | 10,961 | ||||||||||||
Net revenues, less interest on mandatorily redeemable preferred interests of consolidated subsidiaries | 2,475,241 | 2,990,138 | 2,137,313 | 807,583 | ||||||||||||
Non-interest expenses: | ||||||||||||||||
Compensation and benefits | 1,467,131 | 1,698,530 | 1,213,908 | 474,217 | ||||||||||||
Non-compensation expenses: | ||||||||||||||||
Floor brokerage and clearing fees | 199,780 | 215,329 | 150,774 | 46,155 | ||||||||||||
Technology and communications | 313,044 | 268,212 | 193,683 | 59,878 | ||||||||||||
Occupancy and equipment rental | 101,138 | 107,767 | 86,701 | 24,309 | ||||||||||||
Business development | 105,963 | 106,984 | 63,115 | 24,927 | ||||||||||||
Professional services | 103,972 | 109,601 | 72,802 | 24,135 | ||||||||||||
Bad debt provision | (396 | ) | 55,355 | 179 | 1,945 | |||||||||||
Goodwill impairment | — | 54,000 | — | — | ||||||||||||
Other | 70,382 | 71,339 | 91,856 | 12,530 | ||||||||||||
Total non-compensation expenses | 893,883 | 988,587 | 659,110 | 193,879 | ||||||||||||
Total non-interest expenses | 2,361,014 | 2,687,117 | 1,873,018 | 668,096 | ||||||||||||
Earnings before income taxes | 114,227 | 303,021 | 264,295 | 139,487 | ||||||||||||
Income tax expense | 18,898 | 142,061 | 94,686 | 48,645 | ||||||||||||
Net earnings | 95,329 | 160,960 | 169,609 | 90,842 | ||||||||||||
Net earnings attributable to noncontrolling interests | 1,795 | 3,400 | 8,418 | 10,704 | ||||||||||||
Net earnings attributable to Jefferies Group LLC/ common stockholders | $ | 93,534 | $ | 157,560 | $ | 161,191 | $ | 80,138 | ||||||||
Earnings per common share: | ||||||||||||||||
Basic | N/A | N/A | N/A | $ | 0.35 | |||||||||||
Diluted | N/A | N/A | N/A | $ | 0.35 | |||||||||||
Dividends declared per common share | N/A | N/A | N/A | $ | 0.075 | |||||||||||
Weighted average common shares: | ||||||||||||||||
Basic | N/A | N/A | N/A | 213,732 | ||||||||||||
Diluted | N/A | N/A | N/A | 217,844 |
Successor | Predecessor | |||||||||||||||
Year Ended November 30, 2015 | Year Ended November 30, 2014 | Nine Months Ended November 30, 2013 | Three Months Ended February 28, 2013 | |||||||||||||
Net earnings | $ | 95,329 | $ | 160,960 | $ | 169,609 | $ | 90,842 | ||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||
Currency translation and other adjustments | (27,157 | ) | (30,995 | ) | 21,341 | (10,018 | ) | |||||||||
Minimum pension liability adjustments, net of tax (1) | (3,116 | ) | (7,778 | ) | 2,759 | — | ||||||||||
Total other comprehensive income (loss), net of tax (2) | (30,273 | ) | (38,773 | ) | 24,100 | (10,018 | ) | |||||||||
Comprehensive income | 65,056 | 122,187 | 193,709 | 80,824 | ||||||||||||
Net earnings attributable to noncontrolling interests | 1,795 | 3,400 | 8,418 | 10,704 | ||||||||||||
Comprehensive income attributable to Jefferies Group LLC/ common stockholders | $ | 63,261 | $ | 118,787 | $ | 185,291 | $ | 70,120 |
(1) | Includes income tax benefit of $4.2 million, $0.5 million, $2.5 million and $0.0 for the years ended November 30, 2015 and 2014, the nine months ended November 30, 2013 and the three months ended February 28, 2013, respectively. |
(2) | None of the components of other comprehensive income (loss) are attributable to noncontrolling interests. |
Successor | Predecessor | |||||||||||||||
Year Ended November 30, 2015 | Year Ended November 30, 2014 | Nine Months Ended November 30, 2013 | Three Months Ended February 28, 2013 | |||||||||||||
Common stock, par value $0.0001 per share: | ||||||||||||||||
Balance, beginning of period | $ | — | $ | — | $ | — | $ | 20 | ||||||||
Issued | — | — | — | 1 | ||||||||||||
Balance, end of period | $ | — | $ | — | $ | — | $ | 21 | ||||||||
Member’s paid-in capital: | ||||||||||||||||
Balance, beginning of period | $ | 5,439,256 | $ | 5,280,420 | $ | 4,754,101 | $ | — | ||||||||
Contributions | — | — | 362,255 | — | ||||||||||||
Net earnings attributable to Jefferies Group LLC | 93,534 | 157,560 | 161,191 | — | ||||||||||||
Tax benefit (detriment) for issuance of share-based awards | (5,935 | ) | 1,276 | 2,873 | — | |||||||||||
Balance, end of period | $ | 5,526,855 | $ | 5,439,256 | $ | 5,280,420 | $ | — | ||||||||
Additional paid-in capital: | ||||||||||||||||
Balance, beginning of period | $ | — | $ | — | $ | — | $ | 2,219,959 | ||||||||
Benefit plan share activity (1) | — | — | — | 3,138 | ||||||||||||
Share-based expense, net of forfeitures and clawbacks | — | — | — | 22,288 | ||||||||||||
Proceeds from exercise of stock options | — | — | — | 57 | ||||||||||||
Acquisitions and contingent consideration | — | — | — | 2,535 | ||||||||||||
Tax deficiency for issuance of share-based awards | — | — | — | (17,965 | ) | |||||||||||
Dividend equivalents on share-based plans | — | — | — | 1,418 | ||||||||||||
Balance, end of period | $ | — | $ | — | $ | — | $ | 2,231,430 | ||||||||
Retained earnings: | ||||||||||||||||
Balance, beginning of period | $ | — | $ | — | $ | — | $ | 1,281,855 | ||||||||
Net earnings to common stockholders | — | — | — | 80,138 | ||||||||||||
Dividends | — | — | — | (17,217 | ) | |||||||||||
Balance, end of period | $ | — | $ | — | $ | — | $ | 1,344,776 | ||||||||
Accumulated other comprehensive income (loss) (2) (3): | ||||||||||||||||
Balance, beginning of period | $ | (14,673 | ) | $ | 24,100 | $ | — | $ | (53,137 | ) | ||||||
Currency adjustments | (27,157 | ) | (30,995 | ) | 21,341 | (10,018 | ) | |||||||||
Pension adjustments, net of tax | (3,116 | ) | (7,778 | ) | 2,759 | — | ||||||||||
Balance, end of period | $ | (44,946 | ) | $ | (14,673 | ) | $ | 24,100 | $ | (63,155 | ) | |||||
Treasury stock, at cost: | ||||||||||||||||
Balance, beginning of period | $ | — | $ | — | $ | — | $ | (12,682 | ) | |||||||
Purchases | — | — | — | (166,541 | ) | |||||||||||
Returns / forfeitures | — | — | — | (1,922 | ) | |||||||||||
Balance, end of period | $ | — | $ | — | $ | — | $ | (181,145 | ) | |||||||
Total member’s / common stockholders’ equity | $ | 5,481,909 | $ | 5,424,583 | $ | 5,304,520 | $ | 3,331,927 | ||||||||
Noncontrolling interests: | ||||||||||||||||
Balance, beginning of period | $ | 38,848 | $ | 117,154 | $ | 356,180 | $ | 346,738 | ||||||||
Net earnings attributable to noncontrolling interests | 1,795 | 3,400 | 8,418 | 10,704 | ||||||||||||
Contributions | — | 39,075 | 100,210 | — | ||||||||||||
Distributions | (4,982 | ) | — | (25 | ) | (1,262 | ) | |||||||||
Redemptions | — | — | (347,629 | ) | — | |||||||||||
Deconsolidation of asset management company | (8,193 | ) | (120,781 | ) | — | — | ||||||||||
Balance, end of period | $ | 27,468 | $ | 38,848 | $ | 117,154 | $ | 356,180 | ||||||||
Total equity | $ | 5,509,377 | $ | 5,463,431 | $ | 5,421,674 | $ | 3,688,107 |
(1) | Includes grants related to the Incentive Plan, Deferred Compensation Plan and Directors' Plan. |
(2) | The components of other comprehensive income (loss) are attributable to Jefferies Group LLC (formerly Jefferies Group, Inc.). None of the components of other comprehensive income (loss) are attributable to noncontrolling interests. |
(3) | There were no material reclassifications out of Accumulated other comprehensive income during the year ended November 30, 2015, the year ended November 30, 2014 and the nine months ended November 30, 2013. |
Successor | Predecessor | |||||||||||||||
Year Ended November 30, 2015 | Year Ended November 30, 2014 | Nine Months Ended November 30, 2013 | Three Months Ended February 28, 2013 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net earnings | $ | 95,329 | $ | 160,960 | $ | 169,609 | $ | 90,842 | ||||||||
Adjustments to reconcile net earnings to net cash (used in) provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 15,236 | 691 | (2,509 | ) | 17,393 | |||||||||||
Goodwill impairment | — | 54,000 | — | — | ||||||||||||
Interest on mandatorily redeemable preferred interests of consolidated subsidiaries | — | — | 3,368 | 10,961 | ||||||||||||
Accruals related to various benefit plans and stock issuances, net of forfeiture | — | — | — | 23,505 | ||||||||||||
Deferred income taxes | 88,796 | 122,195 | 31,284 | 30,835 | ||||||||||||
Income on loans to and investments in related parties | (75,717 | ) | (90,243 | ) | (92,181 | ) | — | |||||||||
Distributions received on investments in related parties | 76,681 | 53,985 | 37,742 | — | ||||||||||||
Other adjustments | (97,804 | ) | (78,064 | ) | (14,740 | ) | (1,154 | ) | ||||||||
Net change in assets and liabilities: | ||||||||||||||||
Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations | 2,691,028 | 166,108 | 113,754 | 352,891 | ||||||||||||
Receivables: | ||||||||||||||||
Brokers, dealers and clearing organizations | 576,832 | 11,872 | 506,774 | (1,225,840 | ) | |||||||||||
Customers | 57,837 | (294,412 | ) | (170,286 | ) | 67,626 | ||||||||||
Fees, interest and other | 541 | (12,062 | ) | (29,388 | ) | (29,149 | ) | |||||||||
Securities borrowed | (127,060 | ) | (1,497,438 | ) | (41,678 | ) | (224,557 | ) | ||||||||
Financial instruments owned | 2,003,978 | (2,243,053 | ) | (200,974 | ) | 229,394 | ||||||||||
Loans to and investments in related parties | — | — | — | (197,166 | ) | |||||||||||
Investments in managed funds | 15,498 | 13,473 | 2,674 | (2,213 | ) | |||||||||||
Securities purchased under agreements to resell | 53,817 | (200,568 | ) | (156,197 | ) | (224,418 | ) | |||||||||
Other assets | (63,110 | ) | (146,114 | ) | 47,296 | (5,346 | ) | |||||||||
Payables: | ||||||||||||||||
Brokers, dealers and clearing organizations | 471,661 | 968,615 | (532,255 | ) | (1,018,241 | ) | ||||||||||
Customers | (3,455,080 | ) | 1,089,423 | (224,772 | ) | (124,233 | ) | |||||||||
Securities loaned | 385,929 | 95,607 | 600,539 | (28,138 | ) | |||||||||||
Financial instruments sold, not yet purchased | (2,043,319 | ) | 1,832,930 | (2,511,777 | ) | 2,327,667 | ||||||||||
Securities sold under agreements to repurchase | (650,795 | ) | (84,303 | ) | 2,794,412 | (197,493 | ) | |||||||||
Accrued expenses and other liabilities | (230,370 | ) | 69,459 | 414,515 | (267,336 | ) | ||||||||||
Net cash (used in) provided by operating activities | (210,092 | ) | (6,939 | ) | 745,210 | (394,170 | ) | |||||||||
Cash flows from investing activities: | ||||||||||||||||
Contributions to loans to and investments in related parties | (1,438,675 | ) | (2,786,394 | ) | (2,241,232 | ) | — | |||||||||
Distributions from loans to and investments in related parties | 1,384,944 | 2,751,384 | 2,360,691 | — | ||||||||||||
Net payments on premises and equipment | (68,813 | ) | (110,536 | ) | (48,534 | ) | (10,706 | ) | ||||||||
Cash disposed in connection with disposal of reporting units, net of cash received | — | — | (4,939 | ) | — | |||||||||||
Deconsolidation of asset management entity | (16,512 | ) | (137,856 | ) | — | — | ||||||||||
Cash received from contingent consideration | 4,444 | 6,253 | 3,796 | 1,203 | ||||||||||||
Net cash (used in) provided by investing activities | (134,612 | ) | (277,149 | ) | 69,782 | (9,503 | ) |
Successor | Predecessor | |||||||||||||||
Year Ended November 30, 2015 | Year Ended November 30, 2014 | Nine Months Ended November 30, 2013 | Three Months Ended February 28, 2013 | |||||||||||||
Cash flows from financing activities: | ||||||||||||||||
Excess tax benefits from the issuance of share-based awards | $ | 749 | $ | 1,921 | $ | 3,054 | $ | 5,682 | ||||||||
Proceeds from short-term borrowings | 17,263,217 | 18,965,163 | 13,623,650 | 6,744,000 | ||||||||||||
Payments on short-term borrowings | (16,964,558 | ) | (18,965,163 | ) | (13,711,650 | ) | (6,794,000 | ) | ||||||||
Proceeds from secured credit facility | 903,000 | 2,819,000 | 920,000 | 900,000 | ||||||||||||
Payments on secured credit facility | (1,073,000 | ) | (2,849,000 | ) | (980,000 | ) | (990,007 | ) | ||||||||
Net proceeds from other secured financings | 157,085 | 371,113 | 114,711 | 60,000 | ||||||||||||
Net proceeds from issuance of senior notes, net of issuance costs | — | 681,222 | — | 991,469 | ||||||||||||
Repayment of long-term debt | (500,000 | ) | (250,000 | ) | — | — | ||||||||||
Proceeds from contributions of noncontrolling interests | — | 39,075 | 100,210 | — | ||||||||||||
Payments on mandatorily redeemable preferred interest of consolidated subsidiaries | — | — | (64 | ) | (61 | ) | ||||||||||
Payments on repurchase of common stock | — | — | — | (166,541 | ) | |||||||||||
Payments on dividends | — | — | — | (15,799 | ) | |||||||||||
Proceeds from exercise of stock options, not including tax benefits | — | — | — | 57 | ||||||||||||
Payments on distributions to noncontrolling interests | (4,982 | ) | — | (347,654 | ) | (1,262 | ) | |||||||||
Net cash (used in) provided by financing activities | (218,489 | ) | 813,331 | (277,743 | ) | 733,538 | ||||||||||
Effect of changes in exchange rates on cash and cash equivalents | (6,612 | ) | (10,394 | ) | 5,912 | (4,502 | ) | |||||||||
Net (decrease) increase in cash and cash equivalents | (569,805 | ) | 518,849 | 543,161 | 325,363 | |||||||||||
Cash and cash equivalents at beginning of period | 4,079,968 | 3,561,119 | 3,017,958 | 2,692,595 | ||||||||||||
Cash and cash equivalents at end of period | $ | 3,510,163 | $ | 4,079,968 | $ | 3,561,119 | $ | 3,017,958 | ||||||||
Supplemental disclosures of cash flow information: | ||||||||||||||||
Cash paid (received) during the period for: | ||||||||||||||||
Interest | $ | 859,815 | $ | 922,194 | $ | 638,657 | $ | 178,836 | ||||||||
Income taxes, net | (683 | ) | 120,703 | 55,251 | (34,054 | ) |
Note | Page |
Level 1: | Quoted prices are available in active markets for identical assets or liabilities at the reported date. |
Level 2: | Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these financial instruments include cash instruments for which quoted prices are available but traded less frequently, derivative instruments whose fair value have been derived using a model where inputs to the model are directly observable in the market, or can be derived principally from or corroborated by observable market data, and instruments that are fair valued using other financial instruments, the parameters of which can be directly observed. |
Level 3: | Instruments that have little to no pricing observability at the reported date. These financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation. |
Purchase Price: | |||
Jefferies common stock outstanding | 205,368,031 | ||
Less: Jefferies common stock owned by Leucadia | (58,006,024 | ) | |
Jefferies common stock acquired by Leucadia | 147,362,007 | ||
Exchange ratio | 0.81 | ||
Leucadia’s shares issued (excluding for Jefferies shares held by Leucadia) | 119,363,226 | ||
Less: restricted shares issued for share-based payment awards (1) | (6,894,856 | ) | |
Leucadia’s shares issued, excluding share-based payment awards | 112,468,370 | ||
Closing price of Leucadia’s common stock (2) | $ | 26.90 | |
Fair value of common shares acquired by Leucadia | $ | 3,025,399 | |
Fair value of 3.25% cumulative convertible preferred shares (3) | 125,000 | ||
Fair value of shares-based payment awards (4) | 343,811 | ||
Fair value of Jefferies shares owned by Leucadia (5) | 1,259,891 | ||
Total purchase price | $ | 4,754,101 |
(1) | Represents shares of restricted stock included in Jefferies common stock outstanding that contained a future service requirement at March 1, 2013. |
(2) | The value of the shares of common stock exchanged with Jefferies shareholders was based upon the closing price of Leucadia’s common stock at February 28, 2013, the last trading day prior to the date of acquisition. |
(3) | Represents Leucadia’s 3.25% Cumulative Convertible Preferred Shares issued in exchange for Jefferies Group, Inc.’s 3.25% Series A-1 Convertible Cumulative Preferred Stock. |
(4) | The fair value of share-based payment awards is calculated in accordance with Accounting Standards Codification 718, Compensation – Stock Compensation. Share-based payment awards attributable to pre-combination service are included as part of the total purchase price. Share-based payment awards attributable to pre-combination service is estimated based on the ratio of the pre-combination service performed to the original service period of the award. |
(5) | The fair value of Jefferies shares owned by Leucadia was based upon a price of $21.72, the closing price of Jefferies common stock at February 28, 2013. |
Assets acquired: | |||
Cash and cash equivalents | $ | 3,017,958 | |
Cash and securities segregated | 3,728,742 | ||
Financial instruments owned, at fair value | 16,413,535 | ||
Investments in managed funds | 59,976 | ||
Loans to and investments in related parties | 766,893 | ||
Securities borrowed | 5,315,488 | ||
Securities purchased under agreements to resell | 3,578,366 | ||
Securities received as collateral | 25,338 | ||
Receivables: | |||
Brokers, dealers and clearing organizations | 2,444,085 | ||
Customers | 1,045,251 | ||
Fees, interest and other | 225,555 | ||
Premises and equipment | 192,603 | ||
Indefinite-lived intangible exchange memberships and licenses (1) | 15,551 | ||
Finite-lived intangible customer relationships (1) | 136,002 | ||
Finite-lived trade name (1) | 131,299 | ||
Other assets | 939,600 | ||
Total assets | $ | 38,036,242 | |
Liabilities assumed: | |||
Short-term borrowings | $ | 100,000 | |
Financial instruments sold, not yet purchased, at fair value | 9,766,876 | ||
Securities loaned | 1,902,687 | ||
Securities sold under agreements to repurchase | 7,976,492 | ||
Other secured financings | 122,294 | ||
Obligation to return securities received as collateral | 25,338 | ||
Payables: | |||
Brokers, dealers and clearing organizations | 1,787,055 | ||
Customers | 5,450,781 | ||
Accrued expenses and other liabilities | 793,843 | ||
Long-term debt | 6,362,024 | ||
Mandatorily redeemable preferred interests | 358,951 | ||
Total liabilities | $ | 34,646,341 | |
Noncontrolling interests | $ | 356,180 | |
Fair value of net assets acquired, excluding goodwill | $ | 3,033,721 | |
Goodwill | $ | 1,720,380 |
(1) | Intangible assets are recorded within Other assets on the Consolidated Statements of Financial Condition. |
November 30, 2015 | |||||||||||||||||||
Level 1(1) | Level 2(1) | Level 3 | Counterparty and Cash Collateral Netting (2) | Total | |||||||||||||||
Assets: | |||||||||||||||||||
Financial instruments owned: | |||||||||||||||||||
Corporate equity securities | $ | 1,853,351 | $ | 133,732 | $ | 40,906 | $ | — | $ | 2,027,989 | |||||||||
Corporate debt securities | — | 2,867,165 | 25,876 | — | 2,893,041 | ||||||||||||||
Collateralized debt obligations | — | 89,144 | 85,092 | — | 174,236 | ||||||||||||||
U.S. government and federal agency securities | 2,555,018 | 90,633 | — | — | 2,645,651 | ||||||||||||||
Municipal securities | — | 487,141 | — | — | 487,141 | ||||||||||||||
Sovereign obligations | 1,251,366 | 1,407,955 | 120 | — | 2,659,441 | ||||||||||||||
Residential mortgage-backed securities | — | 2,731,070 | 70,263 | — | 2,801,333 | ||||||||||||||
Commercial mortgage-backed securities | — | 1,014,913 | 14,326 | — | 1,029,239 | ||||||||||||||
Other asset-backed securities | — | 118,629 | 42,925 | — | 161,554 | ||||||||||||||
Loans and other receivables | — | 1,123,044 | 189,289 | — | 1,312,333 | ||||||||||||||
Derivatives | 1,037 | 4,395,704 | 19,785 | (4,165,446 | ) | 251,080 | |||||||||||||
Investments at fair value | — | 26,224 | 53,120 | — | 79,344 | ||||||||||||||
Total financial instruments owned, excluding Investments at fair value based on NAV | $ | 5,660,772 | $ | 14,485,354 | $ | 541,702 | $ | (4,165,446 | ) | $ | 16,522,382 | ||||||||
Cash and cash equivalents | $ | 3,510,163 | $ | — | $ | — | $ | — | $ | 3,510,163 | |||||||||
Cash and securities segregated and on deposit for regulatory purposes | $ | 751,084 | $ | — | $ | — | $ | — | $ | 751,084 | |||||||||
Liabilities: | |||||||||||||||||||
Financial instruments sold, not yet purchased: | |||||||||||||||||||
Corporate equity securities | $ | 1,382,377 | $ | 36,518 | $ | 38 | $ | — | $ | 1,418,933 | |||||||||
Corporate debt securities | — | 1,556,941 | — | — | 1,556,941 | ||||||||||||||
U.S. government and federal agency securities | 1,488,121 | — | — | — | 1,488,121 | ||||||||||||||
Sovereign obligations | 837,614 | 505,382 | — | — | 1,342,996 | ||||||||||||||
Residential mortgage-backed securities | — | 117 | — | — | 117 | ||||||||||||||
Loans | — | 758,939 | 10,469 | — | 769,408 | ||||||||||||||
Derivatives | 364 | 4,446,639 | 19,543 | (4,257,998 | ) | 208,548 | |||||||||||||
Total financial instruments sold, not yet purchased | $ | 3,708,476 | $ | 7,304,536 | $ | 30,050 | $ | (4,257,998 | ) | $ | 6,785,064 | ||||||||
Other secured financings | $ | — | $ | — | $ | 544 | $ | — | $ | 544 |
(1) | There were no material transfers between Level 1 and Level 2 for the year ended November 30, 2015. |
(2) | Represents counterparty and cash collateral netting across the levels of the fair value hierarchy for positions with the same counterparty. |
November 30, 2014 | |||||||||||||||||||
Level 1 (1) | Level 2 (1) | Level 3 | Counterparty and Cash Collateral Netting (2) | Total | |||||||||||||||
Assets: | |||||||||||||||||||
Financial instruments owned: | |||||||||||||||||||
Corporate equity securities | $ | 2,178,837 | $ | 226,441 | $ | 20,964 | $ | — | $ | 2,426,242 | |||||||||
Corporate debt securities | — | 3,342,276 | 22,766 | (4) | — | 3,365,042 | |||||||||||||
Collateralized debt obligations | — | 306,218 | 124,650 | (4) | — | 430,868 | |||||||||||||
U.S. government and federal agency securities | 2,694,268 | 81,273 | — | — | 2,775,541 | ||||||||||||||
Municipal securities | — | 590,849 | — | — | 590,849 | ||||||||||||||
Sovereign obligations | 1,968,747 | 790,764 | — | — | 2,759,511 | ||||||||||||||
Residential mortgage-backed securities | — | 2,879,954 | 82,557 | — | 2,962,511 | ||||||||||||||
Commercial mortgage-backed securities | — | 966,651 | 26,655 | — | 993,306 | ||||||||||||||
Other asset-backed securities | — | 137,387 | 2,294 | — | 139,681 | ||||||||||||||
Loans and other receivables | — | 1,458,760 | 97,258 | — | 1,556,018 | ||||||||||||||
Derivatives | 65,145 | 5,046,278 | 54,190 | (4,759,345 | ) | 406,268 | |||||||||||||
Investments at fair value | — | 73,148 | 53,224 | — | 126,372 | ||||||||||||||
Physical commodities | — | 62,234 | — | — | 62,234 | ||||||||||||||
Total financial instruments owned, excluding Investments at fair value based on NAV | $ | 6,906,997 | $ | 15,962,233 | $ | 484,558 | $ | (4,759,345 | ) | $ | 18,594,443 | ||||||||
Cash and cash equivalents | $ | 4,079,968 | $ | — | $ | — | $ | — | $ | 4,079,968 | |||||||||
Cash and securities segregated and on deposit for regulatory purposes (3) | $ | 3,444,674 | $ | — | $ | — | $ | — | $ | 3,444,674 | |||||||||
Securities received as collateral | $ | 5,418 | $ | — | $ | — | $ | — | $ | 5,418 | |||||||||
Liabilities: | |||||||||||||||||||
Financial instruments sold, not yet purchased: | |||||||||||||||||||
Corporate equity securities | $ | 1,911,145 | $ | 74,681 | $ | 38 | $ | — | $ | 1,985,864 | |||||||||
Corporate debt securities | — | 1,611,994 | 223 | — | 1,612,217 | ||||||||||||||
Collateralized debt obligations | — | 4,557 | — | — | 4,557 | ||||||||||||||
U.S. government and federal agency securities | 2,253,055 | — | — | — | 2,253,055 | ||||||||||||||
Sovereign obligations | 1,217,075 | 574,010 | — | — | 1,791,085 | ||||||||||||||
Loans | — | 856,525 | 14,450 | — | 870,975 | ||||||||||||||
Derivatives | 52,778 | 5,117,803 | 49,552 | (4,856,618 | ) | 363,515 | |||||||||||||
Total financial instruments sold, not yet purchased | $ | 5,434,053 | $ | 8,239,570 | $ | 64,263 | $ | (4,856,618 | ) | $ | 8,881,268 | ||||||||
Obligation to return securities received as collateral | $ | 5,418 | $ | — | $ | — | $ | — | $ | 5,418 | |||||||||
Other secured financings | $ | — | $ | — | $ | 30,825 | $ | — | $ | 30,825 | |||||||||
Embedded conversion option | $ | — | $ | — | $ | 693 | $ | — | $ | 693 |
(1) | At December 1, 2013, equity options presented within Financial instruments owned and Financial instruments sold, not yet purchased of $6.1 million and $6.6 million, respectively, were transferred from Level 1 to Level 2 as adjustments were incorporated into the valuation approach for such contracts to estimate the point within the bid-ask range that meets the best estimate of fair value. |
(2) | Represents counterparty and cash collateral netting across the levels of the fair value hierarchy for positions with the same counterparty. |
(3) | Cash and securities segregated and on deposit for regulatory purposes include U.S. government securities with a fair value of $453.7 million and CFTC approved money market funds with a fair value of $545.0 million. |
(4) | Level 3 Collateralized debt obligations increased by $33.2 million with a corresponding decrease in Level 3 Corporate debt securities from those previously reported to correct for the classification of certain positions. The total amount of Level 3 assets remained unchanged. |
• | 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 or Level 3 of the fair value hierarchy. |
• | 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 for recently executed market transactions and are categorized within Level 2 of the fair value hierarchy. Where such information is not available, non-exchange traded equity securities are categorized within Level 3 of the fair value hierarchy and measured using valuation techniques involving quoted prices of or market data for comparable companies, similar company ratios and multiples (e.g., price/EBITDA, price/book value), discounted cash flow analyses and transaction prices observed for subsequent financing or capital issuance by the company. When using pricing data of comparable companies, judgment must be applied to adjust the pricing data to account for differences between the measured security and the comparable security (e.g., issuer market capitalization, yield, dividend rate, geographical concentration). |
• | Equity warrants: 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. |
• | Corporate Bonds: Corporate bonds are measured primarily using pricing data from external pricing services and broker quotations, where available, prices observed for 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. 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. Corporate bonds measured using alternative valuation techniques are categorized within Level 3 of the fair value hierarchy and comprise a limited portion of our 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 for recently executed market transactions of comparable size. Where pricing data is less observable, valuations are categorized within Level 3 and are based on pending transactions involving the issuer or comparable issuers, prices implied from an issuer’s subsequent financings or recapitalizations, 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 and categorized within Level 1 of the fair value hierarchy. |
• | U.S. Agency Issued Debt Securities: Callable and non-callable U.S. agency issued 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 interest-only and principal-only securities and are generally measured using market price quotations from external pricing services and categorized within Level 2 of the fair value hierarchy. |
• | Agency Residential Interest-Only and Inverse Interest-Only Securities (“Agency Inverse IOs”): The fair value of agency inverse IOs is estimated using expected future cash flow techniques that incorporate prepayment models and other prepayment assumptions to amortize the underlying mortgage loan collateral. We use prices observed for recently executed transactions to develop market-clearing spread and yield curve assumptions. Valuation inputs with regard to the underlying collateral incorporate weighted average coupon, loan-to-value, credit scores, geographic location, maximum and average loan size, originator, servicer, and weighted average loan age. Agency inverse IOs are categorized within Level 2 or Level 3 of the fair value hierarchy. We also use vendor data in developing our assumptions, as appropriate. |
• | Non-Agency Residential Mortgage-Backed Securities: Fair values are 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. |
• | Agency Commercial Mortgage-Backed Securities: Government National Mortgage Association (“GNMA”) project loans are measured based on inputs corroborated from and benchmarked to observed prices of recent securitization transactions of similar securities with adjustments incorporating an evaluation for 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 for 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 and prices observed for recently executed market transactions and are categorized within Level 2 and Level 3 of the fair value hierarchy. |
• | Corporate Loans: Corporate loans categorized within Level 2 of the fair value hierarchy are measured based on market price quotations where market price quotations from external pricing services are supported by market transaction data. Corporate loans categorized within Level 3 of the fair value hierarchy are measured based on market price quotations that are considered to be less transparent, market prices for debt securities of the same creditor, and estimates of future cash flow 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. 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 of assets with similar underlying loan collateral to derive an implied spread. Securitization prices are adjusted to estimate the fair value of the loans incorporating an evaluation for various factors, including prepayment speeds, default rates, and cash flow structures as well as the likelihood of pricing levels in the current market environment. 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 incorporating additional 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 Trade Claim Receivables: Escrow and trade 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 trade claim receivables are categorized within Level 2 of the fair value hierarchy where fair value is based on recent trade activity in the same security. |
• | Listed Derivative Contracts: Listed derivative contracts that are actively traded are measured based on quoted exchange prices, which are generally obtained from external pricing services, and are categorized within Level 1 of the fair value hierarchy. Listed derivatives for which there is limited trading activity are measured based on incorporating the closing auction price of the underlying equity security, use similar valuation approaches as those applied to over-the-counter derivative contracts and are categorized within Level 2 of the fair value hierarchy. |
• | OTC Derivative Contracts: Over-the-counter (“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 period transaction. Inputs to valuation models are appropriately calibrated to 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. |
November 30, 2015 | |||||||||
Fair Value (1) | Unfunded Commitments | Redemption Frequency (if currently eligible) | |||||||
Equity Long/Short Hedge Funds (2) | $ | 78,083 | $ | — | Monthly, Quarterly | ||||
Fixed Income and High Yield Hedge Funds (3) | 1,703 | — | — | ||||||
Fund of Funds (4) | 287 | 94 | — | ||||||
Equity Funds (5) | 42,111 | 20,791 | — | ||||||
Convertible Bond Funds (6) | 326 | — | At Will | ||||||
Total | $ | 122,510 | $ | 20,885 |
November 30, 2014 | |||||||||
Fair Value (1) | Unfunded Commitments | Redemption Frequency (if currently eligible) | |||||||
Equity Long/Short Hedge Funds (2) | $ | 44,983 | $ | — | Monthly, Quarterly | ||||
Fixed Income and High Yield Hedge Funds (3)(7) | 2,704 | — | — | ||||||
Fund of Funds (4) | 323 | 94 | — | ||||||
Equity Funds (5) | 65,216 | 26,023 | — | ||||||
Convertible Bond Funds (6) | 3,355 | — | At Will | ||||||
Total | $ | 116,581 | $ | 26,117 |
(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, in primarily equity securities in domestic and international markets in both the public and private sectors. At November 30, 2015 and November 30, 2014, investments representing approximately 100% and 99%, respectively, of the fair value of investments in this category are redeemable with 30-90 days prior written notice. |
(3) | Includes investments in funds that invest 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. There are no redemption provisions. At November 30, 2015 and November 30, 2014, the underlying assets of 8% and 8%, respectively, of these funds are being liquidated and we are unable to estimate when the underlying assets will be fully liquidated. |
(4) | Includes investments in fund of funds that invest in various private equity funds. At November 30, 2015 and November 30, 2014, approximately 95% and 95%, respectively, of the fair value of investments in this category are managed by us and have no redemption provisions, instead distributions are received through the liquidation of the underlying assets of the fund of funds, which are estimated to be liquidated in the next twelve months. For the remaining investments, we have requested redemption; however, we are unable to estimate when these funds will be received. |
(5) | At November 30, 2015 and November 30, 2014, approximately 100% and 99%, respectively, of the fair value of investments in this category include investments in equity funds that invest in the equity of various U.S. and foreign private companies in the energy, technology, internet service and telecommunication service industries. These investments cannot be redeemed, instead distributions are received through the liquidation of the underlying assets of the funds which are expected to liquidate in one to eight years. |
(6) | This category represents an investment in the Jefferies Umbrella Fund, an open-ended investment company managed by us that invests primarily in convertible bonds. The remaining investments are in liquidation and we are unable to estimate when the underlying assets will be fully liquidated. |
(7) | Fixed income and high yield hedge funds was revised by $2.5 million from that previously reported due to the inclusion of a fixed income fund, which has the characteristics of an investment company that is included in Investments at fair value within Financial instruments owned in the Consolidated Statement of Financial Condition. The total amount of Investments at fair value remained unchanged. |
Successor | |||||||||||||||||||||||||||||||||||
Year Ended November 30, 2015 | |||||||||||||||||||||||||||||||||||
Balance at November 30, 2014 | Total gains/ losses (realized and unrealized) (1) | Purchases | Sales | Settlements | Issuances | Net transfers into/ (out of) Level 3 | Balance at November 30, 2015 | Change in unrealized gains/ (losses) relating to instruments still held at November 30, 2015 (1) | |||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||
Financial instruments owned: | |||||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 20,964 | $ | 11,154 | $ | 21,385 | $ | (6,391 | ) | $ | — | $ | — | $ | (6,206 | ) | $ | 40,906 | $ | 11,424 | |||||||||||||||
Corporate debt securities | 22,766 | (11,013 | ) | 21,534 | (14,636 | ) | — | — | 7,225 | 25,876 | (9,443 | ) | |||||||||||||||||||||||
Collateralized debt obligations | 124,650 | (66,332 | ) | 104,998 | (107,381 | ) | (5,754 | ) | — | 34,911 | 85,092 | (48,514 | ) | ||||||||||||||||||||||
Municipal securities | — | 10 | — | — | (21,551 | ) | — | 21,541 | — | — | |||||||||||||||||||||||||
Sovereign obligations | — | 47 | 1,032 | (1,031 | ) | — | — | 72 | 120 | 39 | |||||||||||||||||||||||||
Residential mortgage-backed securities | 82,557 | (12,951 | ) | 18,961 | (31,762 | ) | (597 | ) | — | 14,055 | 70,263 | (4,498 | ) | ||||||||||||||||||||||
Commercial mortgage-backed securities | 26,655 | (3,813 | ) | 3,480 | (10,146 | ) | (6,861 | ) | — | 5,011 | 14,326 | (3,205 | ) | ||||||||||||||||||||||
Other asset-backed securities | 2,294 | (990 | ) | 42,922 | (1,299 | ) | (2 | ) | — | — | 42,925 | (254 | ) | ||||||||||||||||||||||
Loans and other receivables | 97,258 | (14,755 | ) | 792,345 | (576,536 | ) | (124,365 | ) | — | 15,342 | 189,289 | (16,802 | ) | ||||||||||||||||||||||
Investments, at fair value | 53,224 | 64,380 | 5,510 | (124,852 | ) | (4,093 | ) | — | 58,951 | 53,120 | (388 | ) | |||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||
Financial instruments sold, not yet purchased: | |||||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 38 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 38 | $ | — | |||||||||||||||||
Corporate debt securities | 223 | (110 | ) | (6,804 | ) | 6,691 | — | — | — | — | — | ||||||||||||||||||||||||
Net derivatives (2) | (4,638 | ) | (7,310 | ) | (6,705 | ) | 13,522 | 37 | 2,437 | 2,415 | (242 | ) | 4,754 | ||||||||||||||||||||||
Loans | 14,450 | (163 | ) | (2,059 | ) | 229 | — | — | (1,988 | ) | 10,469 | 104 | |||||||||||||||||||||||
Other secured financings | 30,825 | — | — | — | (15,704 | ) | 36,995 | (51,572 | ) | 544 | — | ||||||||||||||||||||||||
Embedded conversion option | 693 | (693 | ) | — | — | — | — | — | — | 693 |
(1) | Realized and unrealized gains/losses are reported in Principal transaction revenues in the Consolidated Statements of Earnings. |
(2) | Net derivatives represent Financial instruments owned—Derivatives and Financial instruments sold, not yet purchased —Derivatives. |
• | Collateralized debt obligations of $69.8 million, non-agency residential mortgage-backed securities of $30.4 million, commercial mortgage-backed securities of $11.3 million for which no recent trade activity was observed for purposes of determining observable inputs; |
• | Municipal securities of $21.5 million and loans and other receivables of $20.1 million due to a lower number of contributors comprising vendor quotes to support classification within Level 2; |
• | Investments at fair value of $74.7 million and corporate debt securities of $7.4 million due to a lack of observable market transactions. |
• | Non-agency residential mortgage-backed securities of $16.3 million and commercial mortgage-backed securities of $6.3 million for which market trades were observed in the period for either identical or similar securities; |
• | Collateralized debt obligations of $34.9 million and loans and other receivables of $4.7 million due to a greater number of contributors for certain vendor quotes supporting classification into Level 2; |
• | Investments at fair value of $15.8 million due to an increase in observable market transactions; |
• | Corporate equity securities of $7.7 million due to an increase in observable market transactions. |
Successor | |||||||||||||||||||||||||||||||||||
Year Ended November 30, 2014 | |||||||||||||||||||||||||||||||||||
Balance at November 30, 2013 | Total gains/ losses (realized and unrealized) (1) | Purchases | Sales | Settlements | Issuances | Net transfers into/ (out of) Level 3 | Balance at November 30, 2014 | Change in unrealized gains/ (losses) relating to instruments still held at November 30, 2014 (1) | |||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||
Financial instruments owned: | |||||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 9,884 | $ | 957 | $ | 18,138 | $ | (12,826 | ) | $ | — | $ | — | $ | 4,811 | $ | 20,964 | $ | 2,324 | ||||||||||||||||
Corporate debt securities | 25,666 | 6,629 | 38,316 | (40,328 | ) | — | — | (7,517 | ) | 22,766 | 8,982 | ||||||||||||||||||||||||
Collateralized debt obligations | 37,216 | (6,386 | ) | 204,337 | (181,757 | ) | (1,297 | ) | — | 72,537 | 124,650 | (1,141 | ) | ||||||||||||||||||||||
U.S. government and federal agency securities | — | 13 | 2,505 | (2,518 | ) | — | — | — | — | — | |||||||||||||||||||||||||
Residential mortgage-backed securities | 105,492 | (9,870 | ) | 42,632 | (61,689 | ) | (1,847 | ) | — | 7,839 | 82,557 | (4,679 | ) | ||||||||||||||||||||||
Commercial mortgage-backed securities | 17,568 | (4,237 | ) | 49,159 | (51,360 | ) | (782 | ) | — | 16,307 | 26,655 | (2,384 | ) | ||||||||||||||||||||||
Other asset-backed securities | 12,611 | 1,784 | 4,987 | (18,002 | ) | — | — | 914 | 2,294 | 1,484 | |||||||||||||||||||||||||
Loans and other receivables | 145,890 | (31,311 | ) | 130,169 | (92,140 | ) | (60,390 | ) | — | 5,040 | 97,258 | (26,864 | ) | ||||||||||||||||||||||
Investments at fair value | 66,931 | 13,781 | 32,493 | (43,286 | ) | (1,243 | ) | — | (15,452 | ) | 53,224 | (1,876 | ) | ||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||
Financial instruments sold, not yet purchased: | |||||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 38 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 38 | $ | — | |||||||||||||||||
Corporate debt securities | — | (149 | ) | (565 | ) | 960 | — | — | (23 | ) | 223 | (8 | ) | ||||||||||||||||||||||
Net derivatives (2) | 6,905 | 15,055 | (24,682 | ) | 1,094 | 322 | — | (3,332 | ) | (4,638 | ) | (15,615 | ) | ||||||||||||||||||||||
Loans | 22,462 | — | (18,332 | ) | 11,338 | — | — | (1,018 | ) | 14,450 | — | ||||||||||||||||||||||||
Other secured financings | 8,711 | — | — | — | (17,525 | ) | 39,639 | — | 30,825 | — | |||||||||||||||||||||||||
Embedded conversion option | 9,574 | (8,881 | ) | — | — | — | — | — | 693 | 8,881 |
(1) | Realized and unrealized gains/losses are reported in Principal transaction revenues in the Consolidated Statements of Earnings. |
(2) | Net derivatives represent Financial instruments owned—Derivatives and Financial instruments sold, not yet purchased —Derivatives. |
• | Non-agency residential mortgage-backed securities of $30.3 million and commercial mortgage-backed securities of $16.6 million for which no recent trade activity was observed for purposes of determining observable inputs; |
• | Loans and other receivables of $8.5 million due to a lower number of contributors comprising vendor quotes to support classification within Level 2; |
• | Collateralized debt obligations of $73.0 million which have little to no transparency related to trade activity. |
• | Corporate equity securities of $9.7 million due to a lack of observable market transactions. |
• | Non-agency residential mortgage-backed securities of $22.4 million for which market trades were observed in the period for either identical or similar securities; |
• | Loans and other receivables of $3.5 million and investments at fair value of $15.5 million due to a greater number of contributors for certain vendor quotes supporting classification into Level 2; |
• | Corporate equity securities of $4.9 million and corporate debt securities of $7.5 million due to an increase in observable market transactions. |
Successor | |||||||||||||||||||||||||||||||||||
Nine Months Ended November 30, 2013 | |||||||||||||||||||||||||||||||||||
Balance at February 28, 2013 | Total gains/ losses (realized and unrealized) (1) | Purchases | Sales | Settlements | Issuances | Net transfers into/ (out of) Level 3 | Balance at November 30, 2013 | Change in unrealized gains/ (losses) relating to instruments still held at November 30, 2013 (1) | |||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||
Financial instruments owned: | |||||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 13,234 | $ | 1,551 | $ | 3,583 | $ | (7,141 | ) | $ | — | $ | — | $ | (1,343 | ) | $ | 9,884 | $ | (419 | ) | ||||||||||||||
Corporate debt securities | 31,820 | (2,454 | ) | 31,014 | (34,125 | ) | — | — | (589 | ) | 25,666 | (2,749 | ) | ||||||||||||||||||||||
Collateralized debt obligations | 24,736 | (2,309 | ) | 45,437 | (32,874 | ) | — | — | 2,226 | 37,216 | (8,384 | ) | |||||||||||||||||||||||
Residential mortgage-backed securities | 169,426 | (4,897 | ) | 89,792 | (150,807 | ) | (11,007 | ) | — | 12,985 | 105,492 | (6,932 | ) | ||||||||||||||||||||||
Commercial mortgage-backed securities | 17,794 | (4,469 | ) | 20,130 | (13,538 | ) | (100 | ) | — | (2,249 | ) | 17,568 | (3,794 | ) | |||||||||||||||||||||
Other asset-backed securities | 1,292 | (4,535 | ) | 105,291 | (104,711 | ) | — | — | 15,274 | 12,611 | (3,497 | ) | |||||||||||||||||||||||
Loans and other receivables | 170,986 | 15,008 | 287,757 | (115,231 | ) | (211,805 | ) | — | (825 | ) | 145,890 | 13,402 | |||||||||||||||||||||||
Investments, at fair value | 39,693 | (1,317 | ) | 28,515 | (102 | ) | (875 | ) | — | 1,017 | 66,931 | (1,290 | ) | ||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||
Financial instruments sold, not yet purchased: | |||||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 38 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 38 | $ | — | |||||||||||||||||
Residential mortgage-backed securities | 1,542 | (1,542 | ) | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Net derivatives (2) | 11,185 | 4,408 | — | (300 | ) | (8,515 | ) | — | 127 | 6,905 | 1,609 | ||||||||||||||||||||||||
Loans | 7,398 | 2,959 | (16,027 | ) | 28,065 | 67 | — | — | 22,462 | (2,970 | ) | ||||||||||||||||||||||||
Other secured financings | — | — | — | — | — | 8,711 | — | 8,711 | — | ||||||||||||||||||||||||||
Embedded conversion option (3) | 16,488 | (6,914 | ) | — | — | — | — | — | 9,574 | 6,914 |
(1) | Realized and unrealized gains/losses are reported in Principal transaction revenues in the Consolidated Statements of Earnings. |
(2) | Net derivatives represent Financial instruments owned—Derivatives and Financial instruments sold, not yet purchased —Derivatives. |
(3) | The embedded conversion option of $16.5 million is at March 1, 2013, upon completion of the Leucadia Transaction (See Note 13.) |
• | Non-agency residential mortgage-backed securities of $58.8 million, and other asset-backed securities of $16.4 million for which no recent trade activity was observed for purposes of determining observable inputs; |
• | Loans and other receivables of $0.8 million due to a lower number of contributors comprising vendor quotes to support classification within Level 2; |
• | Corporate equity securities of $2.3 million, corporate debt securities of $0.2 million and investments at fair value of $1.0 million due to a lack of observable market transactions. |
• | Collateralized debt obligations of $2.8 million which have little to no transparency in trade activity; |
• | Non-agency residential mortgage-backed securities of $45.9 million, commercial mortgage-backed securities of $2.2 million and other asset-backed securities of $1.1 million for which market trades were observed in the period for either identical or similar securities; |
• | Collateralized debt obligations of $0.6 million, loans and other receivables of $1.7 million due to a greater number of contributors for certain vendor quotes supporting classification into Level 2; |
• | Corporate equity securities of $3.6 million and corporate debt securities of $0.8 million due to an increase in observable market transactions. |
Predecessor | |||||||||||||||||||||||||||||||
Three Months Ended February 28, 2013 (1) | |||||||||||||||||||||||||||||||
Balance at November 30, 2012 | Total gains/ losses (realized and unrealized) (2) | Purchases | Sales | Settlements | Net transfers into/ (out of) Level 3 | Balance at February 28, 2013 | Change in unrealized gains/ (losses) relating to instruments still held at February 28, 2013 (2) | ||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||
Financial instruments owned: | |||||||||||||||||||||||||||||||
Corporate equity securities | $ | 16,815 | $ | 200 | $ | 707 | $ | 109 | $ | — | $ | (4,597 | ) | $ | 13,234 | $ | 172 | ||||||||||||||
Corporate debt securities | 3,631 | 7,836 | 11,510 | (1,918 | ) | — | 10,761 | 31,820 | 7,833 | ||||||||||||||||||||||
Collateralized debt obligations | 31,255 | 3,584 | 4,406 | (17,374 | ) | — | 2,865 | 24,736 | (1,165 | ) | |||||||||||||||||||||
Residential mortgage-backed securities | 156,069 | 11,906 | 132,773 | (130,143 | ) | (6,057 | ) | 4,878 | 169,426 | 4,511 | |||||||||||||||||||||
Commercial mortgage-backed securities | 30,202 | (995 | ) | 2,280 | (2,866 | ) | (1,188 | ) | (9,639 | ) | 17,794 | (2,059 | ) | ||||||||||||||||||
Other asset-backed securities | 1,114 | 90 | 1,627 | (1,342 | ) | (19 | ) | (178 | ) | 1,292 | 39 | ||||||||||||||||||||
Loans and other receivables | 180,393 | (8,682 | ) | 105,650 | (29,828 | ) | (61,407 | ) | (15,140 | ) | 170,986 | (12,374 | ) | ||||||||||||||||||
Investments, at fair value | 48,879 | (756 | ) | 5,000 | (4,656 | ) | (7,676 | ) | (1,098 | ) | 39,693 | (473 | ) | ||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||
Financial instruments sold, not yet purchased: | |||||||||||||||||||||||||||||||
Corporate equity securities | $ | 38 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 38 | $ | — | |||||||||||||||
Residential mortgage-backed securities | — | 25 | (73,846 | ) | 75,363 | — | — | 1,542 | (19 | ) | |||||||||||||||||||||
Net derivatives (3) | 9,188 | 2,648 | — | — | — | (651 | ) | 11,185 | (2,648 | ) | |||||||||||||||||||||
Loans | 1,711 | — | (1,711 | ) | 7,398 | — | — | 7,398 | — |
(1) | There were no issuances during the three months ended February 28, 2013. |
(2) | Realized and unrealized gains/losses are reported in Principal transaction revenues in the Consolidated Statements of Earnings. |
(3) | Net derivatives represent Financial instruments owned—Derivatives and Financial instruments sold, not yet purchased —Derivatives. |
• | Non-agency residential mortgage-backed securities of $78.4 million and commercial mortgage-backed securities of $1.3 million for which no recent trade activity was observed for purposes of determining observable inputs; |
• | Corporate debt securities of $10.8 million and corporate equity securities of $0.1 million due to lack of observable market transactions; |
• | Collateralized debt obligations of $5.3 million which have little to no transparency in trade activity; |
• | Loans and other receivables of $4.8 million due to a lower number of contributors comprising vendor quotes to support classification within Level 2. |
• | Non-agency residential mortgage-backed securities of $73.5 million, commercial mortgage-backed securities of $10.9 million and $0.2 million of other asset-backed securities for which market trades were observed in the period for either identical or similar securities; |
• | Loans and other receivables of $19.9 million and collateralized debt obligations of $2.4 million due to a greater number of contributors for certain vendor quotes supporting classification into Level 2; |
• | Corporate equity securities of $4.7 million due to an increase in observable market transactions. |
November 30, 2015 | ||||||||||||||
Financial Instruments Owned | Fair Value (in thousands) | Valuation Technique | Significant Unobservable Input(s) | Input / Range | Weighted Average | |||||||||
Corporate equity securities | $ | 20,285 | ||||||||||||
Non-exchange traded securities | Market approach | EBITDA (a) multiple | 4.4 | — | ||||||||||
Transaction level | $1 | — | ||||||||||||
Underlying stock price | $5-$102 | $ | 19 | |||||||||||
Corporate debt securities | $ | 20,257 | ||||||||||||
Convertible bond model | Discount rate/yield | 86% | — | |||||||||||
Market approach | Transaction level | $59 | — | |||||||||||
Collateralized debt obligations | $ | 49,923 | Discounted cash flows | |||||||||||
Constant prepayment rate | 5%-20% | 13 | % | |||||||||||
Constant default rate | 2%-8% | 2 | % | |||||||||||
Loss severity | 25%-90% | 52 | % | |||||||||||
Yield | 6%-13% | 10 | % | |||||||||||
Residential mortgage-backed securities | $ | 70,263 | Discounted cash flows | Constant prepayment rate | 0%-50% | 13 | % | |||||||
Constant default rate | 1%-9% | 3 | % | |||||||||||
Loss severity | 25%-70% | 39 | % | |||||||||||
Yield | 1%-9% | 6 | % | |||||||||||
Commercial mortgage-backed securities | $ | 14,326 | Discounted cash flows | Yield | 7%-30% | 16 | % | |||||||
Cumulative loss rate | 2%-63% | 23 | % | |||||||||||
Other asset-backed securities | $ | 21,463 | Discounted cash flows | Constant prepayment rate | 6%-8% | 7 | % | |||||||
Constant default rate | 3%-5% | 4 | % | |||||||||||
Loss severity | 55%-75% | 62 | % | |||||||||||
Yield | 7%-22% | 18 | % | |||||||||||
Over-collateralization | Over-collateralization percentage | 117%-125% | 118 | % | ||||||||||
Loans and other receivables | $ | 161,470 | Comparable pricing | Comparable loan price | $99-$100 | $ | 99.7 | |||||||
Market approach | Discount rate/yield | 2%-17% | 12 | % | ||||||||||
EBITDA (a) multiple | 10 | — | ||||||||||||
Scenario analysis | Estimated recovery percentage | 6%-100% | 83 | % | ||||||||||
Derivatives | 19,785 | |||||||||||||
Commodity forwards | Market approach | Discount rate/yield | 47% | — | ||||||||||
Transaction level | $9,500,000 | — | ||||||||||||
Unfunded commitments | Comparable pricing | Comparable loan price | $100 | — | ||||||||||
Market approach | Credit spread | 298 bps | — | |||||||||||
Total return swaps | Comparable pricing | Comparable loan price | $91.7-$92.4 | $ | 92.1 | |||||||||
Investments at fair value | ||||||||||||||
Private equity securities | $ | 7,693 | Market approach | Transaction level | $64 | — | ||||||||
Enterprise value | $5,200,000 | — | ||||||||||||
Liabilities | ||||||||||||||
Financial Instruments Sold, Not Yet Purchased: | ||||||||||||||
Derivatives | $ | 19,543 | ||||||||||||
Equity options | Option model | Volatility | 45% | — | ||||||||||
Default rate | Default probability | 0% | — | |||||||||||
Unfunded commitments | Comparable pricing | Comparable loan price | $79-$100 | $ | 82.6 | |||||||||
Market approach | Discount rate/yield | 3%-10% | 10 | % | ||||||||||
Discounted cash flows | Constant prepayment rate | 20% | — | |||||||||||
Constant default rate | 2% | — | ||||||||||||
Loss severity | 25% | — | ||||||||||||
Yield | 11% | — | ||||||||||||
Total return swaps | Comparable pricing | Comparable loan price | $91.7-92.4 | $ | 92.1 | |||||||||
Loans and other receivables | $ | 10,469 | Comparable pricing | Comparable loan price | $100 | — |
(a) | Earnings before interest, taxes, depreciation and amortization (“EBITDA”). |
November 30, 2014 | ||||||||||||||
Financial Instruments Owned | Fair Value (in thousands) | Valuation Technique | Significant Unobservable Input(s) | Input / Range | Weighted Average | |||||||||
Corporate equity securities | $ | 19,814 | ||||||||||||
Non-exchange traded securities | Market approach | EBITDA multiple | 3.4 to 4.7 | 3.6 | ||||||||||
Scenario analysis | Estimated recovery percentage | 24% | — | |||||||||||
Corporate debt securities | $ | 22,766 | Convertible bond model | Discount rate/yield | 32% | — | ||||||||
Collateralized debt obligations | $ | 41,784 | Discounted cash flows | Constant prepayment rate | 0% to 20% | 13 | % | |||||||
Constant default rate | 0% to 2% | 2 | % | |||||||||||
Loss severity | 0% to 70% | 39 | % | |||||||||||
Yield | 2% to 51% | 16 | % | |||||||||||
Residential mortgage-backed securities | $ | 82,557 | Discounted cash flows | Constant prepayment rate | 1% to 50% | 13 | % | |||||||
Constant default rate | 1% to 100% | 14 | % | |||||||||||
Loss severity | 20% to 80% | 50 | % | |||||||||||
Yield | 3% to 13% | 7 | % | |||||||||||
Commercial mortgage-backed securities | $ | 26,655 | Discounted cash flows | Yield | 8% to 12% | 11 | % | |||||||
Cumulative loss rate | 4% to 72% | 15 | % | |||||||||||
Scenario analysis | Estimated recovery percentage | 90% | — | |||||||||||
Other asset-backed securities | $ | 2,294 | Discounted cash flows | Constant prepayment rate | 8% | — | ||||||||
Constant default rate | 3% | — | ||||||||||||
Loss severity | 70% | — | ||||||||||||
Yield | 7% | — | ||||||||||||
Loans and other receivables | $ | 88,154 | Comparable pricing | Comparable loan price | $100 to $101 | $ | 100.3 | |||||||
Market approach | Yield | 3% to 5% | 4 | % | ||||||||||
EBITDA multiple | 3.4 to 8.2 | 7.6 | ||||||||||||
Scenario analysis | Estimated recovery percentage | 10% to 41% | 36 | % | ||||||||||
Derivatives | $ | 54,190 | ||||||||||||
Foreign exchange options | Option Model | Volatility | 13% to 23% | 17 | % | |||||||||
Commodity forwards | Discounted cash flows | Discount rate | 17% | — | ||||||||||
Loan commitments | Comparable pricing | Comparable loan price | $100 | — | ||||||||||
Investments at fair value | $ | 8,500 | ||||||||||||
Private equity securities | Market approach | Transaction level | $50 | — | ||||||||||
Liabilities | ||||||||||||||
Financial Instruments Sold, Not Yet Purchased: | ||||||||||||||
Derivatives | $ | 49,552 | ||||||||||||
FX options | Option model | Volatility | 13% to 23% | 17 | % | |||||||||
Unfunded commitments | Comparable pricing | Comparable loan price | $89 to $100 | $ | 92.0 | |||||||||
Credit spread | 45bps | — | ||||||||||||
Market approach | Yield | 5% | — | |||||||||||
Loans and other receivables | $ | 14,450 | Comparable pricing | Comparable loan price | $100 | — | ||||||||
Other secured financings | $ | 30,825 | Comparable pricing | Comparable loan price | $81 to $100 | $ | 98.7 | |||||||
Embedded conversion option | $ | 693 | Option valuation model | Historical volatility | 19% | — |
• | Loans and other receivables, loan and unfunded commitments, total return swaps and other secured financings using comparable pricing valuation techniques. A significant increase (decrease) in the comparable loan price in isolation would result in a significantly higher (lower) fair value measurement. |
• | Corporate debt securities using a convertible bond model. A significant increase (decrease) in the bond discount rate/yield would result in a significantly lower (higher) fair value measurement. |
• | Non-exchange traded securities, corporate debt securities, loans and other receivables, unfunded commitments, commodity forwards and private equity securities using a market approach valuation technique. A significant increase (decrease) in the EBITDA or other multiples in isolation would result in a significantly higher (lower) fair value measurement. A significant increase (decrease) in the yield of a corporate debt security, loan and other receivable or unfunded commitment would result in a significantly lower (higher) fair value measurement. A significant increase (decrease) in the transaction level of a private equity security would result in a significantly higher (lower) fair value measurement. |
• | Non-exchange traded securities, commercial mortgage-backed securities and loans and other receivables using scenario analysis. A significant increase (decrease) in the possible recovery rates of the cash flow outcomes underlying the investment would result in a significantly higher (lower) fair value measurement for the financial instrument. |
• | Collateralized debt obligations, corporate debt securities, residential and commercial mortgage-backed securities and other asset-backed securities, commodity forwards and unfunded commitments using a discounted cash flow valuation technique. A significant increase (decrease) in isolation in the constant default rate, and loss severities or cumulative loss rate would result in a significantly lower (higher) fair value measurement. The impact of changes in the constant prepayment rate would have differing impacts depending on the capital structure of the security. A significant increase (decrease) in the loan or bond yield would result in a significantly lower (higher) fair value measurement. |
• | Certain other asset-backed securities using an over-collateralization model. A significant increase (decrease) in the over-collateralization percentage would result in a significantly higher (lower) fair value measurement. |
• | Derivative foreign exchange and equity options using an option model. A significant increase (decrease) in volatility would result in a significantly higher (lower) fair value measurement. |
• | Derivative equity options using a default rate model. A significant increase (decrease) in default probability would result in a significantly lower (higher) fair value measurement. |
• | Embedded conversion option using an option valuation model. A significant increase (decrease) in historical volatility would result in a significantly higher (lower) fair value measurement. |
Successor | Predecessor | |||||||||||||||
Year Ended November 30, 2015 | Year Ended November 30, 2014 | Nine Months Ended November 30, 2013 | Three Months Ended February 28, 2013 | |||||||||||||
Financial Instruments Owned: | ||||||||||||||||
Loans and other receivables | $ | (17,389 | ) | $ | (24,785 | ) | $ | 15,327 | $ | 3,924 | ||||||
Financial Instruments Sold: | ||||||||||||||||
Loans | $ | (162 | ) | $ | (585 | ) | $ | (32 | ) | $ | — | |||||
Loan commitments | 7,502 | (15,459 | ) | (1,007 | ) | (2,746 | ) |
November 30, 2015 | November 30, 2014 | ||||||
Financial Instruments Owned: | |||||||
Loans and other receivables (1) | $ | 408,369 | $ | 403,119 | |||
Loans and other receivables greater than 90 days past due (1) | 29,720 | 5,594 | |||||
Loans and other receivables on nonaccrual status (1) (2) | 54,652 | (22,360 | ) |
(1) | Interest income is recognized separately from other changes in fair value and is included within Interest revenues on the Consolidated Statements of Earnings. |
(2) | Amounts include all loans and other receivables greater than 90 days past due. |
Carrying Value at November 30, 2015 | Level 2 | Level 3 | Impairment Losses for the Year Ended November 30, 2015 | |||||||||||||
Futures Reporting Unit (1): | ||||||||||||||||
Exchange ownership interests (2) | $ | 4,178 | $ | 4,178 | $ | — | $ | 1,289 |
Carrying Value at November 30, 2014 | Level 2 | Level 3 | Impairment Losses for the Year Ended November 30, 2014 | |||||||||||||
Futures Reporting Unit (1): | ||||||||||||||||
Exchange ownership interests (2) | $ | 5,608 | $ | 5,608 | $ | — | $ | 178 | ||||||||
Goodwill (3) | — | — | — | 51,900 | ||||||||||||
Intangible assets (4) | — | — | — | 7,534 | ||||||||||||
International Asset Management Reporting Unit (5): | ||||||||||||||||
Goodwill (6) | $ | — | $ | — | $ | — | $ | 2,100 | ||||||||
Intangible assets (7) | — | — | — | 60 |
(1) | Given management’s decision to pursue strategic alternatives for our Futures business, including possible disposal, as a result of recent operating performance and margin challenges experienced by the business, an impairment analysis of the carrying amounts of goodwill, intangible assets and certain other assets employed directly by the business was performed at November 30, 2015 and November 30, 2014, respectively. (See Note 11, Goodwill and Other Intangible Assets.) |
(2) | Exchange memberships, which represent ownership interests in market exchanges on which trading business is conducted, were written down to their fair value during the year ended November 30, 2015 and the year ended November 30, 2014 resulting in impairment losses of $1.3 million and $0.2 million, respectively, recognized in Other expenses. The fair value of these exchange memberships is based on observed quoted sales prices for each individual membership. |
(3) | An impairment loss for goodwill allocated to our Futures business with a carrying amount of $51.9 million was recognized for the year ended November 30, 2014. The fair value of the Futures business was estimated 1) by comparison to similar companies using publicly traded price-to-tangible book multiples as the basis for valuation and 2) by utilizing a discounted cash flow methodology based on internally developed forecasts of profitability and an appropriate risk-adjusted discount rate. |
(4) | Intangible assets relate primarily to customer relationship intangibles. An impairment loss for customer relationships within our Futures business with a carrying amount of $7.5 million was recognized in Other expenses for the year ended November 30, 2014. Fair value was estimated utilizing a discounted cash flow methodology based on projected future cash flows and operating margins and an appropriate risk-adjusted discount rate. |
(5) | Given management’s decision to liquidate our International Asset Management business, an impairment analysis of the carrying amounts of goodwill, intangible assets and certain other assets employed directly by the business was performed at November 30, 2014. (See Note 11, Goodwill and Other Intangible Assets.) |
(6) | An impairment loss for goodwill allocated to our International Asset Management business with a carrying amount of $2.1 million was recognized for the year ended November 30, 2014. Fair value was estimated by utilizing a discounted cash flow methodology based on internally developed forecasts of profitability and an appropriate risk-adjusted discount rate. |
(7) | Intangible assets relate to customer relationship intangibles. Impairment losses of $0.1 million were recognized in Other expenses for the year ended November 30, 2014. Fair values were estimated utilizing a discounted cash flow methodology based on projected future cash flows and operating margins and an appropriate risk-adjusted discount rate. |
November 30, 2015 (1) | |||||||||||||
Assets | Liabilities | ||||||||||||
Fair Value | Number of Contracts | Fair Value | Number of Contracts | ||||||||||
Interest rate contracts: | |||||||||||||
Exchange-traded | $ | 998 | 52,605 | $ | 364 | 70,672 | |||||||
Cleared OTC | 2,213,730 | 2,742 | 2,202,836 | 2,869 | |||||||||
Bilateral OTC | 695,365 | 1,401 | 646,758 | 1,363 | |||||||||
Foreign exchange contracts: | |||||||||||||
Exchange-traded | — | 441 | — | 112 | |||||||||
Bilateral OTC | 472,544 | 7,675 | 470,649 | 7,292 | |||||||||
Equity contracts: | |||||||||||||
Exchange-traded | 955,287 | 3,054,315 | 1,004,699 | 2,943,657 | |||||||||
Bilateral OTC | 61,004 | 1,039 | 81,085 | 1,070 | |||||||||
Commodity contracts: | |||||||||||||
Exchange-traded | — | 1,726 | — | 1,684 | |||||||||
Credit contracts: | |||||||||||||
Cleared OTC | 621 | 39 | 841 | 44 | |||||||||
Bilateral OTC | 16,977 | 100 | 59,314 | 135 | |||||||||
Total gross derivative assets/ liabilities: | |||||||||||||
Exchange-traded | 956,285 | 1,005,063 | |||||||||||
Cleared OTC | 2,214,351 | 2,203,677 | |||||||||||
Bilateral OTC | 1,245,890 | 1,257,806 | |||||||||||
Amounts offset in the Consolidated Statements of Financial Condition (2): | |||||||||||||
Exchange-traded | (938,482 | ) | (938,482 | ) | |||||||||
Cleared OTC | (2,184,438 | ) | (2,184,438 | ) | |||||||||
Bilateral OTC | (1,042,526 | ) | (1,135,078 | ) | |||||||||
Net amounts per Consolidated Statements of Financial Condition (3) | $ | 251,080 | $ | 208,548 |
(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) | Amounts netted include both netting by counterparty and for cash collateral paid or received. |
(3) | 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. |
November 30, 2014 (1) | |||||||||||||
Assets | Liabilities | ||||||||||||
Fair Value | Number of Contracts | Fair Value | Number of Contracts | ||||||||||
Interest rate contracts: | |||||||||||||
Exchange-traded | $ | 2,450 | 67,437 | $ | 1,400 | 87,008 | |||||||
Cleared OTC | 1,425,375 | 2,160 | 1,481,329 | 2,124 | |||||||||
Bilateral OTC | 871,982 | 1,908 | 809,962 | 729 | |||||||||
Foreign exchange contracts: | |||||||||||||
Exchange-traded | — | 1,562 | — | 1,821 | |||||||||
Bilateral OTC | 1,514,881 | 11,299 | 1,519,349 | 10,931 | |||||||||
Equity contracts: | |||||||||||||
Exchange-traded | 1,011,101 | 2,269,044 | 987,531 | 2,049,513 | |||||||||
Bilateral OTC | 39,889 | 2,463 | 70,484 | 1,956 | |||||||||
Commodity contracts: | |||||||||||||
Exchange-traded | 62,091 | 1,027,542 | 51,145 | 1,015,894 | |||||||||
Bilateral OTC | 214,635 | 4,026 | 252,061 | 4,524 | |||||||||
Credit contracts: | |||||||||||||
Cleared OTC | 17,831 | 27 | 23,264 | 22 | |||||||||
Bilateral OTC | 5,378 | 18 | 23,608 | 27 | |||||||||
Total gross derivative assets/liabilities: | |||||||||||||
Exchange-traded | 1,075,642 | 1,040,076 | |||||||||||
Cleared OTC | 1,443,206 | 1,504,593 | |||||||||||
Bilateral OTC | 2,646,765 | 2,675,464 | |||||||||||
Amounts offset in the Consolidated Statements of Financial Condition (2): | |||||||||||||
Exchange-traded | (1,038,992 | ) | (1,038,992 | ) | |||||||||
Cleared OTC | (1,416,613 | ) | (1,416,613 | ) | |||||||||
Bilateral OTC | (2,303,740 | ) | (2,401,013 | ) | |||||||||
Net amounts per Consolidated Statements of Financial Condition (3) | $ | 406,268 | $ | 363,515 |
(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) | Amounts netted include both netting by counterparty and for cash collateral paid or received. |
(3) | 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. |
Successor | Predecessor | |||||||||||||||
Gains (Losses) | Year Ended November 30, 2015 | Year Ended November 30, 2014 | Nine Months Ended November 30, 2013 | Three Months Ended February 28, 2013 | ||||||||||||
Interest rate contracts | $ | (37,601 | ) | $ | (149,587 | ) | $ | 132,397 | $ | 45,875 | ||||||
Foreign exchange contracts | 36,101 | 39,872 | 5,514 | 12,228 | ||||||||||||
Equity contracts | (137,636 | ) | (327,978 | ) | (21,216 | ) | (20,938 | ) | ||||||||
Commodity contracts | 21,409 | 58,746 | 45,546 | 19,585 | ||||||||||||
Credit contracts | (14,397 | ) | (23,934 | ) | (18,098 | ) | (3,886 | ) | ||||||||
Total | $ | (132,124 | ) | $ | (402,881 | ) | $ | 144,143 | $ | 52,864 |
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 | $ | 4,628 | $ | 14,713 | $ | — | $ | — | $ | 19,341 | |||||||||
Equity swaps and options | 26,278 | 7,112 | — | (3,782 | ) | 29,608 | |||||||||||||
Credit default swaps | — | 6,022 | — | (2,839 | ) | 3,183 | |||||||||||||
Total return swaps | 8,648 | 252 | — | (1 | ) | 8,899 | |||||||||||||
Foreign currency forwards, swaps and options | 82,382 | 15,780 | — | (7,462 | ) | 90,700 | |||||||||||||
Interest rate swaps, options and forwards | 57,655 | 158,874 | 63,816 | (43,881 | ) | 236,464 | |||||||||||||
Total | $ | 179,591 | $ | 202,753 | $ | 63,816 | $ | (57,965 | ) | 388,195 | |||||||||
Cross product counterparty netting | (13,063 | ) | |||||||||||||||||
Total OTC derivative assets included in Financial instruments owned | $ | 375,132 |
(1) | At November 30, 2015, we held exchange traded derivative assets and other credit agreements with a fair value of $20.4 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 on the Consolidated Statements of Financial Condition. At November 30, 2015, cash collateral received was $144.4 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 | |||||||||||||||
Commodity swaps, options and forwards | $ | 4,628 | $ | — | $ | — | $ | — | $ | 4,628 | |||||||||
Equity swaps and options | 4,880 | 28,516 | 3,046 | (3,782 | ) | 32,660 | |||||||||||||
Credit default swaps | — | 2,628 | 31,982 | (2,839 | ) | 31,771 | |||||||||||||
Total return swaps | 22,644 | 774 | 2,540 | (1 | ) | 25,957 | |||||||||||||
Foreign currency forwards, swaps and options | 98,726 | 12,255 | — | (7,462 | ) | 103,519 | |||||||||||||
Fixed income forwards | 2,522 | — | — | — | 2,522 | ||||||||||||||
Interest rate swaps, options and forwards | 41,938 | 91,139 | 89,934 | (43,881 | ) | 179,130 | |||||||||||||
Total | $ | 175,338 | $ | 135,312 | $ | 127,502 | $ | (57,965 | ) | 380,187 | |||||||||
Cross product counterparty netting | (13,063 | ) | |||||||||||||||||
Total OTC derivative liabilities included in Financial instruments sold, not yet purchased | $ | 367,124 |
(1) | At November 30, 2015, we held exchange traded derivative liabilities and other credit agreements with a fair value of $78.4 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 on the Consolidated Statements of Financial Condition. At November 30, 2015, cash collateral pledged was $237.0 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. |
Counterparty credit quality (1): | |||
A- or higher | $ | 188,146 | |
BBB- to BBB+ | 76,471 | ||
BB+ or lower | 50,581 | ||
Unrated | 59,934 | ||
Total | $ | 375,132 |
(1) | We utilize internal credit ratings determined by our Risk Management. Credit ratings determined by Risk Management use methodologies that produce ratings generally consistent with those produced by external rating agencies. |
Securities Lending Arrangements | Repurchase Agreements | Total | ||||||||||
Collateral Pledged: | ||||||||||||
Corporate equity securities | $ | 2,195,912 | $ | 275,880 | $ | 2,471,792 | ||||||
Corporate debt securities | 748,405 | 1,752,222 | 2,500,627 | |||||||||
Mortgage- and asset-backed securities | — | 3,537,812 | 3,537,812 | |||||||||
U.S. government and federal agency securities | 34,983 | 12,006,081 | 12,041,064 | |||||||||
Municipal securities | — | 357,350 | 357,350 | |||||||||
Sovereign obligations | — | 1,804,103 | 1,804,103 | |||||||||
Loans and other receivables | — | 462,534 | 462,534 | |||||||||
Total | $ | 2,979,300 | $ | 20,195,982 | $ | 23,175,282 |
Contractual Maturity | |||||||||||||||||||
Overnight and Continuous | Up to 30 Days | 30-90 Days | Greater than 90 Days | Total | |||||||||||||||
Securities lending arrangements | $ | 1,522,475 | $ | — | $ | 973,201 | $ | 483,624 | $ | 2,979,300 | |||||||||
Repurchase agreements | 7,850,791 | 5,218,059 | 5,291,729 | 1,835,403 | 20,195,982 | ||||||||||||||
Total | $ | 9,373,266 | $ | 5,218,059 | $ | 6,264,930 | $ | 2,319,027 | $ | 23,175,282 |
November 30, 2015 | |||||||||||||||||||||||
Gross Amounts | Netting in Consolidated Statement of Financial Condition | Net Amounts in Consolidated Statement of Financial Condition | Additional Amounts Available for Setoff (1) | Available Collateral (2) | Net Amount (3) | ||||||||||||||||||
Assets | |||||||||||||||||||||||
Securities borrowing arrangements | $ | 6,975,136 | $ | — | $ | 6,975,136 | $ | (478,991 | ) | $ | (667,099 | ) | $ | 5,829,046 | |||||||||
Reverse repurchase agreements | 14,048,860 | (10,191,554 | ) | 3,857,306 | (83,452 | ) | (3,745,215 | ) | 28,639 | ||||||||||||||
Liabilities | |||||||||||||||||||||||
Securities lending arrangements | $ | 2,979,300 | $ | — | $ | 2,979,300 | $ | (478,991 | ) | $ | (2,464,395 | ) | $ | 35,914 | |||||||||
Repurchase agreements | 20,195,982 | (10,191,554 | ) | 10,004,428 | (83,452 | ) | (8,103,468 | ) | 1,817,508 |
November 30, 2014 | |||||||||||||||||||||||
Gross Amounts | Netting in Consolidated Statement of Financial Condition | Net Amounts in Consolidated Statement of Financial Condition | Additional Amounts Available for Setoff (1) | Available Collateral (2) | Net Amount (4) | ||||||||||||||||||
Assets | |||||||||||||||||||||||
Securities borrowing arrangements | $ | 6,853,103 | $ | — | $ | 6,853,103 | $ | (680,222 | ) | $ | (1,274,196 | ) | $ | 4,898,685 | |||||||||
Reverse repurchase agreements | 14,059,133 | (10,132,275 | ) | 3,926,858 | (634,568 | ) | (3,248,817 | ) | 43,473 | ||||||||||||||
Liabilities | |||||||||||||||||||||||
Securities lending arrangements | $ | 2,598,487 | $ | — | $ | 2,598,487 | $ | (680,222 | ) | $ | (1,883,140 | ) | $ | 35,125 | |||||||||
Repurchase agreements | 20,804,432 | (10,132,275 | ) | 10,672,157 | (634,568 | ) | (8,810,770 | ) | 1,226,819 |
(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 counterparty in the event of a counterparty’s default, but which are not netted in the balance sheet because other netting provisions of U.S. 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) | Amounts include $5,796.1 million of securities borrowing arrangements, for which we have received securities collateral of $5,613.3 million, and $1,807.2 million of repurchase agreements, for which we have pledged securities collateral of $1,875.3 million, which are subject to master netting agreements but we have not yet determined the agreements to be legally enforceable. |
(4) | Amounts include $4,847.4 million of securities borrowing arrangements, for which we have received securities collateral of $4,694.0 million, and $1,201.9 million of repurchase agreements, for which we have pledged securities collateral of $1,238.4 million, which are subject to master netting agreements but we have not yet determined the agreements to be legally enforceable. |
Successor | Predecessor | |||||||||||||||
Year Ended November 30, 2015 | Year Ended November 30, 2014 | Nine Months Ended November 30, 2013 | Three Months Ended February 28, 2013 | |||||||||||||
Transferred assets | $ | 5,770.5 | $ | 6,112.6 | $ | 4,592.5 | $ | 2,735.2 | ||||||||
Proceeds on new securitizations | 5,811.3 | 6,221.1 | 4,609.0 | 2,751.3 | ||||||||||||
Cash flows received on retained interests | 31.2 | 46.3 | 35.6 | 32.3 |
November 30, 2015 | |||||||
Securitization Type | Total Assets | Retained Interests | |||||
U.S. government agency residential mortgage-backed securities | $ | 10,901.9 | $ | 203.6 | |||
U.S. government agency commercial mortgage-backed securities | 2,313.4 | 87.2 | |||||
Collateralized loan obligations | 4,538.4 | 51.5 | |||||
Consumer and other loans | 655.0 | 31.0 |
November 30, 2014 | |||||||
Securitization Type | Total Assets | Retained Interests | |||||
U.S. government agency residential mortgage-backed securities | $ | 19,196.9 | $ | 226.9 | |||
U.S. government agency commercial mortgage-backed securities | 5,848.5 | 204.7 | |||||
Collateralized loan obligations | 4,511.8 | 108.4 |
• | 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- and other asset-backed securities and the securitization of commercial 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- and other asset-backed securities, |
• | Warehousing funding arrangements for client-sponsored consumer loan vehicles and collateralized loan obligations (“CLOs”) through participation certificates and revolving loan commitments, and |
• | Loans to, investments in and fees from various investment fund vehicles. |
November 30, 2015 | November 30, 2014 | ||||||||||||||
Securitization Vehicles | Other | Securitization Vehicles | Other | ||||||||||||
Cash | $ | 0.5 | $ | 0.2 | $ | — | $ | 0.2 | |||||||
Financial instruments owned | 68.3 | 0.3 | 62.7 | 0.3 | |||||||||||
Securities purchased under agreement to resell (1) | 717.3 | — | 575.2 | — | |||||||||||
Fees, interest and other receivables | 0.3 | — | 0.4 | — | |||||||||||
$ | 786.4 | $ | 0.5 | $ | 638.3 | $ | 0.5 | ||||||||
Other secured financings (2) | $ | 785.0 | $ | — | $ | 637.7 | $ | — | |||||||
Other liabilities | 1.4 | 0.2 | 0.6 | 0.2 | |||||||||||
$ | 786.4 | $ | 0.2 | $ | 638.3 | $ | 0.2 |
(1) | Securities purchased under agreement to resell represent an amount due under a collateralized transaction on a related consolidated entity, which is eliminated in consolidation. |
(2) | Approximately $22.1 million and $39.7 million of the secured financing represents an amount held by us in inventory and is eliminated in consolidation at November 30, 2015 and November 30, 2014, respectively. |
November 30, 2015 | |||||||||||||||
Carrying Amount | Maximum | ||||||||||||||
Assets | Liabilities | Exposure to Loss | VIE Assets | ||||||||||||
Collateralized loan obligations | $ | 73.6 | $ | 0.2 | $ | 458.1 | $ | 6,368.7 | |||||||
Consumer loan vehicles | 188.3 | — | 845.8 | 1,133.0 | |||||||||||
Asset management vehicles | 0.5 | — | 0.5 | 45.5 | |||||||||||
Private equity vehicles | 27.3 | — | 40.7 | 80.8 | |||||||||||
Total | $ | 289.7 | $ | 0.2 | $ | 1,345.1 | $ | 7,628.0 |
November 30, 2014 | |||||||||||||||
Carrying Amount | Maximum | ||||||||||||||
Assets | Liabilities | Exposure to Loss | VIE Assets | ||||||||||||
Collateralized loan obligations | $ | 134.0 | $ | — | $ | 926.9 | $ | 7,737.1 | |||||||
Consumer loan vehicles | 170.6 | — | 797.8 | 485.2 | |||||||||||
Asset management vehicle | 11.3 | — | 11.3 | 432.3 | |||||||||||
Private equity vehicles | 44.3 | — | 59.2 | 92.8 | |||||||||||
Total | $ | 360.2 | $ | — | $ | 1,795.2 | $ | 8,747.4 |
• | 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, |
• | Investments in variable funding notes issued by CLOs, |
• | A guarantee to a CLO managed by Jefferies Finance, LLC ("Jefferies Finance"), whereby we guarantee certain of the obligations of Jefferies Finance to the CLO. |
November 30, 2015 | November 30, 2014 | ||||||
Total assets | $ | 7,292.1 | $ | 5,954.0 | |||
Total liabilities | 6,297.3 | 4,961.7 | |||||
Total equity | 994.8 | 992.3 | |||||
Our total equity balance | 497.4 | 496.0 |
November 30, 2015 | November 30, 2014 | ||||||
Total assets | $ | 2,069.1 | $ | 1,502.8 | |||
Total liabilities | 1,469.8 | 964.5 | |||||
Total equity | 599.3 | 538.3 | |||||
Our total equity balance | 290.7 | 261.1 |
September 30, 2015 (1) | December 31, 2014 (1) | ||||||||||||||||||||||
Total assets | $ | 84,417 | $ | 73,261 | |||||||||||||||||||
Total liabilities | 75 | 66 | |||||||||||||||||||||
Total partners' capital | 84,342 | 73,195 | |||||||||||||||||||||
Nine Months Ended September 30, 2015 (1) | Three Months Ended December 30, 2014 (1) | Nine Months Ended September 30, 2014 (1) | Three Months Ended December 30, 2013 (1) | Nine Months Ended September 30, 2013 (1) | Three Months Ended December 30, 2012 (1) | ||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | (1,751 | ) | $ | (65,700 | ) | $ | (24,239 | ) | $ | (2,947 | ) | $ | 8,416 | $ | (8,690 | ) |
(1) | Financial information for JCP Fund V within our consolidated financial statements at November 30, 2015 and November 30, 2014 and for the year ended November 30, 2015, the year ended November 30, 2014, the nine months ended November 30, 2013 and the three months ended February 28, 2013 is included based on the presented periods. |
November 30, 2015 | November 30, 2014 | ||||||
Capital Markets | $ | 1,653,588 | $ | 1,659,636 | |||
Asset Management | 3,000 | 3,000 | |||||
Total goodwill | $ | 1,656,588 | $ | 1,662,636 |
Year Ended November 30, 2015 | Year Ended November 30, 2014 | ||||||
Balance, at beginning of period | $ | 1,662,636 | $ | 1,722,346 | |||
Impairment loss (1) | — | (54,000 | ) | ||||
Purchase accounting adjustments (2) | (1,959 | ) | — | ||||
Translation adjustments | (4,089 | ) | (5,710 | ) | |||
Balance, at end of period | $ | 1,656,588 | $ | 1,662,636 |
(1) | Activity for the year ended November 30, 2014 represents impairment losses of $51.9 million related to our Futures reporting unit and $2.1 million related to our International Asset Management business. |
(2) | During the year ended November 30, 2015, we have made correcting adjustments to decrease goodwill by $2.0 million. Goodwill has been overstated in the historical financial statements since the Leucadia Transaction. Financial instruments owned and Accrued expenses and other liabilities have been understated, while the net deferred tax asset and net income tax receivable, both of which are presented within Other assets on the face of the consolidated statements of financial condition, have been overstated. We do not believe this misstatement is material to our financial statements for any previously reported period. |
November 30, 2015 | Weighted average remaining lives (years) | ||||||||||||||||||||
Gross cost | Disposals (1) | Impairment losses | Accumulated amortization | Net carrying amount | |||||||||||||||||
Customer relationships | $ | 127,667 | $ | — | $ | — | $ | (34,754 | ) | $ | 92,913 | 12.9 | |||||||||
Trade name | 131,288 | — | — | (10,315 | ) | 120,973 | 32.3 | ||||||||||||||
Exchange and clearing organization membership interests and registrations | 14,413 | (1,227 | ) | (1,289 | ) | — | 11,897 | N/A | |||||||||||||
$ | 273,368 | $ | (1,227 | ) | $ | (1,289 | ) | $ | (45,069 | ) | $ | 225,783 |
November 30, 2014 | Weighted average remaining lives (years) | ||||||||||||||||
Gross cost | Impairment losses | Accumulated amortization | Net carrying amount | ||||||||||||||
Customer relationships (2) | $ | 135,926 | $ | (7,603 | ) | $ | (26,402 | ) | $ | 101,921 | 13.7 | ||||||
Trade name | 132,009 | — | (6,677 | ) | 125,332 | 33.3 | |||||||||||
Exchange and clearing organization membership interests and registrations | 14,706 | (178 | ) | — | 14,528 | N/A | |||||||||||
$ | 282,641 | $ | (7,781 | ) | $ | (33,079 | ) | $ | 241,781 |
Year ended November 30, 2016 | $ | 12,198 | |
Year ended November 30, 2017 | 12,198 | ||
Year ended November 30, 2018 | 12,198 | ||
Year ended November 30, 2019 | 12,198 | ||
Year ended November 30, 2020 | 12,198 |
November 30, 2015 | November 30, 2014 | ||||||
Bank loans | $ | 262,000 | $ | 12,000 | |||
Secured revolving loan facility | 48,659 | — | |||||
Committed revolving credit facility | — | — | |||||
$ | 310,659 | $ | 12,000 |
November 30, 2015 | November 30, 2014 | ||||||
Unsecured Long-Term Debt | |||||||
3.875% Senior Notes, due November 9, 2015 (effective interest rate of 2.17%) | $ | — | $ | 507,944 | |||
5.5% Senior Notes, due March 15, 2016 (effective interest rate of 2.52%) | 353,025 | 363,229 | |||||
5.125% Senior Notes, due April 13, 2018 (effective interest rate of 3.46%) | 830,298 | 842,359 | |||||
8.5% Senior Notes, due July 15, 2019 (effective interest rate of 4.00%) | 806,125 | 832,797 | |||||
2.375% Euro Medium Term Notes, due May 20, 2020 (effective rate of 2.42%) | 527,606 | 620,725 | |||||
6.875% Senior Notes, due April 15, 2021 (effective interest rate of 4.40%) | 838,765 | 853,091 | |||||
2.25% Euro Medium Term Notes, due July 13, 2022 (effective rate of 4.08%) | 3,779 | 4,379 | |||||
5.125% Senior Notes, due January 20, 2023 (effective interest rate of 4.55%) | 620,890 | 623,311 | |||||
6.45% Senior Debentures, due June 8, 2027 (effective interest rate of 5.46%) | 379,711 | 381,515 | |||||
3.875% Convertible Senior Debentures, due November 1, 2029 (effective interest rate of 3.50%) (1) | 347,307 | 349,261 | |||||
6.25% Senior Debentures, due January 15, 2036 (effective interest rate of 6.03%) | 512,730 | 513,046 | |||||
6.50% Senior Notes, due January 20, 2043 (effective interest rate of 6.09%) | 421,656 | 421,960 | |||||
$ | 5,641,892 | $ | 6,313,617 | ||||
Secured Long-Term Debt | |||||||
Credit facility | — | 170,000 | |||||
$ | 5,641,892 | $ | 6,483,617 |
(1) | The value of the 3.875% Convertible Senior debentures at November 30, 2015 and November 30, 2014 includes the fair value of the conversion feature of $0.0 million and $0.7 million, respectively. The change in fair value of the conversion feature, which is included within Principal transaction revenues in the Consolidated Statements of Earnings, was not material for the year ended November 30, 2015 and amounted to a gain of $8.9 million for the year ended November 30, 2014. |
November 30, 2015 | November 30, 2014 | ||||||
Global Equity Event Opportunity Fund, LLC (1) | $ | 26,292 | $ | 33,303 | |||
Other | 1,176 | 5,545 | |||||
Noncontrolling interests | $ | 27,468 | $ | 38,848 |
(1) | Noncontrolling interests attributed to Leucadia were $26.3 million and $25.4 million at November 30, 2015 and November 30, 2014, respectively. |
Year Ended November 30, | |||||||
2015 | 2014 | ||||||
Change in projected benefit obligation: | |||||||
Projected benefit obligation, beginning of period | $ | 55,262 | $ | 48,255 | |||
Service cost | 250 | 250 | |||||
Interest cost | 2,340 | 2,429 | |||||
Actuarial losses | 4,280 | 5,834 | |||||
Administrative expenses paid | (359 | ) | (196 | ) | |||
Benefits paid | (729 | ) | (1,310 | ) | |||
Settlements | (2,714 | ) | — | ||||
Projected benefit obligation, end of period | $ | 58,330 | $ | 55,262 | |||
Change in plan assets: | |||||||
Fair value of assets, beginning of period | $ | 51,085 | $ | 47,416 | |||
Benefit payments made | (729 | ) | (1,310 | ) | |||
Administrative expenses paid | (359 | ) | (196 | ) | |||
Actual return on plan assets | (252 | ) | 5,175 | ||||
Settlements | (2,714 | ) | — | ||||
Fair value of assets, end of period | $ | 47,031 | $ | 51,085 | |||
Funded status at end of period | $ | (11,299 | ) | $ | (4,177 | ) |
November 30, | |||||||
2015 | 2014 | ||||||
Consolidated statements of financial condition: | |||||||
Liabilities | $ | (11,299 | ) | $ | (4,177 | ) | |
Accumulated other comprehensive income (loss), before taxes: | |||||||
Net gain (loss) | $ | (5,255 | ) | $ | 2,390 |
Year Ended November 30, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Components of net periodic pension cost: | |||||||||||
Service cost | $ | 250 | $ | 250 | $ | 225 | |||||
Interest cost on projected benefit obligation | 2,340 | 2,429 | 2,201 | ||||||||
Expected return on plan assets | (3,357 | ) | (3,125 | ) | (2,698 | ) | |||||
Net amortization | — | (94 | ) | 326 | |||||||
Settlement losses | 244 | — | — | ||||||||
Net periodic pension cost | $ | (523 | ) | $ | (540 | ) | $ | 54 |
Year Ended November 30, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Amounts recognized in other comprehensive income: | |||||||||||
Net (gain) loss arising during the period | $ | 7,890 | $ | 3,784 | $ | (9,419 | ) | ||||
Amortization of net loss | — | 94 | (326 | ) | |||||||
Settlements during the period | (244 | ) | — | — | |||||||
Total recognized in Other comprehensive income | 7,646 | 3,878 | (9,745 | ) | |||||||
Net amount recognized in net periodic benefit cost and Other comprehensive income | $ | 7,123 | $ | 3,338 | $ | (9,691 | ) |
2015 | 2014 | 2013 | ||||||
Discount rate used to determine benefit obligation | 4.10 | % | 4.30 | % | 5.10 | % | ||
Weighted average assumptions used to determine net pension cost: | ||||||||
Discount rate | 4.30 | % | 5.10 | % | 4.40 | % | ||
Expected long-term rate of return on plan assets | 6.75 | % | 6.75 | % | 6.75 | % |
2016 | $ | 2,103 | |
2017 | 1,828 | ||
2018 | 2,163 | ||
2019 | 3,046 | ||
2020 | 2,448 | ||
2021 through 2025 | 21,085 |
At November 30, 2015 | |||||||||||
Level 1 | Level 2 | Total | |||||||||
Plan assets (1): | |||||||||||
Cash and cash equivalents | $ | 487 | $ | — | $ | 487 | |||||
Listed equity securities (2) | 29,156 | — | 29,156 | ||||||||
Fixed income securities: | |||||||||||
Corporate debt securities | — | 6,598 | 6,598 | ||||||||
Foreign corporate debt securities | — | 2,140 | 2,140 | ||||||||
U.S. government securities | 3,975 | — | 3,975 | ||||||||
Agency mortgage-backed securities | — | 3,504 | 3,504 | ||||||||
Commercial mortgage-backed securities | — | 425 | 425 | ||||||||
Asset-backed securities | — | 746 | 746 | ||||||||
$ | 33,618 | $ | 13,413 | $ | 47,031 |
(1) | There are no plan assets classified within Level 3 of the fair value hierarchy. |
(2) | Listed equity securities are diversified across a spectrum of primarily U.S. large-cap companies. |
At November 30, 2014 | |||||||||||
Level 1 | Level 2 | Total | |||||||||
Plan assets (1): | |||||||||||
Cash and cash equivalents | $ | 373 | $ | — | $ | 373 | |||||
Listed equity securities (2) | 31,327 | — | 31,327 | ||||||||
Fixed income securities: | |||||||||||
Corporate debt securities | — | 6,482 | 6,482 | ||||||||
Foreign corporate debt securities | — | 1,321 | 1,321 | ||||||||
U.S. government securities | 5,929 | — | 5,929 | ||||||||
Agency mortgage-backed securities | — | 3,883 | 3,883 | ||||||||
Commercial mortgage-backed securities. | — | 1,080 | 1,080 | ||||||||
Asset-backed securities | — | 690 | 690 | ||||||||
$ | 37,629 | $ | 13,456 | $ | 51,085 |
(1) | There are no plan assets classified within Level 3 of the fair value hierarchy. |
(2) | Listed equity securities are diversified across a spectrum of primarily U.S. large-cap companies. |
• | Cash equivalents are valued at cost, which approximates fair value and are categorized in Level 1 of the fair value hierarchy; |
• | Listed equity securities are valued using the quoted prices in active markets for identical assets; |
• | Fixed income securities: |
◦ | Corporate debt, mortgage- and asset-backed securities and other securities valuations use data readily available to all market participants and use inputs available for substantially the full term of the security. Valuation inputs include benchmark yields, reported trades, broker dealer quotes, issuer spreads, two sided markets, benchmark securities, bids, offers, reference data, and industry and economic events; |
◦ | U.S. government and agency securities valuations generally include quoted bid prices in active markets for identical or similar assets. |
Year Ended November 30, | |||||||
2015 | 2014 | ||||||
Change in projected benefit obligation: | |||||||
Projected benefit obligation, beginning of period | $ | 28,434 | $ | 26,368 | |||
Service cost | — | 40 | |||||
Interest cost | 523 | 801 | |||||
Actuarial losses | (40 | ) | 4,631 | ||||
Benefits paid | (1,069 | ) | (1,193 | ) | |||
Currency adjustment | (4,303 | ) | (2,213 | ) | |||
Projected benefit obligation, end of period | $ | 23,545 | $ | 28,434 | |||
Funded status at end of period | $ | (23,545 | ) | $ | (28,434 | ) |
November 30, | |||||||
2015 | 2014 | ||||||
Consolidated statements of financial condition: | |||||||
Liabilities | $ | 23,545 | $ | 28,434 | |||
Accumulated other comprehensive income (loss), before taxes: | |||||||
Net gain (loss) | $ | (4,917 | ) | $ | (5,281 | ) |
Year Ended November 30, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Components of net periodic pension cost: | |||||||||||
Service cost | $ | — | $ | 40 | $ | 67 | |||||
Interest cost on projected benefit obligation | 523 | 801 | 902 | ||||||||
Net amortization | 325 | 244 | 179 | ||||||||
Net periodic pension cost | $ | 848 | $ | 1,085 | $ | 1,148 |
Year Ended November 30, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Amounts recognized in other comprehensive income: | |||||||||||
Net (gain) loss arising during the period | $ | (39 | ) | $ | 4,631 | $ | 1,033 | ||||
Amortization of net loss | (325 | ) | (244 | ) | (179 | ) | |||||
Total recognized in Other comprehensive income | $ | (364 | ) | $ | 4,387 | $ | 854 | ||||
Net amount recognized in net periodic benefit cost and Other comprehensive income | $ | 484 | $ | 5,472 | $ | 2,002 |
Year Ended November 30, | |||
2015 | 2014 | ||
Projected benefit obligation: | |||
Discount rate | 2.20% | 2.10% | |
Rate of compensation increase (1) | N/A | 3.00% | |
Net periodic pension benefit cost: | |||
Discount rate | 2.10% | 3.40% | |
Rate of compensation increase (1) | N/A | 3.00% |
2016 | $ | 1,143 | |
2017 | 1,124 | ||
2018 | 1,133 | ||
2019 | 1,110 | ||
2020 | 1,159 | ||
2021 through 2025 | 5,831 |
Successor | Predecessor | |||||||||||||||
Year Ended November 30, 2015 | Year Ended November 30, 2014 | Nine Months Ended November 30, 2013 | Three Months Ended February 28, 2013 | |||||||||||||
Components of compensation cost: | ||||||||||||||||
Restricted cash awards | $ | 249.2 | $ | 193.7 | $ | 164.4 | 48.2 | |||||||||
Restricted stock and RSUs (1) | 57.9 | 84.5 | 64.4 | 22.3 | ||||||||||||
Profit sharing plan | 6.1 | 6.1 | 3.2 | 2.6 | ||||||||||||
Total compensation cost | $ | 313.2 | $ | 284.3 | $ | 232.0 | $ | 73.1 |
(1) | Total compensation cost associated with restricted stock and RSUs includes the amortization of sign-on, retention and senior executive awards, less forfeitures and clawbacks. Additionally, we recognize compensation cost related to the discount provided to employees in electing to defer compensation under the Deferred Compensation Plan. This compensation cost was approximately $399,000 for the year ended November 30, 2015, $268,000 for the year ended November 30, 2014, $111,000 and $72,000 for the nine months ended November 30, 2013 and three months ended February 28, 2013, respectively. |
Remaining Unamortized Amounts | Weighted Average Vesting Period (in Years) | |||||
Non-vested share-based awards | $ | 32.1 | 2 | |||
Restricted cash awards | 258.3 | 3 | ||||
Total | $ | 290.4 |
Year Ended November 30, 2015 | Year Ended November 30, 2016 | Year Ended November 30, 2017 | Thereafter | Total | |||||||||||||||
Restricted cash awards | $ | 61.6 | $ | 61.6 | $ | 61.6 | $ | 133.9 | $ | 318.7 |
Successor | Predecessor | ||||||||||||||||
Year Ended November 30, 2015 | Year Ended November 30, 2014 | Nine Months Ended November 30, 2013 | Three Months Ended February 28, 2013 | ||||||||||||||
Non-interest expenses: | |||||||||||||||||
Compensation and benefits | $ | 1,467,131 | $ | 1,698,530 | $ | 1,213,908 | $ | 474,217 | |||||||||
Non-compensation expenses: | |||||||||||||||||
Floor brokerage and clearing fees | 199,780 | 215,329 | 150,774 | 46,155 | |||||||||||||
Technology and communications | 313,044 | 268,212 | 193,683 | 59,878 | |||||||||||||
Occupancy and equipment rental | 101,138 | 107,767 | 86,701 | 24,309 | |||||||||||||
Business development | 105,963 | 106,984 | 63,115 | 24,927 | |||||||||||||
Professional services | 103,972 | 109,601 | 72,802 | 24,135 | |||||||||||||
Bad debt provision (1) | (396 | ) | 55,355 | 179 | 1,945 | ||||||||||||
Goodwill impairment (2) | — | 54,000 | — | — | |||||||||||||
Intangible assets amortization and impairment (3) | 13,487 | 20,569 | 20,784 | 384 | |||||||||||||
Other | 56,895 | 50,770 | 71,072 | 12,146 | |||||||||||||
Total non-compensation expenses | 893,883 | 988,587 | 659,110 | 193,879 | |||||||||||||
Total non-interest expenses | $ | 2,361,014 | $ | 2,687,117 | $ | 1,873,018 | $ | 668,096 |
(1) | During the year ended November 30, 2015, we released $4.4 million in reserves related to the resolution of bankruptcy claims against Lehman Brothers Holdings, Inc. During the fourth quarter of 2014, we recognized a bad debt provision, which primarily relates to a receivable of $52.3 million from a client to which we provided futures clearing and execution services, which declared bankruptcy. |
(2) | Goodwill impairment losses of $51.9 million and $2.1 million at November 30, 2014 were recognized in the Futures and International Asset Management reporting units at November 30, 2014, respectively. (See Note 11, Goodwill and Other Intangible Assets for further information.) |
(3) | The amount for the year ended November 30, 2015 includes an impairment loss of $1.3 million on certain exchange memberships based on a decline in fair value at August 1, 2015. The amount for the year ended November 30, 2014 includes impairment losses at November 30, 2014 of $7.5 million and $0.1 million in the Futures business and the International Asset Management business, respectively. (See Note 11, Goodwill and Other Intangible Assets for further information.) |
Predecessor | ||||
Three Months Ended February 28, 2013 | ||||
Earnings for basic earnings per common share: | ||||
Net earnings | $ | 90,842 | ||
Net earnings to noncontrolling interests | 10,704 | |||
Net earnings to common shareholders | 80,138 | |||
Less: Allocation of earnings to participating securities (1) | 5,890 | |||
Net earnings available to common shareholders | $ | 74,248 | ||
Earnings for diluted earnings per common share: | ||||
Net earnings | $ | 90,842 | ||
Net earnings to noncontrolling interests | 10,704 | |||
Net earnings to common shareholders | 80,138 | |||
Add: Mandatorily redeemable convertible preferred stock dividends | 1,016 | |||
Less: Allocation of earnings to participating securities (1) | 5,882 | |||
Net earnings available to common shareholders | $ | 75,272 | ||
Shares: | ||||
Average common shares used in basic computation | 213,732 | |||
Stock options | 2 | |||
Mandatorily redeemable convertible preferred stock | 4,110 | |||
Average common shares used in diluted computation | 217,844 | |||
Earnings per common share: | ||||
Basic | $ | 0.35 | ||
Diluted | $ | 0.35 | ||
Dividends: | ||||
Dividends declared per share of common stock | $ | 0.075 |
(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 restricted stock units for which requisite service has not yet been rendered and amounted to weighted average shares of 16,756,000 for the three months ended February 28, 2013. Dividends declared on participating securities during the three months ended February 28, 2013 amounted to approximately $1.3 million. Undistributed earnings are allocated to participating securities based upon their right to share in earnings if all earnings for the period had been distributed. |
Successor | Predecessor | ||||||||||||||||
Year Ended November 30, 2015 | Year Ended November 30, 2014 | Nine Months Ended November 30, 2013 | Three Months Ended February 28, 2013 | ||||||||||||||
Income tax expense | $ | 18,898 | $ | 142,061 | $ | 94,686 | $ | 48,645 | |||||||||
Stockholders’ equity, for compensation expense for tax purposes (in excess of)/less than amounts recognized for financial reporting purposes | $ | 5,935 | $ | (1,276 | ) | $ | (2,873 | ) | $ | 17,965 |
Successor | Predecessor | ||||||||||||||||
Year Ended November 30, 2015 | Year Ended November 30, 2014 | Nine Months Ended November 30, 2013 | Three Months Ended February 28, 2013 | ||||||||||||||
Current: | |||||||||||||||||
U.S. Federal | $ | (45,007 | ) | $ | 4,335 | $ | 50,089 | $ | 22,936 | ||||||||
U.S. state and local | (28,260 | ) | 4,056 | 6,263 | (3,176 | ) | |||||||||||
Foreign | 3,369 | 11,475 | 7,050 | (1,950 | ) | ||||||||||||
(69,898 | ) | 19,866 | 63,402 | 17,810 | |||||||||||||
Deferred: | |||||||||||||||||
U.S. Federal | 74,085 | 87,293 | 25,262 | 17,392 | |||||||||||||
U.S. state and local | 22,811 | 27,181 | 8,868 | 9,761 | |||||||||||||
Foreign | (8,100 | ) | 7,721 | (2,846 | ) | 3,682 | |||||||||||
88,796 | 122,195 | 31,284 | 30,835 | ||||||||||||||
$ | 18,898 | $ | 142,061 | $ | 94,686 | $ | 48,645 |
Successor | Predecessor | ||||||||||||||||||||||||||||
Year Ended November 30, 2015 | Year Ended November 30, 2014 | Nine Months Ended November 30, 2013 | Three Months Ended February 28, 2013 | ||||||||||||||||||||||||||
Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||||||||
Computed expected income taxes | $ | 39,979 | 35.0 | % | $ | 106,058 | 35.0 | % | $ | 92,504 | 35.0 | % | $ | 48,820 | 35.0 | % | |||||||||||||
Increase (decrease) in income taxes resulting from: | |||||||||||||||||||||||||||||
State and city income taxes, net of Federal income tax benefit | (3,542 | ) | (3.1 | ) | 20,304 | 6.7 | 9,835 | 3.7 | 4,280 | 3.1 | |||||||||||||||||||
Income allocated to Noncontrolling interest, not subject to tax | (628 | ) | (0.5 | ) | (1,190 | ) | (0.4 | ) | (2,946 | ) | (1.1 | ) | (3,553 | ) | (2.5 | ) | |||||||||||||
Foreign rate differential | (10,130 | ) | (8.9 | ) | (9,024 | ) | (2.9 | ) | (4,750 | ) | (1.8 | ) | (2,993 | ) | (2.2 | ) | |||||||||||||
Tax exempt income | (6,789 | ) | (5.9 | ) | (6,746 | ) | (2.2 | ) | (3,742 | ) | (1.4 | ) | (1,003 | ) | (0.7 | ) | |||||||||||||
Non deductible settlements | — | — | 3,850 | 1.3 | 4,900 | 1.9 | — | — | |||||||||||||||||||||
Valuation allowance related to Futures business | — | — | 4,655 | 1.5 | — | — | — | — | |||||||||||||||||||||
Goodwill impairment | — | — | 13,619 | 4.5 | — | — | — | — | |||||||||||||||||||||
Foreign tax credits | (7,240 | ) | (6.3 | ) | (3,149 | ) | (1.0 | ) | — | — | — | — | |||||||||||||||||
Non-deductible Bache Wind down Costs | 3,225 | 2.8 | — | — | — | — | — | — | |||||||||||||||||||||
Meals & entertainment | 5,232 | 4.6 | 4,103 | 1.4 | 2,908 | 1.1 | 890 | 0.6 | |||||||||||||||||||||
Other, net | (1,209 | ) | (1.2 | ) | 9,581 | 3.0 | (4,023 | ) | (1.6 | ) | 2,204 | 1.6 | |||||||||||||||||
Total income taxes | $ | 18,898 | 16.5 | % | $ | 142,061 | 46.9 | % | $ | 94,686 | 35.8 | % | $ | 48,645 | 34.9 | % |
Successor | Predecessor | |||||||||||||||
Year Ended November 30, 2015 | Year Ended November 30, 2014 | Nine Months Ended November 30, 2013 | Three Months Ended February 28, 2013 | |||||||||||||
Balance at beginning of period | $ | 126,662 | $ | 126,844 | $ | 129,010 | $ | 110,539 | ||||||||
Increases based on tax positions related to the current period | — | 4,831 | 8,748 | 7,185 | ||||||||||||
Increases based on tax positions related to prior periods | 2,818 | 1,624 | 7,383 | 15,356 | ||||||||||||
Decreases based on tax positions related to prior periods | (3,883 | ) | (1,709 | ) | (18,297 | ) | (4,070 | ) | ||||||||
Decreases related to settlements with taxing authorities | (17,695 | ) | (4,928 | ) | — | — | ||||||||||
Balance at end of period | $ | 107,902 | $ | 126,662 | $ | 126,844 | $ | 129,010 |
November 30, 2015 | November 30, 2014 | |||||||
Deferred tax assets: | ||||||||
Compensation and benefits | $ | 253,291 | $ | 302,072 | ||||
Net operating loss | 14,985 | 17,830 | ||||||
Long-term debt | 95,765 | 140,685 | ||||||
Accrued expenses and other | 106,136 | 89,273 | ||||||
Sub-total | 470,177 | 549,860 | ||||||
Valuation allowance | (13,337 | ) | (13,069 | ) | ||||
Total deferred tax assets | 456,840 | 536,791 | ||||||
Deferred tax liabilities: | ||||||||
Amortization of intangibles | 103,560 | 97,268 | ||||||
Other | 26,345 | 26,454 | ||||||
Total deferred tax liabilities | 129,905 | 123,722 | ||||||
Net deferred tax asset, included in Other assets | $ | 326,935 | $ | 413,069 |
Jurisdiction | Tax Year |
United States | 2007 |
California | 2006 |
New Jersey | 2010 |
New York State | 2001 |
New York City | 2003 |
United Kingdom | 2014 |
Expected Maturity Date | |||||||||||||||||||||||
2016 | 2017 | 2018 and 2019 | 2020 and 2021 | 2022 and Later | Maximum Payout | ||||||||||||||||||
Equity commitments (1) | $ | 9.5 | $ | — | $ | — | $ | 15.8 | $ | 189.5 | $ | 214.8 | |||||||||||
Loan commitments (1) | 247.3 | 170.7 | 81.4 | — | — | 499.4 | |||||||||||||||||
Mortgage-related and other purchase commitments | 1,571.4 | 312.5 | 1,013.7 | — | — | 2,897.6 | |||||||||||||||||
Forward starting reverse repos and repos | 1,635.0 | — | — | — | — | 1,635.0 | |||||||||||||||||
Other unfunded commitments (1) | 87.0 | 186.9 | 20.2 | 5.7 | 35.6 | 335.4 | |||||||||||||||||
$ | 3,550.2 | $ | 670.1 | $ | 1,115.3 | $ | 21.5 | $ | 225.1 | $ | 5,582.2 |
(1) | Equity, loan and other unfunded commitments are presented by contractual maturity date. The amounts, however, are available on demand. |
Fiscal Year | Operating Leases | ||
2016 | $ | 54,532 | |
2017 | 57,072 | ||
2018 | 57,298 | ||
2019 | 55,755 | ||
2020 | 50,584 | ||
Thereafter | 396,041 | ||
Total | $ | 671,282 | |
Fiscal Year | |||
2016 | $ | 3,798 | |
2017 | 3,798 | ||
2018 | 1,513 | ||
2019 | 189 | ||
Net minimum lease payments | 9,298 | ||
Less amount representing interest | 471 | ||
Present value of net minimum lease payments | $ | 8,827 | |
Expected Maturity Date | |||||||||||||||||||||||
2016 | 2017 | 2018 and 2019 | 2020 and 2021 | 2022 and Later | Notional/ Maximum Payout | ||||||||||||||||||
Guarantee Type: | |||||||||||||||||||||||
Derivative contracts—non-credit related | $ | 11,840.6 | $ | 584.6 | $ | 142.8 | $ | — | $ | 414.4 | $ | 12,982.4 | |||||||||||
Written derivative contracts—credit related | — | — | 115.4 | 955.4 | 10.0 | 1,080.8 | |||||||||||||||||
Total derivative contracts | $ | 11,840.6 | $ | 584.6 | $ | 258.2 | $ | 955.4 | $ | 424.4 | $ | 14,063.2 |
External Credit Rating | |||||||||||||||||||||||||||
AAA/ Aaa | AA/Aa | A | BBB/ Baa | Below Investment Grade | Unrated | Notional/ Maximum Payout | |||||||||||||||||||||
Credit related derivative contracts: | |||||||||||||||||||||||||||
Index credit default swaps | $ | 698.4 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 698.4 | |||||||||||||
Single name credit default swaps | $ | — | $ | — | $ | 10.0 | $ | 57.5 | $ | 264.3 | $ | 50.6 | $ | 382.4 |
Net Capital | Excess Net Capital | ||||||
Jefferies | $ | 1,556,602 | $ | 1,471,663 | |||
Jefferies Execution | 9,647 | 9,397 |
• | Net revenues and expenses directly associated with each reportable business segment are included in determining earnings before taxes. |
• | Net revenues and expenses not directly associated with specific reportable business segments are allocated based on the most relevant measures applicable, including each reportable business segment’s net revenues, headcount and other factors. |
• | Reportable business segment assets include an allocation of indirect corporate assets that have been fully allocated to our reportable business segments, generally based on each reportable business segment’s capital utilization. |
Successor | Predecessor | |||||||||||||||
Year Ended November 30, 2015 | Year Ended November 30, 2014 | Nine Months Ended November 30, 2013 | Three Months Ended February 28, 2013 | |||||||||||||
Capital Markets: | ||||||||||||||||
Net revenues | $ | 2,415.1 | $ | 2,949.0 | $ | 2,074.1 | $ | 807.6 | ||||||||
Expenses | $ | 2,325.2 | $ | 2,652.0 | $ | 1,840.4 | $ | 660.6 | ||||||||
Asset Management: | ||||||||||||||||
Net revenues | $ | 60.1 | $ | 41.1 | $ | 66.6 | $ | 10.9 | ||||||||
Expenses | $ | 35.8 | $ | 35.1 | $ | 32.6 | $ | 7.5 | ||||||||
Total: | ||||||||||||||||
Net revenues | $ | 2,475.2 | $ | 2,990.1 | $ | 2,140.7 | $ | 818.5 | ||||||||
Expenses | $ | 2,361.0 | $ | 2,687.1 | $ | 1,873.0 | $ | 668.1 |
November 30, 2015 | November 30, 2014 | ||||||
Segment assets: | |||||||
Capital Markets | $ | 37,806.1 | $ | 44,002.6 | |||
Asset Management | 759.0 | 515.0 | |||||
Total assets | $ | 38,565.1 | $ | 44,517.6 |
Successor | Predecessor | |||||||||||||||
Year Ended November 30, 2015 | Year Ended November 30, 2014 | Nine Months Ended November 30, 2013 | Three Months Ended February 28, 2013 | |||||||||||||
Americas (1) | $ | 1,887,007 | $ | 2,261,683 | $ | 1,651,789 | $ | 663,588 | ||||||||
Europe (2) | 510,044 | 634,358 | 441,795 | 133,104 | ||||||||||||
Asia | 78,190 | 94,097 | 47,097 | 21,852 | ||||||||||||
Net revenues | $ | 2,475,241 | $ | 2,990,138 | $ | 2,140,681 | $ | 818,544 |
(1) | Substantially all relates to U.S. results. |
(2) | Substantially all relates to U.K. results. |
Successor | Predecessor | |||||||||||||||
Year Ended November 30, 2015 | Year Ended November 30, 2014 | Nine Months Ended November 30, 2013 | Three Months Ended February 28, 2013 | |||||||||||||
Interest income | $ | — | $ | — | $ | 852 | $ | 516 | ||||||||
Other revenues and investment income (loss) | (26,179 | ) | (14,868 | ) | 9,294 | 947 |
• | Under a service agreement we charge Leucadia for certain services, which amounted to $34.6 million for the year ended November 30, 2015, $22.3 million for the year ended November 30, 2014 and $16.7 million for the nine months ended November 30, 2013. At November 30, 2015 and November 30, 2014, we had a receivable from Leucadia of $10.2 million and $10.9 million, respectively, which is included within Other assets on the Consolidated Statements of Financial Condition. At November 30, 2015 and November 30, 2014, we had a payable to Leucadia of $0.6 million and $41.5 million, respectively, related to stock compensation arrangements and senior executive benefits provided by Leucadia, which is included within Other liabilities on the Consolidated Statements of Financial Condition. |
• | 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 November 30, 2015, a net current tax receivable from Leucadia of $109.5 million is included in Other assets on the Consolidated Statements of Financial Condition. |
• | Of the total noncontrolling interests in asset management entities that are consolidated by us at November 30, 2015 and November 30, 2014, $26.3 million and $25.4 million, respectively, are attributed to Leucadia. |
• | We provide capital markets and asset management services to Leucadia and its affiliates. The following table presents the revenues earned by type of services provided (in thousands): |
For the Year Ended November 30, | |||||||
2015 | 2014 | ||||||
Investment banking and advisory | $ | 21,185 | $ | 2,800 | |||
Asset management | 400 | — | |||||
Commissions and other fees | 43 | — |
• | On August 28, 2015, we sold an equity position to Leucadia at fair value of $124.4 million for cash. There was no gain or loss on the transaction. |
• | On March 18, 2014, we sold our investment in HRG, consisting of approximately 18.6 million shares, to Leucadia at the closing price on that date. |
• | On February 28, 2014, we sold our ownership interest in CoreCommodity Capital, LLC (formerly CoreCommodity Management, LLC, our commodity asset management business) to Leucadia at a fair value. |
Year Ended November 30, 2015 | ||||
Severance costs | $ | 30,327 | ||
Accelerated amortization of restricted stock and restricted cash awards | 7,922 | |||
Accelerated amortization of capitalized software | 19,745 | |||
Contract termination costs | 11,247 | |||
Other expenses | 3,853 | |||
Total | $ | 73,094 |
Year Ended November 30, 2015 | ||||
Compensation and benefits | $ | 38,249 | ||
Technology and communications | 30,992 | |||
Professional services | 2,508 | |||
Other expenses | 1,345 | |||
Total | $ | 73,094 |
Severance costs | Other costs | Contract termination costs | Total restructuring costs | Accelerated amortization of restricted stock and restricted cash awards | Accelerated amortization of capitalized software | Impairments | Total | ||||||||||||||||||||||||
Balance at February 28, 2015 | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||
Expenses | 30,327 | 2,774 | 11,247 | 44,348 | $ | 7,922 | $ | 19,745 | $ | 1,079 | $ | 73,094 | |||||||||||||||||||
Payments | (25,522 | ) | (2,774 | ) | (11,247 | ) | (39,543 | ) | |||||||||||||||||||||||
Liability at November 30, 2015 | $ | 4,805 | $ | — | $ | — | $ | 4,805 |
Three Months Ended | ||||||||||||||||
November 30, 2015 | August 31, 2015 | May 31, 2015 | February 28, 2015 | |||||||||||||
Total revenues | $ | 701,930 | $ | 781,123 | $ | 1,008,510 | $ | 783,332 | ||||||||
Net revenues | 513,087 | 578,928 | 791,554 | 591,672 | ||||||||||||
Earnings before income taxes | 9,538 | 7,093 | 84,712 | 12,884 | ||||||||||||
Net earnings attributable to Jefferies Group LLC | 19,962 | 2,057 | 59,833 | 11,682 | ||||||||||||
Three Months Ended | ||||||||||||||||
November 30, 2014 | August 31, 2014 | May 31, 2014 | February 28, 2014 | |||||||||||||
Total revenues | $ | 723,004 | $ | 1,055,435 | $ | 970,786 | $ | 1,097,040 | ||||||||
Net revenues | 524,809 | 843,309 | 722,992 | 899,028 | ||||||||||||
Earnings (loss) before income taxes | (114,020 | ) | 135,635 | 99,137 | 182,269 | |||||||||||
Net earnings (loss) attributable to Jefferies Group LLC | (99,759 | ) | 83,561 | 61,326 | 112,432 |
LEUCADIA NATIONAL CORPORATION | Exhibit 21 |
Subsidiaries as of December 31, 2015 | |
State/Country of | |
Name | Incorporation |
Jefferies Execution Services, Inc. | California |
Baldwin Enterprises, Inc. | Colorado |
BEI Italia Wireless LLC | Delaware |
BIA Investments, LLC | Delaware |
Chrome Capital Group LLC | Delaware |
Conwed Plastics LLC | Delaware |
Garcadia Auto, LLC | Delaware |
Jefferies Derivative Products, LLC | Delaware |
Jefferies Finance, LLC | Delaware |
Jefferies Financial Products, LLC | Delaware |
Jefferies Financial Services, Inc. | Delaware |
Jefferies Funding LLC | Delaware |
Jefferies Group LLC | Delaware |
Jefferies Investment Advisers, LLC | Delaware |
Jefferies LLC | Delaware |
Jefferies LoanCore LLC | Delaware |
Jefferies Mortgage Finance, Inc. | Delaware |
Juneau Energy, LLC | Delaware |
LAM Holding LLC | Delaware |
Leucadia Asset Management LLC | Delaware |
Leucadia Aviation, Inc. | Delaware |
Leucadia Funding LLC | Delaware |
Leucadia LLC | Delaware |
LNG Development Company, LLC | Delaware |
LUK Servicing, LLC | Delaware |
National Beef California, L.P. | Delaware |
National Beef Leathers, LLC | Delaware |
National Beef Packing Company, LLC | Delaware |
Oregon Pipeline Company, LLC | Delaware |
Vitesse Energy, LLC | Delaware |
Idaho Timber of Carthage, LLC | Idaho |
Kansas City Steak Company, LLC | Missouri |
Foursight Capital LLC | Utah |
Jefferies Securities, Inc. | British Columbia |
Jefferies International Limited | England & Wales |
Jefferies Hong Kong Limited | Hong Kong |
Jefferies Singapore Limited | Hong Kong |
Jefferies India Private Limited | India |
Jefferies (Japan) Limited | Japan |
Subsidiaries not included on this list, considered in the aggregate as a single subsidiary, would not | |
constitute a significant subsidiary as of December 31, 2015. |
1. | I have reviewed this annual report on Form 10-K of Leucadia National Corporation; |
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: February 19, 2016 | By: | /s/ Richard B. Handler |
Name: Richard B. Handler | ||
Title: Chief Executive Officer |
1. | I have reviewed this annual report on Form 10-K of Leucadia National Corporation; |
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: February 19, 2016 | By: | /s/ Teresa S. Gendron |
Name: Teresa S. Gendron | ||
Title: Chief Financial Officer |
(1) | the accompanying Form 10-K report for the period ending December 31, 2015 as filed with the U.S. Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: February 19, 2016 | By: | /s/ Richard B. Handler |
Name: Richard B. Handler | ||
Title: Chief Executive Officer |
(1) | the accompanying Form 10-K report for the period ending December 31, 2015 as filed with the U.S. Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: February 19, 2016 | By: | /s/ Teresa S. Gendron |
Name: Teresa S. Gendron | ||
Title: Chief Financial Officer |
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Document And Entity Information - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Feb. 11, 2016 |
Jun. 30, 2015 |
|
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2015 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Central Index Key | 0000096223 | ||
Entity Registrant Name | LEUCADIA NATIONAL CORP | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 362,243,256 | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Public Float | $ 8,196,406,000 |
Consolidated Statements Of Financial Condition (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
ASSETS | ||
Securities pledged | $ 12,207,123 | $ 14,794,488 |
EQUITY | ||
Common shares, par value (USD per share) | $ 1 | $ 1 |
Common shares, authorized | 600,000,000 | 600,000,000 |
Common shares, issued and outstanding after deducting shares held in treasury | 362,617,423 | 367,498,615 |
Treasury stock, shares | 53,755,292 | 48,447,573 |
Consolidated Statements Of Operations (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Income Statement [Abstract] | |||
Income tax (benefit) from discontinued operations | $ 231 | $ (9,634) | $ (32,303) |
Income tax provision (benefit) related to gain (loss) on disposal of discontinued operations | $ 2,743 | $ 899 | $ (3,009) |
Consolidated Statements Of Changes In Equity (Parenthetical) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Statement of Stockholders' Equity [Abstract] | |||
Common shares, par value (USD per share) | $ 1 | $ 1 | $ 1 |
Dividends per common share (USD per share) | $ 0.25 | $ 0.25 | $ 0.25 |
Nature Of Operations |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature Of Operations | Nature of Operations Leucadia National Corporation (“Leucadia” or the “Company”) is a diversified holding company focused on return on investment and long-term value creation to maximize shareholder value. We continuously review acquisitions of businesses, securities and assets that have the potential for significant long-term value creation, invest in a broad array of businesses, and evaluate the retention and disposition of our existing operations and holdings. Changes in the mix of our businesses and investments should be expected. Our financial services businesses and investments include Jefferies (investment banking and capital markets), Leucadia Asset Management (asset management), Berkadia (commercial mortgage banking and servicing), FXCM (a publicly traded company providing online foreign exchange trading), HomeFed (a publicly traded real estate company) and Foursight Capital and Chrome Capital (vehicle finance). We also own and have investments in a diverse array of other businesses, including National Beef (beef processing), HRG Group ("HRG"), formerly known as Harbinger (a publicly traded diversified holding company), Vitesse Energy and Juneau Energy (oil and gas exploration and development), Garcadia (automobile dealerships), Linkem (fixed wireless broadband services in Italy), Conwed Plastics and Idaho Timber (manufacturing), and Golden Queen (a gold and silver mining project). The structure of each of our investments was tailored to the unique opportunity each transaction presented. Our investments may be reflected in our consolidated results as operating subsidiaries, equity investments, receivables, securities, or in other ways, depending on the structure of our specific holdings. Jefferies is a global full-service, integrated securities and investment banking firm. In March 2013, Jefferies became an indirect wholly-owned subsidiary of Leucadia, yet retains a separate credit rating and continues to be a separate SEC reporting company. Through Jefferies, we own 50% of Jefferies Finance LLC ("Jefferies Finance"), our joint venture with Babson Capital Management LLC and Massachusetts Mutual Life Insurance Company. Jefferies Finance is a commercial finance company whose primary focus is the origination and syndication of senior secured debt of middle market and growth companies in the form of term and revolving loans. Through Jefferies, we also own a 48.5% voting interest in Jefferies LoanCore, a joint venture with the Government of Singapore Investment Corporation and LoanCore, LLC. Jefferies LoanCore originates, purchases and securitizes commercial real estate loans throughout the U.S. Jefferies has a November 30th fiscal year, which it retains for standalone reporting purposes. We reflect Jefferies in our consolidated financial statements utilizing a one month lag. We have reviewed Jefferies business and internal operating results for the month of December 2015 for the purpose of evaluating whether additional financial statement disclosure or adjustments are required to this Annual Report on Form 10-K, and we have concluded that no additional disclosures or adjustments are warranted. Leucadia Asset Management supports and develops focused alternative asset management businesses led by distinct management teams. These primarily include Folger Hill, a multi-manager discretionary long/short equity hedge fund platform; Topwater Capital, a first-loss hedge fund; Mazama Capital Management, a long-only growth equity fund manager; and 54 Madison Capital, LLC, which targets real estate projects. After the end of 2015, we contributed an additional $33.7 million to 54 Madison for real estate projects. Our investment in FXCM Inc. ("FXCM") consists of a two-year senior secured term loan ($192.7 million outstanding at December 31, 2015), with rights to a variable proportion of certain distributions in connection with an FXCM sale of assets or certain other events, and our right to require a sale of FXCM beginning in January 2018. Berkadia, our 50-50 equity method joint venture with Berkshire Hathaway Inc., originates and brokers commercial real estate loans primarily in respect of multi-family housing units and services commercial real estate loans in the U.S. Our approximately 65% equity method interest of HomeFed, owns and develops residential and mixed use real estate properties. HomeFed is a public company traded on the NASD OTC Bulletin Board. During 2014, we sold substantially all of our standalone real estate operations to HomeFed; see Notes 11 and 29 for more information. We own 100% of Foursight Capital, an auto loan originator and servicer. We also own 83% of Chrome Capital, which provides leases on used Harley-Davidson motorcycles. We own 79% of National Beef Packing Company. National Beef processes and markets fresh and chilled boxed beef, ground beef, beef by-products, consumer-ready beef and pork, and wet blue leather for domestic and international markets. National Beef operates two beef processing facilities, three consumer-ready facilities and a wet blue tanning facility, all located in the U.S. National Beef operates one of the largest wet blue tanning facilities in the world that sells processed hides to tanners that produce finished leather for the automotive, luxury goods, apparel and furniture industries. National Beef owns Kansas City Steak Company, LLC, which sells portioned beef and other products to customers in the food service and retail channels as well as direct to consumers through the internet, direct mail and direct response television. National Beef also owns a refrigerated and livestock transportation and logistics company that provides transportation services for National Beef and third parties. We own approximately 23% of HRG, a diversified holding company that operates in four business segments: consumer products, insurance, energy and asset management. Its consumer products segment contains an approximate 58% ownership stake in Spectrum Brands, a global consumer products company. Its insurance segment includes an approximate 81% ownership stake in Fidelity & Guaranty Life ("FGL"). On November 8, 2015, FGL and Anbang Insurance Group Co., Ltd. ("Anbang") had entered into a definitive merger agreement pursuant to which Anbang will acquire FGL for $26.80 per share. HRG is a public company traded on the NYSE and we reflect this investment at fair value. Vitesse Energy, LLC is our 96% owned consolidated subsidiary that acquires and develops non-operated working and royalty oil and gas interests in the Bakken Shale oil field in North Dakota and Montana. Juneau Energy, LLC, a 98% owned consolidated subsidiary, engages in the exploration, development and production of oil and gas from onshore, unconventional resource areas. Juneau currently has interests in acreage in the Oklahoma and Texas Gulf Coast regions. Garcadia is an equity method joint venture that owns and operates 27 automobile dealerships in California, Texas, Iowa and Michigan. We own approximately 75%. We own approximately 42% of the common shares of Linkem and convertible preferred shares which, if converted, would increase our ownership to approximately 56% of Linkem's common equity. Linkem provides residential broadband services using WiMAX and LTE technologies deployed over the 3.5 GHz spectrum band. Linkem operates in Italy, which has few cable television systems and poor broadband alternatives. Linkem is accounted for under the equity method. After the end of 2015, we purchased $33.3 million (€30.5 million) of additional convertible preferred shares. If all of our convertible preferred shares were converted, we would continue to own approximately 56% of Linkem's common equity. Conwed Plastics is our consolidated subsidiary that manufactures and markets lightweight plastic netting used for building and construction, erosion and sediment control, packaging, agricultural purposes, carpet padding, filtration, consumer products and other purposes. In 2014, Conwed acquired 80% of Filtrexx, a manufacturer and marketer of a knitted sock product with numerous applications in sediment control and storm water management, and 100% of Weaver Express, the leading installer of Filtrexx's knitted sock projects. Idaho Timber is our consolidated subsidiary engaged in the manufacture and distribution of various wood products, including the following principal activities: remanufacturing dimension lumber; remanufacturing, bundling and bar coding of home center boards for large retailers; and production of pine dimension lumber and 5/4” radius-edge, pine decking. Golden Queen Mining Company, LLC owns the Soledad Mountain project, a fully-permitted, open pit, heap leach gold and silver project in Kern County, California. We and the Clay family have formed and made contributions to a limited liability company, controlled by us, through which we invested in Golden Queen Mining Company, LLC for the development and operation of the project. Our effective ownership of Golden Queen Mining Company, LLC is approximately 35% and is accounted for under the equity method. During August 2015, Jefferies sold an investment to Leucadia, for a cash payment of $124.4 million, which represented the fair value of the investment at the time of sale. This intercompany transaction had no impact on our consolidated results. On February 25, 2013, we distributed to our shareholders the common shares of the Crimson Wine Group, Ltd., a holding company through which we historically conducted our winery operations. The distribution was structured to qualify as a tax-free spin-off for U.S. federal income tax purposes. Our common shareholders on the record date received one share of Crimson common stock for every ten common shares of Leucadia, with cash in lieu of fractional shares. The distribution was a condition to the Jefferies acquisition. As a result, we recorded a dividend of $197.0 million. Crimson was not reflected as a discontinued operation in our consolidated financial statements as amounts were not significant. Certain amounts have been reclassified to be consistent with the 2015 presentation. |
Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||
Significant Accounting Policies | Significant Accounting Policies The preparation of these financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires us to make estimates and assumptions that affect the reported amounts in the financial statements and disclosures of contingent assets and liabilities. On an on-going basis, we evaluate all of these estimates and assumptions. The most important of these estimates and assumptions relate to fair value measurements, compensation and benefits, asset impairment, the ability to realize deferred tax assets, the recognition and measurement of uncertain tax positions and contingencies. Although these and other estimates and assumptions are based on the best available information, actual results could be different from these estimates. Consolidation Our policy is to consolidate all entities in which we can vote a majority of the outstanding voting stock. In addition, we consolidate entities which meet the definition of a variable interest entity for which we are the primary beneficiary. The primary beneficiary is the party who has the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance and who has an obligation to absorb losses of the entity or a right to receive benefits from the entity that could potentially be significant to the entity. We consider special allocations of cash flows and preferences, if any, to determine amounts allocable to noncontrolling interests. All intercompany transactions and balances are eliminated in consolidation. In situations where we have significant influence, but not control, of an entity that does not qualify as a variable interest entity, we apply either the equity method of accounting or fair value accounting pursuant to the fair value option election under GAAP. We have also formed nonconsolidated investment vehicles with third-party investors that are typically organized as partnerships or limited liability companies and are carried at fair value. Our subsidiaries may act as general partner or managing member for these investment vehicles and have generally provided the third-party investors with termination or “kick-out” rights. Revenue Recognition Policies Beef Processing and Other Operations Revenues are recognized when the following conditions are met: (1) collectibility is reasonably assured; (2) title to the product has passed or the service has been rendered and earned; (3) persuasive evidence of an arrangement exists; and (4) there is a fixed or determinable price. National Beef’s revenues are recognized based on the terms of the sale, which for beef processing operations is typically upon delivery to customers. Manufacturing revenues are recognized when title passes. Investment Banking Activities Commissions. All customer securities transactions are reported in the Consolidated Statements of Financial Condition on a settlement date basis with related income reported on a trade date basis. We permit institutional customers to allocate a portion of their gross commissions to pay for research products and other services provided by third parties. The amounts allocated for those purposes are commonly referred to as soft dollar arrangements. These arrangements are accounted for on an accrual basis and, as we are not the primary obligor for these arrangements, netted against commission revenues in the Consolidated Statements of Operations. The commissions and related expenses on client transactions executed by Jefferies LLC, a futures commission merchant, are recorded on a half-turn basis. In addition, we earn asset-based fees associated with the management and supervision of assets, account services and administration related to customer accounts. Principal Transactions. Trading assets and trading liabilities are carried at fair value with gains and losses reflected in Principal transactions in the Consolidated Statements of Operations on a trade date basis. Fees received on loans carried at fair value are also recorded within Principal transactions. Investment Banking. Underwriting revenues and fees from mergers and acquisitions, restructuring and other investment banking advisory assignments or engagements are recorded when the services related to the underlying transactions are completed under the terms of the assignment or engagement. Expenses associated with such assignments are deferred until reimbursed by the client, the related revenue is recognized or the engagement is otherwise concluded. Expenses are recorded net of client reimbursements and netted against revenues. Unreimbursed expenses with no related revenues are included in Selling, general and administrative expenses in the Consolidated Statements of Operations. Interest Revenue and Expense. Interest expense that is deducted from Revenues to arrive at Net revenues is related to Jefferies operations. Contractual interest on Trading assets and Trading liabilities is recognized on an accrual basis as a component of Interest income and Interest expense. Interest flows on derivative trading transactions and dividends are included as part of the fair valuation of these contracts and recognized in Principal transactions in the Consolidated Statements of Operations rather than as a component of interest income or expense. Discounts/premiums arising on long-term debt are accreted/amortized to Interest expense using the effective yield method over the remaining lives of the underlying debt obligations. Interest revenue related to Securities borrowed and Securities purchased under agreements to resell activities and interest expense related to Securities loaned and Securities sold under agreements to repurchase activities are recognized on an accrual basis. Cash Equivalents Cash equivalents include highly liquid investments, including money market funds, not held for resale with original maturities of three months or less. Cash and Securities Segregated and on Deposit for Regulatory Purposes or Deposited With Clearing and Depository Organizations In accordance with Rule 15c3-3 of the Securities Exchange Act of 1934, Jefferies LLC, as a broker-dealer carrying client accounts, is subject to requirements related to maintaining cash or qualified securities in a segregated reserve account for the exclusive benefit of its clients. In addition, certain financial instruments used for initial and variation margin purposes with clearing and depository organizations are recorded in this caption. Jefferies LLC, as a futures commission merchant, is obligated by rules mandated by the Commodities Futures Trading Commission ("CFTC") under the Commodities Exchange Act, to segregate or set aside cash or qualified securities to satisfy such regulations, which regulations have been promulgated to protect customer assets. During October 2015, Jefferies ceased being a full service futures commission merchant. As a result, Jefferies no longer carries customer or proprietary accounts or holds any customer monies or funds. Certain other entities are also obligated by rules mandated by their primary regulators to segregate or set aside cash or equivalent securities to satisfy regulations, promulgated to protect customer assets. Financial Instruments and Fair Value Trading assets and Trading liabilities are recorded at fair value, either as required by accounting pronouncements or through the fair value option election. Gains and losses on trading assets and trading liabilities are recognized in our Consolidated Statements of Operations in Principal transactions. Available for sales securities are reflected at fair value, with unrealized gains and losses reflected as a separate component of equity, net of taxes. When sold, realized gains and losses on available for sale securities are reflected in the caption Net realized securities gains. The cost of securities sold is based on average cost. Fair value is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). Fair Value Hierarchy In determining fair value, we maximize the use of observable inputs and minimize the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. Unobservable inputs reflect our assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. We apply a hierarchy to categorize our fair value measurements broken down into three levels based on the transparency of inputs as follows:
Financial instruments are valued at quoted market prices, if available. Certain financial instruments have bid and ask prices that can be observed in the marketplace. For financial instruments whose inputs are based on bid-ask prices, the financial instrument is valued at the point within the bid-ask range that meets our best estimate of fair value. We use prices and inputs that are current as of the measurement date. For financial instruments that do not have readily determinable fair values using quoted market prices, the determination of fair value is based upon consideration of available information, including types of financial instruments, current financial information, restrictions on dispositions, fair values of underlying financial instruments and quotations for similar instruments. The valuation of financial instruments may include the use of valuation models and other techniques. Adjustments to valuations derived from valuation models may be made when, in management’s judgment, features of the financial instrument such as its complexity, the market in which the financial instrument is traded and risk uncertainties about market conditions require that an adjustment be made to the value derived from the models. Adjustments from the price derived from a valuation model reflect management’s judgment that other participants in the market for the financial instrument being measured at fair value would also consider in valuing that same financial instrument. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. The availability of observable inputs can vary and is affected by a wide variety of factors, including, for example, the type of financial instrument and market conditions. As the observability of prices and inputs may change for a financial instrument from period to period, this condition may cause a transfer of an instrument among the fair value hierarchy levels. Transfers among the levels are recognized at the beginning of each period. The degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. Valuation Process for Financial Instruments The Jefferies Independent Price Verification ("IPV") Group, which is part of the Jefferies finance department, in partnership with Jefferies Risk Management, is responsible for establishing Jefferies valuation policies and procedures. The IPV Group and Risk Management, which are independent of business functions, play an important role and serve as a control function in determining that Jefferies financial instruments are appropriately valued and that fair value measurements are reliable. This is particularly important where prices or valuations that require inputs are less observable. In the event that observable inputs are not available, the control processes are designed to assure that the valuation approach utilized is appropriate and consistently applied and that the assumptions are reasonable. The IPV Group reports to the Jefferies Global Controller and is subject to the oversight of the IPV Committee, which includes senior members of Jefferies finance department and other personnel. Jefferies independent price verification policies and procedures are reviewed, at a minimum, annually and changes to the policies require the approval of the IPV Committee. Price Testing Process. Jefferies business units are responsible for determining the fair value of Jefferies financial instruments using approved valuation models and methodologies. In order to ensure that the business unit valuations represent a fair value exit price, the IPV Group tests and validates the fair value of the financial instruments inventory. In the testing process, the IPV Group obtains prices and valuation inputs from sources independent of Jefferies, consistently adheres to established procedures set forth in the valuation policies for sourcing prices and valuation inputs and utilizing valuation methodologies. Sources used to validate fair value prices and inputs include, but are not limited to, exchange data, recently executed transactions, pricing data obtained from third party vendors, pricing and valuation services, broker quotes and observed comparable transactions. To the extent discrepancies between the business unit valuations and the pricing or valuations resulting from the price testing process are identified, such discrepancies are investigated by the IPV Group and fair values are adjusted, as appropriate. The IPV Group maintains documentation of its testing, results, rationale and recommendations and prepares a monthly summary of its valuation results. This process also forms the basis for the classification of fair values within the fair value hierarchy (i.e., Level 1, Level 2 or Level 3). The IPV Group utilizes the additional expertise of Risk Management personnel in valuing more complex financial instruments and financial instruments with less or limited pricing observability. The results of the valuation testing are reported to the IPV Committee on a monthly basis, which discusses the results and is charged with the final conclusions as to the financial instrument fair values in the consolidated financial statements. This process specifically assists management in asserting as to the fair presentation of our financial condition and results of operations as included within our Quarterly Reports on Form 10-Q and Annual Report on Form 10-K. At each quarter end, the overall valuation results, as concluded upon by the IPV Committee, are presented to the Jefferies Audit Committee. Judgment exercised in determining Level 3 fair value measurements is supplemented by daily analysis of profit and loss performed by the Product Control functions. Gains and losses, which result from changes in fair value, are evaluated and corroborated daily based on an understanding of each of the trading desks’ overall risk positions and developments in a particular market on the given day. Valuation techniques generally rely on recent transactions of suitably comparable financial instruments and use the observable inputs from those comparable transactions as a validation basis for Level 3 inputs. Level 3 fair value measurements are further validated through subsequent sales testing and market comparable sales, if such information is available. Level 3 fair value measurements require documentation of the valuation rationale applied, which is reviewed for consistency in application from period to period; and the documentation includes benchmarking the assumptions underlying the valuation rationale against relevant analytic data. Third Party Pricing Information. Pricing information obtained from external data providers (including independent pricing services and brokers) may incorporate a range of market quotes from dealers, recent market transactions and benchmarking model derived prices to quoted market prices and trade data for comparable securities. External pricing data is subject to evaluation for reasonableness by the IPV Group using a variety of means including comparisons of prices to those of similar product types, quality and maturities, consideration of the narrowness or wideness of the range of prices obtained, knowledge of recent market transactions and an assessment of the similarity in prices to comparable dealer offerings in a recent time period. Jefferies has a process whereby it challenges the appropriateness of pricing information obtained from external data providers (including independent pricing services and brokers) in order to validate the data for consistency with the definition of a fair value exit price. Jefferies process includes understanding and evaluating the external data providers’ valuation methodologies. For corporate, U.S. government and agency, municipal debt securities, and loans, to the extent independent pricing services or broker quotes are utilized in our valuation process, the vendor service providers are collecting and aggregating observable market information as to recent trade activity and active bid-ask submissions. The composite pricing information received from the independent pricing service is not based on unobservable inputs or proprietary models. For mortgage- and other asset-backed securities and collateralized debt obligations, the independent pricing services use a matrix evaluation approach incorporating both observable yield curves and market yields on comparable securities as well as implied inputs from observed trades for comparable securities in order to determine prepayment speeds, cumulative default rates and loss severity. Further, Jefferies considers pricing data from multiple service providers as available as well as compares pricing data to prices observed for recent transactions, if any, in order to corroborate valuation inputs. Model Review Process. Where a pricing model is to be used to determine fair value, the pricing model is reviewed for theoretical soundness and appropriateness by Risk Management, independent from the trading desks, and then approved by Risk Management to be used in the valuation process. Review and approval of a model for use may include benchmarking the model against relevant third party valuations, testing sample trades in the model, backtesting the results of the model against actual trades and stress-testing the sensitivity of the pricing model using varying inputs and assumptions. In addition, recently executed comparable transactions and other observable market data are considered for purposes of validating assumptions underlying the model. Models are independently reviewed and validated by Risk Management annually or more frequently if market conditions or use of the valuation model changes. Investments in Managed Funds Investments in managed funds include our investments in funds managed by us and our investments in related party managed funds in which we are entitled to a portion of the management and/or performance fees. Investments in nonconsolidated managed funds are accounted for at fair value with gains or losses included in the Consolidated Statements of Operations. Asset management fees and investment income from managed funds include revenues we earn from management, administrative and performance fees from funds and accounts managed by us, revenues from management and performance fees we earn from related-party managed funds and investment income from our investments in these funds. We earn fees in connection with management and investment advisory services performed for various funds and managed accounts. These fees are based on assets under management or an agreed upon notional amount and may include performance fees based upon the performance of the funds. Management and administrative fees are generally recognized over the period that the related service is provided. Generally, performance fees are earned when the return on assets under management exceeds certain benchmark returns, “high-water marks” or other performance targets. Performance fees are accrued (or reversed) on a monthly basis based on measuring performance to date versus any relevant benchmark return hurdles stated in the investment management agreement. Performance fees are not subject to adjustment once the measurement period ends (generally annual periods) and the performance fees have been realized. Loans to and Investments in Associated Companies Loans to and investments in associated companies include investments in private equity and other operating entities in which we exercise significant influence over operating and capital decisions and loans issued in connection with such investments. Loans to and investments in associated companies are accounted for using the equity method. See Note 11 for additional information regarding certain of these investments. Under the equity method of accounting, our share of the investee’s underlying net income or loss is recorded as Income (loss) related to associated companies, or as part of Other revenues if such investees are considered to be an extension of our business. Income (loss) for investees for which the fair value option was elected is reported as Principal transactions revenues. Receivables and Provision for Doubtful Accounts At December 31, 2015 and 2014, Receivables include receivables from brokers, dealers and clearing organizations of $1,616.3 million and $2,187.5 million, respectively, and receivables from customers of securities operations of $1,191.3 million and $1,250.5 million, respectively. During the fourth quarter of 2014, Jefferies recognized a bad debt provision, which primarily relates to a receivable of $52.3 million from a client to which Jefferies provided futures clearing and execution services, which declared bankruptcy. Securities Borrowed and Securities Loaned Securities borrowed and securities loaned are carried at the amounts of cash collateral advanced and received in connection with the transactions and accounted for as collateralized financing transactions. In connection with both trading and brokerage activities, Jefferies borrows securities to cover short sales and to complete transactions in which customers have failed to deliver securities by the required settlement date, and lend securities to other brokers and dealers for similar purposes. Jefferies has an active securities borrowed and lending matched book business in which it borrows securities from one party and lends them to another party. When Jefferies borrows securities, it generally provides cash to the lender as collateral, which is reflected in the Consolidated Statements of Financial Condition as Securities borrowed. Jefferies earns interest revenues on this cash collateral. Similarly, when Jefferies lends securities to another party, that party provides cash to Jefferies as collateral, which is reflected in the Consolidated Statements of Financial Condition as Securities loaned. Jefferies pays interest expense on the cash collateral received from the party borrowing the securities. The initial collateral advanced or received approximates or is greater than the fair value of the securities borrowed or loaned. Jefferies monitors the fair value of the securities borrowed and loaned on a daily basis and requests additional collateral or returns excess collateral, as appropriate. Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase Securities purchased under agreements to resell and Securities sold under agreements to repurchase (collectively "repos") are accounted for as collateralized financing transactions and are recorded at their contracted resale or repurchase amount plus accrued interest. Repos are presented in the Consolidated Statements of Financial Condition on a net-basis-by counterparty, where permitted by GAAP. The fair value of the underlying securities is monitored daily versus the related receivable or payable balances. Should the fair value of the underlying securities decline or increase, additional collateral is requested or excess collateral is returned, as appropriate. Property, Equipment and Leasehold Improvements Property, equipment and leasehold improvements are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization are provided principally on the straight-line method over the estimated useful lives of the assets or, if less, the term of the underlying lease. Impairment of Long-Lived Assets We evaluate our long-lived assets for impairment whenever events or changes in circumstances indicate, in management’s judgment, that the carrying value of such assets may not be recoverable. When testing for impairment, we group our long-lived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities (or asset group). The determination of whether an asset group is recoverable is based on management’s estimate of undiscounted future cash flows directly attributable to the asset group as compared to its carrying value. If the carrying amount of the asset group is greater than the undiscounted cash flows, an impairment loss would be recognized for the amount by which the carrying amount of the asset group exceeds its estimated fair value. During the fourth quarter of 2013, after exhausting all opportunities to improve the operating performance of the Brawley beef processing facility, which had been adversely affected by the declining supply of fed cattle available to the plant and fixed cost inefficiencies inherent in a single shift plant, National Beef concluded that this facility would continue to generate losses for the foreseeable future. This resulted in a decision in December 2013 to close the facility in the second quarter of 2014. National Beef evaluated the recoverability of the long-lived assets at Brawley, which had an aggregate carrying amount of $93.2 million at December 31, 2013, and based on its estimate of future undiscounted cash flows concluded that the carrying value was not recoverable and the facility was impaired. In performing this evaluation, National Beef determined that the Brawley facility was the asset group that represented the lowest level of cash flows that were largely independent of the cash flows of other assets and liabilities. The management of National Beef engaged an independent valuation and appraisal firm to assist in estimating the fair value of the long-lived assets at Brawley. National Beef’s estimate of fair value was based on an orderly liquidation technique, which represents the amount that can be realized in a liquidation sale, given a reasonable period of time to find a purchaser, assuming an as-is where-is condition. In preparing its analysis, National Beef considered current market conditions, replacement cost, as well as the age, physical and functional characteristics of the long-lived assets. As a result, National Beef concluded that the fair value of the long-lived assets at the Brawley facility was $29.9 million at December 31, 2013, and recorded an impairment loss of $63.3 million, which is reflected in Selling, general and other expenses in the Consolidated Statement of Operations for the year ended December 31, 2013. As with any estimate of fair value, future market, regulatory and general economic conditions as well as the obsolescence, future deterioration of, or inability to locate a purchaser should National Beef decide to sell the facility could have a significant effect on their future value. In addition to the long-lived asset impairment charge, National Beef incurred additional costs relating to the closing of the facility during 2014 of $6.9 million. These costs include employee separation and retention, systems decommissioning and various other expenses. Of these amounts, $4.6 million related to employee separation, which is included in Compensation and benefits, and the various other costs are included in Selling, general and other expenses in the Consolidated Statement of Operations. In 2015, we recorded impairment charges in Selling, general and other expenses of $27.7 million, primarily related to a $20.3 million impairment at our Juneau Energy oil and gas company and an additional impairment charge related to the Brawley plant of $4.7 million. For the oil and gas impairment test, we compare expected undiscounted future net cash flows to the unamortized capitalized cost of the asset. If the future undiscounted net cash flows are lower than the unamortized capital cost, we reduce the capitalized cost to fair market value. We used a third party reserve report in which the cash flows were calculated using West Texas Intermediate (oil) and Henry Hub (gas) NYMEX futures prices as of December 31, 2015. For one of our oil fields, the undiscounted net cash flows were lower than the unamortized capital cost and as a result, we wrote off the total capital cost. There were no significant impairment charges in 2014. Excluding the National Beef impairment, we recorded impairment charges in Selling, general and other expenses of $20.0 million in 2013, all related to various real estate development projects. Prior to the impairment charges in 2013, these projects had a book value of $32.3 million; after recognizing the impairment charges the carrying value of the real estate projects was reduced to their estimated fair value of $12.3 million. Estimates of fair value were principally determined using discounted cash flow analyses and/or current and expected market conditions for the specific geographic area. For the year ended December 31, 2013, impairment charges related to real estate include an out of period adjustment of $15.4 million to record charges related to prior periods. Substantially all of our operating businesses sell products or services that are impacted by general economic conditions in the U.S. and to a lesser extent internationally. In recent years general economic conditions reduced the demand for products or services sold by our operating subsidiaries and/or resulted in reduced pricing for products or services. A worsening of current economic conditions could cause a decline in estimated future cash flows expected to be generated by our operations and investments. If future undiscounted cash flows are estimated to be less than the carrying amounts of the asset groups used to generate those cash flows in subsequent reporting periods, particularly for those with large investments in intangible assets, property and equipment and other long-lived assets (for example, Jefferies, National Beef, manufacturing, oil and gas exploration and production and certain associated company investments), impairment charges would have to be recorded. Intangible Assets, Net and Goodwill Intangible Assets. Intangible assets deemed to have finite lives are generally amortized on a straight line basis over their estimated useful lives, where the useful life is the period over which the asset is expected to contribute directly, or indirectly, to our future cash flows. Intangible assets are reviewed for impairment on an interim basis when certain events or circumstances exist. If future undiscounted cash flows are estimated to be less than the carrying amounts of the asset groups used to generate those cash flows in subsequent reporting periods, particularly for those with large investments in amortizable intangible assets, impairment charges would have to be recorded. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when certain events or circumstances exist indicating an assessment for impairment is necessary. Impairment exists when the carrying amount exceeds its fair value. Fair value will be determined using valuation techniques consistent with what a market participant would use. All of our indefinite-lived intangible assets were recognized in connection with the Jefferies acquisition, and our annual impairment testing date for Jefferies is as of August 1. Goodwill. At acquisition, we allocate the cost of a business acquisition to the specific tangible and intangible assets acquired and liabilities assumed based upon their fair values. Significant judgments and estimates are often made by management to determine these values, and may include the use of appraisals, consideration of market quotes for similar transactions, use of discounted cash flow techniques or consideration of other information we believe to be relevant. Any excess of the cost of a business acquisition over the fair values of the net assets and liabilities acquired is recorded as goodwill, which is not amortized to expense. Substantially all of our goodwill was recognized in connection with the Jefferies acquisition. At least annually, and more frequently if warranted, we will assess whether goodwill has been impaired. If the estimated fair value exceeds the carrying value, goodwill at the reporting unit level is not impaired. If the estimated fair value is less than carrying value, further analysis is necessary to determine the amount of impairment, if any, by comparing the implied fair value of the reporting unit’s goodwill to the carrying value of the reporting unit’s goodwill. The fair values will be based on widely accepted valuation techniques that we believe market participants would use, although the valuation process requires significant judgment and often involves the use of significant estimates and assumptions. The methodologies we utilize in estimating fair value include market capitalization, price-to-book multiples of comparable exchange traded companies, multiples of merger and acquisitions of similar businesses and/or projected cash flows. The estimates and assumptions used in determining fair value could have a significant effect on whether or not an impairment charge is recorded and the magnitude of such a charge. Adverse market or economic events could result in impairment charges in future periods. Our annual goodwill impairment testing date related to Jefferies is as of August 1 and National Beef as of December 31. See Note 13 for further information with respect to our impairment charges related to intangible assets during 2014 and 2015. Inventories and Cost of Sales National Beef’s inventories consist primarily of beef products, beef by-products and supplies, and are stated at the lower of cost or market, with cost principally determined under the first-in-first-out method for beef products and average cost for supplies. Manufacturing inventories are stated at the lower of cost or market, with cost principally determined under the first-in-first-out method. Manufacturing cost of sales principally includes product and manufacturing costs, inbound and outbound shipping costs and handling costs. Payables, expense accruals and other liabilities At December 31, 2015 and 2014, Payables, expense accruals and other liabilities include payables to brokers, dealers and clearing organizations of $2,757.2 million and $2,280.1 million, respectively, and payables to customers of securities operations of $2,780.5 million and $6,242.0 million, respectively. Income Taxes We record a valuation allowance to reduce our net deferred tax asset to the net amount that is more likely than not to be realized. If in the future we determine that it is more likely than not that we will be able to realize our net deferred tax asset in excess of our net recorded amount, an adjustment to increase the net deferred tax asset would increase income in such period. If in the future we were to determine that we would not be able to realize all or part of our recorded net deferred tax asset, an adjustment to decrease the net deferred tax asset would be charged to income in such period. We are required to consider all available evidence, both positive and negative, and to weigh the evidence when determining whether a valuation allowance is required and the amount of such valuation allowance. Generally, greater weight is required to be placed on objectively verifiable evidence when making this assessment, in particular on recent historical operating results. Our estimate of future taxable income considers all available evidence, both positive and negative, about our operating businesses and investments, includes an aggregation of individual projections for each significant operating business and investment, estimated apportionment factors for state and local taxing jurisdictions and included all future years that we estimate we will have available net operating loss carryforwards (“NOLs”) (until 2035). We believe that our estimate of future taxable income is reasonable but inherently uncertain, and if our current or future operations and investments generate taxable income different than the projected amounts, further adjustments to the valuation allowance are possible. The current balance of the deferred tax valuation allowance principally reserves for NOLs of certain subsidiaries that are not available to offset income generated by other members of the consolidated tax return group. We also record reserves for unrecognized tax benefits based on our assessment of the probability of successfully sustaining tax filing positions. Interest and penalties, if any, are recorded as components of income tax expense. Management exercises significant judgment when assessing the probability of successfully sustaining tax filing positions, and in determining whether a contingent tax liability should be recorded and if so estimating the amount. If our tax filing positions are successfully challenged, payments could be required that are in excess of reserved amounts or we may be required to reduce the carrying amount of our net deferred tax asset, either of which could be significant to our Consolidated Statement of Financial Condition or results of operations. Share-based Compensation Share-based awards are measured based on the fair value of the award as determined in accordance with GAAP and recognized over the required service or vesting period. The fair value of options and warrants are estimated at the date of grant using the Black-Scholes option pricing model. Expected forfeitures are included in determining share-based compensation expense. Foreign Currency Translation Assets and liabilities of foreign subsidiaries are translated to U.S. dollars using the currency exchange rates at the end of the relevant period. Revenues and expenses are translated at average exchange rates during the period. The effects of exchange rate changes on the translation of the balance sheets, net of hedging gains or losses and taxes, if any, are included in other comprehensive income (loss) in the Consolidated Statements of Comprehensive Income (Loss) and classified as Accumulated other comprehensive income in the Consolidated Statements of Financial Condition and Consolidated Statements of Changes in Equity. Gains or losses resulting from Jefferies foreign currency transactions are included in Principal transactions in the Consolidated Statements of Operations; gains or losses from foreign currency transactions unrelated to Jefferies were not significant. Earnings per Common Share Basic earnings per share ("EPS") is computed by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding and certain other shares committed to be, but not yet issued. Net earnings available to common shareholders represent net earnings to common shareholders reduced by the allocation of earnings to participating securities. Losses are not allocated to participating securities. Common shares outstanding and certain other shares committed to be, but not yet issued, include restricted stock and restricted stock units ("RSUs") for which no future service is required. Diluted EPS is computed by dividing net earnings available to common shareholders plus dividends on dilutive mandatorily redeemable convertible preferred shares and interest on convertible notes by the weighted average number of common shares outstanding and certain other shares committed to be, but not yet issued, plus all dilutive common stock equivalents outstanding during the period. Unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and, therefore, are included in the earnings allocation in computing earnings per share under the two-class method of earnings per share. Restricted stock and RSUs granted as part of share-based compensation contain nonforfeitable rights to dividends and dividend equivalents, respectively, and therefore, prior to the requisite service being rendered for the right to retain the award, restricted stock and RSUs meet the definition of a participating security. As such, we calculate basic and diluted earnings per share under the two-class method. Securitization Activities Jefferies engages in securitization activities related to corporate loans, commercial mortgage loans and mortgage-backed and other asset-backed securities. Such transfers of financial assets are accounted for as sales when we have relinquished control over the transferred assets. The gain or loss on sale of such financial assets depends, in part, on the previous carrying amount of the assets involved in the transfer allocated between the assets sold and the retained interests, if any, based upon their respective fair values at the date of sale. We may retain interests in the securitized financial assets as one or more tranches of the securitization. These retained interests are included within Trading assets in the Consolidated Statements of Financial Condition at fair value. Any changes in the fair value of such retained interests are recognized within Principal transactions in the Consolidated Statements of Operations. When we transfer assets that do not meet the criteria of a sale, the transfer is accounted for as a secured borrowing and we continue to recognize the assets of a secured borrowing, and recognize the associated financing in Other secured financings in the Consolidated Statements of Financial Condition. Beginning in the third quarter of 2014, another of our subsidiaries utilized a special purpose entity to securitize automobile loans receivable. This special purpose entity is a variable interest entity and our subsidiary is the primary beneficiary; the related assets and the secured borrowings are recognized in the Consolidated Statement of Financial Condition. These secured borrowings do not have recourse to our subsidiary’s general credit. Contingencies In the normal course of business, we have been named, from time to time, as a defendant in legal and regulatory proceedings. We are also involved, from time to time, in other exams, investigations and similar reviews (both formal and informal) by governmental and self-regulatory agencies regarding our businesses, certain of which may result in judgments, settlements, fines, penalties or other injunctions. We recognize a liability for a contingency when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. If the reasonable estimate of a probable loss is a range, we accrue the most likely amount of such loss, and if such amount is not determinable, then we accrue the minimum in the range as the loss accrual. The determination of the outcome and loss estimates requires significant judgment on the part of management, can be highly subjective and is subject to significant change with the passage of time as more information becomes available. Estimating the ultimate impact of litigation matters is inherently uncertain, in particular because the ultimate outcome will rest on events and decisions of others that may not be within our power to control. We do not believe that any of our current litigation will have a significant adverse effect on our consolidated financial position, results of operations or liquidity; however, if amounts paid at the resolution of litigation are in excess of recorded reserve amounts, the excess could be significant in relation to results of operations for that period. For further information, see Note 26. |
Accounting Developments |
12 Months Ended |
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Dec. 31, 2015 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Accounting Developments | Accounting Developments Discontinued Operations. In January 2015, we adopted new Financial Accounting Standards Board (“FASB”) guidance on the reporting of discontinued operations. The new guidance requires that disposal of a component of an entity or a group of components of an entity be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results, and would require expanded disclosures. The adoption of this guidance did not have an impact on our consolidated financial statements. Revenue Recognition. In May 2014, the FASB issued new guidance that defines how companies report revenues from contracts with customers, and also requires enhanced disclosures. The core principle of this new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. This guidance originally was effective for interim and annual periods beginning after December 15, 2016. In August 2015, the FASB issued guidance that deferred the effective date by one year, with early adoption on the original effective date permitted. We are currently evaluating the impact this new guidance will have on our consolidated financial statements. Repurchase Agreements. In January 2015, we adopted the FASB’s new guidance that changes the accounting for repurchase-to-maturity transactions and linked repurchase financings to secured borrowing accounting, which is consistent with the accounting for other repurchase agreements. This guidance did not significantly impact our consolidated results of operations, financial condition or cash flows. Effective for interim periods beginning after March 31, 2015, the guidance also requires new disclosures about transfers that are accounted for as sales in transactions that are economically similar to repurchase agreements and increased transparency about the types of collateral pledged in repurchase agreements and similar transactions accounted for as secured borrowings. We have provided the additional disclosures in our consolidated financial statements. Consolidation. In February 2015, the FASB issued new guidance that amends current consolidation guidance including changes to both the variable and voting interest models used to evaluate whether an entity should be consolidated. This guidance also eliminates the deferral of certain consolidation standards for entities considered to be investment companies. This guidance will be effective for annual and interim periods beginning after December 15, 2015, and early adoption is permitted. We will adopt this guidance in the first quarter of fiscal 2016. The adoption of this guidance is not expected to have a significant impact on our consolidated financial statements. Debt Issuance Costs. In April 2015, the FASB issued new guidance that requires debt issuance costs related to a recognized debt liability be presented in the Consolidated Statements of Financial Condition as a direct deduction from the carrying amount of that debt liability. This guidance will be effective for annual and interim periods beginning after December 15, 2015, and early adoption is permitted. The adoption of this guidance is not expected to have a significant impact on our Consolidated Statements of Financial Condition. Investments in Certain Entities That Calculate Net Asset Value. In May 2015, the FASB issued new guidance that removes the requirement to include investments in the fair value hierarchy for which the fair value is measured at net asset value ("NAV") using the practical expedient. The guidance also removes the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value practical expedient. Rather, those disclosures are limited to investments for which we have elected to measure the fair value using that practical expedient. The guidance is effective retrospectively for annual and interim periods beginning after December 15, 2015. Early adoption is permitted and we have early adopted this guidance during the second quarter of 2015. Since the guidance only impacts our disclosures, adoption did not impact our consolidated financial statements. Financial Instruments. In January 2016, the FASB issued new guidance that affects the accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. The guidance is effective for annual and interim periods beginning after December 15, 2017. We are currently evaluating the impact this new guidance will have on our consolidated financial statements. |
Acquisitions |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions Jefferies became a wholly-owned subsidiary on March 1, 2013. Each share of Jefferies common stock was converted at the Exchange Ratio into our common shares, an aggregate of approximately 119,363,000 common shares, and we issued a new series of our 3.25% Cumulative Convertible Preferred Shares ($125.0 million at mandatory redemption value) in exchange for Jefferies outstanding 3.25% Series A-1 Cumulative Convertible Preferred Stock. In addition, each restricted share of Jefferies common stock and each RSU of Jefferies common stock was converted at the Exchange Ratio into an award of restricted shares or RSUs of Leucadia, with all such awards subject to the same terms and conditions, including, without limitation, vesting and, in the case of performance-based RSUs, performance being measured at existing targets. We did not assume or guarantee any of Jefferies outstanding debt securities, but Jefferies 3.875% Convertible Senior Debentures due 2029 ($345.0 million principal amount outstanding) became convertible into our common shares. As specified in the indenture governing such debentures, the debentures are not currently convertible; if the debentures were currently convertible, the conversion price would be $44.53 per common share. The Jefferies acquisition was accounted for using the acquisition method of accounting. The aggregate purchase price ($4,770.6 million) equaled the sum of the fair value of our common shares issued at closing, the fair value of employee stock based awards attributable to periods prior to closing, the fair value of the Jefferies common stock owned by us ($1.3 billion) and the redemption value of the new series of preferred shares issued at closing, which represents its fair value. The fair values of the Jefferies common stock owned by us and the common shares and employee stock based awards issued were determined by using market prices at closing. Including our investment in Jefferies High Yield Holdings, LLC (“JHYH”), which was contributed to Jefferies capital after the acquisition, our aggregate investment in Jefferies is $5.5 billion at December 31, 2015. For the year ended December 31, 2013, we expensed costs related to the acquisition of Jefferies of $18.5 million. Presented below for the year ended December 31, 2013, are unaudited pro forma operating results assuming the acquisition of Jefferies had occurred on January 1, 2012 (in thousands, except per share amounts):
Pro forma adjustments for Jefferies principally reflect an increase to amortization expenses related to the fair value of amortizable intangible assets, a reduction to interest expense for the amortization of the premium recorded to reflect long-term debt at fair value and to reflect the costs related to the acquisition as if they had occurred in the period beginning January 1, 2012. In addition, the pro forma adjustments reflect the elimination from Net revenues amounts recognized from the application of the fair value option to our investment in Jefferies for periods prior to March 1, 2013, as more fully described in Note 5. For the year ended December 31, 2013, pro forma adjustments include the removal of the deferred tax liability reversal related to our investment in Jefferies for periods prior to March 1, 2013 ($34.0 million). The unaudited pro forma data is not indicative of future results of operations or what would have resulted if the acquisitions had actually occurred as of January 1, 2012. |
Fair Value Disclosures |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures | Fair Value Disclosures The following is a summary of our financial instruments and trading liabilities that are accounted for at fair value on a recurring basis, excluding Investments at fair value based on NAV of $36.7 million and $42.2 million, respectively, by level within the fair value hierarchy at December 31, 2015 and 2014 (in thousands):
The following is a description of the valuation basis, including valuation techniques and inputs, used in measuring our financial assets and liabilities that are accounted for at fair value on a recurring basis: Corporate Equity Securities
Corporate Debt Securities
Collateralized Debt Obligations Collateralized debt obligations are measured based on prices observed for recently executed market transactions of the same or similar security or based on valuations received from third party brokers or data providers and are categorized within Level 2 or Level 3 of the fair value hierarchy depending on the observability and significance of the pricing inputs. Valuation that is based on recently executed market transactions of similar securities incorporates additional review and analysis of pricing inputs and comparability criteria including but not limited to collateral type, tranche type, rating, origination year, prepayment rates, default rates, and severities. U.S. Government and Federal Agency Securities
Municipal Securities Municipal securities are measured based on quoted prices obtained from external pricing services and are generally categorized within Level 2 of the fair value hierarchy. Sovereign Obligations Foreign sovereign government obligations are measured based on quoted market prices obtained from external pricing services, where available, or recently executed independent transactions of comparable size. To the extent external price quotations are not available or recent transactions have not been observed, valuation techniques incorporating interest rate yield curves and country spreads for bonds of similar issuers, seniority and maturity are used to determine fair value of sovereign bonds or obligations. Foreign sovereign government obligations are classified in Level 1, Level 2 or Level 3 of the fair value hierarchy, primarily based on the country of issuance. Residential Mortgage-Backed Securities
Commercial Mortgage-Backed Securities
Other Asset-Backed Securities Other asset-backed securities include, but are not limited to, securities backed by auto loans, credit card receivables, student loans and other consumer loans and are categorized within Level 2 and Level 3 of the fair value hierarchy. Valuations are primarily determined using pricing data obtained from external pricing services and prices observed for recently executed market transactions. Loans and Other Receivables
Derivatives
OTC options include OTC equity, foreign exchange, interest rate and commodity options measured using various valuation models, such as the Black-Scholes, with key inputs impacting the valuation including the underlying security, foreign exchange spot rate or commodity price, implied volatility, dividend yield, interest rate curve, strike price and maturity date. Discounted cash flow models are utilized to measure certain OTC derivative contracts including the valuations of our interest rate swaps, which incorporate observable inputs related to interest rate curves, valuations of our foreign exchange forwards and swaps, which incorporate observable inputs related to foreign currency spot rates and forward curves and valuations of our commodity swaps and forwards, which incorporate observable inputs related to commodity spot prices and forward curves. Credit default swaps include both index and single-name credit default swaps. External prices are available as inputs in measuring index credit default swaps and single-name credit default swaps. For commodity and equity total return swaps, market prices are observable for the underlying asset and used as the basis for measuring the fair value of the derivative contracts. Total return swaps executed on other underlyings are measured based on valuations received from external pricing services.
Investment in FXCM In January 2015, we entered into a credit agreement with FXCM, and provided FXCM a $300 million two-year senior secured term loan with rights to a variable proportion of certain distributions in connection with an FXCM sale of assets or certain other events, and to require a sale of FXCM beginning in January 2018. FXCM is an online provider of foreign exchange trading and related services. The loan had an initial interest rate of 10% per annum, increasing by 1.5% per annum each quarter, not to exceed 20.5% per annum. The variable proportion of distributions is as follows: 100% until amounts due under the loan are repaid; 50% of the next $350 million; then 90% of the next $500 million (this was an amount initially set at a range between $500 million to $680 million and based on payments made by FXCM to us through April 16, 2015, this amount became $500 million); and 60% of all amounts thereafter. During the year ended December 31, 2015, we received $144.7 million of principal, interest and fees from FXCM and $192.7 million remained outstanding under the credit agreement as of December 31, 2015. FXCM is considered a variable interest entity and our term loan with rights is a variable interest. We have determined that we are not the primary beneficiary of FXCM because we do not have the power to direct the activities that most significantly impact FXCM’s performance. Therefore, we are not consolidating FXCM. We view the FXCM loan and associated rights as one integrated transaction; since the rights, as derivatives, are accounted for at fair value, we have elected the fair value option for the loan. The total amount of our investment in FXCM is reported within Trading assets, at fair value in our Consolidated Statement of Financial Condition, and unrealized and realized changes in value, including the component related to interest income on the loan, are included within Principal transactions in the Consolidated Statements of Operations. During the year ended December 31, 2015, we recorded in Principal transactions an aggregate $491.3 million of unrealized and realized gains (losses), interest income and fees relating to our investment in FXCM. Our maximum exposure to loss as a result of our involvement with FXCM is limited to the carrying value of our investment ($625.7 million at December 31, 2015). We engaged an independent valuation firm to assist management in estimating the fair value of our loan and rights in FXCM. Our estimate of fair value was determined using valuation models with inputs including management’s assumptions concerning the amount and timing of expected cash flows; the loan’s implied credit rating and effective yield; implied total equity value, based primarily on the publicly traded FXCM stock price; volatility; risk-free rate; and term. Because of these inputs and the degree of judgment involved, we have categorized our investment in FXCM in Level 3. The valuation is most significantly impacted by the inputs and assumptions related to the publicly traded stock price, volatility and the time to liquidity event. A $1.00 change in the price of FXCM’s shares alone (representing about 6% of the price at December 31, 2015 after FXCM completed a one-for-ten reverse split of its common stock), would result in a change of about $15 million in this valuation, assuming no change in any other factors we considered. Likewise, a 10% change in the assumed volatility would result in a change of about $18 million in this valuation, assuming no other change in any other factors. A three month change in the estimated time to liquidity event would result in a change of about $8 million in this valuation, assuming no change in any other factors. As we adjust to fair value each quarter, we anticipate there could be volatility in the FXCM valuation, which could materially impact our results in a given period. Physical Commodities Physical commodities include base and precious metals and are measured using observable inputs including spot prices and published indices. Physical commodities are categorized within Level 2 of the fair value hierarchy. To facilitate the trading in precious metals we undertake leasing of such precious metals. The fees earned or paid for such leases are recorded as revenues in the Consolidated Statements of Operations. Investments at Fair Value and Investments in Managed Funds Investments at fair value based on NAV and Investments in managed funds include investments in hedge funds, fund of funds, private equity funds, convertible bond funds and other funds, which are measured at the NAV of the funds provided by the fund managers and are excluded from the fair value hierarchy. Investments at fair value also include direct equity investments in private companies, which are measured at fair value using valuation techniques involving quoted prices of or market data for comparable companies, similar company ratios and multiples (e.g., price/EBITDA, price/book value), discounted cash flow analyses and transaction prices observed for subsequent financing or capital issuance by the company. Direct equity investments in private companies are categorized within Level 2 or Level 3 of the fair value hierarchy. Additionally, investments at fair value include investments in insurance contracts relating to our defined benefit plan in Germany. Fair value for the insurance contracts is determined using a third party and is categorized within Level 3 of the fair value hierarchy. The following tables present information about our investments in entities that have the characteristics of an investment company and are measured based on NAV. (in thousands).
Other Secured Financings Other secured financings that are accounted for at fair value include notes issued by consolidated VIEs, which are classified as Level 2 or Level 3 within the fair value hierarchy. Fair value is based on recent transaction prices for similar assets. In addition, at December 31, 2015 and 2014, Other secured financings includes $0.0 million and $7.8 million, respectively, related to transfers of loans accounted for as secured financings rather than as sales and classified as Level 3 within the fair value hierarchy. The following is a summary of changes in fair value of our financial assets and liabilities that have been categorized within Level 3 of the fair value hierarchy for the year ended December 31, 2015 (in thousands):
Analysis of Level 3 Assets and Liabilities for the year ended December 31, 2015 During the year ended December 31, 2015, transfers of assets of $236.7 million from Level 2 to Level 3 of the fair value hierarchy are attributed to:
During the year ended December 31, 2015, transfers of assets of $85.8 million from Level 3 to Level 2 are attributed to:
During the year ended December 31, 2015, there were transfers of other secured financings of $51.6 million from Level 3 to Level 2 due to an increase in observable inputs in the valuation. Net gains on Level 3 assets were $455.5 million and net gains on Level 3 liabilities were $7.6 million for the year ended December 31, 2015. Net gains on Level 3 assets were primarily due to increased valuations of our investment in FXCM and increase in valuation of certain investments at fair value and corporate equity securities partially offset by decreased valuations of collateralized debt obligations, certain loans and other receivables and residential and commercial mortgage-backed securities. Net gains on Level 3 liabilities were primarily due to increased valuations of certain derivatives. The following is a summary of changes in fair value of our financial assets and liabilities that have been categorized within Level 3 of the fair value hierarchy for the year ended December 31, 2014 (in thousands):
During the year ended December 31, 2014, transfers of assets of $139.0 million from Level 2 to Level 3 of the fair value hierarchy are attributed to:
During the year ended December 31, 2014, transfers of assets of $54.6 million from Level 3 to Level 2 are attributed to:
During the year ended December 31, 2014, there were transfers of loan liabilities of $1.0 million from Level 3 to Level 2 and transfers of net derivative liabilities of $3.3 million from Level 3 to Level 2 due to an increase in observable inputs in the valuation and an increase in observable inputs used in the valuing of derivative contracts, respectively. Net losses on Level 3 assets were $24.8 million and net losses on Level 3 liabilities were $14.9 million for the year ended December 31, 2014. Net losses on Level 3 assets were primarily due to a decrease in valuation of certain loans and other receivables, residential and commercial mortgage-backed securities, partially offset by increased valuations of certain investments at fair value certain corporate debt securities and other asset-backed securities. Net losses on Level 3 liabilities were primarily due to increased valuations of certain derivatives. The following is a summary of changes in fair value of our financial assets and liabilities that have been categorized within Level 3 of the fair value hierarchy for the period from the Jefferies acquisition through December 31, 2013 (in thousands). There were no significant Leucadia Level 3 trading assets or liabilities prior to the Jefferies acquisition.
Analysis of Level 3 Assets and Liabilities for the Period from the Jefferies Acquisition through December 31, 2013 During the period from the Jefferies acquisition through December 31, 2013, transfers of assets of $82.4 million from Level 2 to Level 3 of the fair value hierarchy are attributed to:
During the period from the Jefferies acquisition through December 31, 2013, transfers of assets of $55.9 million from Level 3 to Level 2 are attributed to:
During the period from the Jefferies acquisition through December 31, 2013, there were no transfers of liabilities from Level 2 to Level 3 and there were $0.1 million transfers of net derivative liabilities from Level 3 to Level 2 due to an increase in observable inputs used in the valuing of derivative contracts. Net losses on Level 3 assets were $3.4 million and net losses on Level 3 liabilities were $5.8 million for the period from the Jefferies acquisition through December 31, 2013. Net losses on Level 3 assets were primarily due to a decrease in valuation of certain corporate debt securities, collateralized debt obligations, residential and commercial mortgage-backed securities and other asset-backed securities, partially offset by increased valuations of certain corporate equity securities and loans and other receivables. Net losses on Level 3 liabilities were primarily due to increased valuations of certain derivative instruments and loan positions. Quantitative Information about Significant Unobservable Inputs used in Level 3 Fair Value Measurements The tables below present information on the valuation techniques, significant unobservable inputs and their ranges for our financial assets and liabilities, subject to threshold levels related to the market value of the positions held, measured at fair value on a recurring basis with a significant Level 3 balance. The range of unobservable inputs could differ significantly across different firms given the range of products across different firms in the financial services sector. The inputs are not representative of the inputs that could have been used in the valuation of any one financial instrument; i.e., the input used for valuing one financial instrument within a particular class of financial instruments may not be appropriate for valuing other financial instruments within that given class. Additionally, the ranges of inputs presented below should not be construed to represent uncertainty regarding the fair values of our financial instruments; rather the ranges of inputs are reflective of the differences in the underlying characteristics of the financial instruments in each category. For certain categories, we have provided a weighted average of the inputs allocated based on the fair values of the financial instruments comprising the category. We do not believe that the range or weighted average of the inputs is indicative of the reasonableness of uncertainty of our Level 3 fair values. The range and weighted average are driven by the individual financial instruments within each category and their relative distribution in the population. The disclosed inputs when compared with the inputs as disclosed in other quarters should not be expected to necessarily be indicative of changes in our estimates of unobservable inputs for a particular financial instrument as the population of financial instruments comprising the category will vary from period to period based on purchases and sales of financial instruments during the period as well as transfers into and out of Level 3 each period.
The fair values of certain Level 3 assets and liabilities that were determined based on third-party pricing information, unadjusted past transaction prices, reported net asset value or a percentage of the reported enterprise fair value are excluded from the above tables. At December 31, 2015 and 2014, asset exclusions consisted of $280.6 million and $137.8 million, respectively, primarily comprised of certain corporate debt and equity securities, investments at fair value, private equity securities, derivative contracts, collateralized debt obligations, sovereign obligations and certain loans and other receivables. At December 31, 2015 and 2014, liability exclusions consisted of $0.6 million and $0.3 million, respectively, of certain corporate debt and equity securities and other secured financings. Sensitivity of Fair Values to Changes in Significant Unobservable Inputs For recurring fair value measurements categorized within Level 3 of the fair value hierarchy, the sensitivity of the fair value measurement to changes in significant unobservable inputs and interrelationships between those unobservable inputs (if any) are described below:
Fair Value Option Election We have elected the fair value option for all loans and loan commitments made by Jefferies capital markets businesses. These loans and loan commitments include loans entered into by Jefferies investment banking division in connection with client bridge financing and loan syndications, loans purchased by Jefferies leveraged credit trading desk as part of its bank loan trading activities and mortgage loan commitments and fundings in connection with mortgage-backed securitization activities. Loans and loan commitments originated or purchased by Jefferies leveraged credit and mortgage-backed businesses are managed on a fair value basis. Loans are included in Trading assets and loan commitments are included in Trading liabilities. The fair value option election is not applied to loans made to affiliate entities as such loans are entered into as part of ongoing, strategic business ventures. Loans to affiliate entities are included within Loans to and investments in associated companies and are accounted for on an amortized cost basis. We have also elected the fair value option for certain financial instruments held by Jefferies subsidiaries as the investments are risk managed on a fair value basis. The fair value option has also been elected for certain secured financings that arise in connection with Jefferies securitization activities and other structured financings. Other secured financings, receivables from brokers, dealers and clearing organizations, receivables from customers of securities operations, payables to brokers, dealers and clearing organizations and payables to customers of securities operations, are accounted for at cost plus accrued interest rather than at fair value; however, the recorded amounts approximate fair value due to their liquid or short-term nature. The following is a summary of gains (losses) due to changes in instrument specific credit risk on loans and other receivables and loan commitments measured at fair value under the fair value option for the years ended December 31, 2015 and 2014 and the period from the Jefferies acquisition through December 31, 2013 (in thousands):
The following is a summary of the amount by which contractual principal exceeds fair value for loans and other receivables measured at fair value under the fair value option (in thousands):
The aggregate fair value of loans and other receivables that were 90 or more days past due was $11.3 million and $0 million at December 31, 2015 and 2014, respectively. The aggregate fair value of loans and other receivables on nonaccrual status, which includes all loans and other receivables greater than 90 or more days past due, was $307.5 million and $274.6 million at December 31, 2015 and 2014, respectively. Prior to the completion of the Jefferies acquisition, we elected the fair value option for our investment in Jefferies, commencing on the date Jefferies became subject to the equity method of accounting. The increase in the fair value of our investment in Jefferies prior to the acquisition was $182.7 million during 2013, which is reflected as Principal transactions in the Consolidated Statements of Operations. We have elected the fair value option for Jefferies investment in KCG Holdings, Inc. The change in the fair value of this investment was $49.1 million, $(14.7) million and $19.5 million for 2015, 2014 and 2013, respectively. As of December 31, 2015 and 2014, we owned approximately 46.6 million common shares of HRG, representing approximately 23% of HRG’s outstanding common shares, which are accounted for under the fair value option. The shares are included in our Consolidated Statements of Financial Condition at fair value of $631.9 million and $659.9 million at December 31, 2015 and 2014, respectively. The shares were acquired at an aggregate cost of $475.6 million. The change in the fair value of our investment in HRG aggregated $(28.0) million during the year ended December 31, 2015 and $119.2 million during the year ended December 31, 2014. We currently have two directors on HRG’s board. We have agreed not to increase our interest in HRG above 27.5% through March 17, 2016. The shares have the benefit of a registration rights agreement, and may be otherwise sold consistent with the securities laws; however, we have agreed not to sell the shares to a party if after such sale the party would own in excess of 4.9% of HRG common stock. We believe accounting for these investments at fair value better reflected the economics of these investments, and quoted market prices for these investments provides an objectively determined fair value at each balance sheet date. Our investment in HomeFed is the only other investment accounted for under the equity method of accounting that is also a publicly traded company for which we did not elect the fair value option. HomeFed’s common stock is not listed on any stock exchange, and price information for the common stock is not regularly quoted on any automated quotation system. It is traded in the over-the-counter market with high and low bid prices published by the National Association of Securities Dealers OTC Bulletin Board Service; however, trading volume is minimal. For these reasons we did not elect the fair value option for HomeFed. |
Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments Off-Balance Sheet Risk Jefferies has contractual commitments arising in the ordinary course of business for securities loaned or purchased under agreements to resell, repurchase agreements, future purchases and sales of foreign currencies, securities transactions on a when-issued basis and underwriting. Each of these financial instruments and activities contains varying degrees of off-balance sheet risk whereby the fair values of the securities underlying the financial instruments may be in excess of, or less than, the contract amount. The settlement of these transactions is not expected to have a significant effect upon our consolidated financial statements. Derivative Financial Instruments Derivative activities are recorded at fair value in the Consolidated Statements of Financial Condition in Trading assets and Trading liabilities, net of cash paid or received under credit support agreements and on a net counterparty basis when a legal right to offset exists under a master netting agreement. Net realized and unrealized gains and losses are primarily recognized in Principal transactions in the Consolidated Statements of Operations on a trade date basis and as a component of cash flows from operating activities in the Consolidated Statements of Cash Flows. Acting in a trading capacity, Jefferies may enter into derivative transactions to satisfy the needs of its clients and to manage its own exposure to market and credit risks resulting from trading activities. See Notes 5 and 26 for additional disclosures about derivative financial instruments. Derivatives are subject to various risks similar to other financial instruments, including market, credit and operational risk. The risks of derivatives should not be viewed in isolation, but rather should be considered on an aggregate basis along with our other trading-related activities. Jefferies manages the risks associated with derivatives on an aggregate basis along with the risks associated with proprietary trading as part of its firm wide risk management policies. In connection with Jefferies derivative activities, Jefferies may enter into International Swaps and Derivative Association, Inc. (“ISDA”) master netting agreements and similar agreements with counterparties. These agreements provide Jefferies with the ability to offset a counterparty’s rights and obligations, request additional collateral when necessary or liquidate the collateral in the event of counterparty default. See Note 12 for additional information with respect to financial statement offsetting. The following tables present the fair value and related number of derivative contracts categorized by type of derivative contract as reflected in the Consolidated Statements of Financial Condition at December 31, 2015 and 2014. The fair value of assets/liabilities related to derivative contracts represents our receivable/payable for derivative financial instruments, gross of counterparty netting and cash collateral received and pledged (in thousands, except contract amounts):
The following table presents unrealized and realized gains (losses) on derivative contracts as reflected in the Consolidated Statements of Operations for the years ended December 31, 2015 and 2014 and the period from the Jefferies acquisition through December 31, 2013 (in thousands):
OTC Derivatives. The following tables set forth by remaining contract maturity the fair value of OTC derivative assets and liabilities as reflected in the Consolidated Statement of Financial Condition at December 31, 2015 (in thousands):
At December 31, 2015, the counterparty credit quality with respect to the fair value of our OTC derivative assets was as follows (in thousands):
Contingent Features Certain of Jefferies derivative instruments contain provisions that require their debt to maintain an investment grade credit rating from each of the major credit rating agencies. If Jefferies debt were to fall below investment grade, it would be in violation of these provisions and the counterparties to the derivative instruments could request immediate payment or demand immediate and ongoing full overnight collateralization on Jefferies derivative instruments in liability positions. The aggregate fair value of all derivative instruments with such credit-risk-related contingent features that are in a liability position at December 31, 2015 and 2014 is $114.5 million and $269.0 million, respectively, for which Jefferies has posted collateral of $97.2 million and $234.6 million, respectively, in the normal course of business. If the credit-risk-related contingent features underlying these agreements were triggered on December 31, 2015 and 2014, Jefferies would have been required to post an additional $19.7 million and $55.1 million, respectively, of collateral to its counterparties. Other Derivatives National Beef uses futures contracts in order to reduce its exposure associated with entering into firm commitments to purchase live cattle at prices determined prior to the delivery of the cattle as well as firm commitments to sell certain beef products at sales prices determined prior to shipment. National Beef accounts for the futures contracts and their related firm purchase commitments at fair value. Certain firm commitments for live cattle purchases and all firm commitments for sales are treated as normal purchases and sales and therefore not marked to market. The gains and losses associated with the change in fair value of the futures contracts and the offsetting gains and losses associated with changes in the market value of certain of the firm purchase commitments related to the futures contracts are recorded to income and expense in the period of change. Vitesse uses call and put options in order to reduce exposure to future oil price fluctuations. Vitesse accounts for the derivative instruments at fair value. The gains and losses associated with the change in fair value of the derivatives are recorded in income. |
Collateralized Transactions |
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Collateralized Transactions | Collateralized Transactions Jefferies enters into secured borrowing and lending arrangements to obtain collateral necessary to effect settlement, finance trading asset inventory positions, meet customer needs or re-lend as part of dealer operations. Jefferies monitors the fair value of the securities loaned and borrowed on a daily basis as compared with the related payable or receivable, and requests additional collateral or returns excess collateral, as appropriate. Jefferies pledges financial instruments as collateral under repurchase agreements, securities lending agreements and other secured arrangements, including clearing arrangements. Jefferies agreements with counterparties generally contain contractual provisions allowing the counterparty the right to sell or repledge the collateral. Pledged securities owned that can be sold or repledged by the counterparty are included within Financial instruments owned and noted parenthetically as Securities pledged on our Consolidated Statements of Financial Condition. The following tables set forth the carrying value of securities lending arrangements and repurchase agreements by class of collateral pledged and remaining contractual maturity (in thousands):
Jefferies receives securities as collateral under resale agreements, securities borrowing transactions and customer margin loans. Jefferies also receives securities as collateral in connection with securities-for-securities transactions in which it is the lender of securities. In many instances, Jefferies is permitted by contract or custom to rehypothecate the securities received as collateral. These securities may be used to secure repurchase agreements, enter into securities lending transactions, satisfy margin requirements on derivative transactions or cover short positions. At December 31, 2015 and 2014, the approximate fair value of securities received as collateral by Jefferies that may be sold or repledged was $26.2 billion and $25.8 billion, respectively. A substantial portion of these securities have been sold or repledged. |
Securitization Activities |
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Securitization Activities | Securitization Activities Jefferies engages in securitization activities related to corporate loans, commercial mortgage loans, consumer loans and mortgage-backed and other asset-backed securities. In securitization transactions, Jefferies transfers assets to special purpose entities ("SPEs") and acts as the placement or structuring agent for the beneficial interests sold to investors by the SPE. A significant portion of the securitization transactions are securitization of assets issued or guaranteed by U.S. government agencies. These SPEs generally meet the criteria of variable interest entities; however, the SPEs are generally not consolidated as Jefferies is not considered the primary beneficiary for these SPEs. Beginning in the third quarter of 2014, another of our subsidiaries utilized an SPE to securitize automobile loans receivable. This SPE is a variable interest entity and our subsidiary is the primary beneficiary; the related assets and the secured borrowings are recognized in the Consolidated Statement of Financial Condition. These secured borrowings do not have recourse to our subsidiary’s general credit. See Note 10 for further information on variable interest entities. Jefferies accounts for securitization transactions as sales provided it has relinquished control over the transferred assets. Transferred assets are carried at fair value with unrealized gains and losses reflected in the Consolidated Statements of Operations prior to the identification and isolation for securitization. Subsequently, revenues recognized upon securitization are reflected as net underwriting revenues. Jefferies generally receives cash proceeds in connection with the transfer of assets to an SPE. Jefferies may, however, have continuing involvement with the transferred assets, which is limited to retaining one or more tranches of the securitization (primarily senior and subordinated debt securities in the form of mortgage- and other asset-backed securities or collateralized loan obligations), which are included within Trading assets and are generally initially categorized as Level 2 within the fair value hierarchy. Jefferies applies fair value accounting to the securities. If Jefferies has not relinquished control over the transferred assets, the assets continue to be recognized in Trading assets and a corresponding liability is recognized in Other secured financings. The related liabilities do not have recourse to Jefferies general credit. The following table presents activity related to our securitizations that were accounted for as sales in which we had continuing involvement during the years ended December 31, 2015 and 2014 and the period from the Jefferies acquisition through December 31, 2013 (in millions):
Jefferies has no explicit or implicit arrangements to provide additional financial support to these SPEs, has no liabilities related to these SPEs and has no outstanding derivative contracts executed in connection with these securitizations at December 31, 2015 and 2014. The following table summarizes our retained interests in SPEs where Jefferies transferred assets and has continuing involvement and received sale accounting treatment (in millions):
Total assets represent the unpaid principal amount of assets in the SPEs in which Jefferies has continuing involvement and are presented solely to provide information regarding the size of the transaction and the size of the underlying assets supporting its retained interests, and are not considered representative of the risk of potential loss. Assets retained in connection with a securitization transaction represent the fair value of the securities of one or more tranches issued by an SPE, including senior and subordinated tranches. Jefferies risk of loss is limited to this fair value amount which is included within total Trading assets in our Consolidated Statements of Financial Condition. Although not obligated, in connection with secondary market-making activities Jefferies may make a market in the securities issued by these SPEs. In these market-making transactions, Jefferies buys these securities from and sells these securities to investors. Securities purchased through these market-making activities are not considered to be continuing involvement in these SPEs, although the securities are included in Trading assets. To the extent Jefferies purchased securities through these market-making activities and Jefferies is not deemed to be the primary beneficiary of the variable interest entity, these securities are included in agency and non-agency mortgage- and asset-backed securitizations in the nonconsolidated variable interest entities section presented in Note 10. |
Available For Sale Securities |
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Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Available For Sale Securities | Available for Sale Securities The amortized cost, gross unrealized gains and losses and estimated fair value of investments classified as available for sale at December 31, 2015 and 2014 are as follows (in thousands):
The amortized cost and estimated fair value of investments classified as available for sale at December 31, 2015, by contractual maturity, are shown below. Expected maturities are likely to differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
At December 31, 2015, the unrealized losses on investments which have been in a continuous unrealized loss position for less than 12 months and 12 months or longer were not significant. During the first quarter of 2013, we exchanged our investment in Inmet Mining Corporation for 18,202,313 shares of First Quantum Minerals Ltd., valued at $340.4 million on the date received, and $391.2 million in cash. We recorded a gain on the transaction of $227.6 million during 2013. During 2013 and 2014, we sold our interest in First Quantum. |
Variable Interest Entities |
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Variable Interest Entities | Variable Interest Entities Variable interest entities ("VIEs") are entities in which equity investors lack the characteristics of a controlling financial interest. VIEs are consolidated by the primary beneficiary. The primary beneficiary is the party who has both the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and an obligation to absorb losses of the entity or a right to receive benefits from the entity that could potentially be significant to the entity. Our variable interests in VIEs include debt and equity interests, an equity interest in an associated company, commitments, guarantees and certain fees. Our involvement with VIEs arises primarily from the following activities of Jefferies, but also includes other activities discussed below:
We determine whether we are the primary beneficiary of a VIE upon our initial involvement with the VIE and we reassess whether we are the primary beneficiary of a VIE on an ongoing basis. Our determination of whether we are the primary beneficiary of a VIE is based upon the facts and circumstances for each VIE and requires significant judgment. Our considerations in determining the VIE’s most significant activities and whether we have power to direct those activities include, but are not limited to, the VIE’s purpose and design and the risks passed through to investors, the voting interests of the VIE, management, service and/or other agreements of the VIE, involvement in the VIE’s initial design and the existence of explicit or implicit financial guarantees. In situations where we have determined that the power over the VIE’s most significant activities is shared, we assess whether we are the party with the power over the majority of the significant activities. If we are the party with the power over the majority of the significant activities, we meet the "power" criteria of the primary beneficiary. If we do not have the power over a majority of the significant activities or we determine that decisions require consent of each sharing party, we do not meet the "power" criteria of the primary beneficiary. We assess our variable interests in a VIE both individually and in aggregate to determine whether we have an obligation to absorb losses of or a right to receive benefits from the VIE that could potentially be significant to the VIE. The determination of whether our variable interest is significant to the VIE requires significant judgment. In determining the significance of our variable interest, we consider the terms, characteristics and size of the variable interests, the design and characteristics of the VIE, our involvement in the VIE and our market-making activities related to the variable interests. Consolidated VIEs The following tables present information about the assets and liabilities of our consolidated VIEs, which are presented within our Consolidated Statements of Financial Condition in the respective asset and liability categories, as of December 31, 2015 and 2014.
Securitization vehicles. Jefferies is the primary beneficiary of securitization vehicles associated with their financing of consumer and small business loans. In the creation of the securitization vehicles, Jefferies was involved in the decisions made during the establishment and design of the entities and holds variable interests consisting of the securities retained that could potentially be significant. The assets of the VIEs consist of the small business loans and term loans backed by consumer installment receivables, which are available for the benefit of the vehicles' beneficial interest holders. The creditors of the VIEs do not have recourse to Jefferies general credit and the assets of the VIEs are not available to satisfy any other debt. Jefferies is also the primary beneficiary of mortgage-backed financing vehicles to which Jefferies sells agency and non-agency residential and commercial mortgage loans and mortgage-backed securities pursuant to the terms of a master repurchase agreement. Jefferies manages the assets within these vehicles. Jefferies variable interests in these vehicles consist of its collateral margin maintenance obligations under the master repurchase agreement. The assets of these VIEs consist of reverse repurchase agreements, which are available for the benefit of the vehicle’s debt holders. The creditors of these VIEs do not have recourse to Jefferies general credit and each such VIE’s assets are not available to satisfy any other debt. At December 31, 2015 and 2014, another of our subsidiaries is the primary beneficiary of SPEs it utilized to securitize automobile loans receivable. Our subsidiary acts as the servicer for which it receives a fee, and owns the equity interest in the SPEs. The notes issued by the SPEs are secured solely by the assets of the SPEs and do not have recourse to our subsidiary’s general credit and the assets of the VIEs are not available to satisfy any other debt. Nonconsolidated VIEs The following tables present information about Jefferies variable interests in nonconsolidated VIEs.
Jefferies maximum exposure to loss often differs from the carrying value of the variable interests. The maximum exposure to loss is dependent on the nature of the variable interests in the VIEs and is limited to the notional amounts of certain loan commitments and guarantees. Jefferies maximum exposure to loss does not include the offsetting benefit of any financial instruments that may be utilized to hedge the risks associated with its variable interests and is not reduced by the amount of collateral held as part of a transaction with a VIE. Collateralized Loan Obligations. Assets collateralizing the CLOs include bank loans, participation interests and sub-investment grade and senior secured U.S. loans. Jefferies underwrites securities issued in CLO transactions on behalf of sponsors and provides advisory services to the sponsors. Jefferies may also sell corporate loans to the CLOs. Jefferies variable interests in connection with collateralized loan obligations where it has been involved in providing underwriting and/or advisory services consist of the following:
In addition, Jefferies owns variable interests in CLOs previously managed by Jefferies. These variable interests consist of debt securities and a right to a portion of the CLOs’ management and incentive fees. Jefferies exposure to loss from these CLOs is limited to its investments in the debt securities held. Management and incentives fees are accrued as the amounts become realizable. These CLOs represent interests in assets consisting primarily of senior secured loans, unsecured loans and high yield bonds. Consumer Loan Vehicles. Jefferies provides financing and lending related services to certain client-sponsored VIEs in the form of revolving funding note agreements, revolving credit facilities and forward purchase agreements. The underlying assets, which are collateralizing the vehicles, are primarily comprised of unsecured consumer and small business loans. In addition, Jefferies may provide structuring and advisory services and act as an underwriter or placement agent for securities issued by the vehicles. Jefferies does not control the activities of these entities. Asset Management Vehicle. Jefferies managed the Jefferies Umbrella Fund, an "umbrella structure" company that invested primarily in convertible bonds and enabled investors to choose between one or more investment objectives by investing in one or more sub-funds within the same structure. Jefferies variable interests in the Jefferies Umbrella Fund consist of equity interests, management fees and performance fees. Effective May 2015, the Jefferies Umbrella Fund was placed into liquidation. Jefferies manages an asset management vehicle that provides investors with exposure to absolute return strategies, primarily including merger arbitrage, relative value and stock loan arbitrage. Jefferies variable interests in this asset management vehicle consist of management and performance fees. Private Equity Vehicles. On July 26, 2010, Jefferies committed to invest equity of up to $75.0 million in Jefferies SBI USA Fund L.P. (the "SBI USA Fund L.P."). As of December 31, 2015 and 2014, Jefferies funded approximately $64.6 million and $60.1 million, respectively, of its commitment. The carrying amount of Jefferies equity investment was $26.2 million and $43.1 million at December 31, 2015 and 2014, respectively. Jefferies exposure to loss is limited to its equity commitment. The SBI USA Fund L.P. has assets consisting primarily of private equity and equity related investments. Jefferies has a variable interest in Jefferies Employees Partners IV, LLC ("JEP IV") consisting of an equity investment. The carrying amount of Jefferies equity investment was $1.1 million and $1.2 million at December 31, 2015 and 2014, respectively. Jefferies exposure to loss is limited to its equity investment. JEP IV has assets consisting primarily of private equity and equity related investments. Jefferies has provided a guarantee of a portion of Energy Partners I, LP's obligations under a credit agreement. Energy Partners I, LP is a private equity fund owned and managed by certain of our employees. At December 31, 2015, the carrying value and maximum exposure to loss of the guarantee were $11,000 and $3.0 million, respectively. Energy Partners I, LP, has assets consisting primarily of debt and equity investments. Mortgage- and Other Asset-Backed Vehicles. In connection with Jefferies secondary trading and market-making activities, Jefferies buys and sells agency and non-agency mortgage-backed and other asset-backed securities, which are issued by third party securitization SPEs and are generally considered variable interests in VIEs. Securities issued by securitization SPEs are backed by residential mortgage loans, U.S. agency collateralized mortgage obligations, commercial mortgage loans, collateralized debt obligations and CLOs and other consumer loans, such as installment receivables, auto loans and student loans. These securities are accounted for at fair value and included in Trading assets in our Consolidated Statements of Financial Condition. Jefferies has no other involvement with the related SPEs and therefore does not consolidate these entities. Jefferies also engages in underwriting, placement and structuring activities for third-party-sponsored securitization trusts generally through agency (Fannie Mae, Freddie Mac and Ginnie Mae) or non-agency sponsored SPEs and may purchase loans or mortgage-backed securities from third parties that are subsequently transferred into the securitization trusts. The securitizations are backed by residential and commercial mortgage, home equity and auto loans. Jefferies does not consolidate agency sponsored securitizations as it does not have the power to direct the activities of the SPEs that most significantly impact their economic performance. Further, Jefferies is not the servicer of non-agency sponsored securitizations and therefore does not have power to direct the most significant activities of the SPEs and accordingly, does not consolidate these entities. Jefferies may retain unsold senior and/or subordinated interests at the time of securitization in the form of securities issued by the SPEs. Jefferies transfers existing securities, typically mortgage-backed securities, into resecuritization vehicles. These transactions in which debt securities are transferred to a VIE in exchange for new beneficial interests occur in connection with both agency and non-agency sponsored VIEs. The consolidation analysis is largely dependent on Jefferies role and interest in the resecuritization trusts. Most resecuritizations in which Jefferies is involved are in connection with investors seeking securities with specific risk and return characteristics. As such, we have concluded that the decision-making power is shared between Jefferies and the investor(s), considering the joint efforts involved in structuring the trust and selecting the underlying assets as well as the level of security interests the investor(s) hold in the SPE; therefore, Jefferies does not consolidate the resecuritization VIEs. At December 31, 2015 and 2014, Jefferies held $3,359.1 million and $3,186.9 million of agency mortgage-backed securities, respectively, and $630.5 million and $1,120.0 million of non-agency mortgage- and other asset-backed securities, respectively, as a result of its secondary trading and market-making activities, underwriting, placement and structuring activities and resecuritization activities. Jefferies maximum exposure to loss on these securities is limited to the carrying value of its investments in these securities. Mortgage- and other asset-backed securitization vehicles discussed within this section are not included in the above table containing information about Jefferies variable interests in nonconsolidated VIEs. We also have a variable interest in a nonconsolidated VIE consisting of our equity interest in an associated company, Golden Queen Mining Company, LLC. See Note 11 for further discussion. In addition, at December 31, 2015, we have a variable interest in a nonconsolidated VIE consisting of our senior secured term loan receivable with rights with FXCM. See Note 5 for further discussion. |
Loans To And Investments In Associated Companies |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans To And Investments In Associated Companies | Loans to and Investments in Associated Companies A summary of loans to and investments in associated companies at December 31, 2015 and 2014 accounted for under the equity method of accounting is as follows (in thousands):
Jefferies Finance In October 2004, Jefferies entered into an agreement with Massachusetts Mutual Life Insurance Company ("MassMutual") and Babson Capital Management LLC to form Jefferies Finance, a joint venture entity. Jefferies Finance is a commercial finance company whose primary focus is the origination and syndication of senior secured debt to middle market and growth companies in the form of term and revolving loans. Loans are originated primarily through the investment banking efforts of Jefferies. Jefferies Finance may also originate other debt products such as second lien term, bridge and mezzanine loans, as well as related equity co‑investments. Jefferies Finance also purchases syndicated loans in the secondary market. Jefferies and MassMutual each made equity commitments to Jefferies Finance of $600.0 million. At December 31, 2015, approximately $497.4 million of Jefferies commitment was funded. The investment commitment is scheduled to mature on March 1, 2016 with automatic one year extensions subject to a 60 day termination notice by either party. In addition, Jefferies and MassMutual have entered into a Secured Revolving Credit Facility, to be funded equally, to support loan underwritings by Jefferies Finance. The Secured Revolving Credit Facility bears interest based on the interest rates of the related Jefferies Finance underwritten loans and is secured by the underlying loans funded by the proceeds of the facility. During 2015, the Secured Revolving Credit Facility was modified and reduced from a committed and discretionary total of $1.0 billion to a total committed amount of $500.0 million at December 31, 2015. Advances are shared equally between Jefferies and MassMutual. The facility is scheduled to mature on March 1, 2016 with automatic one year extensions subject to a 60 day termination notice by either party. At December 31, 2015 and 2014, $19.3 million and $0.0 million, respectively, of Jefferies $250.0 million and $350.0 million commitment, respectively, was funded. Jefferies engages in debt capital markets transactions with Jefferies Finance related to the originations of loans by Jefferies Finance. In connection with such transactions, Jefferies earned fees of $122.7 million, $199.5 million and $125.8 million during 2015, 2014 and 2013, respectively, which are recognized in Investment banking revenues in the Consolidated Statements of Operations. In addition, Jefferies paid fees to Jefferies Finance in respect of certain loans originated by Jefferies Finance of $5.9 million, $10.6 million and $12.0 million during 2015, 2014 and 2013, respectively, which are recognized within Selling, general and other expenses in the Consolidated Statements of Operations. During the years ended December 31, 2015, 2014 and 2013, Jefferies acted as placement agent in connection with several CLOs managed by Jefferies Finance, for which Jefferies recognized fees of $6.2 million, $4.6 million and $1.9 million, respectively, which are included in Investment banking revenues in the Consolidated Statements of Operations. At December 31, 2015 and 2014, Jefferies held securities issued by the CLOs managed by Jefferies Finance, which are included within Trading assets, and provided a guarantee, whereby Jefferies is required to make payments to a CLO in the event Jefferies Finance is unable to meet its obligation to the CLO. Additionally, Jefferies has entered into participation agreements and derivative contracts with Jefferies Finance whose underlying is based on certain securities issued by the CLOs. There were no significant revenues recognized by Jefferies in connection with its roles related to the execution of the CLOs. During 2015, 2014 and the 2013 period, Jefferies acted as underwriter in connection with senior notes issued by Jefferies Finance, for which Jefferies recognized net underwriting fees of $1.3 million, $7.7 million and $6.0 million, respectively, which are included in Investment banking revenues in the Consolidated Statements of Operations. Under a service agreement, Jefferies charged Jefferies Finance $51.7 million, $41.6 million and $14.2 million for services provided during 2015, 2014 and 2013, respectively. Receivables from Jefferies Finance, included within Other assets in the Consolidated Statements of Financial Condition, were $7.8 million and $41.5 million at December 31, 2015 and 2014, respectively. Jefferies LoanCore In February 2011, Jefferies entered into a joint venture agreement with the Government of Singapore Investment Corporation and LoanCore, LLC and formed Jefferies LoanCore, a commercial real estate finance company. Jefferies LoanCore originates and purchases commercial real estate loans throughout the United States with the support of the investment banking and securitization capabilities of Jefferies and the real estate and mortgage investment expertise of the Government of Singapore Investment Corporation and LoanCore, LLC. Jefferies LoanCore has aggregate equity commitments of $600.0 million. At December 31, 2015 and 2014, Jefferies has funded $207.4 million and $200.9 million, respectively, of its $291.0 million equity commitment and has a 48.5% voting interest in Jefferies LoanCore. Berkadia Berkadia Commercial Mortgage LLC is a commercial mortgage banking and servicing joint venture formed in 2009 with Berkshire Hathaway Inc. We and Berkshire Hathaway each contributed $217.2 million of equity capital to the joint venture and each have a 50% equity interest in Berkadia. Through December 31, 2015, cumulative cash distributions received from this investment aggregated $393.9 million. Berkadia originates commercial/multifamily real estate loans that are sold to U.S. government agencies, and originates and brokers commercial/multifamily mortgage loans which are not part of government agency programs. Berkadia is a servicer of commercial real estate loans in the U.S., performing primary, master and special servicing functions for U.S. government agency programs, commercial mortgage-backed securities transactions, banks, insurance companies and other financial institutions. For the year ended December 31, 2013, our share of Berkadia’s income includes an out of period adjustment of $16.4 million to record income related to prior periods. Berkadia uses all of the proceeds from the commercial paper sales of an affiliate of Berkadia to fund new mortgage loans, servicer advances, investments and other working capital requirements. Repayment of the commercial paper is supported by a $2.5 billion surety policy issued by a Berkshire Hathaway insurance subsidiary and corporate guaranty, and we have agreed to reimburse Berkshire Hathaway for one-half of any losses incurred thereunder. As of December 31, 2015, the aggregate amount of commercial paper outstanding was $2.47 billion. Garcadia Garcadia is a joint venture between us and Garff Enterprises, Inc. that owns and operates 27 automobile dealerships comprised of domestic and foreign automobile makers. The Garcadia joint venture agreement specifies that we and Garff shall have equal board representation and equal votes on all matters affecting Garcadia, and that all cash flows from Garcadia will be allocated 65% to us and 35% to Garff, with the exception of one dealership from which we receive 83% of all cash flows and five other dealerships from which we receive 71% of all cash flows. Garcadia’s strategy is to acquire automobile dealerships in primary or secondary market locations meeting its specified return criteria. Linkem We own approximately 42% of the common shares of Linkem, a fixed wireless broadband services provider in Italy, at a cost of $142.9 million. In addition, we had purchased 5% convertible notes issued by Linkem for $108.6 million (€81.2 million principal amount, including interest in kind). During 2015, these notes and a $1.1 million (€1.0 million) loan were swapped for convertible preferred equity with similar terms. In 2015, we also purchased an additional $14.2 million (€13.3 million principal amount) of convertible preferred equity. If all of our convertible preferred equity was converted, it would increase our ownership to approximately 56% of Linkem’s common equity. The excess of our investment in Linkem’s common shares over our share of underlying book value is being amortized to expense over 12 years. HomeFed At December 31, 2015, we own 9,974,226 shares of HomeFed’s common stock, representing approximately 65% of HomeFed’s outstanding common shares; however, we have agreed to limit our voting rights such that we will not be able to vote more than 45% of HomeFed’s total voting securities voting on any matter, assuming all HomeFed shares not owned by us are voted. HomeFed develops and owns residential and mixed-use real estate properties. HomeFed is a public company traded on the NASD OTC Bulletin Board (Symbol: HOFD). As a result of a 1998 distribution to all of our shareholders, approximately 4.8% of HomeFed is beneficially owned by our Chairman at December 31, 2015. Our Chairman also serves as HomeFed’s Chairman, and our President is a Director of HomeFed. During 2014, we sold to HomeFed substantially all of our real estate properties and operations, our interest in Brooklyn Renaissance Plaza (“BRP”) and cash of approximately $14.0 million, in exchange for 7,500,000 newly issued unregistered HomeFed common shares. Under GAAP, we are not permitted to immediately recognize any gain on real estate sale transactions in which the seller does not receive cash; accordingly the gain on sale of approximately $36.1 million was deferred and is being recognized into income over time. Since we do not control HomeFed, our investment in HomeFed is accounted for as an investment in an associated company. We have also entered into a stockholders agreement that will limit our ability to increase our interest in HomeFed or dispose of our interest in HomeFed. We have a registration rights agreement with HomeFed that covers all of our HomeFed shares. Golden Queen Mining Company During 2014 and 2015, we invested $83.0 million, net cash in a limited liability company (Gauss LLC) to partner with the Clay family and Golden Queen Mining Co. Ltd., to jointly fund, develop and operate the Soledad Mountain gold and silver mine project. Previously 100% owned by Golden Queen Mining Co. Ltd., the project is a fully-permitted, open pit, heap leach gold and silver project located in Kern County, California. Construction is essentially complete and mining activities and project commissioning commenced in the fourth quarter of 2015. In exchange for a noncontrolling ownership interest in Gauss LLC, the Clay family contributed $34.5 million, net in cash. Gauss LLC invested both our and the Clay family’s net contributions totaling $117.5 million to the joint venture, Golden Queen Mining Company, LLC, in exchange for a 50% ownership interest. Golden Queen Mining Co., Ltd. contributed the Soledad Mountain project to the joint venture in exchange for the other 50% interest. As a result of our consolidating Gauss LLC, our Loans to and investments in associated companies reflects Gauss LLC’s net investment of $117.5 million in the joint venture, which includes both the amount we contributed and the amount contributed by the Clay family. The joint venture, Golden Queen Mining Company, LLC, is considered a VIE as the voting rights of the investors are not proportional to their obligations to absorb the expected losses and their rights to receive the expected residual returns, given the provision of services to the joint venture by Golden Queen Mining Co. Ltd. Golden Queen Mining Co. Ltd. has entered into an agreement with the joint venture for the provision of executive officers, financial, managerial, administrative and other services, and office space and equipment. We have determined that we are not the primary beneficiary of the joint venture and are therefore not consolidating its results. Our maximum exposure to loss as a result of our involvement with the joint venture is limited to our investment. Other Under GAAP, JHYH was considered a variable interest entity that was consolidated by Jefferies, since Jefferies was the primary beneficiary. In connection with the Jefferies acquisition in 2013, we contributed our investment in JHYH to Jefferies, other third-party investors were redeemed and JHYH was effectively dissolved. The following table provides summarized data for associated companies as of December 31, 2015 and 2014 and for the three years ended December 31, 2015 (in thousands):
Except for our investment in Berkadia and Jefferies Finance, we have not provided any guarantees, nor are we contingently liable for any of the liabilities reflected in the above table. All such liabilities are non-recourse to us. Our exposure to adverse events at the investee companies is limited to the book value of our investment. See Note 26 for further discussion of these guarantees. Included in consolidated retained earnings at December 31, 2015 is approximately $117.1 million of undistributed earnings of the associated companies accounted for under the equity method of accounting. |
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Offsetting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Statement Offsetting | Financial Statement Offsetting In connection with Jefferies derivative activities and securities financing activities, Jefferies may enter into master netting agreements and collateral arrangements with counterparties. Generally, transactions are executed under standard industry agreements, including, but not limited to: derivative transactions –ISDA master netting agreements; securities lending transactions – master securities lending agreements; and repurchase transactions – master repurchase agreements. A master agreement creates a single contract under which all transactions between two counterparties are executed allowing for trade aggregation and a single net payment obligation. Master agreements provide protection in bankruptcy in certain circumstances and, where legally enforceable, enable receivables and payables with the same counterparty to be settled or otherwise eliminated by applying amounts due to a counterparty against all or a portion of an amount due from the counterparty or a third party. In addition, Jefferies may enter into customized bilateral trading agreements and other customer agreements that provide for the netting of receivables and payables with a given counterparty as a single net obligation. Under Jefferies derivative ISDA master netting agreements, Jefferies typically will also execute credit support annexes, which provide for collateral, either in the form of cash or securities, to be posted by or paid to a counterparty based on the fair value of the derivative receivable or payable based on the rates and parameters established in the credit support annex. In the event of the counterparty’s default, provisions of the master agreement permit acceleration and termination of all outstanding transactions covered by the agreement such that a single amount is owed by, or to, the non-defaulting party. In addition, any collateral posted can be applied to the net obligations, with any excess returned; and the collateralized party has a right to liquidate the collateral. Any residual claim after netting is treated along with other unsecured claims in bankruptcy court. The conditions supporting the legal right of offset may vary from one legal jurisdiction to another and the enforceability of master netting agreements and bankruptcy laws in certain countries or in certain industries is not free from doubt. The right of offset is dependent both on contract law under the governing arrangement and consistency with the bankruptcy laws of the jurisdiction where the counterparty is located. Industry legal opinions with respect to the enforceability of certain standard provisions in respective jurisdictions are relied upon as a part of managing credit risk. Master netting agreements are a critical component of Jefferies risk management processes as part of reducing counterparty credit risk and managing liquidity risk. Jefferies is also a party to clearing agreements with various central clearing parties. Under these arrangements, the central clearing counterparty facilitates settlement between counterparties based on the net payable owed or receivable due and, with respect to daily settlement, cash is generally only required to be deposited to the extent of the net amount. In the event of default, a net termination amount is determined based on the market values of all outstanding positions and the clearing organization or clearing member provides for the liquidation and settlement of the net termination amount among all counterparties to the open repurchase and/or securities lending transactions. The following table provides information regarding derivative contracts, repurchase agreements and securities borrowing and lending arrangements that are recognized in the Consolidated Statements of Financial Condition and 1) the extent to which, under enforceable master netting arrangements, such balances are presented net in the Consolidated Statements of Financial Condition as appropriate under GAAP and 2) the extent to which other rights of setoff associated with these arrangements exist and could have an effect on our consolidated financial position.
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Intangible Assets, Net And Goodwill |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets, Net And Goodwill | Intangible Assets, Net and Goodwill A summary of intangible assets, net and goodwill at December 31, 2015 and 2014 is as follows (in thousands):
Amortization expense on intangible assets was $63.9 million, $66.2 million and $74.8 million for the years ended December 31, 2015, 2014 and 2013, respectively. The estimated aggregate future amortization expense for the intangible assets for each of the next five years is as follows: 2016 - $63.4 million; 2017 - $63.5 million; 2018 - $63.6 million; 2019 - $63.5 million; and 2020 - $63.2 million. Goodwill Impairment Testing The quantitative goodwill impairment test is performed at our reporting unit level and consists of two steps. In the first step, the fair value of each reporting unit is compared with its carrying value, including goodwill and allocated intangible assets. If the fair value is in excess of the carrying value, the goodwill for the reporting unit is considered not to be impaired. If the fair value is less than the carrying value, then a second step is performed in order to measure the amount of the impairment loss, if any, which is based on comparing the implied fair value of the reporting unit’s goodwill to the carrying value. The estimated fair values are based on valuation techniques that we believe market participants would use, although the valuation process requires significant judgment and often involves the use of significant estimates and assumptions. The methodologies we utilize in estimating fair value include market capitalization, price-to-book multiples of comparable exchange traded companies, multiples of mergers and acquisitions of similar businesses and/or projected cash flows. In addition, as the fair values determined under a market approach represent a noncontrolling interest, we applied a control premium to arrive at the estimated fair value of our reporting units on a controlling basis. An independent valuation specialist was engaged to assist with the valuation process for Jefferies as of August 1, 2015, as well as for National Beef as of December 31, 2015. The results of our annual impairment test related to Jefferies, National Beef and other operations indicated goodwill was not impaired when tested. Intangible Assets Impairment Testing We performed our annual impairment testing of Jefferies intangible assets with an indefinite useful life, which consists of exchange and clearing organization membership interests and registrations, as of August 1, 2015. We elected to perform a quantitative assessment of membership interests and registrations that have available quoted sales prices, as well as all other membership interests and registrations related to the Bache business. A qualitative assessment was performed on the remainder of Jefferies indefinite-life intangible assets. In applying the quantitative assessment, we recognized an impairment loss of $1.3 million on certain exchange memberships based on a decline in fair value at August 1, 2015. With regard to the qualitative assessment of the remaining indefinite-life intangible assets, based on our assessment of market conditions, the utilization of the assets and replacement costs associated with the assets, we have concluded that it is not more likely than not that the intangible assets are impaired. As a result of Jefferies management’s decisions during the fourth quarter of 2014 to pursue strategic alternatives for Jefferies Futures business and to liquidate Jefferies International Asset Management business, Jefferies performed additional impairment testing of indefinite- and finite-life intangible assets that are associated with those reporting units. Estimating the fair value of customer relationship intangible assets using a discounted cash flow methodology, Jefferies recognized impairment losses at November 30, 2014 of $7.5 million and $0.1 million in the Futures business and the International Asset Management business, respectively, which are recognized in Selling, general and other expenses in the Consolidated Statements of Operations. |
Inventory |
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Inventory, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory | Inventory A summary of inventory at December 31, 2015 and 2014 which is classified as Other assets is as follows (in thousands):
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Property, Equipment And Leasehold Improvements, Net |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Equipment and Leasehold Improvements, Net | Property, Equipment and Leasehold Improvements, Net A summary of property, equipment and leasehold improvements, net at December 31, 2015 and 2014 is as follows (in thousands):
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Short-Term Borrowings |
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Debt Disclosure [Abstract] | |
Short-Term Borrowings | Short-Term Borrowings Short-term borrowings represent Jefferies bank loans that are payable on demand and generally bear interest at a spread over the federal funds rate, as well as borrowings under revolving credit facilities. Unsecured bank loans are typically overnight loans used to finance trading assets or clearing related balances, but are not part of Jefferies systemic funding model. At December 31, 2015 and 2014, $310.7 million and $12.0 million, respectively, was outstanding, all of which was secured financing. At December 31, 2015, the interest rate on short-term borrowings outstanding was 0.85% per annum. In October 2015, Jefferies entered into a secured revolving loan facility (“Loan Facility”) with Pacific Western Bank. Pacific Western Bank agrees to make available a revolving loan facility in a maximum principal amount of $50.0 million in U.S. dollars to purchase eligible receivables that meet certain requirements as defined in the Loan Facility agreement. Interest is based on an annual rate equal to the lesser of the LIBOR rate plus 3.75% or the maximum rate as defined in the Loan Facility agreement. In April 2015, Jefferies entered into a committed revolving credit facility (“Intraday Credit Facility”) with the Bank of New York Mellon under which, the Bank of New York Mellon has agreed to make revolving intraday credit advances for an aggregate committed amount of $500.0 million in U.S. dollars. The term of the Intraday Credit Facility was six months after the closing date, but could be extended for an additional six months upon Jefferies request and at the lender's discretion. On October 22, 2015, Jefferies amended and restated the Intraday Credit Facility and reduced the aggregate committed amount to $300.0 million in U.S. dollars and extended the termination date to October 21, 2016, which can be extended for 364 days upon Jefferies request and at the lender's discretion. The Intraday Credit Facility contains a financial covenant, which includes a minimum regulatory net capital requirement. Interest is based on the higher of the Federal funds effective rate plus 0.5% or the prime rate. At December 31, 2015, Jefferies was in compliance with debt covenants under the Intraday Credit Facility. |
Long-Term Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Long-Term Debt The principal amount (net of unamortized discounts and premiums), stated interest rate and maturity date of outstanding debt at December 31, 2015 and 2014 are as follows (dollars in thousands):
At December 31, 2015, $1.6 billion of consolidated assets (primarily receivables, property and equipment and other assets) are pledged for indebtedness aggregating $777.1 million, principally for National Beef, Foursight and 54 Madison subsidiary debt. The aggregate annual mandatory redemptions of all long-term debt during the five year period ending December 31, 2020 are as follows: 2016 - $485.1 million; 2017 - $468.4 million; 2018 - $1,282.4 million; 2019 - $809.1 million; and 2020 - $548.1 million. Parent Company Debt: From time to time we have purchased our outstanding debt securities depending upon prevailing market conditions, our liquidity requirements and other factors; such purchases may be commenced or suspended at any time without notice. No such purchases were made during 2015, 2014 and 2013. Our senior note indentures contain covenants that restrict our ability to incur more Indebtedness or issue Preferred Stock of Subsidiaries unless, at the time of such incurrence or issuance, the Company meets a specified ratio of Consolidated Debt to Consolidated Tangible Net Worth, limit the ability of the Company and Material Subsidiaries to incur, in certain circumstances, Liens, limit the ability of Material Subsidiaries to incur Funded Debt in certain circumstances, and contain other terms and restrictions all as defined in the senior note indentures. We have the ability to incur substantial additional indebtedness or make distributions to our shareholders and still remain in compliance with these restrictions. If we are unable to meet the specified ratio, we would not be able to issue additional Indebtedness or Preferred Stock, but our inability to meet the applicable ratio would not result in a default under our senior note indentures. The senior note indentures do not restrict the payment of dividends. Subsidiary Debt: Jefferies 3.875% Convertible Senior Debentures due 2029 are convertible into our common shares; each $1,000 are convertible into 22.4574 common shares (equivalent to a conversion price of approximately $44.53). The debentures are convertible at the holders’ option any time beginning on August 1, 2029 and convertible at any time if: 1) our common stock price is greater than or equal to 130% of the conversion price for at least 20 trading days in a period of 30 consecutive trading days; 2) if the trading price per debenture is less than 95% of the price of our common stock times the conversion ratio for any 10 consecutive trading days; 3) if the debentures are called for redemption; or 4) upon the occurrence of specific corporate actions. The debentures may be redeemed for par, plus accrued interest, on or after November 1, 2012 if the price of our common stock is greater than 130% of the conversion price for at least 20 days in a period of 30 consecutive trading days and we may redeem the debentures for par, plus accrued interest, at our election any time on or after November 1, 2017. Holders may require us to repurchase the debentures for par, plus accrued interest, on November 1, 2017, 2019 and 2024. In addition to ordinary interest, commencing November 1, 2017, contingent interest will accrue at 0.375% if the average trading price of a debenture for 5 trading days ending on and including the third trading day immediately preceding a six-month interest period equals or exceeds $1,200 per $1,000 debenture. At December 31, 2014, Jefferies had a committed senior secured revolving credit facility ("Jefferies Credit Facility") with a group of commercial banks in U.S. dollars, Euros and Sterling, in an aggregate committed amount of $750.0 million with availability subject to one or more borrowing bases. The Jefferies Credit Facility contained certain financial covenants, including, but not limited to, restrictions on future indebtedness of Jefferies subsidiaries, minimum tangible net worth and liquidity requirements amounts and minimum capital requirements. Interest was based on, in the case of U.S. dollar borrowings, the Federal funds rate or the London Interbank Offered Rate or, in the case of non-U.S. dollar borrowings, was based on the London Interbank Offered Rate. The obligations of each borrower under the Credit Facility were secured by substantially all the assets of such borrower, but none of the borrowers was responsible for any obligations of any other borrower. Jefferies terminated the Credit Facility on July 31, 2015, due to the exiting of the Bache business. For further information with respect to Jefferies use of the Credit Facility, see Note 32. At December 31, 2015, National Beef’s credit facility consisted of a $375.0 million term loan and a revolving credit facility of $375.0 million, which matures in October 2018. The term loan and the revolving credit facility bear interest at the Base Rate or the LIBOR Rate (as defined in the credit facility), plus a margin ranging from .75% to 2.75% depending upon certain financial ratios and the rate selected. At December 31, 2015, the interest rate on the outstanding term loan was 3.0% and the interest rate on the outstanding revolving credit facility was 3.0%. The credit facility contains a minimum tangible net worth covenant; at December 31, 2015, National Beef met this covenant. The credit facility is secured by a first priority lien on substantially all of the assets of National Beef and its subsidiaries. Borrowings under the revolving credit facility are available for National Beef’s working capital requirements, capital expenditures and other general corporate purposes. Unused capacity under the facility can also be used to issue letters of credit; letters of credit aggregating $19.8 million were outstanding at December 31, 2015. Amounts available under the revolver are subject to a borrowing base calculation primarily comprised of receivable and inventory balances. At December 31, 2015, after deducting outstanding amounts and issued letters of credit, $109.9 million of the unused revolver was available to National Beef. At December 31, 2015, 54 Madison had $115.7 million of 6% term loan debt that matures in 2017 and 2018. As discussed further in Note 29, the holders of the debt are also investors in 54 Madison. At December 31, 2015, Foursight’s credit facilities consisted of two warehouse credit commitments aggregating $175.0 million, which mature in March 2016 and December 2018. The 2016 credit facility bears interest based on the three-month LIBOR plus a margin of 1.75% and the 2018 credit facility bears interest based on the one-month LIBOR plus a margin of 2.15%. As a condition of the 2016 credit facility, Foursight is obligated to maintain interest rate caps with a notional amount no less than the outstanding loan on any day. The credit facilities are secured by first priority liens on auto loan receivables owed to Foursight of approximately $143.0 million at December 31, 2015. |
Mezzanine Equity |
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Temporary Equity Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mezzanine Equity | Mezzanine Equity Redeemable Noncontrolling Interests Redeemable noncontrolling interests primarily relate to National Beef and are held by its minority owners, principally USPB, NBPCo Holdings and the chief executive officer of National Beef. The holders of these interests share in the profits and losses of National Beef on a pro rata basis with us. However, the minority owners have the right to require us to purchase their interests under certain specified circumstances at fair value (put rights), and we also have the right to purchase their interests under certain specified circumstances at fair value (call rights). Each of the holders of the put rights has the right to make an election that requires us to purchase up to one-third of their interests on December 30, 2016, one-third on December 30, 2018, and the remainder on December 30, 2021. In addition, USPB may elect to exercise their put rights following the termination of the cattle supply agreement, and the chief executive officer following the termination of his employment. Our call rights with respect to USPB may be exercised following the termination of the cattle supply agreement or after USPB’s ownership interest is less than 20% of their interest held at the time we acquired National Beef. Our call rights with respect to other members may be exercised after the ten year anniversary of our acquisition of National Beef if such member’s ownership interest is less than 50% of the interest held at the time we acquired National Beef. Additionally, we may acquire the chief executive officer’s interest following the termination of his employment. Redeemable noncontrolling interests in National Beef are reflected in the Consolidated Statements of Financial Condition at fair value. The following table reconciles National Beef’s redeemable noncontrolling interests activity during the years ended December 31, 2015 and 2014 (in thousands):
At acquisition, we prepared a projection of future cash flows of National Beef, which was used along with other information to allocate the purchase price to National Beef’s individual assets and liabilities. At December 31, 2015, we calculated the fair value of the redeemable noncontrolling interests by updating our estimate of future cash flows, as well as considering other market comparable information deemed appropriate. The projected future cash flows consider estimated revenue growth, cost of sales changes, capital expenditures and other unobservable inputs. However, the most significant unobservable inputs affecting the estimate of fair value are the discount rate (12.50%) and the terminal growth rate (2.00%) used to calculate the capitalization rate of the terminal value. The table below is a sensitivity analysis which shows the fair value of the redeemable noncontrolling interests using the assumed discount and the terminal growth rates and fair values under different rate assumptions as of December 31, 2015 (dollars in millions):
The projection of future cash flows is updated with input from National Beef personnel. The estimate is reviewed by personnel at our corporate office as part of the normal process for the preparation of our quarterly and annual financial statements. At December 31, 2015 and 2014, redeemable noncontrolling interests also include the noncontrolling interest in a business acquired by Conwed of $2.3 million and $2.4 million, respectively. Mandatorily Redeemable Convertible Preferred Shares As mentioned above, in connection with the Jefferies acquisition we issued a new series of 3.25% Cumulative Convertible Preferred Shares (“Preferred Shares”) ($125.0 million at mandatory redemption value) in exchange for Jefferies outstanding 3.25% Series A-1 Cumulative Convertible Preferred Stock. The Preferred Shares have a 3.25% annual, cumulative cash dividend and are currently convertible into 4,162,200 common shares, an effective conversion price of $30.03 per share. The Preferred Shares are callable beginning in 2023 at a price of $1,000 per share plus accrued interest and are mandatorily redeemable in 2038. |
Common Shares And Compensation Plans |
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Share-based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Shares And Compensation Plans | Common Shares and Compensation Plans The Board of Directors from time to time has authorized the repurchase of our common shares. At December 31, 2015, we are authorized to repurchase 20,000,000 common shares. Prior to the acquisition of Jefferies, we had two share-based compensation plans: a fixed stock option plan and a senior executive warrant plan. The fixed stock option plan provided for the issuance of stock options and stock appreciation rights to non-employee directors and certain employees at not less than the fair market value of the underlying stock at the date of grant. Options granted to employees under this plan were intended to qualify as incentive stock options to the extent permitted under the Internal Revenue Code and became exercisable in five equal annual installments starting one year from date of grant. Options granted to non-employee directors became exercisable in four equal annual installments starting one year from date of grant. No stock appreciation rights have been granted. In March 2014, we terminated authorization to issue options and rights under our option plan. No shares remain available for future issuances under our option plan or warrant plan. At December 31, 2015 and 2014, 4,661,272 and 5,640,034, respectively, of our common shares were reserved for stock options and warrants. Compensation and benefits expense included $74.1 million, $109.8 million and $87.2 million for the years ended December 31, 2015, 2014 and 2013, respectively, for share-based compensation expense relating to grants made under our share-based compensation plans. Total compensation cost includes the amortization of sign-on, retention and senior executive awards, less forfeitures and clawbacks. The total tax benefit recognized in results of operations related to share-based compensation expenses was $27.3 million, $39.9 million and $33.2 million for the years ended December 31, 2015, 2014 and 2013, respectively. As of December 31, 2015, total unrecognized compensation cost related to nonvested share-based compensation plans was $41.8 million; this cost is expected to be recognized over a weighted-average period of 1.9 years. The net tax benefit (detriment) related to share-based compensation plans recognized in additional paid-in capital was $(5.9) million, $1.3 million and $2.9 million during the years ended December 31, 2015, 2014 and 2013, respectively. Cash flows resulting from tax deductions in excess of the grant date fair value of share-based awards are included in cash flows from financing activities; accordingly, we reflected the excess tax benefit related to share-based compensation in cash flows from financing activities. Such amounts for the years ended December 31, 2015, 2014 and 2013 were not significant. At December 31, 2015, there were 2,004,000 shares of restricted stock outstanding with future service required, 3,388,000 RSUs outstanding with future service required, 8,583,000 RSUs outstanding with no future service required and 927,000 shares issuable under other plans. Excluding shares issuable pursuant to outstanding stock options and warrants, the maximum potential increase to common shares outstanding resulting from these outstanding awards is 12,898,000. Senior Executive Warrant Plan. On March 7, 2011, the Compensation Committee of our Board of Directors granted warrants to purchase 2,000,000 common shares to each of our then Chairman and then President at an exercise price of $33.33 per share (105% of the closing price per share of a common share on the grant date), subject to shareholder approval. In May 2011, the required shareholder approval was received and the warrants were issued. The warrants expire in 2016 and vest in five equal tranches with 20% vesting on the date shareholder approval was received and an additional 20% vesting in each subsequent year. Compensation cost was determined as of the approval date and is recognized in the financial statements over the vesting period of the warrants. We have recorded share-based compensation expense related to this grant of warrants of $1.0 million, $5.3 million and $4.9 million for the years ended December 31, 2015, 2014 and 2013, respectively. Fixed Stock Option Plan. A summary of activity with respect to our stock options for the three years ended December 31, 2015 is as follows:
The following summary presents the weighted-average assumptions used for grants made during 2013. There were no grants during 2014 or 2015.
The expected life assumptions were based on historical behavior and incorporated post-vesting forfeitures for each type of award and population identified. The expected volatility was based on the historical behavior of our stock price. Incentive Plan. The Incentive Plan allows awards in the form of incentive stock options (within the meaning of Section 422 of the Internal Revenue Code), nonqualified stock options, stock appreciation rights, restricted stock, unrestricted stock, performance awards, RSUs, dividend equivalents or other share-based awards. RSUs give a participant the right to receive fully vested shares at the end of a specified deferral period allowing a participant to hold an interest tied to common stock on a tax deferred basis. Prior to settlement, RSUs carry no voting or dividend rights associated with the stock ownership, but dividend equivalents are accrued to the extent there are dividends declared on the underlying common shares as cash amounts or as deemed reinvestments in additional RSUs. Restricted stock and RSUs may be granted to new employees as "sign-on" awards, to existing employees as "retention" awards and to certain executive officers as awards for multiple years. Sign-on and retention awards are generally subject to annual ratable vesting over a four year service period and are amortized as compensation expense on a straight line basis over the related four years. Jefferies has granted restricted stock and RSUs to certain senior executives with both performance and service conditions. The awards granted to senior executives are amortized over the service period if we have determined it is probable that the performance condition will be achieved. The Deferred Compensation Plan (the “DCP”) has been implemented under the Incentive Plan. The DCP permits eligible executive officers and other employees to defer cash compensation, some or all of which may be deemed invested in stock units. A portion of the deferrals may also be directed to notional investments in a money market fund or certain of the employee investment opportunities. Stock units generally have been acquired at a discounted price, which encourages employee participation in the DCP and enhances long-term retention of equity interests by participants and aligns executive interests with those of shareholders. Amounts recognized as compensation cost have not been significant. The shares to be delivered in connection with DCP stock units and options are drawn from the Incentive Plan. The Incentive Plan’s “evergreen” share reservation was terminated on March 21, 2014; the number of equity awards available under the Incentive Plan was set at 20,000,000. At December 31, 2015, 18,165,279 common shares remained available for new grants under the Incentive Plan. Shares issued pursuant to the DCP reduce the shares available under the Incentive Plan. The following table details the activity in restricted stock during the years ended December 31, 2015, 2014 and 2013 (in thousands, except per share amounts):
The following table details the activity in restricted stock units during the years ended December 31, 2015, 2014 and 2013 (in thousands, except per share amounts):
At December 31, 2015 and 2014, respectively, grants include approximately 106,000 and 88,000 dividend equivalents declared on RSUs; the weighted average grant date fair values of the dividend equivalents were approximately $18.13 and $20.41, respectively. Directors’ Plan. Under our Directors’ Plan, we will issue each nonemployee director of Leucadia $120,000 of restricted stock or restricted stock units. These grants will be made on the date directors are elected or reelected at our annual shareholders’ meeting. These shares vest over three years from the date of grant and are expensed over the requisite service period. At December 31, 2015, 289,044 common shares were issuable upon settlement of outstanding restricted stock units and 398,550 shares are available for future grants. Other Stock-Based Plans. Historically, Jefferies also sponsored an Employee Stock Purchase Plan and an Employee Stock Ownership Plan, both of which were assumed by us in connection with the Jefferies acquisition. Amounts related to these plans have not been significant. Restricted Cash Awards. Jefferies provides compensation to new and existing employees in the form of loans and/or other cash awards which are subject to ratable vesting terms with service requirements. These awards are amortized to compensation expense over the relevant service period. At December 31, 2015, the remaining unamortized amount of these awards was $258.3 million and is included within Other assets in the Consolidated Statements of Financial Condition. |
Accumulated Other Comprehensive Income |
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Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income Activity in accumulated other comprehensive income is reflected in the Consolidated Statements of Comprehensive Income (Loss) and Consolidated Statements of Changes in Equity but not in the Consolidated Statements of Operations. A summary of accumulated other comprehensive income, net of taxes at December 31, 2015, 2014 and 2013 is as follows (in thousands):
For the years ended December 31, 2015 and 2014, significant amounts reclassified out of accumulated other comprehensive income to net income (loss) are as follows (in thousands):
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Pension Plans And Postretirement Benefits |
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Pension and Other Postretirement Benefit Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension Plans And Postretirement Benefits | Pension Plans and Postretirement Benefits U.S. Pension Plans Pursuant to the agreement to sell one of our former subsidiaries, WilTel Communications Group, Inc., the responsibility for WilTel’s defined benefit pension plan was retained by us. All benefits under this plan were frozen as of the date of sale. Prior to the acquisition of Jefferies, Jefferies sponsored a defined benefit pension plan covering certain employees; benefits under that plan were frozen as of December 31, 2005. Late in 2015, we launched a limited time voluntary lump sum offer to approximately 4,000 of the deferred vested participants of the WilTel plan. Approximately 2,400 participants accepted the lump sum offer and benefit payments totaling $110.7 million were paid out of plan assets. We also recorded a $40.7 million settlement charge in 2015 related to the participant acceptances. A summary of activity with respect to both plans is as follows (in thousands):
As of December 31, 2015 and 2014, $54.0 million and $126.2 million, respectively, of the net amount recognized in the consolidated balance sheet was reflected as a charge to accumulated other comprehensive income (loss) (substantially all of which were cumulative losses) and $89.3 million and $112.1 million, respectively, was reflected as accrued pension cost. The following table summarizes the components of net periodic pension cost and other amounts recognized in other comprehensive income (loss) excluding taxes (in thousands):
The amounts in accumulated other comprehensive income (loss) at the end of each year have not yet been recognized as components of net periodic pension cost in the Consolidated Statements of Operations. The estimated net loss that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in 2016 is $2.0 million. $20.0 million of employer contributions are expected to be paid in 2016. We use a December 31 measurement date for the WilTel plan and a November 30 date for the Jefferies plan. The assumptions used are as follows:
The following pension benefit payments are expected to be paid (in thousands):
U.S. Plan Assets The information below on the plan assets for the WilTel plan and the Jefferies plan is presented separately for the plans as the investments are managed independently. Cash equivalents are valued at cost, which approximates fair value and are categorized in Level 1 of the fair value hierarchy. The estimated fair values for securities measured using Level 1 inputs are determined using publicly quoted market prices in active markets for identical assets. Certain fixed income securities are measured using Level 2 inputs. Although these securities trade in brokered markets, the market for certain securities is sometimes inactive. Valuation inputs include benchmark yields, reported trades, broker dealer quotes, issuer spreads, two sided markets, benchmark securities, bids, offers, reference data, and industry and economic events. Neither plan had any assets classified within Level 3 of the fair value hierarchy. WilTel Plan Assets. At December 31, 2015 and 2014, the WilTel plan assets at fair value consisted of the following (in thousands):
The current investment objectives are designed to minimize investment losses due to rising interest rates while providing a stable and predictable stream of investment income. To further mitigate investment losses, we have placed certain investment restrictions and limitations over plan assets. The restrictions and limitations include the following:
The FI portfolio is managed to maximize the value of plan assets by minimizing exposure to changes in market interest rates while the IG and HY portfolios are managed to enhance investment income with a focus on minimizing credit losses and changes in market interest rates. This investment strategy provides us with more flexibility in managing the plan should interest rates rise and result in a decrease in the discounted value of benefit obligations. To develop the assumption for the expected long-term rate of return on plan assets, we considered the following underlying assumptions: 2.25% current expected inflation, 1.5% to 2.5% real rate of return for short duration risk-free investments, 0.2% inflation risk premium and 0.75% default risk premium for the portion of the portfolio invested in corporate bonds. We then weighted these assumptions based on invested assets and assumed that investment expenses were offset by expected returns in excess of benchmarks, which resulted in the selection of the 4.0% expected long-term rate of return assumption for 2015. Jefferies Plan Assets. At December 31, 2015 and 2014, the Jefferies plan assets at fair value consisted of the following (in thousands):
Assets in the plan are invested under guidelines adopted by the plan’s administrative committee. Because the plan exists to provide a vehicle for funding future benefit obligations, the investment objectives of the portfolio take into account the nature and timing of future plan liabilities. The policy recognizes that the portfolio’s long-term investment performance and its ability to meet the plan’s overall objectives are dependent on the strategic asset allocation which includes adequate diversification among assets classes. The target allocation of plan assets for 2016 is approximately 50% equities and 50% fixed income securities. The target asset allocation was determined based on the risk tolerance characteristics of the plan and, at times, may be adjusted to achieve the plan’s investment objective and to minimize any concentration of investment risk. The plan’s administrative committee evaluates the asset allocation strategy and adjusts the allocation if warranted based upon market conditions and the impact of the investment strategy on future contribution requirements. The expected long-term rate of return assumption is based on an analysis of historical experience of the portfolio and the summation of prospective returns for each asset class in proportion to the fund’s current asset allocation. The equity portfolio may invest up to 5% of the market value of the portfolio in any one company and may invest up to 10% of the market value of the portfolio in any one sector or up to two times the percentage weighting of any one sector as defined by the S&P 500 or the Russell 1000 Value indices, whichever is higher. Permissible investments specified under the equity portfolio of the plan include equity securities of U.S. and non-U.S. incorporated entities and private placement securities issued pursuant to Rule 144A. At least 75% of the market value of the fixed income portfolio must be invested in investment grade securities rated BBB-/Baa3, including cash and cash equivalents. Permissible investments specified under the fixed income portfolio of the plan include: public or private debt obligations issued or guaranteed by U.S. or foreign issuers; preferred, hybrid, mortgage- or asset-backed securities; senior loans; and derivatives and foreign currency exchange contracts. German Pension Plan In connection with the acquisition of Jefferies Bache from Prudential in 2011, Jefferies acquired a defined benefits pension plan located in Germany for the benefit of eligible employees of Jefferies Bache in that territory. The German pension plan has no plan assets and is therefore unfunded; however, Jefferies has purchased insurance contracts from multi-national insurers held in the name of Jefferies Bache Limited to provide for the plan’s future obligations. The investments in these insurance contracts are included in Financial Instruments owned - Trading assets in the Consolidated Statements of Financial Condition in the amounts of $15.3 million and $18.1 million at December 31, 2015 and 2014, respectively. Jefferies expects to pay the pension liability from the cash flows available to it under the insurance contracts. All costs relating to the plan (including insurance premiums and other costs as computed by the insurers) are paid by Jefferies. In connection with the acquisition, Prudential agreed that any insurance premiums and funding obligations related to pre-acquisition date service will be reimbursed to Jefferies by Prudential. The provisions and assumptions used in the German pension plan are based on local conditions in Germany. Jefferies did not contribute to the plan during the year ended December 31, 2015. The following tables summarize the changes in the projected benefit obligation and the components of net periodic pension cost for the years ended December 31, 2015 and 2014 and for the period from the acquisition of Jefferies to December 31, 2013 (in thousands):
The amounts in accumulated other comprehensive income at December 31, 2015 and 2014 are charges of $4.9 million and $5.3 million, respectively. The following are assumptions used to determine the actuarial present value of the projected benefit obligation and net periodic pension benefit cost for the years ended December 31, 2015 and 2014:
(1) There were no active participants in the plan at December 31, 2015. The following pension benefit payments are expected to be paid (in thousands):
Other We have defined contribution pension plans covering certain employees. Contributions and costs are a percent of each covered employee’s salary. Amounts charged to expense related to such plans were $9.6 million, $9.3 million and $6.3 million for the years ended December 31, 2015, 2014 and 2013. We provide certain health care and other benefits to certain retired employees under plans which are currently unfunded. We pay the cost of postretirement benefits as they are incurred. Accumulated postretirement benefit obligations and amounts recognized in the consolidated statements of operations and in accumulated other comprehensive income (loss) were not significant. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The principal components of deferred taxes at December 31, 2015 and 2014 are as follows (in thousands):
As of December 31, 2015, we have consolidated U.S. federal NOLs of $1.6 billion that may be used to offset the taxable income of any member of our consolidated tax group. In addition, we have $2.1 billion of U.S. federal NOLs that are only available to offset the taxable income of certain subsidiaries. Federal NOLs begin to expire in 2017, with a substantial amount expiring between 2022 and 2025. Approximately $575.3 million of our NOLs can be used to fully offset federal minimum taxable income, and no federal regular or minimum income tax would be payable on such income. We have various state NOLs that expire at different times, which are reflected in the above table to the extent our estimate of future taxable income will be apportioned to those states. We have gross foreign net operating loss carryforwards of approximately $74.4 million. There is a valuation allowance with respect to $7.2 million of these foreign net operating loss carryforwards. Uncertainties that may affect the utilization of our tax attributes include future operating results, tax law changes, rulings by taxing authorities regarding whether certain transactions are taxable or deductible and expiration of carryforward periods. Under certain circumstances, the ability to use the NOLs and future deductions could be substantially reduced if certain changes in ownership were to occur. In order to reduce this possibility, our certificate of incorporation includes a charter restriction that prohibits transfers of our common stock under certain circumstances. At December 31, 2015, we had approximately $205.0 million of earnings attributable to foreign subsidiaries for which no U.S. federal income tax provision has been recorded because, except to the extent such earnings can be repatriated tax efficiently, these earnings are permanently invested abroad. Accordingly, a deferred tax liability of approximately $59.0 million has not been recorded with respect to these earnings. The provision for income taxes for continuing operations for each of the three years in the period ended December 31, 2015 was as follows (in thousands):
For the year ended December 31, 2015, we recorded a benefit related to certain state and local net operating loss carryforwards which we now believe are more likely than not to be realized in the future, a significant portion of which results from recently enacted state and local tax law changes. For the year ended December 31, 2014, we decreased our valuation allowance with respect to certain NOLs which we now believe are more likely than not to be utilized before they expire. For the year ended December 31, 2013, we increased our valuation allowance to reserve for a portion of our net deferred tax asset for state income taxes, resulting from the change in our expected state tax filings as a result of the Jefferies acquisition. In addition, the valuation allowance increased by $11.1 million for 2013 as a result of the valuation allowance required for Jefferies net deferred tax assets at the date of acquisition. The table below reconciles the expected statutory federal income tax to the actual income tax provision (benefit) (in thousands):
As discussed above, we elected the fair value option for our investment in Jefferies for periods prior to the Jefferies acquisition in March 2013. As of December 31, 2012, we had recorded a deferred tax liability related to our investment in Jefferies; as reflected in the table above, the income tax provision includes the reversal of that deferred tax liability for the year ended December 31, 2013. Since there was no net income tax provision recorded for income related to the fair value option for Jefferies for the year ended December 31, 2013, our effective tax rate was lower as a result of the acquisition, and the impact on the tax provision is reflected in the table above. The following table reconciles the total amount of unrecognized tax benefits as of the beginning and end of the periods presented (in thousands):
The statute of limitations with respect to our federal income tax returns has expired for all years through 2011. Our New York State and New York City income tax returns are currently being audited for the 2009 to 2011 period and 2009 to 2012 period, respectively. Prior to becoming a wholly-owned subsidiary, Jefferies filed a consolidated U.S. federal income tax return with its qualifying subsidiaries and was subject to income tax in various states, municipalities and foreign jurisdictions. Jefferies is currently under examination by the Internal Revenue Service and other major tax jurisdictions. The statute of limitations with respect to Jefferies federal income tax returns has expired for all years through 2006. We do not expect that resolution of these examinations will have a significant effect on our consolidated financial position, but could have a significant impact on the consolidated results of operations for the period in which resolution occurs. Over the next twelve months, we believe it is reasonably possible that various tax examinations will be concluded and statutes of limitation will expire which would have the effect of reducing the balance of unrecognized tax benefits by $4.3 million. If recognized, the total amount of unrecognized tax benefits reflected in the table above would lower our effective income tax rate. |
Net Realized Securities Gains (Losses) |
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Gain (Loss) on Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Realized Securities Gains (Losses) | Net Realized Securities Gains (Losses) The following summarizes net realized securities gains (losses) for each of the three years in the period ended December 31, 2015 (in thousands):
Net realized gains on securities during 2013 include a gain of $227.6 million related to our exchange of Inmet shares for First Quantum shares and cash as discussed above. Proceeds from sales of investments classified as available for sale were $1.9 billion, $1.9 billion and $1.8 billion during 2015, 2014 and 2013, respectively. Gross gains of $16.9 million, $12.6 million and $240.4 million were realized on these sales during 2015, 2014 and 2013, respectively; gross losses were $2.8 million during 2015 and not significant during 2014 and 2013. |
Other Results Of Operations Information |
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Nonoperating Income (Expense) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Results of Operations Information | Other Results of Operations Information Other income for each of the three years in the period ended December 31, 2015 consists of the following (in thousands):
Taxes, other than income or payroll, amounted to $21.9 million, $17.0 million and $17.0 million for the years ended December 31, 2015, 2014 and 2013, respectively. Advertising costs amounted to $18.1 million, $14.5 million and $14.6 million for the years ended December 31, 2015, 2014 and 2013, respectively. |
Earnings (Loss) Per Common Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (Loss) Per Common Share | Earnings (Loss) Per Common Share Basic and diluted earnings (loss) per share amounts were calculated by dividing net income (loss) by the weighted average number of common shares outstanding. The numerators and denominators used to calculate basic and diluted earnings (loss) per share are as follows for the years ended December 31, 2015, 2014 and 2013 (in thousands):
Options to purchase 1,000,137, 1,572,777 and 1,711,096 weighted-average shares of common stock were outstanding during the years ended December 31, 2015, 2014 and 2013, respectively, but were not included in the computation of diluted per share amounts as the effect was antidilutive. For each year in the table above, the denominator for diluted earnings (loss) per share does not include weighted-average common shares of 4,000,000 related to outstanding warrants to purchase common shares at $33.33 per share, as the effect was antidilutive. For the years ended December 31, 2015, 2014 and 2013, shares related to the 3.875% Convertible Senior Debentures were not included in the computation of diluted per share amounts as the conversion price exceeded the average market price. For the years ended December 31, 2015 and 2014, 4,162,200 shares related to the mandatorily redeemable convertible preferred shares were not included in the computation of diluted per share amounts as the effect was antidilutive. |
Commitments, Contingencies And Guarantees |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments, Contingencies And Guarantees | Commitments, Contingencies and Guarantees Commitments We and our subsidiaries rent office space and office equipment under noncancellable operating leases with terms varying principally from one to thirty years. Rental expense (net of sublease rental income) was $84.0 million, $79.6 million and $63.9 million for the years ended December 31, 2015, 2014 and 2013, respectively. Future minimum annual rentals (exclusive of month-to-month leases, real estate taxes, maintenance and certain other charges) under these leases at December 31, 2015 are as follows (in thousands):
Effective December 30, 2004, National Beef finalized an agreement with the City of Dodge City, Kansas, whereby in consideration of certain improvements made to the city water and wastewater systems, National Beef committed to make a series of service charge payments totaling $19.3 million over a 20 year period, of which $6.6 million remains as of December 31, 2015. Payments under the commitment will be approximately $0.8 million in each of the years 2016 through 2018, with the remaining balance of $4.1 million to be paid in subsequent years. National Beef makes verbal commitments to cattle producers to purchase cattle approximately one week in advance of delivery of those cattle to its plants. The actual value paid for these cattle is determined after the cattle are delivered, weighed and inspected at National Beef’s facilities. The total value of verbal commitments to purchase cattle as of December 31, 2015 was $68.5 million. The following table summarizes commitments associated with certain business activities (in millions):
Equity Commitments. Equity commitments include commitments to invest in Jefferies joint ventures, Jefferies Finance and Jefferies LoanCore, and commitments to invest in private equity funds and in Jefferies Capital Partners, LLC, the manager of the private equity funds, which are managed by a team led by Brian P. Friedman, our President and a Director. As of December 31, 2015, Jefferies outstanding commitments relating to Jefferies Capital Partners, LLC and its private equity funds was $23.6 million. See Note 11 for additional information regarding Jefferies investments in Jefferies Finance and Jefferies LoanCore. In August 2014, we and Solomon Kumin established Folger Hill Asset Management LLC (“Folger Hill”); we committed to provide Folger Hill with a three-year, $20 million revolving credit facility to fund its start-up and initial operating expenses. As of December 31, 2015, $7.4 million has been provided to Folger Hill under the revolving credit facility. During 2015, we expanded our asset management business to include 54 Madison Capital, LLC. We made a capital commitment of $225.0 million to this new fund, which will target real estate projects. In 2015, we invested $38.4 million in 54 Madison Capital, LLC. Additionally, as of December 31, 2015, Jefferies had other equity commitments to invest up to $4.4 million in various other investments. Loan Commitments. From time to time Jefferies makes commitments to extend credit to investment banking and other clients in loan syndication, acquisition finance and securities transactions and to SPE sponsors in connection with the funding of CLO and other asset-backed transactions. These commitments and any related drawdowns of these facilities typically have fixed maturity dates and are contingent on certain representations, warranties and contractual conditions applicable to the borrower. As of December 31, 2015, Jefferies has $268.7 million of outstanding loan commitments to clients. Loan commitments outstanding as of December 31, 2015, also include Jefferies portion of the outstanding secured revolving credit facility provided to Jefferies Finance, to support loan underwritings by Jefferies Finance. Mortgage-Related and Other Purchase Commitments. Jefferies enters into forward contracts to purchase mortgage participation certificates, mortgage-backed securities and consumer loans. The mortgage participation certificates evidence interests in mortgage loans insured by the Federal Housing Administration and the mortgage-backed securities are insured or guaranteed by the FNMA (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) or the GNMA (Ginnie Mae). Jefferies frequently securitizes the mortgage participation certificates and mortgage-backed securities. The fair value of mortgage-related and other purchase commitments recorded in the Consolidated Statement of Financial Condition at December 31, 2015 was $238.6 million. Forward Starting Reverse Repos and Repos. Jefferies enters into commitments to take possession of securities with agreements to resell on a forward starting basis and to sell securities with agreements to repurchase on a forward starting basis that are primarily secured by U.S. government and agency securities. Other Unfunded Commitments. Other unfunded commitments include obligations in the form of revolving notes to provide financing to asset-backed and CLO vehicles. Upon advancing funds, drawn amounts are collateralized by the assets of an entity. Contingencies Sykes v. Mel Harris & Associates, LLC. -- We and certain of our subsidiaries and officers are named as defendants in a consumer class action captioned Sykes v. Mel Harris & Associates, LLC, et al., 9 Civ. 8486 (DC), in the United States District Court for the Southern District of New York. The named defendants also include the Mel Harris law firm, certain individuals and members associated with the law firm, and a process server, Samserv, Inc. and certain of its employees. The complaint alleges that default judgments obtained by the law firm against approximately 124,000 individuals in New York courts with respect to consumer debt purchased by our subsidiaries violated the Fair Debt Collection Practices Act, the Racketeer Influenced and Corrupt Organizations Act, the New York General Business Law and the New York Judiciary Law (alleged only as to the law firm). The complaint seeks injunctive relief, declaratory relief and damages on behalf of the named plaintiffs and others similarly situated. We asserted that we were an investor with respect to the subject purchased consumer debt and were regularly informed of the amounts received from debt collections, but otherwise had no involvement in any alleged illegal debt collection activities. On December 29, 2010, the District Court denied defendants’ motions to dismiss in part (including as to the claims made against us and our subsidiaries) and granted them in part (including as to certain of the claims made against our officers). On March 28, 2013, the Court certified a Rule 23(b)(2) class and a Rule 23(b)(3) class. On February 10, 2015, the Second Circuit affirmed the certification of these classes. None of these decisions addresses the ultimate merits of the case. On March 18, 2015, we and plaintiffs executed a settlement agreement that provided additional detail regarding the terms of a settlement set out in a December 14, 2014 binding term sheet pursuant to which we have previously accrued approximately $50 million. On November 12, 2015, plaintiffs executed a settlement agreement with the other defendants in the case, and we and plaintiffs executed a first amendment to our settlement agreement to modify the agreement to reflect that settlement of all claims as to all parties had been reached. Both our settlement agreement and that of the other defendants were submitted to the Court on November 12, 2015. On November 16, 2015, the Court entered an order that, among other things, preliminarily approved the settlement agreements, authorized the parties to send notice to the settlement class members and set a fairness hearing for May 11, 2016. Haverhill Retirement System v. Asali, et al. -- On May 2, 2014, plaintiff Haverhill Retirement System (“Haverhill”) filed an amended putative class action and derivative lawsuit (the “Complaint”) entitled Haverhill Retirement System v. Asali, et al. in the Court of Chancery of the State of Delaware (the “Court of Chancery”) against Harbinger Capital Partners LLC, Harbinger Capital Partners Master Fund I, Ltd., Global Opportunities Breakaway Ltd., Harbinger Capital Partners Special Situations Fund, L.P. (collectively, the “Harbinger Funds”), the members of the board of directors of Harbinger Group, Inc. (“Harbinger”), nominal defendant Harbinger, as well as Leucadia. The Complaint alleges, among other things, that the directors of Harbinger breached their fiduciary duties in connection with Leucadia’s March 2014 purchase of preferred securities of subsidiaries of the Harbinger Funds that were exchangeable into Harbinger common stock owned by the Harbinger Funds, certain flaws in the process employed by the special committee of directors appointed by the Harbinger board in connection therewith, and that Leucadia aided and abetted the Harbinger board’s breaches of fiduciary, as well as a claim of unjust enrichment against Leucadia. On April 1, 2014, the Chancery Court denied Haverhill’s motion for expedited proceedings associated with the complaint originally filed by Haverhill on March 26, 2014. Haverhill filed an amended complaint on May 2, 2014. On July 2, 2014, the defendants moved to dismiss the amended complaint. On August 12, 2014, Plaintiffs filed another amended complaint. The amended complaint dropped Plaintiff’s unjust enrichment claim against Leucadia. With respect to remedies sought, the amended complaint no longer sought an injunction against installing Leucadia designees as Board members and no longer sought rescission of Leucadia’s right to select the director class to which one of its designees would be appointed. A term sheet reflecting a settlement among the parties, that did not provide for any payment by the Company, was signed on October 15, 2014. On December 19, 2014, final settlement papers were submitted to the Court. On June 8, 2015, a settlement hearing took place, at which the Court rejected the settlement. The parties then negotiated a stipulation under which the case will be dismissed. The court approved the stipulation and proposed dismissal on January 7, 2016. Following notice to Harbinger's stockholders of the proposed dismissal, Harbinger will notify the court that the notice has been provided and we expect that the case will be dismissed. We and our subsidiaries are parties to other legal and regulatory proceedings that are considered to be either ordinary, routine litigation incidental to their business or not significant to our consolidated financial position. We and our subsidiaries are also involved, from time to time, in other exams, investigations and similar reviews (both formal and informal) by governmental and self-regulatory agencies regarding our businesses, certain of which may result in judgments, settlements, fines, penalties or other injunctions. We do not believe that any of these actions will have a significant adverse effect on our consolidated financial position or liquidity, but any amounts paid could be significant to results of operations for the period. Guarantees Derivative Contracts. Jefferies dealer activities cause it to make markets and trade in a variety of derivative instruments. Certain derivative contracts that Jefferies has entered into meet the accounting definition of a guarantee under GAAP, including credit default swaps, written foreign currency options and written equity put options. On certain of these contracts, such as written interest rate caps and foreign currency options, the maximum payout cannot be quantified since the increase in interest or foreign exchange rates are not contractually limited by the terms of the contract. As such, we have disclosed notional values as a measure of Jefferies maximum potential payout under these contracts. The following table summarizes the notional amounts associated with our derivative contracts meeting the definition of a guarantee under GAAP (in millions):
The external credit ratings of the underlying or referenced assets for our credit related derivatives contracts (in millions):
The derivative contracts deemed to meet the definition of a guarantee under GAAP are before consideration of hedging transactions and only reflect a partial or "one-sided" component of any risk exposure. Written equity options and written credit default swaps are often executed in a strategy that is in tandem with long cash instruments (e.g., equity and debt securities). Jefferies substantially mitigates its exposure to market risk on these contracts through hedges, such as other derivative contracts and/or cash instruments and Jefferies manages the risk associated with these contracts in the context of its overall risk management framework. Jefferies believes notional amounts overstate its expected payout and that fair value of these contracts is a more relevant measure of its obligations. The fair value of derivative contracts meeting the definition of a guarantee is approximately $394.8 million. Berkadia. We have agreed to reimburse Berkshire Hathaway for up to one-half of any losses incurred under a $2.5 billion surety policy securing outstanding commercial paper issued by an affiliate of Berkadia. As of December 31, 2015, the aggregate amount of commercial paper outstanding was $2.47 billion. Loan Guarantee. Jefferies has provided a guarantee to Jefferies Finance that matures in January 2021, whereby Jefferies is required to make certain payments to a SPE sponsored by Jefferies Finance in the event that Jefferies Finance is unable to meet its obligations to the SPE and a guarantee of a credit agreement with an indefinite term for a fund owned by employees. At December 31, 2015, the maximum amount payable under these guarantees is $21.8 million. Other Guarantees. Jefferies is a member of various exchanges and clearing houses. In the normal course of business Jefferies 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. Jefferies obligations under such guarantees could exceed the collateral amounts posted. Jefferies maximum potential liability under these arrangements cannot be quantified; however, the potential for Jefferies to be required to make payments under such guarantees is deemed remote. Accordingly, no liability has been recognized for these arrangements. Indemnification. In connection with the 2013 sale of Empire Insurance Company, we agreed to indemnify the buyer for certain of Empire’s lease obligations that were assumed by another subsidiary of ours as part of the sale of Empire. Our subsidiary was subsequently sold in 2014 to HomeFed as part of the real estate transaction with HomeFed. Although HomeFed has agreed to indemnify us for these lease obligations, our indemnification obligation under the Empire transaction remains. The primary lease expires in 2018 and the aggregate amount of lease obligation as of December 31, 2015 was approximately $30.7 million. Substantially all of the space under the primary lease has been sublet to various third-party tenants for the full length of the lease term in amounts in excess of the obligations under the primary lease. Standby Letters of Credit. At December 31, 2015, Jefferies provided guarantees to certain counterparties in the form of standby letters of credit in the amount of $33.1 million, which expire within one year. Standby letters of credit commit Jefferies to make payment to the beneficiary if the guaranteed party fails to fulfill its obligation under a contractual arrangement with that beneficiary. Since commitments associated with these collateral instruments may expire unused, the amount shown does not necessarily reflect the actual future cash funding requirement. Other subsidiaries of ours have outstanding letters of credit aggregating $23.1 million at December 31, 2015. |
Net Capital Requirements |
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Net Capital Requirements | Net Capital Requirements Jefferies operates broker-dealers registered with the SEC and member firms of the Financial Industry Regulatory Authority ("FINRA"). Jefferies LLC and Jefferies Execution are subject to the Securities and Exchange Commission Uniform Net Capital Rule ("Rule 15c3-1"), which requires the maintenance of minimum net capital and have elected to calculate minimum capital requirements under the alternative method as permitted by Rule 15c3-1 in calculating net capital. Jefferies, as a dually registered U.S. broker-dealer and futures commission merchant ("FCM"), is also subject to Rule 1.17 of the Commodity Futures Trading Commission ("CFTC") which sets forth minimum financial requirements. The minimum net capital requirement in determining excess net capital for a dually-registered U.S. broker-dealer and FCM is equal to the greater of the requirement under Rule 15c3-1 or CFTC Rule 1.17. Jefferies LLC and Jefferies Execution’s net capital and excess net capital are as follows (in thousands):
FINRA is the designated self-regulatory organization (“DSRO”) for our U.S. broker-dealers and the Chicago Mercantile Exchange is the DSRO for Jefferies LLC as an FCM. Effective September 21, 2015, the National Futures Association is the DSRO for Jefferies as an FCM. Certain other U.S. and non-U.S. subsidiaries of Jefferies are subject to capital adequacy requirements as prescribed by the regulatory authorities in their respective jurisdictions, including Jefferies International Limited and Jefferies Bache Limited which are authorized and regulated by the Financial Conduct Authority in the United Kingdom. The regulatory capital requirements referred to above may restrict our ability to withdraw capital from our regulated subsidiaries. |
Other Fair Value Information |
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Other Fair Value Information | Other Fair Value Information The carrying amounts and estimated fair values of our principal financial instruments that are not recognized at fair value on a recurring basis are as follows (in thousands):
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Related Party Transactions |
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Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Jefferies Capital Partners and JEP IV Related Funds. Jefferies has loans to and/or equity investments in private equity funds and in Jefferies Capital Partners, LLC, the manager of the Jefferies Capital Partners funds, which are managed by a team led by Brian P. Friedman, our President and a Director ("Private Equity Related Funds"). Reflected in our Consolidated Statements of Financial Condition at December 31, 2015 and 2014 are loans to and/or equity investments in Private Equity Related Funds of $39.6 million and $60.7 million, respectively. Net losses aggregating $26.2 million and $14.9 million were recorded related to the Private Equity Related Funds for the years ended December 31, 2015 and 2014, respectively, and net gains aggregating $10.1 million were recorded related to the Private Equity Related Funds for the period from the acquisition of Jefferies through December 31, 2013. For further information regarding our commitments and funded amounts to Private Equity Related Funds, see Note 26. Berkadia Commercial Mortgage, LLC. At December 31, 2015 and 2014, Jefferies has commitments to purchase $752.4 million and $344.8 million, respectively, in agency commercial mortgage-backed securities from Berkadia. HRG Group, Inc. As part of Jefferies loan secondary trading activities, it has unsettled purchases and sales of loans pertaining to portfolio companies within funds managed by HRG of $261.6 million and $232.0 million at December 31, 2015 and 2014, respectively. Our Chairman also serves as HRG’s Chairman. Officers, Directors and Employees. We have $28.3 million and $20.1 million of loans outstanding to certain employees (none of whom are an executive officer or director of the Company) that are included in Other assets in the Consolidated Statements of Financial Condition at December 31, 2015 and 2014, respectively. Receivables from and payables to customers includes 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. During 2014, Jefferies sold private equity interests with a fair value of $4.0 million at their then fair value to a private equity fund owned by Jefferies employees and has also provided a guarantee of the fund’s credit agreement. At December 31, 2015 and 2014, Jefferies provided a guarantee of a credit agreement for a private equity fund owned by Jefferies employees. National Beef. National Beef participates in a cattle supply agreement with a minority owner and holder of a redeemable noncontrolling interest in National Beef. Under this agreement National Beef has agreed to purchase 735,385 head of cattle each year (subject to adjustment), from the members of the minority owner, with prices based on those published by the U.S. Department of Agriculture, subject to adjustments for cattle performance. National Beef obtained approximately 28% and 23% of its cattle requirements under this agreement during 2015 and 2014, respectively. National Beef also enters into transactions with an affiliate of another minority owner and holder of a redeemable noncontrolling interest in National Beef to buy and sell a limited number of beef products. During the year ended December 31, 2015, sales to this affiliate were $31.0 million and purchases were $15.1 million. During the year ended December 31, 2014, sales to this affiliate were $43.2 million and purchases were $12.7 million. At December 31, 2015 and 2014, amounts due from and payable to these related parties were not significant. HomeFed. As more fully described in Note 11, during 2014 we sold to HomeFed substantially all of our real estate properties and operations, our interest in BRP and cash of approximately $14.0 million, in exchange for 7,500,000 newly issued unregistered HomeFed common shares. As discussed in Note 11, as a result of a 1998 distribution to all of our shareholders, approximately 4.8% of HomeFed is beneficially owned by our Chairman at December 31, 2015. Our Chairman also serves as HomeFed’s Chairman and our President is a Director of HomeFed. 54 Madison. $115.7 million of long-term debt held by 54 Madison is owed to minority owners of 54 Madison. This long-term debt earns interest at 6% and matures in 2017 and 2018. See Note 11 for information on transactions with Jefferies Finance and Jefferies LoanCore. |
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Discontinued Operations And Assets Held For Sale | Discontinued Operations and Assets Held for Sale In September 2014, we decided not to proceed with further development of the Lake Charles clean energy project that would have used gasification technology to convert low-grade fossil fuels into clean-energy products. Our decision was based on final estimates of the likely ultimate cost of completion of the project. Project development costs to date have been expensed as incurred. As a result, we have classified the clean energy project as a discontinued operation. In July 2014, we sold Premier, through which we had conducted our gaming operations, for aggregate cash consideration of $250.0 million, subject to working capital adjustment. We recorded a pre-tax gain on sale of discontinued operations of $12.1 million in the third quarter of 2014. During the third quarter of 2013, we sold a small power production business and recorded a pre-tax gain on sale of discontinued operations of $6.4 million. In October 2013, we concluded that we would no longer continue to fund Sangart’s research and development operations, through which we had conducted our medical product development operations. We commenced and completed an orderly shut-down of Sangart’s operations during 2013; as a result, our medical product development operations have been classified as a discontinued operation. A summary of the results of discontinued operations for the clean energy project, Premier, Sangart, and the small power production business is as follows for the years ended December 31, 2014 and 2013; discontinued operations for the year ended December 31, 2015 were not significant (in thousands):
During 2013, we sold our subsidiary, Empire Insurance Company, which had been undergoing a voluntary liquidation, for cash consideration of $3.2 million, subject to certain post-closing working capital adjustments, and the sale resulted in the recognition of a tax benefit of $5.4 million. Gain on disposal of discontinued operations for 2013 reflects an after-tax gain of $8.6 million for this sale. Gain on disposal of discontinued operations for the year ended December 31, 2015, primarily relates to additional consideration received related to the 2012 sale of our small Caribbean-based telecommunications provider, and a reversal of a legal reserve. |
Segment Information |
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Segment Information | Segment Information Our operating segments consist of our consolidated businesses, which offer different products and services and are managed separately. Our reportable segments, based on qualitative and quantitative requirements, are Jefferies, National Beef, and Corporate and other. Jefferies is a global full-service, integrated securities and investment banking firm. National Beef processes and markets fresh boxed beef, case-ready beef, beef by-products and wet blue leather for domestic and international markets. Corporate and other assets primarily consist of financial instruments owned, the deferred tax asset (exclusive of Jefferies deferred tax asset), cash and cash equivalents and corporate and other revenues primarily consist of interest, other income and net realized securities gains and losses. We do not allocate Corporate and other revenues or overhead expenses to the operating units. All other consists of our other financial services businesses and investments and our other merchant banking businesses and investments. Our other financial services businesses and investments include the Leucadia asset management platform, specialty finance companies, the commercial mortgage banking investment, the investment in HomeFed and the investment in FXCM. Our other merchant banking businesses and investments primarily include manufacturing, oil and gas exploration and development, real estate, and our investments in HRG, fixed wireless broadband services, automobile dealerships, and our gold and silver mining project. Certain information concerning our segments for the years ended December 31, 2015, 2014 and 2013 is presented in the following table. Consolidated subsidiaries are reflected as of the date a majority controlling interest was acquired. As discussed above, Jefferies became our wholly-owned subsidiary on March 1, 2013 and is reflected in our consolidated financial statements utilizing a one month lag.
Net revenues for Jefferies are recorded in the geographic region in which the position was risk-managed, in the case of investment banking, in which the senior coverage banker is located, or for asset management, according to the location of the investment advisor. Net revenues by geographic region for Jefferies for the years ended December 31, 2015 and 2014 and for the period from the Jefferies acquisition through December 31, 2013 were as follows (in thousands):
Consolidated net revenues exclusive of Jefferies principally relate to the United States for 2015, 2014 and 2013. Net realized securities gains for Corporate and other aggregated $63.0 million, $30.4 million and $16.0 million during 2015, 2014 and 2013, respectively. In 2013, All other includes realized security gains of $227.6 million related to the sale of Inmet. Interest expense classified as a component of Net revenues relates to Jefferies. For the years ended December 31, 2015, 2014 and 2013, interest expense classified as a component of Expenses was primarily comprised of National Beef ($16.0 million, $14.5 million and $12.3 million, respectively) and parent company interest ($85.9 million, $98.1 million and $72.2 million, respectively). |
Exit Costs |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exit Costs | Exit Costs Jefferies Bache. On April 9, 2015, Jefferies entered into an agreement with Société Générale S.A. (the "Agreement") to transfer certain client exchange and over-the-counter transactions associated with Jefferies futures business for the net book value of the over-the-counter transactions, calculated in accordance with certain principles set forth in the Agreement, plus the repayment of certain margin loans in respect of certain exchange transactions. In addition, Jefferies initiated a plan to substantially exit the remaining aspects of its futures business. At December 31, 2015, Jefferies has transferred all of its client accounts to Société Générale S.A. and other brokers. Jefferies substantially completed the exit of the Bache business during its third quarter of 2015. In addition, Jefferies terminated its $750.0 million credit facility on July 31, 2015. During the year ended December 31, 2015, Jefferies recognized costs of $3.8 million related to the Credit Facility. During the year ended December 31, 2015, Jefferies recorded restructuring and impairment costs as follows (in thousands):
Of the above costs, $28.7 million for the year ended December 31, 2015 are of a non-cash nature. Severance costs and amortization of restricted stock and restricted cash awards are recorded as Compensation and benefits, amortization of capitalized software is recorded as Depreciation and amortization and contract termination costs are recorded as Selling, general and other expenses on the Consolidated Statements of Operations for the year ended December 31, 2015. Jefferies expects to incur approximately an additional $3.1 million of restructuring and exit costs in 2016 in connection with its exit activities comprised of severance and related benefits, including additional amortization for restricted stock and restricted cash awards, contract termination costs and additional amortization of capitalized software. The following summarizes Jefferies restructuring reserve activity (in thousands):
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Selected Quarterly Financial Data |
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Selected Quarterly Financial Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected Quarterly Financial Data | Selected Quarterly Financial Data (Unaudited)
In 2015 and 2014, the totals of quarterly per share amounts do not equal annual per share amounts because of changes in outstanding shares during the year. |
Significant Accounting Policies (Policy) |
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Accounting Policies [Abstract] | |||||||||||||||||||
Consolidation | Consolidation Our policy is to consolidate all entities in which we can vote a majority of the outstanding voting stock. In addition, we consolidate entities which meet the definition of a variable interest entity for which we are the primary beneficiary. The primary beneficiary is the party who has the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance and who has an obligation to absorb losses of the entity or a right to receive benefits from the entity that could potentially be significant to the entity. We consider special allocations of cash flows and preferences, if any, to determine amounts allocable to noncontrolling interests. All intercompany transactions and balances are eliminated in consolidation. In situations where we have significant influence, but not control, of an entity that does not qualify as a variable interest entity, we apply either the equity method of accounting or fair value accounting pursuant to the fair value option election under GAAP. We have also formed nonconsolidated investment vehicles with third-party investors that are typically organized as partnerships or limited liability companies and are carried at fair value. Our subsidiaries may act as general partner or managing member for these investment vehicles and have generally provided the third-party investors with termination or “kick-out” rights. |
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Revenue Recognition Policies | Revenue Recognition Policies Beef Processing and Other Operations Revenues are recognized when the following conditions are met: (1) collectibility is reasonably assured; (2) title to the product has passed or the service has been rendered and earned; (3) persuasive evidence of an arrangement exists; and (4) there is a fixed or determinable price. National Beef’s revenues are recognized based on the terms of the sale, which for beef processing operations is typically upon delivery to customers. Manufacturing revenues are recognized when title passes. Investment Banking Activities Commissions. All customer securities transactions are reported in the Consolidated Statements of Financial Condition on a settlement date basis with related income reported on a trade date basis. We permit institutional customers to allocate a portion of their gross commissions to pay for research products and other services provided by third parties. The amounts allocated for those purposes are commonly referred to as soft dollar arrangements. These arrangements are accounted for on an accrual basis and, as we are not the primary obligor for these arrangements, netted against commission revenues in the Consolidated Statements of Operations. The commissions and related expenses on client transactions executed by Jefferies LLC, a futures commission merchant, are recorded on a half-turn basis. In addition, we earn asset-based fees associated with the management and supervision of assets, account services and administration related to customer accounts. Principal Transactions. Trading assets and trading liabilities are carried at fair value with gains and losses reflected in Principal transactions in the Consolidated Statements of Operations on a trade date basis. Fees received on loans carried at fair value are also recorded within Principal transactions. Investment Banking. Underwriting revenues and fees from mergers and acquisitions, restructuring and other investment banking advisory assignments or engagements are recorded when the services related to the underlying transactions are completed under the terms of the assignment or engagement. Expenses associated with such assignments are deferred until reimbursed by the client, the related revenue is recognized or the engagement is otherwise concluded. Expenses are recorded net of client reimbursements and netted against revenues. Unreimbursed expenses with no related revenues are included in Selling, general and administrative expenses in the Consolidated Statements of Operations. Interest Revenue and Expense. Interest expense that is deducted from Revenues to arrive at Net revenues is related to Jefferies operations. Contractual interest on Trading assets and Trading liabilities is recognized on an accrual basis as a component of Interest income and Interest expense. Interest flows on derivative trading transactions and dividends are included as part of the fair valuation of these contracts and recognized in Principal transactions in the Consolidated Statements of Operations rather than as a component of interest income or expense. Discounts/premiums arising on long-term debt are accreted/amortized to Interest expense using the effective yield method over the remaining lives of the underlying debt obligations. Interest revenue related to Securities borrowed and Securities purchased under agreements to resell activities and interest expense related to Securities loaned and Securities sold under agreements to repurchase activities are recognized on an accrual basis. |
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Cash Equivalents | Cash Equivalents Cash equivalents include highly liquid investments, including money market funds, not held for resale with original maturities of three months or less. |
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Cash and Securities Segregated and on Deposit for Regulatory Purposes or Deposited With Clearing and Depository Organizations | Cash and Securities Segregated and on Deposit for Regulatory Purposes or Deposited With Clearing and Depository Organizations In accordance with Rule 15c3-3 of the Securities Exchange Act of 1934, Jefferies LLC, as a broker-dealer carrying client accounts, is subject to requirements related to maintaining cash or qualified securities in a segregated reserve account for the exclusive benefit of its clients. In addition, certain financial instruments used for initial and variation margin purposes with clearing and depository organizations are recorded in this caption. Jefferies LLC, as a futures commission merchant, is obligated by rules mandated by the Commodities Futures Trading Commission ("CFTC") under the Commodities Exchange Act, to segregate or set aside cash or qualified securities to satisfy such regulations, which regulations have been promulgated to protect customer assets. During October 2015, Jefferies ceased being a full service futures commission merchant. As a result, Jefferies no longer carries customer or proprietary accounts or holds any customer monies or funds. Certain other entities are also obligated by rules mandated by their primary regulators to segregate or set aside cash or equivalent securities to satisfy regulations, promulgated to protect customer assets. |
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Financial Instruments and Fair Value | Financial Instruments and Fair Value Trading assets and Trading liabilities are recorded at fair value, either as required by accounting pronouncements or through the fair value option election. Gains and losses on trading assets and trading liabilities are recognized in our Consolidated Statements of Operations in Principal transactions. Available for sales securities are reflected at fair value, with unrealized gains and losses reflected as a separate component of equity, net of taxes. When sold, realized gains and losses on available for sale securities are reflected in the caption Net realized securities gains. The cost of securities sold is based on average cost. Fair value is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). |
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Fair Value Hierarchy | Fair Value Hierarchy In determining fair value, we maximize the use of observable inputs and minimize the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. Unobservable inputs reflect our assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. We apply a hierarchy to categorize our fair value measurements broken down into three levels based on the transparency of inputs as follows:
Financial instruments are valued at quoted market prices, if available. Certain financial instruments have bid and ask prices that can be observed in the marketplace. For financial instruments whose inputs are based on bid-ask prices, the financial instrument is valued at the point within the bid-ask range that meets our best estimate of fair value. We use prices and inputs that are current as of the measurement date. For financial instruments that do not have readily determinable fair values using quoted market prices, the determination of fair value is based upon consideration of available information, including types of financial instruments, current financial information, restrictions on dispositions, fair values of underlying financial instruments and quotations for similar instruments. The valuation of financial instruments may include the use of valuation models and other techniques. Adjustments to valuations derived from valuation models may be made when, in management’s judgment, features of the financial instrument such as its complexity, the market in which the financial instrument is traded and risk uncertainties about market conditions require that an adjustment be made to the value derived from the models. Adjustments from the price derived from a valuation model reflect management’s judgment that other participants in the market for the financial instrument being measured at fair value would also consider in valuing that same financial instrument. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. The availability of observable inputs can vary and is affected by a wide variety of factors, including, for example, the type of financial instrument and market conditions. As the observability of prices and inputs may change for a financial instrument from period to period, this condition may cause a transfer of an instrument among the fair value hierarchy levels. Transfers among the levels are recognized at the beginning of each period. The degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. |
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Valuation Process for Financial Instruments | Valuation Process for Financial Instruments The Jefferies Independent Price Verification ("IPV") Group, which is part of the Jefferies finance department, in partnership with Jefferies Risk Management, is responsible for establishing Jefferies valuation policies and procedures. The IPV Group and Risk Management, which are independent of business functions, play an important role and serve as a control function in determining that Jefferies financial instruments are appropriately valued and that fair value measurements are reliable. This is particularly important where prices or valuations that require inputs are less observable. In the event that observable inputs are not available, the control processes are designed to assure that the valuation approach utilized is appropriate and consistently applied and that the assumptions are reasonable. The IPV Group reports to the Jefferies Global Controller and is subject to the oversight of the IPV Committee, which includes senior members of Jefferies finance department and other personnel. Jefferies independent price verification policies and procedures are reviewed, at a minimum, annually and changes to the policies require the approval of the IPV Committee. Price Testing Process. Jefferies business units are responsible for determining the fair value of Jefferies financial instruments using approved valuation models and methodologies. In order to ensure that the business unit valuations represent a fair value exit price, the IPV Group tests and validates the fair value of the financial instruments inventory. In the testing process, the IPV Group obtains prices and valuation inputs from sources independent of Jefferies, consistently adheres to established procedures set forth in the valuation policies for sourcing prices and valuation inputs and utilizing valuation methodologies. Sources used to validate fair value prices and inputs include, but are not limited to, exchange data, recently executed transactions, pricing data obtained from third party vendors, pricing and valuation services, broker quotes and observed comparable transactions. To the extent discrepancies between the business unit valuations and the pricing or valuations resulting from the price testing process are identified, such discrepancies are investigated by the IPV Group and fair values are adjusted, as appropriate. The IPV Group maintains documentation of its testing, results, rationale and recommendations and prepares a monthly summary of its valuation results. This process also forms the basis for the classification of fair values within the fair value hierarchy (i.e., Level 1, Level 2 or Level 3). The IPV Group utilizes the additional expertise of Risk Management personnel in valuing more complex financial instruments and financial instruments with less or limited pricing observability. The results of the valuation testing are reported to the IPV Committee on a monthly basis, which discusses the results and is charged with the final conclusions as to the financial instrument fair values in the consolidated financial statements. This process specifically assists management in asserting as to the fair presentation of our financial condition and results of operations as included within our Quarterly Reports on Form 10-Q and Annual Report on Form 10-K. At each quarter end, the overall valuation results, as concluded upon by the IPV Committee, are presented to the Jefferies Audit Committee. Judgment exercised in determining Level 3 fair value measurements is supplemented by daily analysis of profit and loss performed by the Product Control functions. Gains and losses, which result from changes in fair value, are evaluated and corroborated daily based on an understanding of each of the trading desks’ overall risk positions and developments in a particular market on the given day. Valuation techniques generally rely on recent transactions of suitably comparable financial instruments and use the observable inputs from those comparable transactions as a validation basis for Level 3 inputs. Level 3 fair value measurements are further validated through subsequent sales testing and market comparable sales, if such information is available. Level 3 fair value measurements require documentation of the valuation rationale applied, which is reviewed for consistency in application from period to period; and the documentation includes benchmarking the assumptions underlying the valuation rationale against relevant analytic data. Third Party Pricing Information. Pricing information obtained from external data providers (including independent pricing services and brokers) may incorporate a range of market quotes from dealers, recent market transactions and benchmarking model derived prices to quoted market prices and trade data for comparable securities. External pricing data is subject to evaluation for reasonableness by the IPV Group using a variety of means including comparisons of prices to those of similar product types, quality and maturities, consideration of the narrowness or wideness of the range of prices obtained, knowledge of recent market transactions and an assessment of the similarity in prices to comparable dealer offerings in a recent time period. Jefferies has a process whereby it challenges the appropriateness of pricing information obtained from external data providers (including independent pricing services and brokers) in order to validate the data for consistency with the definition of a fair value exit price. Jefferies process includes understanding and evaluating the external data providers’ valuation methodologies. For corporate, U.S. government and agency, municipal debt securities, and loans, to the extent independent pricing services or broker quotes are utilized in our valuation process, the vendor service providers are collecting and aggregating observable market information as to recent trade activity and active bid-ask submissions. The composite pricing information received from the independent pricing service is not based on unobservable inputs or proprietary models. For mortgage- and other asset-backed securities and collateralized debt obligations, the independent pricing services use a matrix evaluation approach incorporating both observable yield curves and market yields on comparable securities as well as implied inputs from observed trades for comparable securities in order to determine prepayment speeds, cumulative default rates and loss severity. Further, Jefferies considers pricing data from multiple service providers as available as well as compares pricing data to prices observed for recent transactions, if any, in order to corroborate valuation inputs. Model Review Process. Where a pricing model is to be used to determine fair value, the pricing model is reviewed for theoretical soundness and appropriateness by Risk Management, independent from the trading desks, and then approved by Risk Management to be used in the valuation process. Review and approval of a model for use may include benchmarking the model against relevant third party valuations, testing sample trades in the model, backtesting the results of the model against actual trades and stress-testing the sensitivity of the pricing model using varying inputs and assumptions. In addition, recently executed comparable transactions and other observable market data are considered for purposes of validating assumptions underlying the model. Models are independently reviewed and validated by Risk Management annually or more frequently if market conditions or use of the valuation model changes. |
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Investments in Managed Funds | Investments in Managed Funds Investments in managed funds include our investments in funds managed by us and our investments in related party managed funds in which we are entitled to a portion of the management and/or performance fees. Investments in nonconsolidated managed funds are accounted for at fair value with gains or losses included in the Consolidated Statements of Operations. Asset management fees and investment income from managed funds include revenues we earn from management, administrative and performance fees from funds and accounts managed by us, revenues from management and performance fees we earn from related-party managed funds and investment income from our investments in these funds. We earn fees in connection with management and investment advisory services performed for various funds and managed accounts. These fees are based on assets under management or an agreed upon notional amount and may include performance fees based upon the performance of the funds. Management and administrative fees are generally recognized over the period that the related service is provided. Generally, performance fees are earned when the return on assets under management exceeds certain benchmark returns, “high-water marks” or other performance targets. Performance fees are accrued (or reversed) on a monthly basis based on measuring performance to date versus any relevant benchmark return hurdles stated in the investment management agreement. Performance fees are not subject to adjustment once the measurement period ends (generally annual periods) and the performance fees have been realized. |
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Loans to and Investments in Associated Companies | Loans to and Investments in Associated Companies Loans to and investments in associated companies include investments in private equity and other operating entities in which we exercise significant influence over operating and capital decisions and loans issued in connection with such investments. Loans to and investments in associated companies are accounted for using the equity method. See Note 11 for additional information regarding certain of these investments. Under the equity method of accounting, our share of the investee’s underlying net income or loss is recorded as Income (loss) related to associated companies, or as part of Other revenues if such investees are considered to be an extension of our business. Income (loss) for investees for which the fair value option was elected is reported as Principal transactions revenues. |
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Receivables and Provision for Doubtful Accounts | Receivables and Provision for Doubtful Accounts At December 31, 2015 and 2014, Receivables include receivables from brokers, dealers and clearing organizations of $1,616.3 million and $2,187.5 million, respectively, and receivables from customers of securities operations of $1,191.3 million and $1,250.5 million, respectively. During the fourth quarter of 2014, Jefferies recognized a bad debt provision, which primarily relates to a receivable of $52.3 million from a client to which Jefferies provided futures clearing and execution services, which declared bankruptcy. |
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Securities Borrowed And Securities Loaned | Securities Borrowed and Securities Loaned Securities borrowed and securities loaned are carried at the amounts of cash collateral advanced and received in connection with the transactions and accounted for as collateralized financing transactions. In connection with both trading and brokerage activities, Jefferies borrows securities to cover short sales and to complete transactions in which customers have failed to deliver securities by the required settlement date, and lend securities to other brokers and dealers for similar purposes. Jefferies has an active securities borrowed and lending matched book business in which it borrows securities from one party and lends them to another party. When Jefferies borrows securities, it generally provides cash to the lender as collateral, which is reflected in the Consolidated Statements of Financial Condition as Securities borrowed. Jefferies earns interest revenues on this cash collateral. Similarly, when Jefferies lends securities to another party, that party provides cash to Jefferies as collateral, which is reflected in the Consolidated Statements of Financial Condition as Securities loaned. Jefferies pays interest expense on the cash collateral received from the party borrowing the securities. The initial collateral advanced or received approximates or is greater than the fair value of the securities borrowed or loaned. Jefferies monitors the fair value of the securities borrowed and loaned on a daily basis and requests additional collateral or returns excess collateral, as appropriate. |
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Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase | Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase Securities purchased under agreements to resell and Securities sold under agreements to repurchase (collectively "repos") are accounted for as collateralized financing transactions and are recorded at their contracted resale or repurchase amount plus accrued interest. Repos are presented in the Consolidated Statements of Financial Condition on a net-basis-by counterparty, where permitted by GAAP. The fair value of the underlying securities is monitored daily versus the related receivable or payable balances. Should the fair value of the underlying securities decline or increase, additional collateral is requested or excess collateral is returned, as appropriate. |
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Property, Equipment and Leasehold Improvements | Property, Equipment and Leasehold Improvements Property, equipment and leasehold improvements are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization are provided principally on the straight-line method over the estimated useful lives of the assets or, if less, the term of the underlying lease. |
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Impairment of Long-Lived Assets | Impairment of Long-Lived Assets We evaluate our long-lived assets for impairment whenever events or changes in circumstances indicate, in management’s judgment, that the carrying value of such assets may not be recoverable. When testing for impairment, we group our long-lived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities (or asset group). The determination of whether an asset group is recoverable is based on management’s estimate of undiscounted future cash flows directly attributable to the asset group as compared to its carrying value. If the carrying amount of the asset group is greater than the undiscounted cash flows, an impairment loss would be recognized for the amount by which the carrying amount of the asset group exceeds its estimated fair value. During the fourth quarter of 2013, after exhausting all opportunities to improve the operating performance of the Brawley beef processing facility, which had been adversely affected by the declining supply of fed cattle available to the plant and fixed cost inefficiencies inherent in a single shift plant, National Beef concluded that this facility would continue to generate losses for the foreseeable future. This resulted in a decision in December 2013 to close the facility in the second quarter of 2014. National Beef evaluated the recoverability of the long-lived assets at Brawley, which had an aggregate carrying amount of $93.2 million at December 31, 2013, and based on its estimate of future undiscounted cash flows concluded that the carrying value was not recoverable and the facility was impaired. In performing this evaluation, National Beef determined that the Brawley facility was the asset group that represented the lowest level of cash flows that were largely independent of the cash flows of other assets and liabilities. The management of National Beef engaged an independent valuation and appraisal firm to assist in estimating the fair value of the long-lived assets at Brawley. National Beef’s estimate of fair value was based on an orderly liquidation technique, which represents the amount that can be realized in a liquidation sale, given a reasonable period of time to find a purchaser, assuming an as-is where-is condition. In preparing its analysis, National Beef considered current market conditions, replacement cost, as well as the age, physical and functional characteristics of the long-lived assets. As a result, National Beef concluded that the fair value of the long-lived assets at the Brawley facility was $29.9 million at December 31, 2013, and recorded an impairment loss of $63.3 million, which is reflected in Selling, general and other expenses in the Consolidated Statement of Operations for the year ended December 31, 2013. As with any estimate of fair value, future market, regulatory and general economic conditions as well as the obsolescence, future deterioration of, or inability to locate a purchaser should National Beef decide to sell the facility could have a significant effect on their future value. In addition to the long-lived asset impairment charge, National Beef incurred additional costs relating to the closing of the facility during 2014 of $6.9 million. These costs include employee separation and retention, systems decommissioning and various other expenses. Of these amounts, $4.6 million related to employee separation, which is included in Compensation and benefits, and the various other costs are included in Selling, general and other expenses in the Consolidated Statement of Operations. In 2015, we recorded impairment charges in Selling, general and other expenses of $27.7 million, primarily related to a $20.3 million impairment at our Juneau Energy oil and gas company and an additional impairment charge related to the Brawley plant of $4.7 million. For the oil and gas impairment test, we compare expected undiscounted future net cash flows to the unamortized capitalized cost of the asset. If the future undiscounted net cash flows are lower than the unamortized capital cost, we reduce the capitalized cost to fair market value. We used a third party reserve report in which the cash flows were calculated using West Texas Intermediate (oil) and Henry Hub (gas) NYMEX futures prices as of December 31, 2015. For one of our oil fields, the undiscounted net cash flows were lower than the unamortized capital cost and as a result, we wrote off the total capital cost. There were no significant impairment charges in 2014. Excluding the National Beef impairment, we recorded impairment charges in Selling, general and other expenses of $20.0 million in 2013, all related to various real estate development projects. Prior to the impairment charges in 2013, these projects had a book value of $32.3 million; after recognizing the impairment charges the carrying value of the real estate projects was reduced to their estimated fair value of $12.3 million. Estimates of fair value were principally determined using discounted cash flow analyses and/or current and expected market conditions for the specific geographic area. For the year ended December 31, 2013, impairment charges related to real estate include an out of period adjustment of $15.4 million to record charges related to prior periods. Substantially all of our operating businesses sell products or services that are impacted by general economic conditions in the U.S. and to a lesser extent internationally. In recent years general economic conditions reduced the demand for products or services sold by our operating subsidiaries and/or resulted in reduced pricing for products or services. A worsening of current economic conditions could cause a decline in estimated future cash flows expected to be generated by our operations and investments. If future undiscounted cash flows are estimated to be less than the carrying amounts of the asset groups used to generate those cash flows in subsequent reporting periods, particularly for those with large investments in intangible assets, property and equipment and other long-lived assets (for example, Jefferies, National Beef, manufacturing, oil and gas exploration and production and certain associated company investments), impairment charges would have to be recorded. |
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Intangible Assets, Net and Goodwill | Intangible Assets, Net and Goodwill Intangible Assets. Intangible assets deemed to have finite lives are generally amortized on a straight line basis over their estimated useful lives, where the useful life is the period over which the asset is expected to contribute directly, or indirectly, to our future cash flows. Intangible assets are reviewed for impairment on an interim basis when certain events or circumstances exist. If future undiscounted cash flows are estimated to be less than the carrying amounts of the asset groups used to generate those cash flows in subsequent reporting periods, particularly for those with large investments in amortizable intangible assets, impairment charges would have to be recorded. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when certain events or circumstances exist indicating an assessment for impairment is necessary. Impairment exists when the carrying amount exceeds its fair value. Fair value will be determined using valuation techniques consistent with what a market participant would use. All of our indefinite-lived intangible assets were recognized in connection with the Jefferies acquisition, and our annual impairment testing date for Jefferies is as of August 1. Goodwill. At acquisition, we allocate the cost of a business acquisition to the specific tangible and intangible assets acquired and liabilities assumed based upon their fair values. Significant judgments and estimates are often made by management to determine these values, and may include the use of appraisals, consideration of market quotes for similar transactions, use of discounted cash flow techniques or consideration of other information we believe to be relevant. Any excess of the cost of a business acquisition over the fair values of the net assets and liabilities acquired is recorded as goodwill, which is not amortized to expense. Substantially all of our goodwill was recognized in connection with the Jefferies acquisition. At least annually, and more frequently if warranted, we will assess whether goodwill has been impaired. If the estimated fair value exceeds the carrying value, goodwill at the reporting unit level is not impaired. If the estimated fair value is less than carrying value, further analysis is necessary to determine the amount of impairment, if any, by comparing the implied fair value of the reporting unit’s goodwill to the carrying value of the reporting unit’s goodwill. The fair values will be based on widely accepted valuation techniques that we believe market participants would use, although the valuation process requires significant judgment and often involves the use of significant estimates and assumptions. The methodologies we utilize in estimating fair value include market capitalization, price-to-book multiples of comparable exchange traded companies, multiples of merger and acquisitions of similar businesses and/or projected cash flows. The estimates and assumptions used in determining fair value could have a significant effect on whether or not an impairment charge is recorded and the magnitude of such a charge. Adverse market or economic events could result in impairment charges in future periods. Our annual goodwill impairment testing date related to Jefferies is as of August 1 |
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Inventories and Cost of Sales | Inventories and Cost of Sales National Beef’s inventories consist primarily of beef products, beef by-products and supplies, and are stated at the lower of cost or market, with cost principally determined under the first-in-first-out method for beef products and average cost for supplies. Manufacturing inventories are stated at the lower of cost or market, with cost principally determined under the first-in-first-out method. Manufacturing cost of sales principally includes product and manufacturing costs, inbound and outbound shipping costs and handling costs. |
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Payables, Expense Accruals and other Liabilities | Payables, expense accruals and other liabilities At December 31, 2015 and 2014, Payables, expense accruals and other liabilities include payables to brokers, dealers and clearing organizations of $2,757.2 million and $2,280.1 million, respectively, and payables to customers of securities operations of $2,780.5 million and $6,242.0 million, respectively. |
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Income Taxes | Income Taxes We record a valuation allowance to reduce our net deferred tax asset to the net amount that is more likely than not to be realized. If in the future we determine that it is more likely than not that we will be able to realize our net deferred tax asset in excess of our net recorded amount, an adjustment to increase the net deferred tax asset would increase income in such period. If in the future we were to determine that we would not be able to realize all or part of our recorded net deferred tax asset, an adjustment to decrease the net deferred tax asset would be charged to income in such period. We are required to consider all available evidence, both positive and negative, and to weigh the evidence when determining whether a valuation allowance is required and the amount of such valuation allowance. Generally, greater weight is required to be placed on objectively verifiable evidence when making this assessment, in particular on recent historical operating results. Our estimate of future taxable income considers all available evidence, both positive and negative, about our operating businesses and investments, includes an aggregation of individual projections for each significant operating business and investment, estimated apportionment factors for state and local taxing jurisdictions and included all future years that we estimate we will have available net operating loss carryforwards (“NOLs”) (until 2035). We believe that our estimate of future taxable income is reasonable but inherently uncertain, and if our current or future operations and investments generate taxable income different than the projected amounts, further adjustments to the valuation allowance are possible. The current balance of the deferred tax valuation allowance principally reserves for NOLs of certain subsidiaries that are not available to offset income generated by other members of the consolidated tax return group. We also record reserves for unrecognized tax benefits based on our assessment of the probability of successfully sustaining tax filing positions. Interest and penalties, if any, are recorded as components of income tax expense. Management exercises significant judgment when assessing the probability of successfully sustaining tax filing positions, and in determining whether a contingent tax liability should be recorded and if so estimating the amount. If our tax filing positions are successfully challenged, payments could be required that are in excess of reserved amounts or we may be required to reduce the carrying amount of our net deferred tax asset, either of which could be significant to our Consolidated Statement of Financial Condition or results of operations. |
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Share-based Compensation | Share-based Compensation Share-based awards are measured based on the fair value of the award as determined in accordance with GAAP and recognized over the required service or vesting period. The fair value of options and warrants are estimated at the date of grant using the Black-Scholes option pricing model. Expected forfeitures are included in determining share-based compensation expense. |
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Foreign Currency Translation | Foreign Currency Translation Assets and liabilities of foreign subsidiaries are translated to U.S. dollars using the currency exchange rates at the end of the relevant period. Revenues and expenses are translated at average exchange rates during the period. The effects of exchange rate changes on the translation of the balance sheets, net of hedging gains or losses and taxes, if any, are included in other comprehensive income (loss) in the Consolidated Statements of Comprehensive Income (Loss) and classified as Accumulated other comprehensive income in the Consolidated Statements of Financial Condition and Consolidated Statements of Changes in Equity. Gains or losses resulting from Jefferies foreign currency transactions are included in Principal transactions in the Consolidated Statements of Operations; gains or losses from foreign currency transactions unrelated to Jefferies were not significant. |
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Earnings per Common Share | Earnings per Common Share Basic earnings per share ("EPS") is computed by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding and certain other shares committed to be, but not yet issued. Net earnings available to common shareholders represent net earnings to common shareholders reduced by the allocation of earnings to participating securities. Losses are not allocated to participating securities. Common shares outstanding and certain other shares committed to be, but not yet issued, include restricted stock and restricted stock units ("RSUs") for which no future service is required. Diluted EPS is computed by dividing net earnings available to common shareholders plus dividends on dilutive mandatorily redeemable convertible preferred shares and interest on convertible notes by the weighted average number of common shares outstanding and certain other shares committed to be, but not yet issued, plus all dilutive common stock equivalents outstanding during the period. Unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and, therefore, are included in the earnings allocation in computing earnings per share under the two-class method of earnings per share. Restricted stock and RSUs granted as part of share-based compensation contain nonforfeitable rights to dividends and dividend equivalents, respectively, and therefore, prior to the requisite service being rendered for the right to retain the award, restricted stock and RSUs meet the definition of a participating security. As such, we calculate basic and diluted earnings per share under the two-class method. |
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Securitization Activities | Securitization Activities Jefferies engages in securitization activities related to corporate loans, commercial mortgage loans and mortgage-backed and other asset-backed securities. Such transfers of financial assets are accounted for as sales when we have relinquished control over the transferred assets. The gain or loss on sale of such financial assets depends, in part, on the previous carrying amount of the assets involved in the transfer allocated between the assets sold and the retained interests, if any, based upon their respective fair values at the date of sale. We may retain interests in the securitized financial assets as one or more tranches of the securitization. These retained interests are included within Trading assets in the Consolidated Statements of Financial Condition at fair value. Any changes in the fair value of such retained interests are recognized within Principal transactions in the Consolidated Statements of Operations. When we transfer assets that do not meet the criteria of a sale, the transfer is accounted for as a secured borrowing and we continue to recognize the assets of a secured borrowing, and recognize the associated financing in Other secured financings in the Consolidated Statements of Financial Condition. |
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Contingencies | Contingencies In the normal course of business, we have been named, from time to time, as a defendant in legal and regulatory proceedings. We are also involved, from time to time, in other exams, investigations and similar reviews (both formal and informal) by governmental and self-regulatory agencies regarding our businesses, certain of which may result in judgments, settlements, fines, penalties or other injunctions. We recognize a liability for a contingency when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. If the reasonable estimate of a probable loss is a range, we accrue the most likely amount of such loss, and if such amount is not determinable, then we accrue the minimum in the range as the loss accrual. The determination of the outcome and loss estimates requires significant judgment on the part of management, can be highly subjective and is subject to significant change with the passage of time as more information becomes available. Estimating the ultimate impact of litigation matters is inherently uncertain, in particular because the ultimate outcome will rest on events and decisions of others that may not be within our power to control. We do not believe that any of our current litigation will have a significant adverse effect on our consolidated financial position, results of operations or liquidity; however, if amounts paid at the resolution of litigation are in excess of recorded reserve amounts, the excess could be significant in relation to results of operations for that period. For further information, see Note 26. |
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Accounting Developments | Discontinued Operations. In January 2015, we adopted new Financial Accounting Standards Board (“FASB”) guidance on the reporting of discontinued operations. The new guidance requires that disposal of a component of an entity or a group of components of an entity be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results, and would require expanded disclosures. The adoption of this guidance did not have an impact on our consolidated financial statements. Revenue Recognition. In May 2014, the FASB issued new guidance that defines how companies report revenues from contracts with customers, and also requires enhanced disclosures. The core principle of this new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. This guidance originally was effective for interim and annual periods beginning after December 15, 2016. In August 2015, the FASB issued guidance that deferred the effective date by one year, with early adoption on the original effective date permitted. We are currently evaluating the impact this new guidance will have on our consolidated financial statements. Repurchase Agreements. In January 2015, we adopted the FASB’s new guidance that changes the accounting for repurchase-to-maturity transactions and linked repurchase financings to secured borrowing accounting, which is consistent with the accounting for other repurchase agreements. This guidance did not significantly impact our consolidated results of operations, financial condition or cash flows. Effective for interim periods beginning after March 31, 2015, the guidance also requires new disclosures about transfers that are accounted for as sales in transactions that are economically similar to repurchase agreements and increased transparency about the types of collateral pledged in repurchase agreements and similar transactions accounted for as secured borrowings. We have provided the additional disclosures in our consolidated financial statements. Consolidation. In February 2015, the FASB issued new guidance that amends current consolidation guidance including changes to both the variable and voting interest models used to evaluate whether an entity should be consolidated. This guidance also eliminates the deferral of certain consolidation standards for entities considered to be investment companies. This guidance will be effective for annual and interim periods beginning after December 15, 2015, and early adoption is permitted. We will adopt this guidance in the first quarter of fiscal 2016. The adoption of this guidance is not expected to have a significant impact on our consolidated financial statements. Debt Issuance Costs. In April 2015, the FASB issued new guidance that requires debt issuance costs related to a recognized debt liability be presented in the Consolidated Statements of Financial Condition as a direct deduction from the carrying amount of that debt liability. This guidance will be effective for annual and interim periods beginning after December 15, 2015, and early adoption is permitted. The adoption of this guidance is not expected to have a significant impact on our Consolidated Statements of Financial Condition. Investments in Certain Entities That Calculate Net Asset Value. In May 2015, the FASB issued new guidance that removes the requirement to include investments in the fair value hierarchy for which the fair value is measured at net asset value ("NAV") using the practical expedient. The guidance also removes the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value practical expedient. Rather, those disclosures are limited to investments for which we have elected to measure the fair value using that practical expedient. The guidance is effective retrospectively for annual and interim periods beginning after December 15, 2015. Early adoption is permitted and we have early adopted this guidance during the second quarter of 2015. Since the guidance only impacts our disclosures, adoption did not impact our consolidated financial statements. Financial Instruments. In January 2016, the FASB issued new guidance that affects the accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. The guidance is effective for annual and interim periods beginning after December 15, 2017. We are currently evaluating the impact this new guidance will have on our consolidated financial statements. |
Acquisitions (Tables) |
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Schedule of Pro Forma Operating Results | Presented below for the year ended December 31, 2013, are unaudited pro forma operating results assuming the acquisition of Jefferies had occurred on January 1, 2012 (in thousands, except per share amounts):
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Fair Value Disclosures (Tables) |
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Schedule Of Assets And Liabilities Measured On Recurring Basis At Fair Value | The following is a summary of our financial instruments and trading liabilities that are accounted for at fair value on a recurring basis, excluding Investments at fair value based on NAV of $36.7 million and $42.2 million, respectively, by level within the fair value hierarchy at December 31, 2015 and 2014 (in thousands):
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Investments Measured At Fair Value Based On Net Asset Value | The following tables present information about our investments in entities that have the characteristics of an investment company and are measured based on NAV. (in thousands).
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Summary Of Changes In Fair Value Of Financial Assets And Liabilities Classified As Level 3 | The following is a summary of changes in fair value of our financial assets and liabilities that have been categorized within Level 3 of the fair value hierarchy for the year ended December 31, 2015 (in thousands):
The following is a summary of changes in fair value of our financial assets and liabilities that have been categorized within Level 3 of the fair value hierarchy for the year ended December 31, 2014 (in thousands):
The following is a summary of changes in fair value of our financial assets and liabilities that have been categorized within Level 3 of the fair value hierarchy for the period from the Jefferies acquisition through December 31, 2013 (in thousands). There were no significant Leucadia Level 3 trading assets or liabilities prior to the Jefferies acquisition.
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Quantitative Information About Significant Unobservable Inputs Used In Level 3 Fair Value Measurements |
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Summary Of Gains (Losses) Due To Changes In Instrument Specific Credit Risk For Loans and Other Receivables And Loan Commitments Measured At Fair Value Under Fair Value Option | The following is a summary of gains (losses) due to changes in instrument specific credit risk on loans and other receivables and loan commitments measured at fair value under the fair value option for the years ended December 31, 2015 and 2014 and the period from the Jefferies acquisition through December 31, 2013 (in thousands):
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Summary Of Amount By Which Contractual Principal Exceeds Fair Value For Loans And Other Receivables Measured At Fair Value Under Fair Value Option | The following is a summary of the amount by which contractual principal exceeds fair value for loans and other receivables measured at fair value under the fair value option (in thousands):
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Derivative Financial Instruments (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value And Related Number Of Derivative Contracts Categorized By Predominant Risk Exposure | The fair value of assets/liabilities related to derivative contracts represents our receivable/payable for derivative financial instruments, gross of counterparty netting and cash collateral received and pledged (in thousands, except contract amounts):
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Unrealized And Realized Gains (Losses) On Derivative Contracts | The following table presents unrealized and realized gains (losses) on derivative contracts as reflected in the Consolidated Statements of Operations for the years ended December 31, 2015 and 2014 and the period from the Jefferies acquisition through December 31, 2013 (in thousands):
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Remaining Contract Maturity Of Fair Value Of OTC Derivative Assets And Liabilities | OTC Derivatives. The following tables set forth by remaining contract maturity the fair value of OTC derivative assets and liabilities as reflected in the Consolidated Statement of Financial Condition at December 31, 2015 (in thousands):
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Counterparty Credit Quality With Respect To Fair Value Of OTC Derivatives Assets | At December 31, 2015, the counterparty credit quality with respect to the fair value of our OTC derivative assets was as follows (in thousands):
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Collateralized Transactions (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Collateralized Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Collateralized Financing Transactions | The following tables set forth the carrying value of securities lending arrangements and repurchase agreements by class of collateral pledged and remaining contractual maturity (in thousands):
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Securitization Activities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securitization Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Activity Related To Securitizations Accounted For As Sales | The following table presents activity related to our securitizations that were accounted for as sales in which we had continuing involvement during the years ended December 31, 2015 and 2014 and the period from the Jefferies acquisition through December 31, 2013 (in millions):
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Summary Of Retained Interests In SPEs | The following table summarizes our retained interests in SPEs where Jefferies transferred assets and has continuing involvement and received sale accounting treatment (in millions):
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Available For Sale Securities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost, Gross Unrealized Gains And Losses And Estimated Fair Value Of Available For Sale Investments | The amortized cost, gross unrealized gains and losses and estimated fair value of investments classified as available for sale at December 31, 2015 and 2014 are as follows (in thousands):
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Amortized Cost And Estimated Fair Value Of Investments Classified As Available For Sale By Contractual Maturity | The amortized cost and estimated fair value of investments classified as available for sale at December 31, 2015, by contractual maturity, are shown below. Expected maturities are likely to differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
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Variable Interest Entities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entity, Measure of Activity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets And Liabilities Of Consolidated VIEs | The following tables present information about the assets and liabilities of our consolidated VIEs, which are presented within our Consolidated Statements of Financial Condition in the respective asset and liability categories, as of December 31, 2015 and 2014.
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Non-Consolidated Variable Interest Entities | The following tables present information about Jefferies variable interests in nonconsolidated VIEs.
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Loans To And Investments In Associated Companies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Loans To And Investments In Associated Companies | A summary of loans to and investments in associated companies at December 31, 2015 and 2014 accounted for under the equity method of accounting is as follows (in thousands):
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Schedule Of Summarized Data For Investments In Associated Companies | The following table provides summarized data for associated companies as of December 31, 2015 and 2014 and for the three years ended December 31, 2015 (in thousands):
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Financial Statement Offsetting (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Offsetting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Offsetting Assets And Liabilities | The following table provides information regarding derivative contracts, repurchase agreements and securities borrowing and lending arrangements that are recognized in the Consolidated Statements of Financial Condition and 1) the extent to which, under enforceable master netting arrangements, such balances are presented net in the Consolidated Statements of Financial Condition as appropriate under GAAP and 2) the extent to which other rights of setoff associated with these arrangements exist and could have an effect on our consolidated financial position.
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Intangible Assets, Net And Goodwill (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Intangible Assets, Net And Goodwill | A summary of intangible assets, net and goodwill at December 31, 2015 and 2014 is as follows (in thousands):
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Inventory (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Inventory | A summary of inventory at December 31, 2015 and 2014 which is classified as Other assets is as follows (in thousands):
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Property, Equipment And Leasehold Improvements, Net (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Property, Equipment And Leasehold Improvements | A summary of property, equipment and leasehold improvements, net at December 31, 2015 and 2014 is as follows (in thousands):
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Long-Term Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Indebtedness | The principal amount (net of unamortized discounts and premiums), stated interest rate and maturity date of outstanding debt at December 31, 2015 and 2014 are as follows (dollars in thousands):
|
Mezzanine Equity (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Temporary Equity Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Redeemable Noncontrolling Interests | The following table reconciles National Beef’s redeemable noncontrolling interests activity during the years ended December 31, 2015 and 2014 (in thousands):
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Sensitivity Analysis Of Fair Value Of Redeemable Noncontrolling Interests Using Discount And Terminal Growth Rates | The table below is a sensitivity analysis which shows the fair value of the redeemable noncontrolling interests using the assumed discount and the terminal growth rates and fair values under different rate assumptions as of December 31, 2015 (dollars in millions):
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Common Shares And Compensation Plans (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Company's Stock Options | Fixed Stock Option Plan. A summary of activity with respect to our stock options for the three years ended December 31, 2015 is as follows:
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Summary Of Weighted-Average Assumptions Used For Grants | The following summary presents the weighted-average assumptions used for grants made during 2013. There were no grants during 2014 or 2015.
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Activity of Restricted Stock | The following table details the activity in restricted stock during the years ended December 31, 2015, 2014 and 2013 (in thousands, except per share amounts):
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Activity of Restricted Stock Units | The following table details the activity in restricted stock units during the years ended December 31, 2015, 2014 and 2013 (in thousands, except per share amounts):
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Accumulated Other Comprehensive Income (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Accumulated Other Comprehensive Income, Net Of Taxes | A summary of accumulated other comprehensive income, net of taxes at December 31, 2015, 2014 and 2013 is as follows (in thousands):
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Schedule Of Accumulated Other Comprehensive Income Reclassifications | For the years ended December 31, 2015 and 2014, significant amounts reclassified out of accumulated other comprehensive income to net income (loss) are as follows (in thousands):
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Pension Plans And Postretirement Benefits (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Pension Plans [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components Of Defined Benefit Pension Plans | A summary of activity with respect to both plans is as follows (in thousands):
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Components Of Net Periodic Pension Costs And Amounts Recognized In Other Comprehensive Income | The following table summarizes the components of net periodic pension cost and other amounts recognized in other comprehensive income (loss) excluding taxes (in thousands):
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Schedule Of Assumptions For Pension Plan | We use a December 31 measurement date for the WilTel plan and a November 30 date for the Jefferies plan. The assumptions used are as follows:
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Schedule Of Expected Pension Benefit Payments | The following pension benefit payments are expected to be paid (in thousands):
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U.S. Pension Plans [Member] | WilTel [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Plan's Assets At Fair Value | WilTel Plan Assets. At December 31, 2015 and 2014, the WilTel plan assets at fair value consisted of the following (in thousands):
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U.S. Pension Plans [Member] | Jefferies [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Plan's Assets At Fair Value | Jefferies Plan Assets. At December 31, 2015 and 2014, the Jefferies plan assets at fair value consisted of the following (in thousands):
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German Pension Plan [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Assumptions For Pension Plan | The following are assumptions used to determine the actuarial present value of the projected benefit obligation and net periodic pension benefit cost for the years ended December 31, 2015 and 2014:
(1) There were no active participants in the plan at December 31, 2015. |
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Schedule Of Expected Pension Benefit Payments | The following pension benefit payments are expected to be paid (in thousands):
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Changes in Projected Benefit Obligation | The following tables summarize the changes in the projected benefit obligation and the components of net periodic pension cost for the years ended December 31, 2015 and 2014 and for the period from the acquisition of Jefferies to December 31, 2013 (in thousands):
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Components Of Pension Expense |
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Principal Components Of Deferred Taxes | The principal components of deferred taxes at December 31, 2015 and 2014 are as follows (in thousands):
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Schedule Of Provision (Benefit) For Income Taxes | The provision for income taxes for continuing operations for each of the three years in the period ended December 31, 2015 was as follows (in thousands):
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Schedule Of Reconciliation Of Expected Statutory Federal Income Tax To Actual Income Tax Provision (Benefit) | The table below reconciles the expected statutory federal income tax to the actual income tax provision (benefit) (in thousands):
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Schedule Of Reconciliation Of Unrecognized Tax Benefits | The following table reconciles the total amount of unrecognized tax benefits as of the beginning and end of the periods presented (in thousands):
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Net Realized Securities Gains (Losses) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gain (Loss) on Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Net Securities Gains (Losses) | The following summarizes net realized securities gains (losses) for each of the three years in the period ended December 31, 2015 (in thousands):
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Other Results Of Operations Information (Tables) |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nonoperating Income (Expense) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Other Income | Other income for each of the three years in the period ended December 31, 2015 consists of the following (in thousands):
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Earnings (Loss) Per Common Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share Computation | Basic and diluted earnings (loss) per share amounts were calculated by dividing net income (loss) by the weighted average number of common shares outstanding. The numerators and denominators used to calculate basic and diluted earnings (loss) per share are as follows for the years ended December 31, 2015, 2014 and 2013 (in thousands):
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Commitments, Contingencies and Guarantees (Tables) |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Future Minimum Lease Commitments for Noncancelable Operating Leases | Future minimum annual rentals (exclusive of month-to-month leases, real estate taxes, maintenance and certain other charges) under these leases at December 31, 2015 are as follows (in thousands):
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Commitments and Contingencies | The following table summarizes commitments associated with certain business activities (in millions):
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Guarantees | The following table summarizes the notional amounts associated with our derivative contracts meeting the definition of a guarantee under GAAP (in millions):
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External Credit Ratings of Underlying or Referenced Assets for Credit Related Derivatives Contracts | The external credit ratings of the underlying or referenced assets for our credit related derivatives contracts (in millions):
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Net Capital Requirements (Tables) |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||
Brokers and Dealers [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Net Capital, Adjusted Net Capital And Excess Net Capital | Jefferies LLC and Jefferies Execution’s net capital and excess net capital are as follows (in thousands):
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Other Fair Value Information (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Methods And Assumptions Used To Estimate The Fair Values | The carrying amounts and estimated fair values of our principal financial instruments that are not recognized at fair value on a recurring basis are as follows (in thousands):
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Discontinued Operations And Assets Held For Sale (Tables) |
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Disposal Group, Including Discontinued Operation, Additional Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Results Of Discontinued Operations | A summary of the results of discontinued operations for the clean energy project, Premier, Sangart, and the small power production business is as follows for the years ended December 31, 2014 and 2013; discontinued operations for the year ended December 31, 2015 were not significant (in thousands):
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Segment Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Segment Reporting Information, By Segment | Certain information concerning our segments for the years ended December 31, 2015, 2014 and 2013 is presented in the following table. Consolidated subsidiaries are reflected as of the date a majority controlling interest was acquired. As discussed above, Jefferies became our wholly-owned subsidiary on March 1, 2013 and is reflected in our consolidated financial statements utilizing a one month lag.
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Schedule Of Net Revenues By Geographic Region | Net revenues by geographic region for Jefferies for the years ended December 31, 2015 and 2014 and for the period from the Jefferies acquisition through December 31, 2013 were as follows (in thousands):
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Exit Costs (Tables) |
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Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs | During the year ended December 31, 2015, Jefferies recorded restructuring and impairment costs as follows (in thousands):
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Schedule of Restructuring Reserve | The following summarizes Jefferies restructuring reserve activity (in thousands):
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Selected Quarterly Financial Data (Unaudited) (Tables) |
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Selected Quarterly Financial Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Selected Quarterly Financial Data |
|
Acquisitions (Pro Forma Operating Results) (Details) - Jefferies Group Inc [Member] $ / shares in Units, $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2013
USD ($)
$ / shares
| |
Business Acquisition [Line Items] | |
Net revenues | $ | $ 11,083,248 |
Net income attributable to Leucadia National Corporation common shareholders | $ | $ 267,160 |
Basic income per common share attributable to Leucadia National Corporation common shareholders (USD per share) | $ / shares | $ 0.70 |
Diluted income per common share attributable to Leucadia National Corporation common shareholders (USD per share) | $ / shares | $ 0.70 |
Fair Value Disclosures (Other Secured Financings Narrative) (Details) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Transfers of loans accounted for as secured financings | $ 0.0 | $ 7.8 |
Fair Value Disclosures (Summary Of Gains (Losses) Due To Changes In Instrument Specific Credit Risk For Loans and Other Receivables And Loan Commitments Measured At Fair Value Under Fair Value Option) (Details) - USD ($) $ in Thousands |
10 Months Ended | 12 Months Ended | |
---|---|---|---|
Dec. 31, 2013 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Loans and other receivables | $ (15,327) | $ (17,389) | $ (24,785) |
Financial Instruments Sold [Member] | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Loans | (32) | (162) | (585) |
Loan commitments | $ (1,007) | $ 7,502 | $ (15,459) |
Fair Value Disclosures (Summary Of Amount By Which Contractual Principal Exceeds Fair Value For Loans And Other Receivables Measured At Fair Value Under Fair Value Option) (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Loans and other receivables | $ 408,369 | $ 403,119 |
Loans and other receivables greater than 90 days past due | 29,720 | 5,594 |
Loans and other receivables on nonaccrual status | $ 54,652 | $ (22,360) |
Derivative Financial Instruments (Counterparty Credit Quality With Respect To Fair Value Of OTC Derivatives Assets) (Details) $ in Thousands |
Dec. 31, 2015
USD ($)
|
---|---|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair value of OTC derivatives assets, Counterparty credit quality, A- or higher | $ 195,503 |
Fair value of OTC derivatives assets, Counterparty credit quality, BBB- to BBB+ | 76,796 |
Fair value of OTC derivatives assets, Counterparty credit quality, BB+ or lower | 50,581 |
Fair value of OTC derivatives assets, Counterparty credit quality, Unrated | 59,934 |
Total | $ 382,814 |
Derivative Financial Instruments (Narrative) (Details) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Fair value of derivative instruments in a liability position | $ 114.5 | $ 269.0 |
Collateral posted for derivative instruments in a liability position | 97.2 | 234.6 |
Potential additional collateral required for derivative instruments in a liability position | $ 19.7 | $ 55.1 |
Collateralized Transactions (Details) - USD ($) $ in Billions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Collateralized Transactions [Abstract] | ||
Fair value of securities received as collateral that may be sold or repledged | $ 26.2 | $ 25.8 |
Securitization Activities (Activity Related To Securitizations Accounted For As Sales) (Details) - USD ($) $ in Millions |
10 Months Ended | 12 Months Ended | |
---|---|---|---|
Dec. 31, 2013 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Securitization Activities [Abstract] | |||
Transferred assets | $ 4,592.5 | $ 5,770.5 | $ 6,112.6 |
Proceeds on new securitizations | 4,609.0 | 5,811.3 | 6,221.1 |
Cash flows received on retained interests | $ 35.6 | $ 31.2 | $ 46.3 |
Available For Sale Securities (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2013 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Schedule of Investments [Line Items] | ||||
Net realized securities gains | $ 62,957 | $ 30,394 | $ 243,957 | |
Inmet Mining Corporation [Member] | ||||
Schedule of Investments [Line Items] | ||||
Aggregate net proceeds | $ 391,200 | |||
Net realized securities gains | $ 227,600 | |||
First Quantum Minerals Ltd [Member] | ||||
Schedule of Investments [Line Items] | ||||
Shares of common stock received | 18,202,313 | |||
Fair value of shares received | $ 340,400 |
Variable Interest Entities (Assets And Liabilities Of Consolidated VIEs) (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
---|---|---|---|
Variable Interest Entity [Line Items] | |||
Cash | $ 3,638,648 | $ 4,276,775 | |
Financial instruments owned | 18,500,445 | 21,221,259 | |
Securities purchased under agreement to resell | 3,854,746 | 3,926,858 | |
Other | 1,482,092 | 1,807,284 | |
Total | 46,339,812 | 52,623,908 | $ 47,866,781 |
Other secured financings | 910,357 | 705,126 | |
Total liabilities | 35,557,289 | 41,942,200 | |
Jefferies [Member] | |||
Variable Interest Entity [Line Items] | |||
Secured financings eliminated in consolidation | 22,100 | 39,700 | |
Securitization Vehicles [Member] | |||
Variable Interest Entity [Line Items] | |||
Cash | 1,100 | 500 | |
Financial instruments owned | 68,300 | 62,700 | |
Securities purchased under agreement to resell | 717,300 | 575,200 | |
Other | 160,200 | 107,100 | |
Total | 946,900 | 745,500 | |
Other secured financings | 932,400 | 737,000 | |
Other | 14,500 | 8,500 | |
Total liabilities | $ 946,900 | $ 745,500 |
Loans To And Investments In Associated Companies (Jefferies Finance) (Narrative) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Investment [Line Items] | |||
Investment banking | $ 1,417,807 | $ 1,526,637 | $ 997,955 |
Receivables | 3,830,967 | 3,934,825 | |
Jefferies Finance [Member] | |||
Investment [Line Items] | |||
Equity commitment | 600,000 | ||
Funded equity commitments | $ 497,400 | ||
Investment commitment extension | 1 year | ||
Termination notice | 60 days | ||
Total line of credit facility commitment under joint venture | $ 500,000 | 1,000,000 | |
Credit facility, extension period | 1 year | ||
Funded portion of line of credit commitment | $ 19,300 | 0 | |
Line of credit facility commitment of Jefferies | 250,000 | 350,000 | |
Service fee income | 51,700 | 41,600 | 14,200 |
Receivables | 7,800 | 41,500 | |
Jefferies [Member] | |||
Investment [Line Items] | |||
Investment banking | 122,700 | 199,500 | 125,800 |
Origination fees | 5,900 | 10,600 | 12,000 |
Service fee income | 6,200 | 4,600 | 1,900 |
Net underwriting fees | $ 1,300 | $ 7,700 | $ 6,000 |
Loans To And Investments In Associated Companies (Jefferies LoanCore) (Narrative) (Details) - Jefferies LoanCore [Member] - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Investment [Line Items] | ||
Aggregate equity commitment | $ 600.0 | $ 600.0 |
Funded equity commitments | 207.4 | 200.9 |
Equity commitment | $ 291.0 | $ 291.0 |
Percentage of voting interest | 48.50% | 48.50% |
Loans To And Investments In Associated Companies (Berkadia) (Narrative) (Details) - Berkadia [Member] - USD ($) $ in Millions |
12 Months Ended | 84 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2013 |
Dec. 31, 2009 |
Dec. 31, 2015 |
|
Investment [Line Items] | ||||
Capital contributed | $ 217.2 | |||
Percentage of ownership owned | 50.00% | 50.00% | ||
Contributions to (distributions from) associated companies, net | $ 393.9 | |||
Out of period adjustment | $ 16.4 | |||
Surety policy issued | $ 2,500.0 | |||
Reimbursement of losses incurred, maximum percentage | 50.00% | 50.00% | ||
Commercial paper | $ 2,470.0 | $ 2,470.0 |
Loans To And Investments In Associated Companies Loans To And Investments in Associated Companies (Garcadia) (Narrative) (Details) - Garcadia [Member] |
12 Months Ended |
---|---|
Dec. 31, 2015
facility
| |
Investment [Line Items] | |
Number of automobile dealerships | 27 |
Percent of cash allocated | 65.00% |
One Dealership [Member] | |
Investment [Line Items] | |
Percent of cash allocated | 83.00% |
Five Dealerships [Member] | |
Investment [Line Items] | |
Percent of cash allocated | 71.00% |
Garff Enterprises [Member] | |
Investment [Line Items] | |
Number of automobile dealerships | 27 |
Percent of cash allocated | 35.00% |
Loans To And Investments In Associated Companies (Linkem) (Narrative) (Details) - Linkem [Member] € in Millions, $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2015
USD ($)
|
Dec. 31, 2015
EUR (€)
|
|
Investment [Line Items] | ||
Percentage of ownership owned | 42.00% | 42.00% |
Cash consideration | $ 142.9 | |
Interest rate on convertible notes | 5.00% | |
Payments to acquire convertible notes | $ 108.6 | |
Convertible notes principal amount | € | € 81.2 | |
Shareholder loan | 1.1 | 1.0 |
Purchase of convertible preferred shares | $ 14.2 | |
Principal amount | € | € 13.3 | |
Percentage of ownership upon conversion of preferred shares | 56.00% | 56.00% |
Excess investment amortization period, years | 12 years |
Loans To And Investments In Associated Companies (HomeFed) (Narrative) (Details) - HomeFed Corporation [Member] - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Investment [Line Items] | ||
Shares of common stock owned | 9,974,226 | |
Percentage of ownership owned | 65.00% | |
Maximum voting rights as a percentage of total voting securities voting | 45.00% | |
Cash paid on acquisition of common shares | $ 14.0 | |
Common shares acquired | 7,500,000 | |
Deferred gain on sale | $ 36.1 | |
Company Chairman [Member] | ||
Investment [Line Items] | ||
Ownership percentage of company | 4.80% |
Loans To And Investments In Associated Companies (Golden Queen Mining Company) (Narrative) (Details) - USD ($) $ in Thousands |
12 Months Ended | 24 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Dec. 31, 2015 |
|
Investment [Line Items] | ||||
Contributions from noncontrolling interests | $ 16,189 | $ 72,221 | $ 65,870 | |
Golden Queen Mining Company, LLC [Member] | ||||
Investment [Line Items] | ||||
Prior ownership percentage | 100.00% | |||
Percentage of ownership owned | 35.00% | 35.00% | ||
Golden Queen Mining Co, Ltd [Member] | ||||
Investment [Line Items] | ||||
Ownership percentage | 50.00% | 50.00% | ||
Gauss LLC [Member] | ||||
Investment [Line Items] | ||||
Cash invested in Limited Liability Company | $ 83,000 | |||
Gauss LLC [Member] | Golden Queen Mining Company, LLC [Member] | ||||
Investment [Line Items] | ||||
Percentage of ownership owned | 50.00% | 50.00% | ||
Total investment in associated company | $ 117,500 | $ 117,500 | ||
Clay Family [Member] | ||||
Investment [Line Items] | ||||
Contributions from noncontrolling interests | $ 34,500 |
Loans To And Investments In Associated Companies (Schedule Of Summarized Data For Investments In Associated Companies) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Investments In Associated Companies [Line Items] | |||
Assets | $ 46,339,812 | $ 52,623,908 | $ 47,866,781 |
Liabilities | 35,557,289 | 41,942,200 | |
Noncontrolling interests | 64,679 | 67,864 | |
The Company’s income related to associated companies | 185,998 | 228,769 | 211,221 |
Undistributed earnings of equity method investments | 117,100 | ||
Associated Companies [Member] | |||
Investments In Associated Companies [Line Items] | |||
Assets | 18,489,684 | 12,683,212 | |
Liabilities | 14,990,876 | 9,350,034 | |
Noncontrolling interests | 39,038 | 12,718 | |
Revenues | 3,946,252 | 3,201,823 | 2,710,205 |
Income from continuing operations before extraordinary items | 398,369 | 431,654 | 428,509 |
Net income | 398,369 | 431,654 | 434,969 |
The Company’s income related to associated companies | $ 185,998 | $ 228,769 | $ 211,221 |
Intangible Assets, Net And Goodwill (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Nov. 30, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Intangible Assets [Line Items] | ||||
Amortization expense on intangible assets | $ 63.9 | $ 66.2 | $ 74.8 | |
Future amortization expense, 2016 | 63.4 | |||
Future amortization expense, 2017 | 63.5 | |||
Future amortization expense, 2018 | 63.6 | |||
Future amortization expense, 2019 | 63.5 | |||
Future amortization expense, 2020 | 63.2 | |||
Futures [Member] | ||||
Intangible Assets [Line Items] | ||||
Intangible assets impairment loss | $ 7.5 | |||
International Asset Management [Member] | ||||
Intangible Assets [Line Items] | ||||
Intangible assets impairment loss | $ 0.1 | |||
Jefferies LLC [Member] | ||||
Intangible Assets [Line Items] | ||||
Impairment loss | $ 1.3 |
Inventory (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Inventory, Net [Abstract] | ||
Finished goods | $ 211,426 | $ 343,959 |
Work in process | 34,091 | 40,951 |
Raw materials, supplies and other | 42,556 | 37,993 |
Inventory, net | $ 288,073 | $ 422,903 |
Short-Term Borrowings (Details) - USD ($) |
1 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Oct. 22, 2015 |
Apr. 23, 2015 |
Oct. 31, 2015 |
Apr. 30, 2015 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Short-term Debt [Line Items] | ||||||
Short-term borrowings | $ 310,700,000 | $ 12,000,000 | ||||
Debt interest rate | 0.85% | |||||
Line of Credit [Member] | Loan Facility [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Committed amount | $ 50,000,000.0 | |||||
Line of Credit [Member] | Loan Facility [Member] | LIBOR [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Basis spread on variable rate | 3.75% | |||||
Line of Credit [Member] | Intraday Credit Facility [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Committed amount | $ 500,000,000.0 | |||||
Debt term | 6 months | |||||
Extension term | 6 months | |||||
Line of Credit [Member] | Amended Intraday Credit Facility [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Committed amount | $ 300,000,000.0 | |||||
Extension term | 364 days | |||||
Line of Credit [Member] | Amended Intraday Credit Facility [Member] | Federal Funds Rate [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Basis spread on variable rate | 0.50% |
Mezzanine Equity (Schedule Of Redeemable Noncontrolling Interests) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Redeemable Noncontrolling Interest [Roll Forward] | |||||||||||
Beginning balance | $ 186,686 | $ 186,686 | |||||||||
Loss allocated to redeemable noncontrolling interests | $ (10,612) | $ (6,788) | $ (2,031) | (7,112) | $ (9,582) | $ 5,625 | $ 1,273 | $ (5,932) | (26,543) | $ (8,616) | $ (9,282) |
Increase (decrease) in fair value of redeemable noncontrolling interests charged to additional paid-in capital | (26,325) | 45,401 | (16,781) | ||||||||
Ending balance | 191,633 | 186,686 | 191,633 | 186,686 | |||||||
National Beef [Member] | |||||||||||
Redeemable Noncontrolling Interest [Roll Forward] | |||||||||||
Beginning balance | $ 184,333 | $ 241,075 | 184,333 | 241,075 | |||||||
Loss allocated to redeemable noncontrolling interests | (26,465) | (8,576) | |||||||||
Contributions from redeemable noncontrolling interests | 5,263 | 0 | |||||||||
Distributions to redeemable noncontrolling interests | 0 | (2,765) | |||||||||
Increase (decrease) in fair value of redeemable noncontrolling interests charged to additional paid-in capital | 26,227 | (45,401) | |||||||||
Ending balance | $ 189,358 | $ 184,333 | $ 189,358 | $ 184,333 | $ 241,075 |
Common Shares And Compensation Plans (Summary Of Weighted-Average Assumptions Used For Grants) (Details) |
12 Months Ended |
---|---|
Dec. 31, 2013
$ / shares
| |
Share-based Compensation [Abstract] | |
Risk free interest rate | 1.26% |
Expected volatility | 39.17% |
Expected dividend yield | 0.85% |
Expected life | 4 years |
Weighted-average fair value per grant | $ 7.67 |
Common Shares And Compensation Plans (Activity of Restricted Stock) (Details) - Restricted Stock [Member] - $ / shares shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Shares | |||
Balance, beginning of period | 3,383 | 5,242 | 0 |
Converted in connection with the Jefferies acquisition | 6,895 | ||
Grants | 602 | 864 | 462 |
Forfeited | (94) | (202) | (144) |
Fulfillment of service requirement | (1,887) | (2,521) | (1,971) |
Balance, end of period | 2,004 | 3,383 | 5,242 |
Weighted Average Grant Date Fair Value | |||
Balance, beginning of period (USD per share) | $ 27.00 | $ 26.94 | $ 0.00 |
Converted in connection with the Jefferies acquisition (USD per share) | 26.90 | ||
Grants (USD per share) | 18.63 | 27.03 | 27.38 |
Forfeited (USD per share) | 28.12 | 26.90 | 26.90 |
Fulfillment of service requirement (USD per share) | 26.87 | 26.89 | 26.90 |
Balance, end of period (USD per share) | $ 24.56 | $ 27.00 | $ 26.94 |
Pension Plans And Postretirement Benefits (Components Of Pension Expense) (Details) - USD ($) $ in Thousands |
10 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2013 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
U.S. Pension Plans [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | $ 12,958 | $ 14,239 | $ 12,286 | |
Expected return on plan assets | (10,581) | (10,115) | (9,746) | |
Settlement charge | (40,973) | 0 | 0 | |
Actuarial losses | 6,963 | 4,634 | 7,464 | |
Net periodic pension cost | 50,313 | 8,758 | 10,004 | |
Net (gain) loss arising during the period | (24,186) | 52,027 | (31,952) | |
Amortization of net loss | (6,963) | (4,634) | (7,464) | |
Total recognized in other comprehensive income (loss) | (72,122) | 47,393 | (39,416) | |
Net amount recognized in net periodic benefit cost and other comprehensive income (loss) | (21,809) | 56,151 | $ (29,412) | |
German Pension Plan [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 51 | 0 | 40 | |
Interest cost | 685 | 523 | 801 | |
Net amortization | 179 | 325 | 244 | |
Net periodic pension cost | $ 915 | $ 848 | $ 1,085 |
Pension Plans And Postretirement Benefits (Schedule Of Expected Pension Benefit Payments) (Details) $ in Thousands |
Dec. 31, 2015
USD ($)
|
---|---|
Defined Benefit Plan Disclosure [Line Items] | |
2016 | $ 10,503 |
2017 | 8,818 |
2018 | 9,962 |
2019 | 10,001 |
2020 | 10,506 |
2021 - 2025 | 65,960 |
German Pension Plan [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
2016 | 1,143 |
2017 | 1,124 |
2018 | 1,133 |
2019 | 1,110 |
2020 | 1,159 |
2021 - 2025 | $ 5,831 |
Income Taxes (Schedule Of Principal Components Of Deferred Taxes) (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
NOL carryover | $ 1,375,759 | $ 1,266,972 |
Compensation | 284,761 | 334,576 |
Long-term debt | 89,160 | 134,079 |
Other assets | 162,393 | 160,586 |
Securities valuation reserves | 32,141 | 25,499 |
Intangible assets, net and goodwill | 6,855 | 13,842 |
Other liabilities | 40,393 | 57,006 |
Gross tax assets | 1,991,462 | 1,992,560 |
Valuation allowance | (97,177) | (110,404) |
Total deferred tax assets, net | 1,894,285 | 1,882,156 |
Unrealized gains on investments | (153,035) | (10,406) |
Amortization of intangible assets | (103,561) | (97,268) |
Property and equipment | (4,151) | (866) |
Other | (58,170) | (61,081) |
Gross tax liability | (318,917) | (169,621) |
Net deferred tax asset | $ 1,575,368 | $ 1,712,535 |
Income Taxes (Schedule Of Provision (Benefit) For Income Taxes) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Current taxes: | |||
Federal | $ 709 | $ 746 | $ 2,900 |
State and local | (25,308) | 17,232 | 22,006 |
Foreign | 3,504 | 12,375 | 9,050 |
Total current income taxes | (21,095) | 30,353 | 33,956 |
Deferred taxes: | |||
Federal | 134,590 | 97,190 | 82,173 |
State and local | 4,552 | 30,707 | 23,198 |
Foreign | (8,100) | 7,721 | (2,846) |
Total deferred income taxes | 131,042 | 135,618 | 102,525 |
Actual income tax provision | $ 109,947 | $ 165,971 | $ 136,481 |
Net Realized Securities Gains (Losses) (Summary Of Net Securities Gains (Losses)) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Gain (Loss) on Investments [Abstract] | |||
Net realized gains on securities | $ 14,112 | $ 30,686 | $ 245,262 |
Write-down of investments | 0 | (111) | (1,621) |
Other | 48,845 | (181) | 316 |
Net securities gains (losses) | 62,957 | $ 30,394 | $ 243,957 |
Investment recovery | $ 35,000 |
Net Realized Securities Gains (Losses) (Narrative) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Gain (Loss) on Investments [Line Items] | |||
Net realized securities gains | $ 62,957 | $ 30,394 | $ 243,957 |
Proceeds from sales of investments | 1,900,000 | 1,900,000 | 1,800,000 |
Gross gains | 16,900 | $ 12,600 | 240,400 |
Gross losses | $ 2,800 | ||
Inmet Mining Corporation [Member] | |||
Gain (Loss) on Investments [Line Items] | |||
Net realized securities gains | $ 227,600 |
Other Results of Operations Information (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Nonoperating Income (Expense) [Abstract] | |||
Manufacturing revenues | $ 391,920 | $ 379,274 | $ 310,624 |
Dividend income | 5,482 | 7,379 | 5,553 |
Income from associated companies classified as other revenues | 75,717 | 90,242 | 92,180 |
Revenues of oil and gas exploration and production businesses | 45,939 | 19,373 | 0 |
Gain on sale of equity interest | 0 | 22,714 | 0 |
Rental income | 1,872 | 5,877 | 13,158 |
Winery revenues | 0 | 0 | 8,301 |
Other | 28,298 | 45,606 | 55,676 |
Total other income | 549,228 | 570,465 | 485,492 |
Taxes other than income or payroll | 21,900 | 17,000 | 17,000 |
Advertising costs | $ 18,100 | $ 14,500 | $ 14,600 |
Commitments, Contingencies And Guarantees (Future Minimum Lease Commitments For Noncancelable Operating Leases) (Details) $ in Thousands |
Dec. 31, 2015
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2016 | $ 83,230 |
2017 | 80,167 |
2018 | 75,785 |
2019 | 66,339 |
2020 | 57,198 |
Thereafter | 409,417 |
Future minimum annual rentals | 772,136 |
Less: sublease income | (10,854) |
Future minimum annual rentals net of sublease income | $ 761,282 |
Commitments, Contingencies And Guarantees (Guarantees) (Details) - Notional [Member] $ in Millions |
Dec. 31, 2015
USD ($)
|
---|---|
Derivative Contracts - Non-Credit Related [Member] | |
Guarantor Obligations [Line Items] | |
2015 | $ 11,840.6 |
2016 | 584.6 |
2017 and 2018 | 142.8 |
2019 and 2020 | 0.0 |
2021 and Later | 414.4 |
Maximum Payout | 12,982.4 |
Written Derivative Contracts - Credit Related [Member] | |
Guarantor Obligations [Line Items] | |
2015 | 0.0 |
2016 | 0.0 |
2017 and 2018 | 115.4 |
2019 and 2020 | 955.4 |
2021 and Later | 10.0 |
Maximum Payout | 1,080.8 |
Total Derivative Contracts [Member] | |
Guarantor Obligations [Line Items] | |
2015 | 11,840.6 |
2016 | 584.6 |
2017 and 2018 | 258.2 |
2019 and 2020 | 955.4 |
2021 and Later | 424.4 |
Maximum Payout | $ 14,063.2 |
Net Capital Requirements (Details) $ in Thousands |
Dec. 31, 2015
USD ($)
|
---|---|
Jefferies LLC [Member] | |
Net Capital Requirements [Line Items] | |
Net Capital | $ 1,556,602 |
Excess Net Capital | 1,471,663 |
Jefferies Execution [Member] | |
Net Capital Requirements [Line Items] | |
Net Capital | 9,647 |
Excess Net Capital | $ 9,397 |
Other Fair Value Information (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term borrowings | $ 310,659 | $ 12,000 |
Long-term debt | 7,407,594 | 8,527,929 |
Carrying Amount [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notes and loans receivable | 488,690 | 213,174 |
Short-term borrowings | 310,659 | 12,000 |
Long-term debt | 7,407,594 | 8,527,929 |
Fair Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notes and loans receivable | 490,208 | 217,171 |
Short-term borrowings | 310,659 | 12,000 |
Long-term debt | $ 7,299,405 | $ 8,806,700 |
Segment Information (Schedule Of Net Revenues By Geographic Region) (Details) - USD ($) $ in Thousands |
3 Months Ended | 10 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2013 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||
Net revenues | $ 2,496,216 | $ 2,366,096 | $ 2,839,463 | $ 3,184,683 | $ 2,688,355 | $ 3,003,643 | $ 2,851,963 | $ 2,942,524 | $ 10,886,458 | $ 11,486,485 | $ 10,425,746 | |
Jefferies [Member] | ||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||
Net revenues | $ 2,134,002 | 2,476,133 | 2,986,325 | |||||||||
Americas [Member] | Jefferies [Member] | ||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||
Net revenues | 1,645,110 | 1,887,899 | 2,257,870 | |||||||||
Europe [Member] | Jefferies [Member] | ||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||
Net revenues | 441,795 | 510,044 | 634,358 | |||||||||
Asia [Member] | Jefferies [Member] | ||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||
Net revenues | $ 47,097 | $ 78,190 | $ 94,097 |
Segment Information (Narrative) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Segment Reporting Information [Line Items] | |||
Net realized securities gains | $ 62,957 | $ 30,394 | $ 243,957 |
Interest expense | 111,412 | 117,174 | 84,964 |
Corporate and Other [Member] | |||
Segment Reporting Information [Line Items] | |||
Net realized securities gains | 63,000 | 30,400 | 16,000 |
Inmet Mining Corporation [Member] | |||
Segment Reporting Information [Line Items] | |||
Net realized securities gains | 227,600 | ||
National Beef [Member] | |||
Segment Reporting Information [Line Items] | |||
Interest expense | 16,000 | 14,500 | 12,300 |
Parent Company [Member] | |||
Segment Reporting Information [Line Items] | |||
Interest expense | $ 85,900 | $ 98,100 | $ 72,200 |
Exit Costs - Narrative (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Jul. 31, 2015 |
Dec. 31, 2014 |
|
Jefferies Senior Secured Revolving Credit Facility [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Credit facility term loan, maximum amount | $ 750,000,000.0 | ||
Jefferies [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Non-cash restructuring costs | $ 28,700,000 | ||
Expected costs | 3,100,000 | ||
Jefferies [Member] | Jefferies Senior Secured Revolving Credit Facility [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Credit facility term loan, maximum amount | $ 750,000,000.0 | ||
Recognized costs related to credit facility termination | $ 3,800,000 |
Exit Costs - Restructuring and Impairment Costs (Details) - Jefferies [Member] $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
| |
Restructuring Cost and Reserve [Line Items] | |
Impairment costs | $ 73,094 |
Severance Costs [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Impairment costs | 30,327 |
Accelerated Amortization of Restricted Stock and Restricted Cash Awards [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Impairment costs | 7,922 |
Accelerated Amortization of Capitalized Software [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Impairment costs | 19,745 |
Contract Termination Costs [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Impairment costs | 11,247 |
Selling, General and Other Expenses [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Impairment costs | $ 3,853 |
Selected Quarterly Financial Data (Schedule of Selected Quarterly Financial Data) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Selected Quarterly Financial Information [Abstract] | |||||||||||
Net revenues | $ 2,496,216 | $ 2,366,096 | $ 2,839,463 | $ 3,184,683 | $ 2,688,355 | $ 3,003,643 | $ 2,851,963 | $ 2,942,524 | $ 10,886,458 | $ 11,486,485 | $ 10,425,746 |
Income (loss) from continuing operations | 39,038 | (181,912) | 15,034 | 374,429 | (14,038) | 58,253 | 70,190 | 100,846 | 246,589 | 215,251 | 409,104 |
Income from discontinued operations, net of taxes | 0 | 429 | 0 | 0 | 932 | (5,676) | (4,240) | (8,909) | 429 | (17,893) | (60,026) |
Gain on disposal of discontinued operations, net of taxes | 3,793 | 1,300 | 0 | 0 | (6,518) | 7,685 | 500 | 0 | 5,093 | 1,667 | 13,115 |
Net (income) loss attributable to the noncontrolling interest | 3,168 | 1,238 | 356 | 234 | 1,294 | 1,058 | 912 | (2,537) | 4,996 | 727 | 1,162 |
Net (income) loss attributable to the redeemable noncontrolling interests | 10,612 | 6,788 | 2,031 | 7,112 | 9,582 | (5,625) | (1,273) | 5,932 | 26,543 | 8,616 | 9,282 |
Preferred stock dividends | (1,016) | (1,016) | (1,015) | (1,016) | (1,015) | (1,016) | (1,015) | (1,016) | (4,063) | (4,062) | (3,397) |
Net income attributable to Leucadia National Corporation common shareholders | $ 55,595 | $ (173,173) | $ 16,406 | $ 380,759 | $ (9,763) | $ 54,679 | $ 65,074 | $ 94,316 | $ 279,587 | $ 204,306 | $ 369,240 |
Income (loss) from continuing operations (USD per share) | $ 0.14 | $ (0.47) | $ 0.04 | $ 1.00 | $ (0.01) | $ 0.14 | $ 0.18 | $ 0.27 | $ 0.73 | $ 0.58 | $ 1.20 |
Income (loss) from discontinued operations (USD per share) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | (0.02) | (0.01) | (0.02) | 0.00 | (0.05) | (0.17) |
Gain (loss) on disposal of discontinued operations (USD per share) | 0.01 | 0.00 | 0.00 | 0.00 | (0.02) | 0.02 | 0.00 | 0.00 | 0.01 | 0.01 | 0.04 |
Net income (loss) (USD per share) | $ 0.15 | $ (0.47) | $ 0.04 | $ 1.00 | $ (0.03) | $ 0.14 | $ 0.17 | $ 0.25 | $ 0.74 | $ 0.54 | $ 1.07 |
Number of shares used in calculation - basic (shares) | 369,840 | 372,547 | 373,654 | 373,541 | 373,617 | 373,347 | 371,979 | 368,487 | 372,430 | 371,889 | 339,673 |
Income (loss) from continuing operations (USD per share) | $ 0.14 | $ (0.47) | $ 0.04 | $ 0.99 | $ (0.01) | $ 0.14 | $ 0.18 | $ 0.27 | $ 0.73 | $ 0.58 | $ 1.20 |
Income (loss) from discontinued operations (USD per share) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | (0.02) | (0.01) | (0.02) | 0.00 | (0.05) | (0.17) |
Gain (loss) on disposal of discontinued operations - diluted (USD per share) | 0.01 | 0.00 | 0.00 | 0.00 | (0.02) | 0.02 | 0.00 | 0.00 | 0.01 | 0.01 | 0.03 |
Net income (USD per share) | $ 0.15 | $ (0.47) | $ 0.04 | $ 0.99 | $ (0.03) | $ 0.14 | $ 0.17 | $ 0.25 | $ 0.74 | $ 0.54 | $ 1.06 |
Number of shares used in calculation (shares) | 369,840 | 372,547 | 373,662 | 377,713 | 373,617 | 373,375 | 373,179 | 377,348 | 372,431 | 373,333 | 347,734 |
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