Jefferies Financial Group Inc 8-K, filed Mar 27, 2024

Jefferies Financial Group Inc. (JEF)

8-K 2024-03-27 For: 2024-03-27

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Added on April 07, 2026

About this 8-K

Jefferies Financial Group Inc filed this 8-K on March 27, 2024.

Items reported

Item 2.02: Financial results
Item 9.01: Financial statements and exhibits

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Exhibit No.			Description

99			Press Release of Jefferies Financial Group Inc. - Quarter ended February 29, 2024 Results
104			Cover Page Interactive Data File (embedded within the Inline XBRL document)


			JEFFERIES FINANCIAL GROUP INC.


			By:			/s/ Michael J. Sharp
			Name:			Michael J. Sharp
			Title:			Executive Vice President and General Counsel


(Dollars in thousands, except per share amounts)	Three Months Ended
	February 29, 2024		February 28, 202314		% Change
Net revenues:
Investment Banking and Capital Markets	$	1,451,288	$	1,217,132	19%
Asset Management	273,383		68,455		299%
Other	13,532		(2,095)		N/M
Net revenues	1,738,203		1,283,492		35%
Net earnings from continuing operations before income taxes	220,242		158,018		39%
Income tax expense	55,959		28,694		95%
Net earnings from continuing operations	164,283		129,324		27%
Net losses from discontinued operations, net of income tax benefit	(7,891)		—		N/M
Net earnings	156,392		129,324		21%
Net losses attributable to noncontrolling interests	(7,438)		(6,055)		23%
Net losses attributable to redeemable noncontrolling interests	—		(256)		(100)%
Preferred stock dividends	14,189		2,016		604%
Net earnings attributable to common shareholders	$	149,641	$	133,619	12%

Earnings (losses) per common share:
Basic from continuing operations	$	0.71	$	0.56	27%
Basic from discontinued operations	(0.03)		—		N/M
Basic	$	0.68	$	0.56	22%
Diluted from continuing operations	$	0.69	$	0.54	28%
Diluted from discontinued operations	(0.03)		—		N/M
Diluted	$	0.66	$	0.54	23%

Weighted average common shares	219,902		239,101
Weighted average diluted common shares	225,168		248,095


(Amounts in Thousands) (Unaudited)	Quarter Ended
	February 29, 2024		November 30, 2023		February 28, 202314
Net revenues by source:
Advisory	$	338,567	$	312,310	$	297,178
Equity underwriting	209,303		132,158		125,445
Debt underwriting	129,194		129,436		80,175
Total underwriting	338,497		261,594		205,620
Other investment banking	62,608		2,842		60,046
Total Investment Banking	739,672		576,746		562,844
Equities	359,138		271,477		305,294
Fixed income	352,478		209,774		348,994
Total Capital Markets	711,616		481,251		654,288
Total Investment Banking and Capital Markets Net revenues5	1,451,288		1,057,997		1,217,132
Asset management fees and revenues6	59,657		18,695		42,696
Investment return	117,640		62,892		27,434
Other investments, inclusive of net interest15	111,098		73,627		7,423
Allocated net interest4	(15,012)		(14,568)		(9,098)
Total Asset Management Net revenues	273,383		140,646		68,455
Other	13,532		(1,437)		(2,095)
Total Net revenues by source	$	1,738,203	$	1,197,206	$	1,283,492

Non-interest expenses:
Compensation and benefits	$	926,871	$	612,287	$	703,058
Floor brokerage and clearing fees	109,670		98,410		80,474
Underwriting costs	18,484		19,829		13,207
Technology and communications	137,512		122,128		113,385
Occupancy and equipment rental	28,153		26,630		27,315
Business development	57,651		55,649		36,838
Professional services	77,844		70,875		62,161
Depreciation and amortization	43,202		28,311		33,292
Cost of sales	34,671		23,287		2,168
Other	83,903		52,539		53,576
Total Non-interest expenses	$	1,517,961	$	1,109,945	$	1,125,474


(Unaudited)	Quarter Ended
	February 29, 2024		November 30, 2023		February 28, 2023
Other Data:
Number of trading days	61		63		60
Number of trading loss days7	3		7		3
Average VaR (in millions)8	$	15.13	$	12.36	$	12.85


Three Months Ended February 29, 2024

•Net earnings attributable to common shareholders of: ◦$150 million, or $0.66 per diluted common share ◦$164 million, or $0.69 per diluted common share, from continuing operations ◦$196 million, or $0.87 per diluted common share, from continuing operations excluding Weiss net loss16 •Repurchased 1.1 million common shares for $43 million, an average price of $40.63 per share, in connection with net-share settlements related to distributions under our equity compensation plans. •We had 212.0 million common shares outstanding and 253.5 million common shares outstanding on a fully diluted basis2 at February 29, 2024. Our book value per common share was $46.13 and tangible book value per fully diluted share3 was $30.89 at February 29, 2024. •Effective tax rate of 25.4%


Three Months Ended February 29, 2024
Investment Banking and Capital Markets
•Investment Banking net revenues of $740 million were higher than the prior year comparable period driven by improved performance across advisory, and equity and debt underwriting. •Advisory net revenues were higher than the same quarter last year, attributable to increased mergers and acquisitions volume and continued market share gains. •Underwriting net revenues of $338 million increased from the same quarter last year, as equity underwriting experienced periods of increased activity, as equity markets remained robust, as well as our expanded capabilities and enhanced market position. Debt underwriting activity improved as interest rates and inflationary concerns have stabilized. •Capital Markets net revenues of $712 million were higher compared to the prior year quarter primarily due to stronger performance in Equities attributable to increased volumes and more favorable trading opportunities, while Fixed Income net revenues remained consistent from the comparable prior year.



Asset Management
•Asset Management net revenues of $273 million were substantially higher than the prior year period as Investment return net revenues improved due to strong performance across multiple investment strategies and funds. In addition, Other investments15 net revenues for the quarter were meaningfully higher than the prior year largely due to the consolidation of Stratos and Tessellis (which resulted in increased revenues offset by an increase in expenses).


(Amounts in Millions, Except Other Data) (Unaudited)	Quarter Ended
	February 29, 2024		November 30, 2023		February 28, 2023
Financial position:9
Total assets	$	60,933	$	57,905	$	52,033
Cash and cash equivalents	7,616		8,526		7,509
Financial instruments owned	23,212		21,747		21,083
Level 3 financial instruments owned10	589		681		819
Goodwill and intangible assets	2,064		2,045		1,873
Total equity	9,867		9,802		9,811
Total shareholders' equity	9,780		9,710		9,755
Tangible shareholders' equity11	7,716		7,665		7,882
Other data and financial ratios:
Leverage ratio9, 12	6.2		5.9		5.3
Tangible gross leverage ratio9, 13	7.6		7.3		6.4
Number of employees at period end	7,745		7,564		5,401
Number of employees excluding OpNet and Stratos at period end	5,790		5,661		5,401


	Three Months Ended
	February 29, 2024		February 28, 2023
Numerator for earnings per common share from continuing operations:
Net earnings from continuing operations	$	164,283	$	129,324
Less: Net losses attributable to noncontrolling interests	(6,452)		(6,311)
Mandatorily redeemable convertible preferred share dividends	—		(2,016)
Allocation of earnings to participating securities	(14,189)		(528)
Net earnings from continuing operations attributable to common shareholders for basic earnings per share	$	156,546	$	133,091
Adjustment to allocation of earnings to participating securities related to diluted shares	—		(54)
Mandatorily redeemable convertible preferred share dividends	—		2,016
Net earnings from continuing operations attributable to common shareholders for diluted earnings per share	$	156,546	$	135,053

Numerator for earnings per common share from discontinued operations:
Net losses from discontinued operations, net of income tax benefit	$	(7,891)	$	—
Less: Net losses attributable to noncontrolling interests	(986)		—
Net losses from discontinued operations attributable to common shareholders for basic and diluted earnings per share	$	(6,905)	$	—
Net earnings attributable to common shareholders for basic earnings per share	$	149,641	$	133,091



Net earnings attributable to common shareholders for diluted earnings per share	$	149,641	$	135,053






Denominator for earnings per common share:
Weighted average common shares outstanding	211,535		227,543
Weighted average shares of restricted stock outstanding with future service required	(2,402)		(2,128)
Weighted average restricted stock units outstanding with no future service required	10,769		13,686
Weighted average common shares	219,902		239,101
Stock options and other share-based awards	2,915		2,303
Senior executive compensation plan restricted stock unit awards	2,351		2,917

Mandatorily redeemable convertible preferred shares	—		3,774
Weighted average diluted common shares	225,168		248,095

Earnings (losses) per common share:
Basic from continuing operations	$	0.71	$	0.56
Basic from discontinued operations	(0.03)		—
Basic	$	0.68	$	0.56
Diluted from continuing operations	$	0.69	$	0.54
Diluted from discontinued operations	(0.03)		—
Diluted	$	0.66	$	0.54


	Three Months Ended
(in thousands)	February 29, 2024			February 28, 2023
Net earnings attributable to common shareholders (GAAP)	$	149,641		$	133,619
Intangible amortization and impairment expense, net of tax	4,147			2,027
Adjusted net earnings to common shareholders (non-GAAP)	153,788			135,646
Preferred stock dividends	14,189			2,016
Adjusted net earnings to total shareholders (non-GAAP)	$	167,977		$	137,662


Annualized adjusted net earnings to total shareholders (non-GAAP)	$	671,908		$	550,648

Net earnings impact for net losses from discontinued operations, net of noncontrolling interests	6,905			—
Adjusted net earnings to total shareholders from continuing operations (non-GAAP)	174,882			137,662
Annualized adjusted net earnings to total shareholders from continuing operations (non-GAAP)	699,528			550,648

Net earnings impact for Weiss losses	39,393			—



Adjusted net earnings to total shareholders from continuing operations excluding Weiss losses (non-GAAP)	214,275			137,662


Annualized adjusted net earnings to total shareholders from continuing operations excluding Weiss losses (non-GAAP)	857,100			550,648

	November 30,
	2023			2022
Shareholders' equity (GAAP)	$	9,709,827		$	10,232,846
Less: Intangible assets, net and goodwill	(2,044,776)			(1,875,576)
Less: Deferred tax asset, net	(458,343)			(387,862)
Less: Weighted average impact of dividends and share repurchases	(67,475)			(327,445)
Adjusted tangible shareholders' equity (non-GAAP)	$	7,139,233		$	7,641,963


Annualized return on adjusted tangible total equity (non-GAAP)	9.4		%	7.2		%

Annualized adjusted net earnings to shareholders on adjusted tangible shareholders' equity from continuing operations (non-GAAP)	9.8		%	7.2		%

Annualized adjusted net earnings to shareholders on adjusted tangible shareholders' equity from continuing operations excluding Weiss losses (non-GAAP)	12.0		%	7.2		%


	Three Months Ended
(in thousands, except per share amounts)	February 29, 2024
Net earnings attributable to common shareholders (GAAP)	$	149,641
Net earnings impact for discontinued operations	6,905
Net earnings impact for Weiss losses	39,393
Adjusted net earnings (non-GAAP)	$	195,939

Weighted average diluted common shares	225,168

Earnings per diluted common share (GAAP)	$	0.66
Adjusted earnings per diluted common share from continuing operations excluding Weiss losses (non-GAAP)	$	0.87


		February 29, 2024
Book value (GAAP)		$	9,780,097
Stock options(1)		114,939
Intangible assets, net and goodwill		(2,063,956)
Adjusted tangible book value (non-GAAP)		$	7,831,080

Common shares outstanding (GAAP)		212,001
Preferred shares		21,000
Restricted stock units ("RSUs")		14,062
Stock options(1)		5,065
Other		1,386
Fully diluted shares outstanding (non-GAAP)(2)		253,514

Book value per common share outstanding		$	46.13
Tangible book value per fully diluted share outstanding (non-GAAP)		$	30.89

(1)	Stock options added to book value are equal to the total number of stock options outstanding as of February 29, 2024 of 5.1 million multiplied by the weighted average exercise price of $22.69 on February 29, 2024. Stock options added to fully diluted shares are equal to the total stock options outstanding on February 29, 2024.
(2)	Fully diluted shares outstanding include vested and unvested RSUs as well as the target number of RSUs issuable under the senior executive compensation plans until the performance period is complete. Fully diluted shares outstanding also include all stock options and the impact of mandatorily convertible preferred shares if-converted to common shares.


						FOR MORE INFORMATION Jonathan Freedman 212.778.8913