8-K
Jefferies Financial Group Inc. (JEF)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________
FORM 8-K
________________________________
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): March 26, 2025
________________________________
JEFFERIES FINANCIAL GROUP INC.
(Exact name of registrant as specified in its charter)
________________________________
| New York | 001-05721 | 13-2615557 | |
|---|---|---|---|
| (State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | |
| 520 Madison Avenue | New York, | New York | 10022 |
| (Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (212) 284-2300
(Former name or former address, if changed since last report)
______________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Shares, par value $1 per share | JEF | New York Stock Exchange |
| 4.850% Senior Notes Due 2027 | JEF 27A | New York Stock Exchange |
| 5.875% Senior Notes Due 2028 | JEF 28 | New York Stock Exchange |
| 2.750% Senior Notes Due 2032 | JEF 32A | New York Stock Exchange |
| 6.200% Senior Notes Due 2034 | JEF 34 | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition
On March 26, 2025, we issued a press release containing financial results for our quarter ended February 28, 2025. A copy of the press release is attached hereto as Exhibit 99 and is incorporated herein by reference.
The information provided in this Item 2.02, including the exhibits hereto, is intended to be “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits
The following exhibits are furnished with this report:
| Exhibit No. | Description |
|---|---|
| 99 | Press Release of Jefferies Financial Group Inc. - Quarter ended February 28, 2025 Results |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: March 26, 2025
| JEFFERIES FINANCIAL GROUP INC. | |
|---|---|
| By: | /s/ Michael J. Sharp |
| Name: | Michael J. Sharp |
| Title: | Executive Vice President and General Counsel |
Document
| FOR MORE INFORMATION<br><br>Jonathan Freedman 212.778.8913 |
|---|
For Immediate Release
Jefferies Financial Group Inc. (NYSE: JEF)
March 26, 2025
Jefferies Announces First Quarter 2025 Financial Results
Q1 Financial Highlights
| $ in thousands, except per share amounts | Quarter End | |||||
|---|---|---|---|---|---|---|
| 1Q25 | 1Q24 | |||||
| Net earnings attributable to common shareholders | $ | 127,793 | $ | 149,641 | ||
| Diluted earnings per common share from continuing operations | $ | 0.57 | $ | 0.69 | ||
| Return on adjusted tangible shareholders' equity from continuing operations1 | 8.0 | % | 9.8 | % | ||
| Total net revenues | $ | 1,593,019 | $ | 1,738,203 | ||
| Investment banking net revenues14 | $ | 700,692 | $ | 727,010 | ||
| Capital markets net revenues14 | $ | 698,284 | $ | 724,278 | ||
| Asset management net revenues | $ | 191,715 | $ | 273,383 | ||
| Pre-tax earnings from continuing operations | $ | 151,065 | $ | 220,242 | ||
| Book value per common share | $ | 49.48 | $ | 46.13 | ||
| Adjusted tangible book value per fully diluted share3 | $ | 32.57 | $ | 30.89 |
Quarterly Cash Dividend
The Jefferies Board of Directors declared a quarterly cash dividend equal to $0.40 per Jefferies common share, payable on May 29, 2025 to record holders of Jefferies common shares on May 19, 2025.
Management Comments
"Our first quarter results reflect strength in Advisory, Debt underwriting and Equities offset by a meaningful decline in asset management investment return compared to the prior year quarter. The capital markets have become increasingly more challenging due to the uncertainties that have arisen around U.S. policy and geopolitical events. There remains strong dialogue around potential investment banking transactions (capital raising and advisory) and our high quality backlog continues to build. Its realization depends on confidence and visibility reemerging, which may be beginning.
"We remain very confident about our strategy, our team and our long-term growth opportunities across our global businesses and we will navigate this period of uncertainty the way we always do, by focusing on our clients and helping them address their challenges and opportunities, while watching our risk, maintaining record liquidity and striving to gain market share across our firm.
"Investment Banking net revenues from Advisory, Equity underwriting and Debt underwriting totaling $726 million for the quarter were up 7% versus the prior year quarter. We had strong performance in Advisory, which was up 17%, largely from market share gains, and Debt underwriting, which was up 54%, tempered by subdued performance in Equity underwriting, which was down 39% as the opportunity in the current year in sectors where we have more meaningful market share was down notably from the prior year's comparable period.
"Capital Markets net revenues of $698 million for the first quarter were down 4% versus the prior year quarter. Equities net revenues of $409 million increased 10% from the prior year quarter, with continued strong global performance across a variety of products. Fixed Income net revenues of $289 million decreased 18% from the prior year's exceptionally strong first quarter, driven by lower volatility translating to lower overall volumes.
"Asset Management fees and investment return revenues of $83 million for the quarter were down 53% from the prior year quarter. We achieved a modest increase in management fees and a significant increase in performance fees from our strong performance in calendar year 2024 that were realized in the first quarter of 2025. This was offset by considerably weaker investment return in the current quarter due to a difficult investment environment for a variety of strategies, particularly those with a long equity bias, compared to particularly strong performance in the prior year quarter across several strategies.
"We would also like to thank our clients and colleagues who came together in January as part of our Doing Good Global Trading Day, to proudly contribute $10 million to a variety of amazing charities to support Los Angeles wildfire relief efforts."
Richard Handler, CEO, and Brian Friedman, President
| 1 Jefferies Financial Group |
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Financial Summary (Unaudited)
| $ in thousands | Three Months Ended | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| February 28,<br> 2025 | November 30, <br> 2024 | February 29,<br> 2024 | |||||||
| Net revenues by source: | |||||||||
| Advisory | $ | 397,780 | $ | 596,707 | $ | 338,567 | |||
| Equity underwriting | 128,520 | 191,218 | 209,303 | ||||||
| Debt underwriting | 199,362 | 171,456 | 129,194 | ||||||
| Other investment banking14 | (24,970) | 27,443 | 49,946 | ||||||
| Total Investment Banking | 700,692 | 986,824 | 727,010 | ||||||
| Equities14 | 409,058 | 410,768 | 371,800 | ||||||
| Fixed income | 289,226 | 240,922 | 352,478 | ||||||
| Total Capital Markets | 698,284 | 651,690 | 724,278 | ||||||
| Total Investment Banking and Capital Markets Net revenues5 | 1,398,976 | 1,638,514 | 1,451,288 | ||||||
| Asset management fees and revenues6 | 88,630 | 13,752 | 59,657 | ||||||
| Investment return | (5,634) | 101,762 | 117,640 | ||||||
| Allocated net interest4 | (17,221) | (15,104) | (15,012) | ||||||
| Other investments, inclusive of net interest13 | 125,940 | 214,340 | 111,098 | ||||||
| Total Asset Management Net revenues | 191,715 | 314,750 | 273,383 | ||||||
| Other | 2,328 | 3,338 | 13,532 | ||||||
| Total Net revenues by source | $ | 1,593,019 | $ | 1,956,602 | $ | 1,738,203 | |||
| Non-interest expenses: | |||||||||
| Compensation and benefits | $ | 841,127 | $ | 981,626 | $ | 926,871 | |||
| Compensation ratio15 | 52.8 | % | 50.2 | % | 53.3 | % | |||
| Non-compensation expenses | $ | 600,827 | $ | 670,114 | $ | 591,090 | |||
| Non-compensation ratio15 | 37.7 | % | 34.2 | % | 34.0 | % | |||
| Total Non-interest expenses | $ | 1,441,954 | $ | 1,651,740 | $ | 1,517,961 | |||
| Net earnings from continuing operations before income taxes | $ | 151,065 | $ | 304,862 | $ | 220,242 | |||
| Income tax expense | $ | 14,216 | $ | 86,117 | $ | 55,959 | |||
| Income tax rate | 9.4 | % | 28.2 | % | 25.4 | % | |||
| Net earnings from continuing operations | $ | 136,849 | $ | 218,745 | $ | 164,283 | |||
| Net earnings (losses) from discontinued operations, net of income taxes | — | 5,155 | (7,891) | ||||||
| Net losses attributable to noncontrolling interests | (6,983) | (8,262) | (7,438) | ||||||
| Preferred stock dividends | 16,039 | 26,416 | 14,189 | ||||||
| Net earnings attributable to common shareholders | $ | 127,793 | $ | 205,746 | $ | 149,641 | |||
| 2 Jefferies Financial Group | |||||||||
| --- |
Highlights
| Three Months Ended February 28, 2025 | ||
|---|---|---|
| •Net earnings attributable to common shareholders of $128 million, or $0.57 per diluted common share from continuing operations.<br><br>•Return on adjusted tangible shareholders' equity from continuing operations1 of 8.0%.<br><br>•We had 206.3 million common shares outstanding and 254.3 million common shares outstanding on a fully diluted basis2 at February 28, 2025. Our book value per common share was $49.48 and tangible book value per fully diluted share3 was $32.57.<br><br>•Effective tax rate from continuing operations of 9.4% compared to 25.4% for the prior year quarter. The lower rate was primarily driven by the partial resolution of certain state and local tax matters. | Investment Banking and Capital Markets | |
| --- | ||
| •Investment Banking net revenues from Advisory, Equity underwriting and Debt underwriting totaling $726 million were 7% higher than the prior year quarter.<br><br>•Advisory net revenues of $398 million were higher than the prior year quarter, primarily attributable to meaningful market share gains and an increase in transaction levels across most sectors in the global mergers and acquisitions markets.<br><br>•Underwriting net revenues of $328 million were lower than the prior year quarter, as strong results in Debt underwriting were offset by reduced Equity underwriting activity, as overall industry opportunity slowed particularly in sectors where we have significant market share.<br><br>•Capital Markets net revenues of $698 million were lower compared to the prior year quarter. Equities net revenues increased from the prior year quarter, as results in our prime services business significantly increased over the prior year period. Additionally, revenues from global electronic trading business were also strong. Fixed Income net revenues decreased from the prior year quarter as strong results from our global structured solutions and securitized markets businesses were offset by lower results primarily attributable to our distressed trading and municipal securities businesses, which were particularly strong in the prior year quarter. | Asset Management | |
| --- | ||
| •Asset Management fees and revenues and investment return of $83 million were lower than the prior year quarter.<br><br>•Asset management fees and revenues increased, as strong performance across multiple managed funds resulted in higher performance fee income for the calendar year 2024 which were realized in the first quarter of 2025.<br><br>•Investment return decreased due to a difficult investment environment for a variety of strategies, particularly those with a long equity bias, compared to particularly strong performance across several strategies in the prior year quarter. | Non-interest Expenses | |
| --- | ||
| •Compensation and benefits expense as a percentage of Net revenues was 52.8%, compared to 53.3% for the prior year quarter.<br><br>•Non-compensation expenses slightly increased from the prior year quarter. The current year quarter includes approximately $17 million in charitable donations, including $10 million to support Los Angeles wildfire relief efforts, as well as a modest increase in business development expenses, while the prior year quarter includes the impact of $27 million in bad debt expenses associated with the shutdown of Weiss Multi-Strategy Advisers. |
* * * *
Amounts herein pertaining to February 28, 2025 represent a preliminary estimate as of the date of this earnings release and may be revised upon filing our Quarterly Report on Form 10-Q with the Securities and Exchange Commission (“SEC”). More information on our results of operations for the three months ended February 28, 2025 will be provided upon filing our Quarterly Report on Form 10-Q with the SEC, which we expect to file on or about April 9, 2025.
This press release contains certain “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current views and include statements about our future and statements that are not historical facts. These forward-looking statements are usually preceded by the words “should,” “expect,” “intend,” “may,” “will,” "would," or similar expressions. Forward-looking statements may contain expectations regarding revenues, earnings, operations, and other results, and may include statements of future performance, plans, and objectives. Forward-looking statements may also include statements pertaining to our strategies for future development of our businesses and products. Forward-looking statements represent only our belief regarding future events, many of which by their nature are inherently uncertain. It is possible that the actual results may differ, possibly materially, from the anticipated results indicated in these forward-looking statements. Information regarding important factors, including Risk Factors that could cause actual results to differ, perhaps materially, from those in our forward-looking statements is contained in reports we file with the SEC. You should read and interpret any forward-looking statement together with reports we file with the SEC. We undertake no obligation to update or revise any such forward-looking statement to reflect subsequent circumstances.
Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy will be profitable or equal the corresponding indicated performance level(s).
| 3 Jefferies Financial Group |
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Consolidated Statements of Earnings (Unaudited)
| $ in thousands, except per share amounts | Three Months Ended | |||
|---|---|---|---|---|
| February 28,<br> 2025 | February 29,<br> 2024 | |||
| Revenues | ||||
| Investment banking | $ | 729,510 | $ | 679,065 |
| Principal transactions | 407,230 | 640,736 | ||
| Commissions and other fees | 288,300 | 245,543 | ||
| Asset management fees and revenues | 85,408 | 50,372 | ||
| Interest | 845,171 | 819,489 | ||
| Other | 117,245 | 116,737 | ||
| Total revenues | 2,472,864 | 2,551,942 | ||
| Interest expense | 879,845 | 813,739 | ||
| Net revenues | 1,593,019 | 1,738,203 | ||
| Non-interest expenses | ||||
| Compensation and benefits | 841,127 | 926,871 | ||
| Brokerage and clearing fees | 109,436 | 109,670 | ||
| Underwriting costs | 17,846 | 18,484 | ||
| Technology and communications | 139,475 | 137,512 | ||
| Occupancy and equipment rental | 30,199 | 28,153 | ||
| Business development | 72,291 | 57,651 | ||
| Professional services | 72,466 | 77,844 | ||
| Depreciation and amortization | 30,988 | 43,202 | ||
| Cost of sales | 41,568 | 34,671 | ||
| Other expenses | 86,558 | 83,903 | ||
| Total non-interest expenses | 1,441,954 | 1,517,961 | ||
| Earnings from continuing operations before income taxes | 151,065 | 220,242 | ||
| Income tax expense | 14,216 | 55,959 | ||
| Net earnings from continuing operations | 136,849 | 164,283 | ||
| Net losses from discontinued operations, net of income taxes | — | (7,891) | ||
| Net earnings | 136,849 | 156,392 | ||
| Net losses attributable to noncontrolling interests | (6,983) | (7,438) | ||
| Preferred stock dividends | 16,039 | 14,189 | ||
| Net earnings attributable to common shareholders | $ | 127,793 | $ | 149,641 |
| 4 Jefferies Financial Group | ||||
| --- |
Financial Data and Metrics (Unaudited)
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| February 28,<br> 2025 | November 30, <br> 2024 | February 29,<br> 2024 | ||||
| Other Data: | ||||||
| Number of trading days | 61 | 63 | 61 | |||
| Number of trading loss days7 | 4 | 8 | 3 | |||
| Average VaR (in millions)8 | $ | 13.13 | $ | 12.75 | $ | 15.13 |
| In millions, except other data | February 28,<br> 2025 | November 30, <br> 2024 | February 29,<br> 2024 | |||
| --- | --- | --- | --- | --- | --- | --- |
| Financial position: | ||||||
| Total assets | $ | 70,219 | $ | 64,360 | $ | 60,933 |
| Cash and cash equivalents | 11,176 | 12,153 | 7,616 | |||
| Financial instruments owned | 26,087 | 24,138 | 23,212 | |||
| Level 3 financial instruments owned9 | 781 | 734 | 589 | |||
| Goodwill and intangible assets | 2,038 | 2,054 | 2,064 | |||
| Total equity | 10,268 | 10,225 | 9,867 | |||
| Total shareholders' equity | 10,204 | 10,157 | 9,780 | |||
| Tangible shareholders' equity10 | 8,166 | 8,103 | 7,716 | |||
| Other data and financial ratios: | ||||||
| Leverage ratio11 | 6.8 | 6.3 | 6.2 | |||
| Tangible gross leverage ratio12 | 8.3 | 7.7 | 7.6 | |||
| Number of employees at period end | 7,701 | 7,822 | 7,745 | |||
| Number of employees excluding OpNet, Tessellis and Stratos at period end | 5,994 | 5,968 | 5,790 | |||
| 5 Jefferies Financial Group | ||||||
| --- |
Components of Numerators and Denominators for Earnings Per Common Share
| $ in thousands, except per share amounts | Three Months Ended | |||
|---|---|---|---|---|
| February 28, 2025 | February 29, 2024 | |||
| Numerator for earnings per common share from continuing operations: | ||||
| Net earnings from continuing operations | $ | 136,849 | $ | 164,283 |
| Less: Net losses attributable to noncontrolling interests | (6,983) | (6,452) | ||
| Allocation of earnings to participating securities | (16,039) | (14,189) | ||
| Net earnings from continuing operations attributable to common shareholders for basic earnings per share | $ | 127,793 | $ | 156,546 |
| Net earnings from continuing operations attributable to common shareholders for diluted earnings per share | $ | 127,793 | $ | 156,546 |
| Numerator for earnings per common share from discontinued operations: | ||||
| Net losses from discontinued operations, net of taxes | $ | — | $ | (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 | $ | 127,793 | $ | 149,641 |
| Net earnings attributable to common shareholders for diluted earnings per share | $ | 127,793 | $ | 149,641 |
| Denominator for earnings per common share: | ||||
| Weighted average common shares outstanding | 206,046 | 211,535 | ||
| Weighted average shares of restricted stock outstanding with future service required | (2,200) | (2,402) | ||
| Weighted average restricted stock units outstanding with no future service required | 10,690 | 10,913 | ||
| Weighted average basic common shares | 214,536 | 220,046 | ||
| Stock options and other share-based awards | 5,287 | 2,894 | ||
| Senior executive compensation plan restricted stock unit awards | 2,625 | 2,351 | ||
| Weighted average diluted common shares | 222,448 | 225,291 | ||
| Earnings (losses) per common share: | ||||
| Basic from continuing operations | $ | 0.60 | $ | 0.71 |
| Basic from discontinued operations | — | (0.03) | ||
| Basic | $ | 0.60 | $ | 0.68 |
| Diluted from continuing operations | $ | 0.57 | $ | 0.69 |
| Diluted from discontinued operations | — | (0.03) | ||
| Diluted | $ | 0.57 | $ | 0.66 |
| 6 Jefferies Financial Group | ||||
| --- |
Non-GAAP Reconciliations
The following tables reconcile our non-GAAP financial measures to their respective U.S. GAAP financial measures. Management believes such non-GAAP financial measures are useful to investors as they allow them to view our results through the eyes of management, while facilitating a comparison across historical periods. These measures should not be considered a substitute for, or superior to, measures prepared in accordance with U.S. GAAP.
Return on Adjusted Tangible Equity Reconciliation
| $ in thousands | Three Months Ended | |||||
|---|---|---|---|---|---|---|
| February 28, 2025 | February 29, 2024 | |||||
| Net earnings attributable to common shareholders (GAAP) | $ | 127,791 | $ | 149,641 | ||
| Intangible amortization and impairment expense, net of tax | 7,073 | 4,147 | ||||
| Adjusted net earnings to common shareholders (non-GAAP) | 134,864 | 153,788 | ||||
| Preferred stock dividends | 16,039 | 14,189 | ||||
| Adjusted net earnings to total shareholders (non-GAAP) | $ | 150,903 | $ | 167,977 | ||
| Adjusted net earnings to total shareholders (non-GAAP)1 | $ | 603,612 | $ | 671,908 | ||
| 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) | 150,903 | 174,882 | ||||
| Adjusted net earnings to total shareholders from continuing operations (non-GAAP)1 | 603,612 | 699,528 | ||||
| November 30, | ||||||
| 2024 | 2023 | |||||
| Shareholders' equity (GAAP) | $ | 10,156,772 | $ | 9,709,827 | ||
| Less: Intangible assets, net and goodwill | (2,054,310) | (2,044,776) | ||||
| Less: Deferred tax asset, net | (497,590) | (458,343) | ||||
| Less: Weighted average impact of dividends and share repurchases | (94,936) | (67,475) | ||||
| Adjusted tangible shareholders' equity (non-GAAP) | $ | 7,509,936 | $ | 7,139,233 | ||
| Return on adjusted tangible shareholders' equity (non-GAAP)1 | 8.0 | % | 9.4 | % | ||
| Return on adjusted tangible shareholders' equity from continuing operations (non-GAAP)1 | 8.0 | % | 9.8 | % | ||
| 7 Jefferies Financial Group | ||||||
| --- |
Adjusted Tangible Book Value and Fully Diluted Shares Outstanding Reconciliation
Reconciliation of book value (shareholders' equity) to adjusted tangible book value and common shares outstanding to fully diluted shares outstanding:
| in thousands, except per share amounts | |
|---|---|
| Book value (GAAP) | 10,204,228 |
| Stock options(1) | |
| Intangible assets, net and goodwill | |
| Adjusted tangible book value (non-GAAP) | 8,281,261 |
| Common shares outstanding (GAAP) | |
| Preferred shares | |
| Restricted stock units ("RSUs") | |
| Stock options(1) | |
| Other | |
| Adjusted fully diluted shares outstanding (non-GAAP)(2) | |
| Book value per common share outstanding | 49.48 |
| Adjusted tangible book value per fully diluted share outstanding (non-GAAP) | 32.57 |
| (1) | |
| (2) |
All values are in US Dollars.
| 8 Jefferies Financial Group |
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Notes
1.Return on adjusted tangible shareholders' equity and Return on adjusted tangible shareholders' equity from continuing operations represent non-GAAP financial measures and are based on full year or annualized amounts. Refer to schedule on page 7 for a reconciliation to U.S. GAAP amounts.
2.Shares outstanding on a fully diluted basis (a non-GAAP financial measure) is defined as common shares outstanding plus preferred shares, restricted stock units, stock options and other shares. Refer to schedule on page 8 for a reconciliation to U.S. GAAP amounts.
3.Adjusted tangible book value per fully diluted share (a non-GAAP financial measure) is defined as adjusted tangible book value (a non-GAAP financial measure) divided by shares outstanding on a fully diluted basis (a non-GAAP financial measure). Refer to schedule on page 8 for a reconciliation to U.S. GAAP amounts.
4.Allocated net interest represents an allocation to Asset Management of certain of our long-term debt interest expense, net of interest income on our Cash and cash equivalents and other sources of liquidity. Allocated net interest has been disaggregated to increase transparency and to present direct Asset Management revenues. We believe that aggregating Allocated net interest would obscure the revenue results by including an amount that is unique to our credit spreads, debt maturity profile, capital structure, liquidity risks and allocation methods.
5.Allocated net interest is not separately disaggregated for Investment Banking and Capital Markets. This presentation is aligned to our Investment Banking and Capital Markets internal performance measurement.
6.Asset management fees and revenues include management and performance fees from funds and accounts managed by us as well as our share of fees received by affiliated asset management companies with which we have revenue and profit share arrangements, as well as earnings on our ownership interest in affiliated asset managers.
7.Number of trading loss days is calculated based on trading activities in our Investment Banking and Capital Markets and Asset Management business segments, excluding certain Other investments.
8.VaR estimates the potential loss in value of trading positions due to adverse market movements over a one-day time horizon with a 95% confidence level. For a further discussion of the calculation of VaR, see "Value-at-Risk" in Part II, Item 7A "Quantitative and Qualitative Disclosures About Market Risk" in our Annual Report on Form 10-K for the year ended November 30, 2024.
9.Level 3 financial instruments represent those financial instruments classified as such under Accounting Standards Codification 820, accounted for at fair value and included within Financial instruments owned.
10.Tangible shareholders' equity (a non-GAAP financial measure) is defined as shareholders' equity less Intangible assets and goodwill. We believe that tangible shareholders' equity is meaningful for valuation purposes, as financial companies are often measured as a multiple of tangible shareholders' equity, making these ratios meaningful for investors.
11.Leverage ratio equals total assets divided by total equity.
12.Tangible gross leverage ratio (a non-GAAP financial measure) equals total assets less goodwill and intangible assets divided by tangible shareholders' equity. The tangible gross leverage ratio is used by rating agencies in assessing our leverage ratio.
13.Beginning in fiscal 2024, we now refer to "Merchant banking" as “Other investments” in our Asset Management reportable segment.
14.Beginning in the fourth quarter of 2024, revenues from corporate equity derivative transactions historically included within Other investment banking net revenues were reclassified to Equities net revenues as the underlying business has matured and has started to generate meaningful revenues. Prior year amounts have been revised to conform to this reclassification change to the current year reporting.
15.Compensation ratio equals total compensation expense divided by total net revenues. Non-compensation ratio equals total non-compensation expense divided by total net revenues.
| 9 Jefferies Financial Group |
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