Jefferies Financial Group Inc. (NYSE: JEF):
Q4 Financial Highlights
- Net earnings attributable to common shareholders of $140
million, or $0.57 per diluted share
- Annualized return on adjusted tangible equity of 7.2%1
- Total net revenues of $1.44 billion
- Investment Banking net revenues of $568 million
- Capital Markets net revenues of $478 million
- Asset Management net revenues (before allocated net interest2)
of $402 million, inclusive of $232 million of net revenues from
merchant banking activities
- Repurchased 3.9 million shares of common stock for $121
million, or an average price of $31.24 per share
- Our Board of Directors has increased our share buyback
authorization back to a total of $250 million
- On November 1, 2022, we completed our merger with Jefferies
Group LLC. This merger eliminated Jefferies Group LLC’s requirement
to file Form 10-Qs, Form 10-Ks, and other duplicative processes,
and resulted in us assuming Jefferies Group's debt obligations. In
connection with the merger we have transferred our legacy merchant
banking investments to our Investment Banking and Capital Markets
or Asset Management segment and have reorganized the presentation
of our segments and Net revenues to align with the way we are now
managing our business. Additionally, corporate activities are now
fully allocated to these segments. Prior year amounts have been
revised to conform to this current presentation. Refer to Note 18
for further information.
“Jefferies' 2022 total investment banking
revenues, while down 38% from an off-the-charts 2021, represented
our second-best year ever and were substantially above 2019 levels.
Our advisory net revenues were only 5% below last year's all-time
record result, while our underwriting net revenues were down 59%,
due to the IPO and leveraged finance markets being substantially
closed for much of the year. Our combined equities and fixed income
net revenues were down only 19% versus 2021 and up meaningfully
versus 2019.
"Most significantly, for our fiscal 2022,
Jefferies was the #6 largest investment banking firm in both global
M&A, as well as global equity capital markets (excluding
China), up from #12 and #13, respectively, only five years ago. We
also moved up one spot from the prior year to #7 globally in
combined M&A, ECM and leveraged finance, an improvement from
#10 in 2017. It is worth noting that all the competitors ahead of
us on these lists are trillion dollar plus global bank holding
companies who often lead with their balance sheet, while Jefferies
leads with ideas, expertise and human capital.
"Our Equities franchise continued to expand
in breadth and capability, while gaining market share across the
majority of equity products in 2022. We achieved a U.S. ranking of
#6 and a European ranking of #7 for equity research, while we were
ranked #3 best overall in Asia for combined equity research and
sales. While our Fixed Income business was down for the year, our
fourth quarter was up over 71% and we carried that momentum through
the first month of fiscal 2023.
"Monetizing our legacy merchant banking
portfolio and returning capital to shareholders remains one of our
overriding priorities, and we made continued progress in 2022. We
expect to take a further important step later this week with our
spin-off to shareholders of Vitesse Energy ('Vitesse'). In 2022, we
returned an aggregate of $1.14 billion to shareholders in the form
of $280.1 million in dividends and the repurchase of 25.6 million
shares for a total of $859.6 million, or $33.58 per share. Over the
last five years, we have now returned $5.0 billion in total capital
to shareholders, representing two-thirds of total tangible book
value3 at January 1, 2018 and including 152.8 million shares
repurchased at an average of $23.57 per share. Further, our Vitesse
spin-off delivers to our shareholders an additional estimated more
than $500 million of our shareholders' equity. Pro forma for the
Vitesse spin-off, we will have returned over $5.5 billion in total
capital to shareholders over the last five years, representing over
72% of tangible book value3 at January 1, 2018.
"In sum, we achieved a respectable return on
adjusted tangible equity of 10.3%1 in a very difficult environment,
enhanced our market position in our core businesses and simplified
our corporate structure. As we move forward in 2023, we have never
been more optimistic about our human capital, product capabilities,
industry expertise and geographic breadth, which we intend to
continue to aggressively deliver to our clients going forward. Our
goal is to continue to gain market share, further strengthening our
'never better' competitive position, and continue our quest to be
the best full service global investment banking firm."
Richard Handler, CEO, and Brian Friedman,
President
Please refer to the just-released Jefferies Financial Group
Annual Letter from our CEO and President for broader perspective on
2022, as well as our strategy and outlook.
Quarterly Cash Dividend
The Jefferies Board of Directors declared a quarterly cash
dividend equal to $0.30 per Jefferies common share, payable on
February 24, 2023 to record holders of Jefferies common shares on
February 13, 2023.
Financial Summary
(Dollars in thousands, except per share
amounts)
Three Months Ended
November 30,
Twelve Months Ended
November 30,
2022
202118
% Change
2022
202118
% Change
Net revenues:
Investment Banking and Capital Markets
$
1,046,434
$
1,615,752
(35
)%
$
4,726,150
$
6,917,774
(32
)%
Asset Management
395,228
151,177
161
%
1,257,693
1,092,624
15
%
Other
(3,580
)
(8,438
)
58
%
(5,005
)
3,428
N/M
Net revenues
1,438,082
1,758,491
(18
)%
5,978,838
8,013,826
(25
)%
Net earnings before income taxes
194,840
425,565
(54
)%
1,055,562
2,254,105
(53
)%
Income tax expense
53,903
91,973
(41
)%
273,852
576,729
(53
)%
Net earnings
140,937
333,592
(58
)%
781,710
1,677,376
(53
)%
Net earnings (losses) attributable to
noncontrolling interests
(1,280
)
6,586
N/M
(2,397
)
3,850
N/M
Net earnings (loss) attributable to
redeemable noncontrolling interests
(101
)
245
N/M
(1,342
)
(826
)
62
%
Preferred stock dividends
2,070
1,848
12
%
8,281
6,949
19
%
Net earnings attributable to Jefferies
Financial Group Inc.
$
140,248
$
324,913
(57
)%
$
777,168
$
1,667,403
(53
)%
Basic earnings per common share
$
0.58
$
1.23
(53
)%
$
3.13
$
6.29
(50
)%
Weighted average shares
239,312
261,637
247,378
263,595
Diluted earnings per common share
$
0.57
$
1.20
(53
)%
$
3.06
$
6.13
(50
)%
Weighted average diluted shares
248,338
270,743
255,571
271,501
Annualized return on adjusted tangible
equity1
7.2
%
16.5
%
10.3
%
24.5
%
Adjusted annualized return on adjusted
tangible equity4
7.2
%
16.5
%
11.3
%
24.5
%
N/M — Not Meaningful
Highlights
Three Months Ended November 30, 2022
Twelve Months Ended November 30, 2022
- Net earnings attributable to common shareholders of $140
million, or $0.57 per diluted share.
- Repurchased 3.9 million shares of common stock for $121.0
million, or an average price of $31.24 per share.
- We had 226.1 million shares outstanding and 254.6 million
shares outstanding on a fully diluted basis5 at November 30, 2022.
Our book value per share was $45.25 and tangible book value per
fully diluted share6 was $33.78 at November 30, 2022.
- Our Board of Directors has increased our share buyback
authorization back to a total of $250 million.
- Effective tax rate of 27.7%
- Net earnings attributable to common shareholders of $777
million, or $3.06 per diluted share; adjusted net earnings
attributable to common shareholders8 of $857 million, or $3.37 per
diluted share, after removing $80 million of expense related to a
regulatory settlement in the third quarter.
- Repurchased 25.6 million shares of common stock for $859.6
million, or an average price of $33.58 per share.
- Effective tax rate of 25.9%, reflecting non-deductible $80
million regulatory settlement during the year; adjusted effective
tax rate17 of 24.1% without the cost of this settlement.
Three Months Ended November 30, 2022
Twelve Months Ended November 30, 2022
Investment Banking and Capital Markets
Investment Banking and Capital Markets
- Investment Banking net revenues were $568 million, as our
mergers and acquisitions net revenues remained strong. Our debt and
equity underwriting net revenues were lower than the same quarter
last year, consistent with a reduction in industry-wide deal
activity.
- Capital Markets net revenues of $478 million were slightly
higher as compared to the prior year quarter. Equities net revenues
benefited from elevated client trading volumes and market
volatility. Fixed Income net revenues reflect robust emerging
market trading results partially offset by reduced market activity
for various fixed income products.
- Investment Banking net revenues of $2.90 billion were driven by
near-record advisory net revenues, offset by lower net revenues in
debt and equity underwriting, consistent with significant reduced
industry activity.
- Capital Markets net revenues of $1.83 billion were lower as
compared to the prior year. Equities net revenues were impacted by
significantly reduced trading volumes related to a slowdown in
new-issue offerings offset by strong client activity on market
volatility and global instability. Fixed Income results were also
impacted by significantly reduced trading volumes related to a
decline in new-issue activity, lower overall trading volumes,
mark-to-market losses on certain mortgage inventory positions and a
slowdown in securitization activity in the face of inflation
concerns and interest rate uncertainty.
Three Months Ended November 30, 2022
Twelve Months Ended November 30, 2022
Asset Management
Asset Management
- Asset Management net revenues reflect a challenging trading
environment resulting in modest investment losses offset by the
sale of our Oak Hill investment as well as merchant banking
revenues, which include revenues from the sale of a multi-family
project completed at HomeFed.
- Asset Management net revenues reflect revenues from sales of
certain assets, partially offset by lower investment returns as
compared to the prior year.
* * * *
Amounts herein pertaining to November 30, 2022 represent a
preliminary estimate as of the date of this earnings release and
may be revised upon filing our Annual Report on Form 10-K with the
Securities and Exchange Commission (“SEC”). More information on our
results of operations for the year ended November 30, 2022 will be
provided upon filing our Annual Report on Form 10-K with the SEC,
which we expect to file on or about January 27, 2023.
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).
Selected Financial Information
(Amounts in Thousands, Except Other Data)
(Unaudited)
Quarter Ended
November 30, 2022
August 31, 202218
November 30, 202118
Net revenues by source:
Advisory
$
381,412
$
481,419
$
587,476
Equity underwriting
109,439
150,972
370,636
Debt underwriting
61,731
76,943
222,655
Total underwriting
171,170
227,915
593,291
Other investment banking
15,892
(49,222
)
11,181
Total Investment Banking
568,474
660,112
1,191,948
Equities
251,280
277,448
291,033
Fixed income
226,680
174,618
132,771
Total Capital Markets
477,960
452,066
423,804
Total Investment Banking and Capital
Markets Net revenues9
1,046,434
1,112,178
1,615,752
Asset management fees and revenues10
13,440
17,069
13,065
Investment return2
156,613
(35,488
)
41,554
Merchant banking
231,805
430,009
108,472
Allocated net interest2
(6,630
)
(9,934
)
(11,914
)
Total Asset Management Net
revenues
395,228
401,656
151,177
Other
(3,580
)
(3,990
)
(8,438
)
Total Net revenues by source
$
1,438,082
$
1,509,844
$
1,758,491
Non-interest expenses:
Compensation and benefits
$
659,121
$
559,593
$
746,185
Floor brokerage and clearing fees
85,143
84,685
79,652
Underwriting costs
9,076
11,672
26,932
Technology and communications
114,957
110,925
103,054
Occupancy and equipment rental
28,420
26,589
26,027
Business development
42,610
36,322
42,381
Professional services
71,042
61,428
58,773
Depreciation and amortization
43,471
43,187
40,536
Cost of sales
91,281
123,436
79,954
Other
98,121
150,157
129,432
Total Non-interest expenses
$
1,243,242
$
1,207,994
$
1,332,926
(Amounts in Thousands, Except Other Data)
(Unaudited)
Twelve Months Ended November
30,
2022
202118
Net revenues by source:
Advisory
$
1,778,003
$
1,873,204
Equity underwriting
538,946
1,557,364
Debt underwriting
490,873
935,131
Total underwriting
1,029,819
2,492,495
Other investment banking
92,170
291,423
Total Investment Banking
2,899,992
4,657,122
Equities
1,060,582
1,301,530
Fixed income
765,576
959,122
Total Capital Markets
1,826,158
2,260,652
Total Investment Banking and Capital
Markets Net revenues9
4,726,150
6,917,774
Asset management fees and revenues10
89,127
120,733
Investment return2
156,594
260,316
Merchant banking
1,053,031
756,482
Allocated net interest2
(41,059
)
(44,907
)
Total Asset Management Net
revenues
1,257,693
1,092,624
Other
(5,005
)
3,428
Total Net revenues by source
$
5,978,838
$
8,013,826
Non-interest expenses:
Compensation and benefits
$
2,589,044
$
3,554,760
Floor brokerage and clearing fees
347,805
301,860
Underwriting costs
42,067
117,572
Technology and communications
444,011
388,134
Occupancy and equipment rental
108,001
106,254
Business development
150,500
109,772
Professional services
240,978
215,761
Depreciation and amortization
172,902
157,420
Cost of sales
440,837
470,870
Other
387,131
337,318
Total Non-interest expenses
$
4,923,276
$
5,759,721
Financial Data and Metrics
(Amounts in Thousands, Except Other Data)
(Unaudited)
Quarter Ended
November 30, 2022
August 31, 2022
November 30, 2021
Other Data:
Number of trading days
63
64
63
Number of trading loss days11
3
9
11
Average VaR (in millions)12
$
10.62
$
9.60
$
10.14
Twelve Months Ended November
30,
2022
2021
Other Data:
Number of trading days
252
252
Number of trading loss days11
30
60
Average VaR (in millions)12
$
11.04
$
13.63
(Amounts in Millions, Except Other Data)
(Unaudited)
Quarter Ended
November 30, 2022
August 31, 2022
November 30, 2021
Financial position13:
Total assets19
$
51,058
$
51,477
$
56,107
Total assets less goodwill and intangible
assets for the period19
49,182
49,603
54,209
Cash and cash equivalents
9,703
9,478
10,755
Financial instruments owned19
18,666
18,776
18,025
Level 3 financial instruments owned14,
19
791
790
575
Goodwill and intangible assets
1,876
1,874
1,898
Total equity
10,295
10,360
10,580
Total shareholders' equity
10,233
10,293
10,554
Tangible shareholders' equity7
8,357
8,419
8,656
Other data and financial
ratios:
Leverage ratio13, 15, 19
5.0
5.0
5.3
Tangible gross leverage ratio13, 16,
19
5.9
5.9
6.3
Number of employees, at period end
5,381
5,347
5,556
Components of Denominator for Earnings Per Share
The denominators used to calculate basic and diluted earnings
per share are as follows (in thousands):
Three Months Ended
November 30, 2022
Twelve Months Ended
November 30, 2022
Weighted average common shares
outstanding
227,395
234,258
Weighted average shares of restricted
stock with future service
(1,789
)
(1,330
)
Weighted average restricted stock units
outstanding with no future service
13,706
14,450
Denominator for basic earnings per
share
239,312
247,378
Stock options and other share based
awards
1,617
1,518
Senior executive compensation plan
restricted stock unit awards
2,968
2,234
Mandatorily redeemable convertible
preferred shares
4,441
4,441
Denominator for diluted earnings per
share
248,338
255,571
Notes
- Annualized return on adjusted tangible equity (a non-GAAP
financial measure) is defined as annualized adjusted net earnings
(a non-GAAP financial measure) divided by our beginning of period
adjusted tangible shareholders' equity (a non-GAAP financial
measure). Refer to schedule on page 10 for reconciliation to U.S.
GAAP amounts.
- 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. Refer to Selected Financial
Information on pages 5 to 6.
- Tangible book value (a non-GAAP financial measure) is defined
as shareholders' equity less intangible assets, net and goodwill.
Refer to schedule on page 11 for reconciliation to U.S. GAAP
amounts.
- Adjusted annualized return on adjusted tangible equity (a
non-GAAP financial measure) is defined as Jefferies' annualized
adjusted net earnings excluding the net earnings impact of the $80
million of expense ($80 million, net of tax) related to a
regulatory settlement during the current year (a non-GAAP financial
measure) divided by our beginning of period adjusted tangible
shareholders' equity (a non-GAAP financial measure). Refer to
schedule on page 10 for reconciliation to U.S. GAAP amounts.
- Shares outstanding on a fully diluted basis (a non-GAAP
financial measure) is defined as common shares outstanding plus
restricted stock units, stock options, conversion of redeemable
convertible preferred shares and other shares. Refer to schedule on
page 11 for reconciliation to U.S. GAAP amounts.
- 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 11 for reconciliation to U.S. GAAP amounts.
- Tangible shareholders' equity (a non-GAAP financial measure),
is defined as shareholders' equity less Intangible assets and
goodwill. We believe that tangible equity is meaningful for
valuation purposes, as financial companies are often measured as a
multiple of tangible equity, making these ratios meaningful for
investors.
- Adjusted net earnings attributable to common shareholders (a
non-GAAP financial measure) excludes the $80 million expense ($80
million, net of tax) related to a regulatory settlement in the
third quarter. Refer to schedule on page 9 for reconciliation to
U.S. GAAP amounts.
- 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.
- Includes 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.
- Number of trading loss days is calculated based on trading
activities in our Investment Banking and Capital Markets and Asset
Management business segments.
- 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, 2021.
- Amounts pertaining to November 30, 2022 represent a preliminary
estimate as of the date of this earnings release and may be revised
in our Annual Report on Form 10-K for the year ended November 30,
2022.
- 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.
- Leverage ratio equals total assets divided by total
equity.
- Tangible gross leverage ratio (a non-GAAP financial measure)
equals total assets less goodwill and identifiable intangible
assets divided by tangible equity. The tangible gross leverage
ratio is used by rating agencies in assessing our leverage
ratio.
- Adjusted effective tax rate (a non-GAAP financial measure)
excludes the $80 million expense related to a regulatory settlement
in the current year. Refer to schedule on page 10 for
reconciliation to U.S. GAAP amounts.
- We have reclassified the presentation of certain line items
within our Net revenues by sources to streamline our financial
statements to better align the presentation of our firm with the
strategy of building our investment banking and capital markets and
asset management businesses as we continue to reduce our legacy
merchant banking portfolio. Historical periods have been recast to
conform to these reclassification and presentation changes.
- We have changed the accounting for our secondary trading
activity related to the purchases and sales of corporate loans.
Historically, we have accounted for purchases and sales of
corporate loans on trade date recognizing the total amount of
purchased loans within Financial instruments owned and a
corresponding liability within Payables - brokers, dealers and
clearing organizations and the total amount of loans sold within
Financial instruments sold, not yet purchased and a corresponding
asset within Receivables - brokers, dealers and clearing
organizations on the Consolidated Statements of Financial Condition
for the cash to be paid or received upon settlement. We have
determined that it is more preferable to recognize this trading
activity on a settlement date basis and recognize firm commitments
to purchase and/or sell loans on the date of trade execution due to
the extended settlement period for this trading activity. There was
no impact to net earnings or total equity as a result of this
change in accounting policy.
Non-GAAP Reconciliations
The following tables reconcile our non-GAAP measures to their
respective U.S. GAAP measures. Management believes such non-GAAP
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.
Adjusted Net Earnings Attributable to Common Shareholders and
Adjusted Diluted Earnings Per Share GAAP Reconciliations
Reconciliation of net earnings attributable to common
shareholders to adjusted net earnings attributable to common
shareholders and diluted earnings per share to adjusted diluted
earnings per share (in thousands, except per share amounts):
Three Months Ended
November 30, 2022
Twelve Months Ended
November 30, 2022
Net earnings attributable to common
shareholders (GAAP)
$
140,248
$
777,168
Net earnings impact for regulatory
settlement
—
80,000
Adjusted net earnings attributable to
common shareholders (non-GAAP)
$
140,248
$
857,168
Diluted earnings per share (GAAP)
$
0.57
$
3.06
Diluted earnings per share impact for
regulatory settlement
—
0.31
Adjusted diluted earnings per share
(non-GAAP)
$
0.57
$
3.37
Adjusted Return on Adjusted Tangible Equity
Reconciliation
The table below reconciles our Net earnings attributable to
common shareholders to adjusted net earnings and our Shareholders'
equity to adjusted tangible shareholders' equity (in
thousands):
Three Months Ended
November 30,
Twelve Months Ended
November 30,
2022
2021
2022
2021
Net earnings attributable to common
shareholders (GAAP)
$
140,248
$
324,913
$
777,168
$
1,667,403
Intangible amortization and impairment
expense, net of tax
1,742
2,773
8,100
10,649
Adjusted net earnings
(non-GAAP)
$
141,990
$
327,686
$
785,268
$
1,678,052
Annualized adjusted net earnings
(non-GAAP)
$
567,960
$
1,310,744
$
785,268
$
1,678,052
Net earnings impact for regulatory
settlement
$
—
$
—
$
80,000
$
—
Adjusted net earnings excluding regulatory
settlement (non-GAAP)
$
141,990
$
327,686
$
865,268
$
1,678,052
Annualized adjusted net earnings excluding
regulatory settlement (non-GAAP)
$
567,960
$
1,310,744
$
865,268
$
1,678,052
August 31,
November 30,
2022
2021
2021
2020
Shareholders' equity (GAAP)
$
10,292,531
$
10,381,883
$
10,553,755
$
9,403,893
Less: Intangible assets, net and
goodwill
(1,874,435
)
(1,905,163
)
(1,897,500
)
(1,913,467
)
Less: Deferred tax asset
(398,397
)
(479,016
)
(327,547
)
(393,687
)
Less: Weighted average quarter-to-date or
year-to-date impact of cash dividends and share repurchases
(115,869
)
(62,644
)
(670,949
)
(243,003
)
Adjusted tangible shareholders' equity
(non-GAAP)
$
7,903,830
$
7,935,060
$
7,657,759
$
6,853,736
Return on adjusted tangible equity
(non-GAAP)
7.2
%
16.5
%
10.3
%
24.5
%
Adjusted return on adjusted tangible
equity (non-GAAP)
7.2
%
16.5
%
11.3
%
24.5
%
Adjusted Effective Tax Rate GAAP Reconciliation
The table below reconciles our effective tax rate to adjusted
effective tax rate:
Twelve Months Ended
November 30, 2022
Effective tax rate (GAAP)
25.9
%
Effective tax rate impact for regulatory
settlement
(1.8
)%
Adjusted effective tax rate
(non-GAAP)
24.1
%
Adjusted Tangible Book Value and Fully Diluted Shares
Outstanding GAAP Reconciliation
The table below reconciles our book value (shareholders' equity)
to adjusted tangible book value and our common shares outstanding
to fully diluted shares outstanding (in thousands, except per share
amounts):
November 30, 2022
Book value (GAAP)
$
10,232,846
Redeemable convertible preferred shares
convertible to common shares(1)
125,000
Stock options(2)
119,336
Intangible assets, net and goodwill
(1,875,576
)
Adjusted tangible book value
(non-GAAP)
$
8,601,606
Common shares outstanding (GAAP)
226,130
Restricted stock units ("RSUs")
17,868
Redeemable convertible preferred shares
converted to common shares(1)
4,441
Stock options(2)
5,025
Other
1,168
Fully diluted shares outstanding
(non-GAAP)(3)
254,632
Book value per share outstanding
$
45.25
Tangible book value per fully diluted
share outstanding (non-GAAP)
$
33.78
(1)
Redeemable convertible preferred shares
added to book value and fully diluted shares assume that the
redeemable convertible preferred shares are converted to common
shares.
(2)
Stock options added to book value are
equal to the total number of stock options outstanding as of
November 30, 2022 of 5,024,532 multiplied by the weighted average
exercise price of $23.75 on November 30, 2022. Stock options added
to fully diluted shares are equal to the total stock options
outstanding on November 30, 2022.
(3)
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 additional common shares if
our redeemable convertible preferred shares were converted to
common shares.
Tangible Book Value GAAP Reconciliation
At the beginning of the press release, we disclose how much we
have returned to shareholders through buybacks and dividends since
the beginning of 2018 and what percentage that is of tangible book
value at the beginning of 2018. The table below reconciles our
shareholders' equity to tangible book value at the beginning of
2018 (in thousands):
December 31, 2017
Shareholders' equity (GAAP)
$
10,105,957
Intangible assets, net and goodwill
(2,463,180
)
Tangible book value (non-GAAP)
$
7,642,777
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230109005666/en/
Jonathan Freedman 212.778.8913
Jefferies Financial (NYSE:JEF)
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