Mezzanine Equity

Redeemable Noncontrolling Interests

Redeemable noncontrolling interests primarily relate to National Beef and are held by its minority owners, 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). The holders will have the right to make an election that requires us to purchase up to 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. As discussed further in Note 1, in April 2018, we entered into a definitive agreement to sell 48% of National Beef to Marfrig. Upon closing of the transaction with Marfrig, the current minority owners will no longer have put rights to us.

Redeemable noncontrolling interests in National Beef are reflected in the Consolidated Statements of Financial Condition at fair value. The following table rolls forward National Beef’s redeemable noncontrolling interests activity during the three months ended March 31, 2018 and 2017 (in thousands):



	For the Three Months Ended March 31,
	2018			2017
As of January 1,	$	412,128		$	321,962
Income allocated to redeemable noncontrolling interests	14,450			12,049
Distributions to redeemable noncontrolling interests	(9,519		)	(7,117		)
Increase (decrease) in fair value of redeemable noncontrolling interests	(17,067		)	1,038
Balance, March 31,	$	399,992		$	327,932

At March 31, 2018, the fair value of the redeemable noncontrolling interests is based upon the total equity value associated with the announced sale of National Beef as described more fully in Note 1.

At March 31, 2018 and December 31, 2017, redeemable noncontrolling interests also include other redeemable noncontrolling interests of $14.8 million and $14.5 million, respectively, primarily related to our oil and gas exploration and development businesses.

Mandatorily Redeemable Convertible Preferred Shares

In connection with our acquisition of Jefferies in March 2013, 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 holders of the Preferred Shares are also entitled to an additional quarterly payment in the event we declare and pay a dividend on our common stock in an amount greater than $0.0625 per common share per quarter. The additional quarterly payment would be paid to the holders of Preferred Shares on an as converted basis and on a per share basis would equal the quarterly dividend declared and paid to a holder of a share of common stock in excess of $0.0625 per share. In the third quarter of 2017, we increased our quarterly dividend from $0.0625 to $0.10 per common share. This increased the preferred stock dividend from $1.0 million in the first quarter of 2017 to $1.2 million in the first quarter of 2018. 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.