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Jefferies Reports Fourth Quarter and 2012 Fiscal Year Financial Results



  Jefferies Reports Fourth Quarter and 2012 Fiscal Year Financial Results

Business Wire

NEW YORK & LONDON -- December 18, 2012

Jefferies Group, Inc. (NYSE: JEF) announced today financial results for its
fiscal fourth quarter and year ended November 30, 2012.

Highlights for the three months ended November 30, 2012, versus the three
months ended November 30, 2011:

  * Net revenues of $769 million, versus $554 million
  * Net earnings to common shareholders of $72 million ($81 million on a
    non-GAAP basis after excluding Hurricane Sandy relief donation, Leucadia
    merger costs and certain historical-related items [1]), versus $48 million
    ($39 million on a non-GAAP basis after excluding certain items [2])
  * Net earnings per common share of $0.31 ($0.35 on a non-GAAP basis after
    excluding Hurricane Sandy relief donation, Leucadia merger costs and
    certain historical-related items [1]), versus $0.21 ($0.17 on a non-GAAP
    basis after excluding certain items [2])
  * Investment Banking net revenues of $283 million, up 8%, versus $261
    million
  * Fixed Income net revenues more than doubled to $293 million, versus $141
    million

Highlights for the year ended November 30, 2012, versus the year ended
November 30, 2011:

  * Record fiscal year net revenues of $2,999 million, up 18%, versus $2,549
    million
  * Net earnings to common shareholders of $282 million ($302 million on a
    non-GAAP basis after excluding certain items [1][3]), versus $285 million
    ($232 million on a non-GAAP basis after excluding certain items [2][4])
  * Net earnings per common share of $1.22 ($1.31 on a non-GAAP basis after
    excluding certain items [1][3]), versus $1.28 ($1.04 on a non-GAAP basis
    after excluding certain items [2][4])
  * Fixed Income net revenues of $1,190 million, up 66%, versus $715 million
  * Investment Banking net revenues of $1,126 million versus $1,123 million

“2013 will mark the beginning of a new era for Jefferies. We believe our
imminent merger with Leucadia will result in an even stronger Jefferies, as
well as making us even more distinguished from our bank holding company
competitors. The traditional, entrepreneurial Wall Street model has served us
well historically and we believe this will continue to be an advantage into
the future. Combining our company with an extremely well-capitalized parent
will allow us to continue to aggressively add value to our clients. Our 3,804
employee partners look forward to working our hardest on behalf of Leucadia
shareholders while protecting both of our collective bondholders.”

A conference call with management discussion of these financial results will
be held today, Tuesday, December 18, 2012, at 9:00 AM Eastern (date and time
subject to change). Investors and securities industry professionals may access
the management discussion by calling 877-710-9938 or 702-928-7183. A one-week
replay of the call will also be available at 855-859-2056 or 404-537-3406
(conference ID # 73941351). A live audio webcast and delayed replay can also
be accessed at www.jefferies.com.

Jefferies Group, Inc. (NYSE: JEF), the global investment banking firm focused
on serving clients for over 50 years, is a leader in providing insight,
expertise and execution to investors, companies and governments. Jefferies
provides a full range of investment banking, sales, trading, research and
strategy across the spectrum of equities, fixed income, foreign exchange,
futures and commodities, and also select asset and wealth management
strategies, in the Americas, Europe and Asia.

           Adjustments to net earnings to common shareholders and net earnings
           per common share on a non-GAAP basis include donations to Hurricane
           Sandy relief and transaction costs associated with the announced
      1.   merger with Leucadia, amortization of intangibles and compensation
           awards related to our Bache and Hoare Govett acquisitions and
           interest expense incurred as a result of debt extinguishment
           accounting, from prior quarters, all on an after-tax basis.
           Adjustments to net earnings to common shareholders and net earnings
           per common share on a non-GAAP basis include gain on debt
      2.   extinguishment related to trading activities in our own debt, and
           amortization of intangible assets and compensation awards and other
           severance and bonus costs related to our Bache acquisition, all on
           an after-tax basis.
           Adjustments to net earnings to common shareholders and net earnings
           per common share on a non-GAAP basis include a bargain purchase
      3.   gain and compensation awards on our Hoare Govett acquisition, a
           gain on debt extinguishment relating to trading activities in our
           own debt and impairment charges on intangibles related to our Bache
           acquisition, all on an after-tax basis.
           Adjustments to net earnings to common shareholders and net earnings
           per common share on a non-GAAP basis include a bargain purchase
      4.   gain on our Bache acquisition, which is not a taxable item and
           transaction and integration expenses related to the Bache
           acquisition on an after-tax basis.

                    -- see financial tables in attached --

                                                                              
JEFFERIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in Thousands, Except Per Share Amounts)
(Unaudited)
                      
                       Three Months Ended                  Year Ended
                       November          November          November 30,        November 30,
                       30,               30,
                       2012              2011              2012                2011
Revenues:
Commissions            $ 127,074         $ 130,619         $ 485,569           $ 534,726
Principal                242,140           36,571            1,035,974           428,035
transactions
Investment               282,962           261,298           1,125,883           1,122,528
banking
Asset management
fees and
investment               16,318            6,623             26,966              44,125
income from
managed funds
Interest income          242,904           317,485           1,031,839           1,248,132
Other revenues           61,872            46,144            164,974             152,092    
Total revenues           973,270           798,740           3,871,205           3,529,638
Interest expense         204,421           244,757           872,421             980,825    
Net revenues             768,849           553,983           2,998,784           2,548,813
Interest on
mandatorily
redeemable
preferred                8,279             (2,561  )         42,883              3,622      
interests of

consolidated
subsidiaries
Net revenues,
less mandatorily
redeemable               760,570           556,544           2,955,901           2,545,191  
preferred

interests
                                                                                
Non-interest
expenses:
Compensation and         460,404           308,137           1,770,798           1,482,604
benefits
                                                                                
Non-compensation
expenses:
Floor brokerage
and clearing             29,106            33,837            120,145             126,313
fees
Technology and           64,051            62,377            244,511             215,940
communications
Occupancy and            25,815            23,954            97,397              84,951
equipment rental
Business                 22,968            29,397            95,330              93,645
development
Professional             27,771            17,868            73,427              66,305
services
Other                    16,480            10,294            62,498              56,099     
Total
non-compensation         186,191           177,727           693,308             643,253    
expenses
Total
non-interest             646,595           485,864           2,464,106           2,125,857  
expenses
Earnings before          113,975           70,680            491,795             419,334
income taxes
Income tax               34,243            25,066            168,646             132,966    
expense
Net earnings             79,732            45,614            323,149             286,368
Net earnings
(loss) to                8,128             (2,772  )         40,740              1,750      
noncontrolling
interests
Net earnings to
common                 $ 71,604          $ 48,386          $ 282,409           $ 284,618    
shareholders
Earnings per
common share:
Basic                  $ 0.31            $ 0.21            $ 1.23              $ 1.28       
Diluted                $ 0.31            $ 0.21            $ 1.22              $ 1.28       
                                                                                
Weighted average
common shares:
Basic                    214,415           215,628           215,989             211,056
Diluted                  218,527           215,629           220,101             215,171
                                                                                
                                                                                
Compensation and
benefits / Net           59.9    %         55.6    %         59.1      %         58.2      %
revenues
                                                                                
Effective tax            30.0    %         35.5    %         34.3      %         31.7      %
rate
                                                                                            

                            
JEFFERIES GROUP, INC. AND SUBSIDIARIES
SELECTED STATISTICAL INFORMATION
(Amounts in Thousands, Except Other Data)
(Unaudited)
                                                                 
                             Quarter Ended
                             November 30,       August 31,        November 30,
                             2012               2012              2011
Revenues by Source
Equities                     $   176,595        $ 209,980         $  124,305
Fixed Income                     292,974          265,679            140,651
Other                            -                -                  21,106   
Total                            469,569          475,659            286,062
                                                                   
                                                                   
Equity                           52,919           39,068             26,936
Debt                             145,772          87,894             62,090   
Capital markets                  198,691          126,962            89,026
Advisory                         84,271           133,201            172,272  
Investment banking               282,962          260,163            261,298
                                                                   
Asset management fees
and investment income
/ (loss) from managed
funds:
Asset management fees            9,680            8,583              9,162
Investment income /
(loss) from managed              6,638            (5,467  )          (2,539  )
funds
Total                            16,318           3,116              6,623    
Net revenues                     768,849          738,938            553,983  
Interest on
mandatorily redeemable
preferred interests of           8,279            8,304              (2,561  )
consolidated
subsidiaries
Net revenues, less
mandatorily redeemable       $   760,570        $ 730,634         $  556,544  
preferred interests
                                                                   
Other Data
Number of trading days           63               65                 63
                                                                   
Average firmwide VaR         $   13.38          $ 10.53           $  9.43
(in millions) (1)
Average firmwide VaR
excluding Knight             $   7.95           $ 8.35            N/a
Capital (in millions)
(1)
                                                                   

(1) VaR is the potential loss in value of our 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 7 "Management's Discussion and Analysis" in our Annual Report on Form
10-K for the year ended November 30, 2011.

                        
JEFFERIES GROUP, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(Amounts in Thousands, Except Per Share Amounts)
(Unaudited)
                                                                 
                             Quarter Ended
                             November 30,       August 31,        November 30,
                             2012               2012              2011        
                                                                   
Results:
Net earnings to common       $  71,604          $ 70,171          $  48,386
shareholders
Basic EPS (1)                $  0.31            $ 0.31            $  0.21
Diluted EPS (1)              $  0.31            $ 0.31            $  0.21
Pretax operating                15.0    %         16.7    %          12.7    %
margin
Effective tax rate              30.0    %         36.0    %          35.5    %
                                                                   
Basic and Diluted EPS
impact from share            $  0.04            $ 0.08            N/a
ownership in Knight
Capital (13)
                                                                   
Common share data:
Common shares                   203,312           203,070            197,160
outstanding
Adjusted shares                 214,616           214,177            218,406
outstanding (2)
                                                                   
Share issued during             945               926                2,072
quarter
Shares purchased                603               1,702              5,135
during the quarter
                                                                   
Weighted average                214,415           214,756            215,628
common shares- Basic
Weighted average                218,527           218,867            215,629
common shares- Diluted
                                                                   
Financial position:
Total assets (in             $  36,294          $ 34,407          $  34,971
millions) (3)
Average total assets
for quarter (in              $  44,242          $ 42,594          $  50,087
millions) (3)
Cash and cash
equivalents (in              $  2,693           $ 2,845           $  2,394
millions)
Financial instruments
owned (in millions)          $  16,670          $ 13,917          $  16,679
(3)
                                                                   
Total common
stockholders' equity         $  3,436           $ 3,369           $  3,224
(in millions)
Tangible common
stockholders' equity         $  3,055           $ 2,988           $  2,839
(in millions) (4)
Common book value per        $  16.90           $ 16.59           $  16.35
share (5)
Adjusted book value          $  16.01           $ 15.73           $  14.76
per share (6)
Tangible common book         $  15.03           $ 14.71           $  14.40
value per share (4)
Adjusted tangible book       $  14.24           $ 13.95           $  13.00
value per share (6)
                                                                   
Level 3 financial
instruments:
Level 3 financial
instruments owned (in        $  504             $ 487             $  498
millions) (3) (7)
Level 3 financial
instruments owned with       $  450             $ 436             $  452
economic exposure (in
millions) (3)(8)
Level 3 financial
instruments owned - %           1.4     %         1.4     %          1.4     %
total assets (3)
Level 3 financial
instruments owned - %           3.0     %         3.5     %          3.0     %
total financial
instruments owned (3)
Level 3 financial
instruments owned with
economic exposure - %           2.7     %         3.1     %          2.7     %
total financial
instruments owned (3)
Level 3 financial
instruments owned with
economic exposure - %           13.1    %         12.9    %          14.0    %
common stockholders'
equity (3)
                                                                   
Other data and
financial ratios:
Total capital (in            $  8,710           $ 8,622           $  8,227
millions) (9)
Leverage ratio (3)              9.6               9.3                9.9
(10)
Adjusted leverage               9.0               8.8                9.4
ratio (3) (11)
                                                                   
Number of trading days          63                65                 63
                                                                   
Average firmwide VaR         $  13.38           $ 10.53           $  9.43
(in millions) (12)
Average firmwide VaR
excluding Knight             $  7.95            $ 8.35            N/a
Capital (in millions)
(12)
                                                                   
Number of employees,            3,804             3,814              3,898
at quarter end
                                                                   
Compensation and
benefits / Net                  59.9    %         59.6    %          55.6    %
revenues
                                                                   

      Footnotes
       
(1)   The following details the calculation of basic and diluted earnings per
      share as included in our quarterly and annual reports.

                                                                 
                              Quarter Ended
                              November 30,       August 31,       November 30,
                              2012               2012             2011        
  Earnings for basic
  earnings per common
  share:
  Net earnings                $   79,732         $  78,321        $  45,614
  Net earnings (loss)
  to noncontrolling               8,128             8,150            (2,772  )
  interests
  Net earnings to                 71,604            70,171           48,386
  common shareholders
  Less: Allocation of
  earnings to                     5,143             3,913            2,560    
  participating
  securities (A)
  Net earnings
  available to common         $   66,461         $  66,258        $  45,826   
  shareholders
  Earnings for diluted
  earnings per common
  share:
  Net earnings                $   79,732         $  78,321        $  45,614
  Net earnings (loss)
  to noncontrolling               8,128             8,150            (2,772  )
  interests
  Net earnings to                 71,604            70,171           48,386
  common shareholders
  Add: Convertible
  preferred stock                 1,016             1,016            -
  dividends (B)
  Less: Allocation of
  earnings to                     5,146             3,916            2,560    
  participating
  securities (A)
  Net earnings
  available to common         $   67,474         $  67,271        $  45,826   
  shareholders
  Weighted Average
  Common Shares:
  Basic                           214,415           214,756          215,628
  Diluted                         218,527           218,867          215,629
  Earnings per common
  share:
  Basic                       $   0.31           $  0.31          $  0.21
  Diluted                     $   0.31           $  0.31          $  0.21

     
      (A) Represents dividends declared during the period on participating
      securities plus an allocation of undistributed earnings to participating
      securities. 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 16,406,000, 12,732,000 and 11,755,000 for
      the three months ended November 30, 2012, August 31, 2012 and November
      30, 2011, respectively. Dividends declared on participating securities
      during the three months ended November 30, 2012, August 31, 2012 and
      November 30, 2011 amounted to approximately $1,270,000, $924,000 and
      $959,000, 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.
       
      (B) The conversion of our mandatorily redeemable convertible preferred
      stock was considered anti-dilutive for our three-months ended November
      30, 2011.
       
(2)   The following details the calculation of adjusted shares outstanding:

                                                                 
                              November 30,       August 31,       November 30,
                              2012               2012             2011       
                                                                   
  Common shares               203,312            203,070          197,160
  outstanding
  Unearned restricted         (8,058    )        (8,166   )       (9,032    )
  stock
  Earned restricted           16,656             17,331           18,994
  stock units
  Other issuable shares       2,706              1,942            11,284     
  Adjusted shares             214,616            214,177          218,406    
  outstanding

      
       This amount represents a preliminary estimate as of the date of this
(3)    earnings release and may be revised in our Annual Report on Form 10-K
       for the year ended November 30, 2012.
        
       Tangible common stockholders’ equity represents total common
       stockholders’ equity less goodwill and identifiable intangible assets.
       As of November 30, 2012, tangible common stockholders' equity equals
       total common stockholders' equity of $3,436.0 million less goodwill and
       identifiable intangible assets of $380.9 million. Tangible common book
(4)    value per share equals tangible common stockholders' equity divided by
       common shares outstanding. We believe that tangible common book value
       per share and tangible common stockholders' equity is meaningful as a
       valuation of financial companies are often measured as a multiple of
       tangible common stockholders' equity, making these ratios meaningful
       for investors.
        
(5)    Common book value per share equals total common stockholders' equity
       divided by common shares outstanding.
        
       Adjusted book value per share (non-GAAP financial measure) equals total
       common stockholders’ equity divided by adjusted shares outstanding.
       Adjusted tangible book value per share (non-GAAP financial measure)
(6)    equals tangible common stockholders’ equity divided by adjusted shares
       outstanding. We believe these are meaningful measures as investors
       often incorporate the dilutive effects of outstanding capital in their
       valuations.
        
       Level 3 financial instruments represent those financial instruments
(7)    classified as such under ASC 820, accounted for at fair value and
       included within Financial instruments owned.
        
       Level 3 financial instruments owned with economic exposure represents
       Level 3 financial instruments owned adjusted for Level 3 financial
(8)    instruments that are financed by nonrecourse secured financing or
       attributable to third party or employee noncontrolling interests in
       certain consolidated entities.
        
       Total capital includes our long-term debt, mandatorily redeemable
       convertible preferred stock, mandatorily redeemable preferred interest
(9)    of consolidated subsidiaries and total stockholders' equity. Long-term
       debt included in total capitalization at November 30 and August 31,
       2012 and November 30, 2011 is reduced by amounts outstanding under the
       revolving credit facility.
        
(10)   Leverage ratio equals total assets divided by total stockholders'
       equity.
        
       Adjusted leverage ratio (non-GAAP financial measure) equals adjusted
       assets divided by tangible stockholders' equity. Adjusted assets
       (non-GAAP financial measure) equals total assets less securities
       borrowed, securities purchased under agreements to resell, cash and
       securities segregated, goodwill and identifiable intangibles plus
(11)   financial instruments sold, not yet purchased (net of derivative
       liabilities). As of November 30, 2012, August 31, 2012 and November 30,
       2011 adjusted assets were $30,604 million, $29,232 million and $29,534
       million, respectively. We believe that adjusted assets is a meaningful
       measure as it excludes certain assets that are considered of lower risk
       as they are generally self-financed by customer liabilities through our
       securities lending activities.
        
       VaR is the potential loss in value of our trading positions due to
       adverse market movements over a one-day time horizon with a 95%
(12)   confidence level. For a further discussion of the calculation of VaR,
       see "Value at Risk" in Part II, Item 7 "Management's Discussion and
       Analysis" in our Annual Report on Form 10-K for the year ended November
       30, 2011.
        
       Principal transaction revenues of $48.7 million and $103.3 million from
       our share ownership of Knight Capital had a positive impact on our
       basic and diluted EPS of $0.04 and $0.08 for the three months ended
       November 30, 2012 and August 31, 2012, respectively, on a non-GAAP
(13)   basis after considering compensation costs at a ratio of 59.5% and
       59.6%, allocations to mandatorily redeemable preferred interests of
       $2.6 million and $5.5 million, net earnings to noncontrolling interests
       of $2.5 million and $5.4 million, and income tax expense at an
       effective rate of 36.8% and 41.5%, for the three months ended November
       30 and August 31, 2012, respectively.
        

 
JEFFERIES GROUP, INC. AND SUBSIDIARIES
COMMON SHARES OUTSTANDING AND COMMON SHARES FOR BASIC AND DILUTED EPS
CALCULATIONS
(Amounts in Thousands)
(Unaudited)
                                                                
                                                                   
                                           November 30,
                                           2012
                                                                   
Common shares outstanding                  203,312
      Unearned restricted stock            (8,058)
      Earned restricted stock              16,656
      units
      Other issuable shares                2,706
Adjusted shares outstanding                214,616
                                                                   
Note - All share information below for EPS purposes is based upon
weighted-average balances for the applicable period.
                                                                   
                                           Quarter Ended          Year Ended
                                           November 30,           November 30,
                                           2012                   2012
                                                                   
Shares outstanding (weighted       (1)     203,145                203,369
average)
Unearned restricted stock          (2)     (7,998)                (8,549)
Earned restricted stock units      (3)     17,154                 17,942
Other issuable shares              (4)     2,114                  3,227
Common Shares for Basic EPS                214,415                215,989
                                                                   
Stock options                      (5)     2                      2
Mandatorily redeemable             (6)     4,110                  4,110
convertible preferred stock
Convertible debt                   (7)     -                      -
Common Shares for Diluted EPS              218,527                220,101
                                                                   

      Shares outstanding represents shares issued less shares repurchased in
      treasury stock. Shares issued includes public and private offerings,
(1)   earned and unearned restricted stock, distributions related to
      restricted stock units, deferred compensation plans, and employee stock
      purchase plan and stock option exercises. Shares issued does not include
      undistributed earned and unearned restricted stock units.
       
      As certain restricted stock is contingent upon a future service
(2)   condition, unearned shares are removed from shares outstanding in the
      calculation of basic EPS as Jefferies' obligation to issue these shares
      remains contingent.
       
      As earned restricted stock units are no longer contingent upon a future
(3)   service condition and are issuable upon a certain date in the future,
      earned restricted stock units are added to shares outstanding in the
      calculation of basic EPS.
       
      Other shares issuable include shares issuable to settle previously
(4)   granted restricted stock awards and shares issuable under certain
      deferred compensation plans.
       
      Calculated under the treasury stock method. The treasury stock method
(5)   assumes the issuance of only a net incremental number of shares as
      proceeds from issuance are assumed to be used to repurchase shares at
      the average stock price for the period.
       
      Calculated under the if-converted method. The if-converted method
(6)   assumes the conversion of convertible securities at the beginning of the
      period.
       
      Represents the potential common shares issuable under the conversion
(7)   spread (the excess conversion value over the accreted debt value) based
      on the average stock price for the period.
       

 
         JEFFERIES GROUP, INC. AND SUBSIDIARIES
         RECONCILIATION OF GAAP TO NON GAAP FINANCIAL MEASURES
         (Amounts in Thousands, Except Per Share Amounts)
         (Unaudited)
                                                                                                                
                                                                                                                 Year Ended
                                                         Three Months                                            November 30,
                                                         Ended                              Debt                 2012
                                                         November 30,                       Accounting           (Excluding
                                    Amortization         2012                               Gain and             Debt
                    Three           of Debt              (Excluding                         Amortization         Accounting
                    Months          Discount,            Amortization     Year Ended        of Debt              Gain and
                    Ended           Certain              of Debt                            Discount,            Amortization
                                    Acquisition          Discount,        November 30,      Impairment           of Debt
                    November        Items and            Certain          2012              Charge,              Discount,
                    30, 2012        Hurricane            Acquisition                        Certain              Impairment
                                    Sandy Relief         Items and                          Acquisition          Charge,
                                                         Hurricane                          Items and            Certain
                                                         Sandy                              Hurricane            Acquisition
                                                         Relief)                            Sandy Relief         Items and
                                                                                                                 Hurricane
                                                                                                                 Sandy Relief)
                                                                                                                  
Net revenues        $ 768,849       $  (1,245  )   (A)   $  770,094       $ 2,998,784       $  8,416       (E)   $ 2,990,368
                                                                                                                  
Compensation          460,404          2,496       (B)   $  457,908         1,770,798          24,675      (F)     1,746,123
and benefits
Noncompensation       186,191          9,014       (C)   $  177,177         693,308            14,510      (G)     678,798    
expenses
                                                                                                                  
Total
non-interest          646,595          11,510               635,085         2,464,106          39,185              2,424,921  
expenses
Earnings before       113,975          (12,755 )            126,730         491,795            (30,769 )           522,564
income taxes
Income tax
expense               34,243           (3,499  )   (D)      37,742          168,646            (11,404 )   (D)     180,050    
(benefit)
                                                                                                                  
Net earnings          79,732           (9,256  )            88,988          323,149            (19,365 )           342,514
                                                                                                                  
Net earnings to
common              $ 71,604        $  (9,256  )         $  80,860        $ 282,409         $  (19,365 )         $ 301,774
shareholders
Earnings per
common share:
Basic               $ 0.31                               $  0.35          $ 1.23                                 $ 1.31       
Diluted             $ 0.31                               $  0.35          $ 1.22                                 $ 1.31       
                                                                                                                  
Weighted
average common
shares:
Basic                 214,415                               214,415         215,989                                215,989
Diluted               218,527                               218,527         220,101                                220,101
                                                                                                                  
Compensation
and                   59.9    %                             59.5    %       59.1      %                            58.4      %
benefits/Net
revenues
Effective tax         30.0    %                             29.8    %       34.3      %                            34.5      %
rate
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                         Three Months
                                                         Ended                                                   Year Ended
                                    Debt                 November 30,                       Debt                 November 30,
                    Three           Accounting           2011                               Accounting           2011
                    Months          Gain and             (Excluding       Year Ended        Gain and             (Excluding
                    Ended           Certain              Debt                               Certain              Debt
                                    Bache                Accounting       November 30,      Bache                Accounting
                    November        Acquisition          Gain and         2011              Acquisition          Gain and
                    30, 2011        Items                Certain                            Items                Certain Bache
                                                         Bache                                                   Acquisition
                                                         Acquisition                                             Items)
                                                         Items)
                                                                                                                  
Net revenues        $ 553,983       $  20,175      (H)   $  533,808       $ 2,548,813       $  72,684      (H)   $ 2,476,129
                                                                                                                  
Compensation          308,137          2,721       (I)   $  305,416         1,482,604          11,785      (I)     1,470,819
and benefits
Noncompensation       177,727          704         (J)   $  177,023         643,253            7,826       (K)     635,427    
expenses
                                                                                                                  
Total
non-interest          485,864          3,425                482,439         2,125,857          19,611              2,106,246  
expenses
Earnings before       70,680           16,750               53,930          419,334            53,073              366,261
income taxes
Income tax
expense               25,066           6,985       (L)      18,081          132,966            235         (L)     132,731    
(benefit)
                                                                                                                  
Net earnings          45,614           9,765                35,849          286,368            52,838              233,530
                                                                                                                  
Net earnings to
common              $ 48,386        $  9,765             $  38,621        $ 284,618         $  52,838            $ 231,780
shareholders
Earnings per
common share:
Basic               $ 0.21                               $  0.17          $ 1.28                                 $ 1.04       
Diluted             $ 0.21                               $  0.17          $ 1.28                                 $ 1.04       
                                                                                                                  
Weighted
average common
shares:
Basic                 215,628                               215,628         211,056                                211,056
Diluted               215,629                               215,629         215,171                                215,171
                                                                                                                  
Compensation
and                   55.6    %                             57.2    %       58.2      %                            59.4      %
benefits/Net
revenues
Effective tax         35.5    %                             33.5    %       31.7      %                            36.2      %
rate
                                                                                                                              

The selected financial information for the three months and year ended
November 30, 2012 and 2011 excluding the effects of purchases and sales of our
debt in November and December 2011, certain items identified and recognized in
connection with the acquisition of Hoare Govett from The Royal Bank of
Scotland Group plc on February 1, 2012 and the acquisition of the Global
Commodities Group (the "Bache entities") from Prudential Financial, Inc.
("Prudential") on July 1, 2011, the impairment of certain intangible assets in
the three months ended May 31, 2012, donations to Hurricane Sandy relief in
November 2012 and transaction costs associated with the announced merger with
Leucadia National Corporation incurred in the third and fourth fiscal quarter
of 2012, are non-GAAP financial measures. We believe this presentation
provides meaningful information to shareholders as it provides comparability
for our results of operations for the three months and year ended November 30,
2012 with the results for periods ended November 30, 2011.

 
FOOTNOTES TO SELECTED FINANCIAL INFORMATION
     
      Net revenues in the fourth quarter of 2012 includes additional interest
(A)   expense from the amortization of discounts on long-term debt re-issued
      in November and December 2011 in connection with trading activities in
      our own debt.
       
      Compensation expense for the three months ended November 30, 2012
(B)   includes expense related to the amortization of retention and stock
      replacement awards granted in connection with the acquisition of the
      Bache entities and Hoare Govett.
       
      Reflects amortization of intangible assets recognized in connection with
      the acquisitions of Hoare Govett and the Bache entities, donations to
(C)   Hurricane Sandy relief of $4.1 million and transaction costs (primarily
      professional fees) associated with the announced merger with Leucadia
      National Corporation of $4.2 million.
       
      For the three months and year ended November 30, 2012, reflects the tax
      benefit on the additional interest expense, Hoare Govett and Bache
(D)   related expense items, Hurricane Sandy relief donations and transaction
      costs associated with the announced merger with Leucadia at a domestic
      and foreign marginal tax rate of 42.3% and 24.7%, respectively.
       
      Includes a gain on debt extinguishment of $9.9 million in accordance
      with debt extinguishment accounting under ASC 405 and 470 relating to
      trading activities in our own long term debt and a bargain purchase gain
(E)   of $3.4 million resulting from the acquisition of Hoare Govett recorded
      in Other revenues, partially offset by additional interest expense of
      $4.8 million from subsequent amortization of debt discounts upon
      reissuance of our long-term debt.
       
      Includes compensation expense related to the amortization of retention
(F)   and stock replacement awards granted in connection with the acquisition
      of the Bache entities and Hoare Govett and bonus costs for employees as
      a result of the completion of the Hoare Govett acquisition.
       
      Reflects an impairment charge of $2.9 million on indefinite-lived
      intangible assets and amortization of intangible assets recognized in
(G)   connection with the acquisitions of Hoare Govett and the Bache entities,
      donations to Hurricane Sandy relief of $4.1 million and transaction
      costs (primarily professional fees) associated with the announced merger
      with Leucadia National Corporation of $4.7 million.
       
      In accordance with debt extinguishment accounting under ASC 405 and 470,
      we recorded a gain on debt extinguishment of $20.2 million in Other
      revenues for the three and twelve months ended November 30, 2011,
(H)   relating to trading activities in our own long term debt. The twelve
      months ended November 30, 2011 includes a bargain purchase gain of $52.5
      million resulting from the acquisition of the Bache entities from
      Prudential recorded in Other revenues in the third quarter of 2011.
       
      In connection with the acquisition of the Bache entities, compensation
      expense was recognized for the three months and year ended November 30,
      2011 related to 1) severance costs for certain employees of the acquired
(I)   Bache entities that were terminated subsequent to the acquisition, 2)
      the amortization of stock awards granted to former Bache employees as
      replacement awards for previous Prudential stock awards that were
      forfeited in the acquisition and 3) bonus costs for employees as a
      result of the completion of the acquisition.
       
(J)   Reflects the amortization of intangible assets recognized in connection
      with the acquisition of the Bache entities.
       
      Includes the amortization of intangible assets of $0.7 million
      recognized during the three months ended November 30, 2011 in connection
(K)   with the acquisition of the Bache entities as well as expenses
      (primarily professional fees) totaling $7.1 million related to the
      acquisition and/or integration of the Bache entities within the
      Jefferies Group, Inc.
       
      For the three and twelve months ended November 30, 2011, the total
(L)   domestic marginal tax rate of 41.7% was applied. The bargain purchase
      gain of $52.5 million on the acquisition of the Bache entities is not a
      taxable item.

Contact:

Jefferies Group, Inc.
Peregrine C. Broadbent, 212-284-2338
Chief Financial Officer
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