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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Leucadia National Corp. | NYSE:LUK | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 23.47 | 0 | 01:00:00 |
[X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
New York
(State or other jurisdiction of
|
13-2615557
(I.R.S. Employer
|
incorporation or organization)
|
Identification Number)
|
520 Madison Avenue, New York, New York
(Address of principal executive offices)
|
10022
(Zip Code)
|
Large accelerated filer x
|
||
(Do not check if a smaller reporting company)
|
September 30,
|
December 31,
|
|||||||
2014
|
2013
|
|||||||
ASSETS
|
||||||||
Cash and cash equivalents
|
$
|
4,247,878
|
$
|
3,907,595
|
||||
Cash and securities segregated and on deposit for regulatory purposes
|
||||||||
or deposited with clearing and depository organizations
|
3,301,185
|
3,616,602
|
||||||
Financial instruments owned, including securities pledged of $14,263,610 and $13,253,537:
|
||||||||
Trading assets, at fair value
|
19,241,659
|
16,699,542
|
||||||
Available for sale securities
|
1,866,415
|
2,866,143
|
||||||
Total financial instruments owned
|
21,108,074
|
19,565,685
|
||||||
Investments in managed funds
|
283,999
|
57,285
|
||||||
Loans to and investments in associated companies
|
1,508,997
|
1,258,341
|
||||||
Securities borrowed
|
6,270,452
|
5,359,846
|
||||||
Securities purchased under agreements to resell
|
4,570,533
|
3,746,920
|
||||||
Securities received as collateral
|
8,326
|
11,063
|
||||||
Receivables from brokers, dealers and clearing organizations
|
2,433,842
|
2,180,996
|
||||||
Receivables from customers of securities operations
|
1,660,122
|
1,046,945
|
||||||
Property, equipment and leasehold improvements, net
|
709,326
|
885,859
|
||||||
Intangible assets, net
|
1,004,933
|
1,020,529
|
||||||
Goodwill
|
1,749,372
|
1,748,099
|
||||||
Deferred tax asset, net
|
1,693,010
|
1,809,943
|
||||||
Other assets
|
2,177,752
|
1,651,073
|
||||||
Total
|
$
|
52,727,801
|
$
|
47,866,781
|
||||
LIABILITIES
|
||||||||
Short-term borrowings
|
$
|
92,000
|
$
|
12,000
|
||||
Trading liabilities, at fair value
|
9,723,247
|
7,293,102
|
||||||
Securities loaned
|
2,468,513
|
2,506,122
|
||||||
Securities sold under agreements to repurchase
|
10,532,059
|
10,779,845
|
||||||
Other secured financings
|
729,338
|
234,711
|
||||||
Obligation to return securities received as collateral
|
8,326
|
11,063
|
||||||
Payables to brokers, dealers and clearing organizations
|
1,926,404
|
1,379,243
|
||||||
Payables to customers of securities operations
|
5,943,491
|
5,208,768
|
||||||
Trade payables, expense accruals and other liabilities
|
1,880,127
|
1,721,934
|
||||||
Long-term debt – parent company
|
1,444,941
|
1,541,014
|
||||||
Long-term debt – subsidiaries
|
7,174,256
|
6,639,851
|
||||||
Total liabilities
|
41,922,702
|
37,327,653
|
||||||
Commitments and contingencies
|
||||||||
MEZZANINE EQUITY
|
||||||||
Redeemable noncontrolling interests
|
231,081
|
241,075
|
||||||
Mandatorily redeemable convertible preferred shares
|
125,000
|
125,000
|
||||||
EQUITY
|
||||||||
Common shares, par value $1 per share, authorized 600,000,000 shares;
|
||||||||
368,464,112 and 364,541,333 shares issued and outstanding, after deducting
|
||||||||
47,453,647 and 46,695,470 shares held in treasury
|
368,464
|
364,541
|
||||||
Additional paid-in capital
|
5,021,746
|
4,881,031
|
||||||
Accumulated other comprehensive income
|
533,263
|
538,050
|
||||||
Retained earnings
|
4,461,634
|
4,318,840
|
||||||
Total Leucadia National Corporation shareholders’ equity
|
10,385,107
|
10,102,462
|
||||||
Noncontrolling interest
|
63,911
|
70,591
|
||||||
Total equity
|
10,449,018
|
10,173,053
|
||||||
Total
|
$
|
52,727,801
|
$
|
47,866,781
|
For the Three Month
|
For the Nine Month
|
|||||||||||||||
Period Ended September 30,
|
Period Ended September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Revenues:
|
||||||||||||||||
Beef processing services
|
$
|
1,983,058
|
$
|
1,920,748
|
$
|
5,872,424
|
$
|
5,629,565
|
||||||||
Commissions
|
159,085
|
138,736
|
488,526
|
285,584
|
||||||||||||
Principal transactions
|
160,345
|
(41,171
|
)
|
617,133
|
283,228
|
|||||||||||
Investment banking
|
465,192
|
309,339
|
1,210,661
|
586,473
|
||||||||||||
Interest income
|
257,124
|
236,388
|
805,796
|
506,790
|
||||||||||||
Net realized securities gains
|
3,848
|
4,987
|
20,903
|
244,378
|
||||||||||||
Other
|
185,012
|
140,014
|
435,040
|
355,483
|
||||||||||||
Total revenues
|
3,213,664
|
2,709,041
|
9,450,483
|
7,891,501
|
||||||||||||
Interest expense
|
210,021
|
176,989
|
652,353
|
386,579
|
||||||||||||
Net revenues
|
3,003,643
|
2,532,052
|
8,798,130
|
7,504,922
|
||||||||||||
Expenses:
|
||||||||||||||||
Cost of sales
|
2,001,779
|
1,902,163
|
5,988,785
|
5,654,277
|
||||||||||||
Compensation and benefits
|
516,635
|
321,663
|
1,506,635
|
771,405
|
||||||||||||
Floor brokerage and clearing fees
|
56,030
|
34,500
|
159,673
|
67,491
|
||||||||||||
Interest
|
29,499
|
17,234
|
87,219
|
59,761
|
||||||||||||
Depreciation and amortization
|
46,464
|
47,049
|
132,594
|
120,524
|
||||||||||||
Selling, general and other expenses
|
263,994
|
176,600
|
614,348
|
406,214
|
||||||||||||
2,914,401
|
2,499,209
|
8,489,254
|
7,079,672
|
|||||||||||||
Income from continuing operations before income
|
||||||||||||||||
taxes and income related to associated companies
|
89,242
|
32,843
|
308,876
|
425,250
|
||||||||||||
Income related to associated companies
|
28,917
|
23,889
|
84,298
|
89,560
|
||||||||||||
Income from continuing operations before income taxes
|
118,159
|
56,732
|
393,174
|
514,810
|
||||||||||||
Income tax provision
|
59,906
|
26,758
|
163,885
|
106,881
|
||||||||||||
Income from continuing operations
|
58,253
|
29,974
|
229,289
|
407,929
|
||||||||||||
Loss from discontinued operations, net of income tax
|
||||||||||||||||
(benefit) of $(3,057), $(10,575), $(10,137) and $(20,738)
|
(5,676
|
)
|
(19,751
|
)
|
(18,825
|
)
|
(38,941
|
)
|
||||||||
Gain on disposal of discontinued operations, net of
|
||||||||||||||||
income tax provision of $4,407, $2,240, $4,407 and $2,272
|
7,685
|
4,160
|
8,185
|
4,220
|
||||||||||||
Net income
|
60,262
|
14,383
|
218,649
|
373,208
|
||||||||||||
Net (income) loss attributable to the noncontrolling interest
|
1,058
|
(253
|
)
|
(567
|
)
|
1,098
|
||||||||||
Net (income) loss attributable to the redeemable noncontrolling
|
||||||||||||||||
interests
|
(5,625
|
)
|
(10,132
|
)
|
(966
|
)
|
(11,239
|
)
|
||||||||
Preferred stock dividends
|
(1,016
|
)
|
(1,027
|
)
|
(3,047
|
)
|
(2,381
|
)
|
||||||||
Net income attributable to Leucadia National
|
||||||||||||||||
Corporation common shareholders
|
$
|
54,679
|
$
|
2,971
|
$
|
214,069
|
$
|
360,686
|
For the Three Month
|
For the Nine Month
|
|||||||||||||||
Period Ended September 30,
|
Period Ended September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Basic earnings (loss) per common share attributable
|
||||||||||||||||
to Leucadia National Corporation common shareholders:
|
||||||||||||||||
Income from continuing operations
|
$
|
.14
|
$
|
.05
|
$
|
.59
|
$
|
1.18
|
||||||||
Loss from discontinued operations
|
(.02
|
)
|
(.05
|
)
|
(.05
|
)
|
(.11
|
)
|
||||||||
Gain on disposal of discontinued operations
|
.02
|
.01
|
.02
|
.01
|
||||||||||||
Net income
|
$
|
.14
|
$
|
.01
|
$
|
.56
|
$
|
1.08
|
||||||||
Diluted earnings (loss) per common share attributable
|
||||||||||||||||
to Leucadia National Corporation common shareholders:
|
||||||||||||||||
Income from continuing operations
|
$
|
.14
|
$
|
.05
|
$
|
.59
|
$
|
1.16
|
||||||||
Loss from discontinued operations
|
(.02
|
)
|
(.05
|
)
|
(.05
|
)
|
(.11
|
)
|
||||||||
Gain on disposal of discontinued operations
|
.02
|
.01
|
.02
|
.01
|
||||||||||||
Net income
|
$
|
.14
|
$
|
.01
|
$
|
.56
|
$
|
1.06
|
||||||||
Amounts attributable to Leucadia National Corporation
|
||||||||||||||||
common shareholders:
|
||||||||||||||||
Income from continuing operations, net of taxes
|
$
|
52,745
|
$
|
18,321
|
$
|
224,761
|
$
|
394,656
|
||||||||
Loss from discontinued operations, net of taxes
|
(5,751
|
)
|
(19,510
|
)
|
(18,877
|
)
|
(38,190
|
)
|
||||||||
Gain on disposal of discontinued operations, net of taxes
|
7,685
|
4,160
|
8,185
|
4,220
|
||||||||||||
Net income
|
$
|
54,679
|
$
|
2,971
|
$
|
214,069
|
$
|
360,686
|
For the Three Month
|
For the Nine Month
|
|||||||||||||||
Period Ended September 30,
|
Period Ended September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Net income
|
$
|
60,262
|
$
|
14,383
|
$
|
218,649
|
$
|
373,208
|
||||||||
Other comprehensive income (loss):
|
||||||||||||||||
Net unrealized holding gains (losses) on investments arising
|
||||||||||||||||
during the period, net of income tax provision (benefit) of
|
||||||||||||||||
$(6,014), $21,988, $(4,380) and $(1,800)
|
(10,832
|
)
|
39,602
|
(7,889
|
)
|
(3,242
|
)
|
|||||||||
Less: reclassification adjustment for net (gains) losses included
|
||||||||||||||||
in net income (loss), net of income tax provision (benefit) of
|
||||||||||||||||
$860, $1,058, $(578) and $118,228
|
(1,549
|
)
|
(1,907
|
)
|
1,041
|
(212,944
|
)
|
|||||||||
Net change in unrealized holding gains (losses) on investments, net
|
||||||||||||||||
of income tax provision (benefit) of $(6,874), $20,930, $(3,802)
|
||||||||||||||||
and $(120,028)
|
(12,381
|
)
|
37,695
|
(6,848
|
)
|
(216,186
|
)
|
|||||||||
Net unrealized foreign exchange gains (losses) arising during
|
||||||||||||||||
the period, net of income tax provision (benefit) of $(4,335), $381,
|
||||||||||||||||
$(4,392) and $(299)
|
(16,553
|
)
|
7,313
|
(13
|
)
|
(5,379
|
)
|
|||||||||
Less: reclassification adjustment for foreign exchange (gains)
|
||||||||||||||||
losses included in net income (loss), net of income tax provision
|
||||||||||||||||
(benefit) of $149, $0, $149 and $0
|
(267
|
)
|
–
|
(267
|
)
|
–
|
||||||||||
Net change in unrealized foreign exchange gains (losses), net of
|
||||||||||||||||
income tax provision (benefit) of $(4,484), $381, $(4,541) and $(299)
|
(16,820
|
)
|
7,313
|
(280
|
)
|
(5,379
|
)
|
|||||||||
Net unrealized gains (losses) on derivatives arising during the
|
||||||||||||||||
period, net of income tax provision (benefit) of $221, $(3),
|
||||||||||||||||
$34 and $(7)
|
399
|
(6
|
)
|
61
|
(12
|
)
|
||||||||||
Less: reclassification adjustment for derivative (gains) losses
|
||||||||||||||||
included in net income (loss), net of income tax provision (benefit)
|
||||||||||||||||
of $0, $0, $0 and $0
|
–
|
–
|
–
|
–
|
||||||||||||
Net change in unrealized derivative gains (losses), net of income
|
||||||||||||||||
tax provision (benefit) of $221, $(3), $34 and $(7)
|
399
|
(6
|
)
|
61
|
(12
|
)
|
||||||||||
Net pension and postretirement gains (losses) arising during the
|
||||||||||||||||
period, net of income tax provision (benefit) of $0, $0, $0 and $0
|
–
|
–
|
–
|
–
|
||||||||||||
Less: reclassification adjustment for pension and postretirement (gains)
|
||||||||||||||||
losses included in net income (loss), net of income tax provision
|
||||||||||||||||
(benefit) of $(422), $(666), $(1,266) and $(1,998)
|
760
|
1,200
|
2,280
|
3,600
|
||||||||||||
Net change in pension liability and postretirement benefits, net of
|
||||||||||||||||
income tax provision (benefit) of $422, $666, $1,266 and $1,998
|
760
|
1,200
|
2,280
|
3,600
|
||||||||||||
Other comprehensive income (loss), net of income taxes
|
(28,042
|
)
|
46,202
|
(4,787
|
)
|
(217,977
|
)
|
|||||||||
Comprehensive income
|
32,220
|
60,585
|
213,862
|
155,231
|
||||||||||||
Comprehensive (income) loss attributable to the noncontrolling interest
|
1,058
|
(253
|
)
|
(567
|
)
|
1,098
|
||||||||||
Comprehensive (income) loss attributable to the redeemable
|
||||||||||||||||
noncontrolling interests
|
(5,625
|
)
|
(10,132
|
)
|
(966
|
)
|
(11,239
|
)
|
||||||||
Preferred stock dividends
|
(1,016
|
)
|
(1,027
|
)
|
(3,047
|
)
|
(2,381
|
)
|
||||||||
Comprehensive income attributable to Leucadia National
|
||||||||||||||||
Corporation common shareholders
|
$
|
26,637
|
$
|
49,173
|
$
|
209,282
|
$
|
142,709
|
2014
|
2013
|
|||||||
Net cash flows from operating activities:
|
||||||||
Net income
|
$
|
218,649
|
$
|
373,208
|
||||
Adjustments to reconcile net income to net cash provided by (used for) operations:
|
||||||||
Deferred income tax provision
|
124,099
|
72,858
|
||||||
Depreciation and amortization of property, equipment and leasehold improvements
|
92,189
|
80,688
|
||||||
Other amortization
|
3,956
|
24,270
|
||||||
Share-based compensation
|
87,493
|
60,218
|
||||||
Provision for doubtful accounts
|
10,131
|
10,851
|
||||||
Net securities gains
|
(20,903
|
)
|
(244,378
|
)
|
||||
Income related to associated companies
|
(157,937
|
)
|
(144,753
|
)
|
||||
Distributions from associated companies
|
130,930
|
92,582
|
||||||
Net (gains) losses related to real estate, property and equipment, and other assets
|
(29,584
|
)
|
5,752
|
|||||
Gain on disposal of discontinued operations
|
(12,592
|
)
|
(6,492
|
)
|
||||
Net change in:
|
||||||||
Cash and securities segregated and on deposit for regulatory purposes or deposited
|
||||||||
with clearing and depository organizations
|
316,049
|
269,786
|
||||||
Trading assets
|
(2,781,472
|
)
|
2,508,548
|
|||||
Investments in managed funds
|
(82,776
|
)
|
4,079
|
|||||
Securities borrowed
|
(908,113
|
)
|
(5,251
|
)
|
||||
Securities purchased under agreements to resell
|
(820,235
|
)
|
(846,206
|
)
|
||||
Receivables from brokers, dealers and clearing organizations
|
(298,153
|
)
|
(300,959
|
)
|
||||
Receivables from customers of securities operations
|
(612,457
|
)
|
(51,942
|
)
|
||||
Other assets
|
(242,362
|
)
|
(85,601
|
)
|
||||
Trading liabilities
|
2,634,241
|
(3,127,918
|
)
|
|||||
Securities loaned
|
(40,086
|
)
|
679,305
|
|||||
Securities sold under agreements to repurchase
|
(252,215
|
)
|
2,894,054
|
|||||
Payables to brokers, dealers and clearing organizations
|
638,448
|
(727,408
|
)
|
|||||
Payables to customers of securities operations
|
730,493
|
(607,034
|
)
|
|||||
Trade payables, expense accruals and other liabilities
|
40,912
|
12,811
|
||||||
Other
|
(32,979
|
)
|
(2,335
|
)
|
||||
Net cash provided by (used for) operating activities
|
(1,264,274
|
)
|
938,733
|
|||||
Net cash flows from investing activities:
|
||||||||
Acquisitions of property, equipment and leasehold improvements, and other assets
|
(468,669
|
)
|
(89,387
|
)
|
||||
Acquisitions of and capital expenditures for real estate investments
|
(2,112
|
)
|
(18,012
|
)
|
||||
Proceeds from disposals of real estate, property and equipment, and other assets
|
49,628
|
21,930
|
||||||
Net change in restricted cash
|
5,000
|
86
|
||||||
Proceeds from disposal of discontinued operations, net of expenses and cash
|
||||||||
of operations sold
|
223,373
|
3,965
|
||||||
Cash acquired upon acquisition of Jefferies Group LLC
|
–
|
3,017,958
|
||||||
Acquisitions, net of cash acquired
|
(59,378
|
)
|
–
|
|||||
Cash paid and cash of real estate operations sold to HomeFed Corporation
|
(19,730
|
)
|
–
|
|||||
Advances on notes and other receivables
|
(8,500
|
)
|
(1,934
|
)
|
||||
Collections on notes, loans and other receivables
|
19,240
|
15,659
|
||||||
Loans to and investments in associated companies
|
(1,320,588
|
)
|
(1,199,290
|
)
|
||||
Capital distributions and loan repayment from associated companies
|
1,301,118
|
1,380,925
|
||||||
Deconsolidation of asset management entities
|
(207,965
|
)
|
–
|
|||||
Purchases of investments (other than short-term)
|
(1,473,934
|
)
|
(1,987,973
|
)
|
||||
Proceeds from maturities of investments
|
920,949
|
1,679,127
|
||||||
Proceeds from sales of investments
|
1,542,798
|
1,572,221
|
||||||
Other
|
1,212
|
322
|
||||||
Net cash provided by investing activities
|
502,442
|
4,395,597
|
2014
|
2013
|
|||||||
Net cash flows from financing activities:
|
||||||||
Issuance of debt, net of issuance costs
|
$
|
1,001,510
|
$
|
849,842
|
||||
Change in short-term borrowings
|
80,000
|
(50,000
|
)
|
|||||
Reduction of debt
|
(394,985
|
)
|
(1,554,564
|
)
|
||||
Net proceeds from other secured financings
|
494,627
|
105,000
|
||||||
Issuance of common shares
|
1,295
|
2,068
|
||||||
Cash and cash equivalents of Crimson Wine Group, Ltd., which was spun off
|
–
|
(21,042
|
)
|
|||||
Net distributions to redeemable noncontrolling interests
|
(2,765
|
)
|
(8,073
|
)
|
||||
Distributions to noncontrolling interests
|
(2,152
|
)
|
(313,574
|
)
|
||||
Contributions from noncontrolling interests
|
44,557
|
20,765
|
||||||
Purchase of common shares for treasury
|
(54,190
|
)
|
(31,188
|
)
|
||||
Dividends paid
|
(69,785
|
)
|
(68,283
|
)
|
||||
Other
|
1,640
|
2,358
|
||||||
Net cash provided by (used for) financing activities
|
1,099,752
|
(1,066,691
|
)
|
|||||
Effect of foreign exchange rate changes on cash
|
2,363
|
(3,506
|
)
|
|||||
Net increase in cash and cash equivalents
|
340,283
|
4,264,133
|
||||||
Cash and cash equivalents at January 1, including cash classified as assets of
|
||||||||
discontinued operations
|
3,907,595
|
145,960
|
||||||
Cash and cash equivalents at September 30, including cash classified as assets of
|
||||||||
discontinued operations
|
$
|
4,247,878
|
$
|
4,410,093
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid during the year for:
|
||||||||
Interest
|
$
|
833,594
|
$
|
521,394
|
||||
Income tax payments (refunds), net
|
$
|
5,475
|
$
|
42,395
|
||||
Non-cash investing activities:
|
||||||||
Common stock issued for acquisition of Jefferies Group LLC
|
$
|
–
|
$
|
3,385,699
|
||||
Issuance of mandatorily redeemable convertible preferred shares for
|
||||||||
acquisition of Jefferies Group LLC
|
$
|
–
|
$
|
125,000
|
||||
Non-cash financing activities:
|
||||||||
Net assets excluding cash and cash equivalents of Crimson Wine Group, Ltd.,
|
||||||||
which was spun off
|
$
|
–
|
$
|
175,958
|
||||
Issuance of common shares for debt conversion
|
$
|
97,546
|
$
|
–
|
||||
Leucadia National Corporation Common Shareholders
|
||||||||||||||||||||||||||||
Common
|
Accumulated
|
|||||||||||||||||||||||||||
Shares
|
Additional
|
Other
|
||||||||||||||||||||||||||
$1 Par
|
Paid-In
|
Comprehensive
|
Retained
|
Noncontrolling
|
||||||||||||||||||||||||
Value
|
Capital
|
Income (Loss)
|
Earnings
|
Subtotal
|
Interest
|
Total
|
||||||||||||||||||||||
Balance, January 1, 2013
|
$
|
244,583
|
$
|
1,577,528
|
$
|
705,129
|
$
|
4,240,028
|
$
|
6,767,268
|
$
|
367
|
$
|
6,767,635
|
||||||||||||||
Net income
|
360,686
|
360,686
|
(1,098
|
)
|
359,588
|
|||||||||||||||||||||||
Other comprehensive loss, net of taxes
|
(217,977
|
)
|
(217,977
|
)
|
(217,977
|
)
|
||||||||||||||||||||||
Acquisition of Jefferies Group LLC
|
119,363
|
3,266,336
|
3,385,699
|
356,180
|
3,741,879
|
|||||||||||||||||||||||
Distribution of common shares of Crimson
|
||||||||||||||||||||||||||||
Wine Group, Ltd. to shareholders
|
(197,000
|
)
|
(197,000
|
)
|
(197,000
|
)
|
||||||||||||||||||||||
Contributions from noncontrolling interests
|
–
|
20,765
|
20,765
|
|||||||||||||||||||||||||
Distributions to noncontrolling interests
|
–
|
(354,373
|
)
|
(354,373
|
)
|
|||||||||||||||||||||||
Change in interest in consolidated subsidiary
|
(4,422
|
)
|
(4,422
|
)
|
4,422
|
–
|
||||||||||||||||||||||
Change in fair value of redeemable
|
||||||||||||||||||||||||||||
noncontrolling interests
|
41,195
|
41,195
|
41,195
|
|||||||||||||||||||||||||
Exercise of options to purchase common
|
||||||||||||||||||||||||||||
shares, including excess tax benefit
|
58
|
1,280
|
1,338
|
1,338
|
||||||||||||||||||||||||
Purchase of common shares for treasury
|
(1,110
|
)
|
(30,078
|
)
|
(31,188
|
)
|
(31,188
|
)
|
||||||||||||||||||||
Share-based compensation expense
|
60,218
|
60,218
|
60,218
|
|||||||||||||||||||||||||
Dividends ($.1875 per common share)
|
(69,827
|
)
|
(69,827
|
)
|
(69,827
|
)
|
||||||||||||||||||||||
Other
|
1,673
|
3,690
|
5,363
|
5,363
|
||||||||||||||||||||||||
Balance, September 30, 2013
|
$
|
364,567
|
$
|
4,915,747
|
$
|
487,152
|
$
|
4,333,887
|
$
|
10,101,353
|
$
|
26,263
|
$
|
10,127,616
|
||||||||||||||
Balance, January 1, 2014
|
$
|
364,541
|
$
|
4,881,031
|
$
|
538,050
|
$
|
4,318,840
|
$
|
10,102,462
|
$
|
70,591
|
$
|
10,173,053
|
||||||||||||||
Net income
|
214,069
|
214,069
|
567
|
214,636
|
||||||||||||||||||||||||
Other comprehensive loss, net of taxes
|
(4,787
|
)
|
(4,787
|
)
|
(4,787
|
)
|
||||||||||||||||||||||
Contributions from noncontrolling interests
|
–
|
62,519
|
62,519
|
|||||||||||||||||||||||||
Distributions to noncontrolling interests
|
–
|
(3,954
|
)
|
(3,954
|
)
|
|||||||||||||||||||||||
Deconsolidation of asset management entities
|
–
|
(77,475
|
)
|
(77,475
|
)
|
|||||||||||||||||||||||
Change in interest in consolidated subsidiary
|
(3,086
|
)
|
(3,086
|
)
|
3,086
|
–
|
||||||||||||||||||||||
Change in fair value of redeemable
|
||||||||||||||||||||||||||||
noncontrolling interests
|
10,588
|
10,588
|
10,588
|
|||||||||||||||||||||||||
Exercise of options to purchase common
|
||||||||||||||||||||||||||||
shares, including excess tax benefit
|
7
|
155
|
162
|
162
|
||||||||||||||||||||||||
Issuance of common shares for debt
|
||||||||||||||||||||||||||||
conversion
|
4,606
|
92,940
|
97,546
|
97,546
|
||||||||||||||||||||||||
Purchase of common shares for treasury
|
(2,004
|
)
|
(52,186
|
)
|
(54,190
|
)
|
(54,190
|
)
|
||||||||||||||||||||
Share-based compensation expense
|
87,493
|
87,493
|
87,493
|
|||||||||||||||||||||||||
Dividends ($.1875 per common share)
|
(71,275
|
)
|
(71,275
|
)
|
(71,275
|
)
|
||||||||||||||||||||||
Other
|
1,314
|
4,811
|
6,125
|
8,577
|
14,702
|
|||||||||||||||||||||||
Balance, September 30, 2014
|
$
|
368,464
|
$
|
5,021,746
|
$
|
533,263
|
$
|
4,461,634
|
$
|
10,385,107
|
$
|
63,911
|
$
|
10,449,018
|
Level 1: | Quoted prices are available in active markets for identical assets or liabilities as of the reported date. |
Level 2: | Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these financial instruments include cash instruments for which quoted prices are available but traded less frequently, derivative instruments whose fair value have been derived using a model where inputs to the model are directly observable in the market, or can be derived principally from or corroborated by observable market data, and instruments that are fair valued using other financial instruments, the parameters of which can be directly observed. |
Level 3: | Instruments that have little to no pricing observability as of the reported date. These financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation. |
Assets
|
||||
Cash and cash equivalents
|
$
|
3,017,958
|
||
Cash and securities segregated and on deposit for regulatory purposes or
|
||||
deposited with clearing and depository organizations
|
3,728,742
|
|||
Trading assets
|
16,413,535
|
|||
Loans to and investments in associated companies
|
766,893
|
|||
Securities borrowed
|
5,315,488
|
|||
Securities purchased under agreements to resell
|
3,578,366
|
|||
Intangible assets, net
|
282,852
|
|||
Goodwill
|
1,722,591
|
|||
Deferred tax asset, net
|
539,384
|
|||
Other assets
|
4,386,419
|
|||
Total assets
|
39,752,228
|
|||
Liabilities
|
||||
Short-term borrowings
|
100,000
|
|||
Trading liabilities
|
9,766,876
|
|||
Securities loaned
|
1,902,687
|
|||
Securities sold under agreements to repurchase
|
7,976,492
|
|||
Payables to customers of securities operations
|
5,450,781
|
|||
Trade payables, expense accruals and other liabilities
|
2,724,136
|
|||
Mandatorily redeemable preferred interest in JHYH held by Leucadia
|
358,951
|
|||
Long-term debt
|
6,345,536
|
|||
Total liabilities
|
34,625,459
|
|||
Noncontrolling interests
|
356,180
|
|||
Net assets acquired
|
$
|
4,770,589
|
Amortization
|
|||||
Amount
|
Years
|
||||
Customer relationships
|
$
|
136,002
|
9 to 18 years
|
||
Tradenames and related trademarks
|
131,299
|
35 years
|
|||
Exchange and clearing organization
|
|||||
membership interests and registrations
|
15,551
|
Indefinite
|
|||
Subtotal, intangible assets
|
282,852
|
||||
Goodwill
|
1,722,591
|
||||
Total
|
$
|
2,005,443
|
For the Three Month
|
For the Nine Month
|
|||||||
Period Ended
|
Period Ended
|
|||||||
September 30, 2013
|
September 30, 2013
|
|||||||
Net revenues
|
$
|
2,532,052
|
$
|
8,163,099
|
||||
Net income attributable to Leucadia National Corporation
|
||||||||
common shareholders
|
$
|
5,203
|
$
|
258,606
|
||||
Basic income per common share attributable to Leucadia
|
||||||||
National Corporation common shareholders
|
$
|
0.01
|
$
|
0.67
|
||||
Diluted income per common share attributable to Leucadia
|
||||||||
National Corporation common shareholders
|
$
|
0.01
|
$
|
0.67
|
|
September 30, 2014
|
|||||||||||||||||||
|
Level 1 (1)
|
Level 2 (1)
|
Level 3
|
Counterparty
and
Cash
Collateral
Netting (2)
|
Total
|
|||||||||||||||
Assets:
|
||||||||||||||||||||
Trading assets, at fair value:
|
||||||||||||||||||||
Corporate equity securities
|
$
|
3,141,769
|
$
|
336,954
|
$
|
7,777
|
$
|
–
|
$
|
3,486,500
|
||||||||||
Corporate debt securities
|
–
|
3,294,075
|
36,884
|
–
|
3,330,959
|
|||||||||||||||
Collateralized debt obligations
|
–
|
258,442
|
43,740
|
–
|
302,182
|
|||||||||||||||
U.S. government and federal agency securities
|
3,375,064
|
108,067
|
2,494
|
–
|
3,485,625
|
|||||||||||||||
Municipal securities
|
–
|
468,656
|
–
|
–
|
468,656
|
|||||||||||||||
Sovereign obligations
|
1,570,726
|
840,524
|
–
|
–
|
2,411,250
|
|||||||||||||||
Residential mortgage-backed securities
|
–
|
2,456,612
|
81,034
|
–
|
2,537,646
|
|||||||||||||||
Commercial mortgage-backed securities
|
–
|
942,224
|
19,327
|
–
|
961,551
|
|||||||||||||||
Other asset-backed securities
|
–
|
80,556
|
2,079
|
–
|
82,635
|
|||||||||||||||
Loans and other receivables
|
–
|
1,419,105
|
188,025
|
–
|
1,607,130
|
|||||||||||||||
Derivatives
|
91,950
|
3,414,340
|
1,204
|
(3,148,819
|
)
|
358,675
|
||||||||||||||
Investments at fair value
|
–
|
5,541
|
139,478
|
–
|
145,019
|
|||||||||||||||
Physical commodities
|
–
|
63,831
|
–
|
–
|
63,831
|
|||||||||||||||
Total trading assets
|
$
|
8,179,509
|
$
|
13,688,927
|
$
|
522,042
|
$
|
(3,148,819
|
)
|
$
|
19,241,659
|
|||||||||
Level 3 trading assets for which we do not bear
|
||||||||||||||||||||
economic exposure (3)
|
(18,948
|
)
|
||||||||||||||||||
Level 3 trading assets for which we do bear
|
||||||||||||||||||||
economic exposure
|
$
|
503,094
|
||||||||||||||||||
Available for sale securities:
|
||||||||||||||||||||
Corporate equity securities
|
$
|
88,744
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
88,744
|
||||||||||
Corporate debt securities
|
–
|
30,587
|
–
|
–
|
30,587
|
|||||||||||||||
U.S. government securities
|
866,867
|
–
|
–
|
–
|
866,867
|
|||||||||||||||
Residential mortgage-backed securities
|
–
|
596,378
|
–
|
–
|
596,378
|
|||||||||||||||
Commercial mortgage-backed securities
|
–
|
46,198
|
–
|
–
|
46,198
|
|||||||||||||||
Other asset-backed securities
|
–
|
237,641
|
–
|
–
|
237,641
|
|||||||||||||||
Total available for sale securities
|
$
|
955,611
|
$
|
910,804
|
$
|
–
|
$
|
–
|
$
|
1,866,415
|
||||||||||
Cash and cash equivalents
|
$
|
4,247,878
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
4,247,878
|
||||||||||
Investments in managed funds
|
$
|
–
|
$
|
225,677
|
$
|
58,322
|
$
|
–
|
$
|
283,999
|
||||||||||
Cash and securities segregated and on deposit for regulatory
|
||||||||||||||||||||
purposes or deposited with clearing and depository
|
||||||||||||||||||||
organizations (4)
|
$
|
3,301,185
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
3,301,185
|
||||||||||
Securities received as collateral
|
$
|
8,326
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
8,326
|
||||||||||
Liabilities:
|
||||||||||||||||||||
Trading liabilities:
|
||||||||||||||||||||
Corporate equity securities
|
$
|
1,749,610
|
$
|
66,422
|
$
|
38
|
$
|
–
|
$
|
1,816,070
|
||||||||||
Corporate debt securities
|
–
|
1,617,826
|
242
|
–
|
1,618,068
|
|||||||||||||||
Collateralized debt obligations
|
–
|
500
|
–
|
–
|
500
|
|||||||||||||||
U.S. government and federal agency securities
|
2,851,698
|
–
|
–
|
–
|
2,851,698
|
|||||||||||||||
Sovereign obligations
|
1,457,265
|
824,142
|
–
|
–
|
2,281,407
|
|||||||||||||||
Residential mortgage-backed securities
|
–
|
3,114
|
–
|
–
|
3,114
|
|||||||||||||||
Loans
|
–
|
825,758
|
6,661
|
–
|
832,419
|
|||||||||||||||
Derivatives
|
230,856
|
3,161,500
|
14,784
|
(3,140,135
|
)
|
267,005
|
||||||||||||||
Physical commodities
|
–
|
52,966
|
–
|
–
|
52,966
|
|||||||||||||||
Total trading liabilities
|
$
|
6,289,429
|
$
|
6,552,228
|
$
|
21,725
|
$
|
(3,140,135
|
)
|
$
|
9,723,247
|
|||||||||
Other secured financings
|
$
|
–
|
$
|
–
|
$
|
31,666
|
$
|
–
|
$
|
31,666
|
||||||||||
Obligation to return securities received as collateral
|
$
|
8,326
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
8,326
|
|
December 31, 2013
|
|||||||||||||||||||
|
Level 1 (1)
|
Level 2 (1)
|
Level 3
|
Counterparty
and
Cash
Collateral
Netting (2)
|
Total
|
|||||||||||||||
Assets:
|
||||||||||||||||||||
Trading assets, at fair value:
|
||||||||||||||||||||
Corporate equity securities
|
$
|
1,957,963
|
$
|
175,493
|
$
|
9,884
|
$
|
–
|
$
|
2,143,340
|
||||||||||
Corporate debt securities
|
–
|
2,961,857
|
25,666
|
–
|
2,987,523
|
|||||||||||||||
Collateralized debt obligations
|
–
|
182,095
|
37,216
|
–
|
219,311
|
|||||||||||||||
U.S. government and federal agency securities
|
2,293,221
|
40,389
|
–
|
–
|
2,333,610
|
|||||||||||||||
Municipal securities
|
–
|
664,054
|
–
|
–
|
664,054
|
|||||||||||||||
Sovereign obligations
|
1,458,803
|
889,685
|
–
|
–
|
2,348,488
|
|||||||||||||||
Residential mortgage-backed securities
|
–
|
2,932,268
|
105,492
|
–
|
3,037,760
|
|||||||||||||||
Commercial mortgage-backed securities
|
–
|
1,130,410
|
17,568
|
–
|
1,147,978
|
|||||||||||||||
Other asset-backed securities
|
–
|
55,475
|
12,611
|
–
|
68,086
|
|||||||||||||||
Loans and other receivables
|
–
|
1,203,238
|
145,890
|
–
|
1,349,128
|
|||||||||||||||
Derivatives
|
40,952
|
2,472,238
|
1,493
|
(2,253,589
|
)
|
261,094
|
||||||||||||||
Investments at fair value
|
–
|
40
|
101,242
|
–
|
101,282
|
|||||||||||||||
Physical commodities
|
–
|
37,888
|
–
|
–
|
37,888
|
|||||||||||||||
Total trading assets
|
$
|
5,750,939
|
$
|
12,745,130
|
$
|
457,062
|
$
|
(2,253,589
|
)
|
$
|
16,699,542
|
|||||||||
Available for sale securities:
|
||||||||||||||||||||
Corporate equity securities
|
$
|
252,531
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
252,531
|
||||||||||
Corporate debt securities
|
–
|
51,163
|
–
|
–
|
51,163
|
|||||||||||||||
U.S. government securities
|
1,781,266
|
–
|
–
|
–
|
1,781,266
|
|||||||||||||||
Residential mortgage-backed securities
|
–
|
579,162
|
–
|
–
|
579,162
|
|||||||||||||||
Commercial mortgage-backed securities
|
–
|
17,985
|
–
|
–
|
17,985
|
|||||||||||||||
Other asset-backed securities
|
–
|
184,036
|
–
|
–
|
184,036
|
|||||||||||||||
Total available for sale securities
|
$
|
2,033,797
|
$
|
832,346
|
$
|
–
|
$
|
–
|
$
|
2,866,143
|
||||||||||
Cash and cash equivalents
|
$
|
3,907,595
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
3,907,595
|
||||||||||
Investments in managed funds
|
$
|
–
|
$
|
–
|
$
|
57,285
|
$
|
–
|
$
|
57,285
|
||||||||||
Cash and securities segregated and on deposit for regulatory
|
||||||||||||||||||||
purposes or deposited with clearing and depository
|
||||||||||||||||||||
organizations (4)
|
$
|
3,616,602
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
3,616,602
|
||||||||||
Securities received as collateral
|
$
|
11,063
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
11,063
|
||||||||||
Liabilities:
|
||||||||||||||||||||
Trading liabilities:
|
||||||||||||||||||||
Corporate equity securities
|
$
|
1,804,392
|
$
|
40,358
|
$
|
38
|
$
|
–
|
$
|
1,844,788
|
||||||||||
Corporate debt securities
|
–
|
1,346,078
|
–
|
–
|
1,346,078
|
|||||||||||||||
U.S. government and federal agency securities
|
1,324,326
|
–
|
–
|
–
|
1,324,326
|
|||||||||||||||
Sovereign obligations
|
1,360,269
|
471,088
|
–
|
–
|
1,831,357
|
|||||||||||||||
Residential mortgage-backed securities
|
–
|
34,691
|
–
|
–
|
34,691
|
|||||||||||||||
Loans
|
–
|
672,838
|
22,462
|
–
|
695,300
|
|||||||||||||||
Derivatives
|
43,829
|
2,480,463
|
8,398
|
(2,352,611
|
)
|
180,079
|
||||||||||||||
Physical commodities
|
–
|
36,483
|
–
|
–
|
36,483
|
|||||||||||||||
Total trading liabilities
|
$
|
4,532,816
|
$
|
5,081,999
|
$
|
30,898
|
$
|
(2,352,611
|
)
|
$
|
7,293,102
|
|||||||||
Other secured financings
|
$
|
–
|
$
|
31,000
|
$
|
8,711
|
$
|
–
|
$
|
39,711
|
||||||||||
Obligation to return securities received as collateral
|
$
|
11,063
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
11,063
|
(1) | There were no transfers between Level 1 and Level 2 during the nine months ended September 30, 2014. During the year ended December 31, 2013, listed equity options with a fair value of $403.0 million within Trading assets and $423.0 million within Trading liabilities were transferred from Level 1 to Level 2 as adjustments to the exchange closing price are necessary to best reflect the fair value of the population at its exit price. |
(2) | Represents counterparty and cash collateral netting across the levels of the fair value hierarchy for positions with the same counterparty. |
(3) | Consists of assets which are financed by nonrecourse secured financing. |
(4) | Securities comprise U.S. government securities segregated for regulatory purposes with a fair value of $564.3 million and $304.2 million at September 30, 2014 and December 31, 2013, respectively. |
·
|
Exchange Traded Equity Securities: Exchange traded equity securities are measured based on quoted closing exchange prices, which are generally obtained from external pricing services, and are categorized within Level 1 of the fair value hierarchy, otherwise they are categorized within Level 2 or Level 3 of the fair value hierarchy.
|
·
|
Non-exchange Traded Equity Securities: Non-exchange traded equity securities are measured primarily using broker quotations, pricing data from external pricing services and prices observed for recently executed market transactions and are categorized within Level 2 of the fair value hierarchy. Where such information is not available, non-exchange traded equity securities are categorized within Level 3 of the fair value hierarchy and measured using valuation techniques involving quoted prices of or market data for comparable companies, similar company ratios and multiples (e.g., price/EBITDA, price/book value), discounted cash flow analyses and transaction prices observed for subsequent financing or capital issuance by the company. When using pricing data of comparable companies, judgment must be applied to adjust the pricing data to account for differences between the measured security and the comparable security (e.g., issuer market capitalization, yield, dividend rate, geographical concentration).
|
·
|
Equity warrants: Non-exchange traded equity warrants are generally categorized within Level 3 of the fair value hierarchy and are measured using the Black-Scholes model with key inputs impacting the valuation including the underlying security price, implied volatility, dividend yield, interest rate curve, strike price and maturity date.
|
·
|
Corporate Bonds: Corporate bonds are measured primarily using pricing data from external pricing services and broker quotations, where available, prices observed for recently executed market transactions of comparable size, and bond spreads or credit default swap spreads of the issuer adjusted for basis differences between the swap curve and the bond curve. Corporate bonds measured using these valuation methods are categorized within Level 2 of the fair value hierarchy. If broker quotes, pricing data or spread data is not available, alternative valuation techniques are used including cash flow models incorporating interest rate curves, single name or index credit default swap curves for comparable issuers and recovery rate assumptions. Corporate bonds measured using alternative valuation techniques are categorized within Level 3 of the fair value hierarchy and comprise a limited portion of our corporate bonds.
|
·
|
High Yield Corporate and Convertible Bonds: A significant portion of our high yield corporate and convertible bonds are categorized within Level 2 of the fair value hierarchy and are measured primarily using broker quotations and pricing data from external pricing services, where available, and prices observed for recently executed market transactions of comparable size. Where pricing data is less observable, valuations are categorized within Level 3 and are based on pending transactions involving the issuer or comparable issuers, prices implied from an issuer’s subsequent financings or recapitalizations, models incorporating financial ratios and projected cash flows of the issuer and market prices for comparable issuers.
|
·
|
U.S. Treasury Securities: U.S. Treasury securities are measured based on quoted market prices and categorized within Level 1 of the fair value hierarchy.
|
·
|
U.S. Agency Issued Debt Securities: Callable and non-callable U.S. agency issued debt securities are measured primarily based on quoted market prices obtained from external pricing services. Non-callable U.S. agency securities are generally categorized within Level 1 and callable U.S. agency securities are categorized within Level 2 of the fair value hierarchy.
|
·
|
Agency Residential Mortgage-Backed Securities: Agency residential mortgage-backed securities include mortgage pass-through securities (fixed and adjustable rate), collateralized mortgage obligations and interest-only and principal-only securities and are generally measured using market price quotations from external pricing services and categorized within Level 2 of the fair value hierarchy.
|
·
|
Agency Residential Inverse Interest-Only Securities ("Agency Inverse IOs"): The fair value of Agency Inverse IOs are estimated using expected future cash flow techniques that incorporate prepayment models and other prepayment assumptions to amortize the underlying mortgage loan collateral. We use prices observed for recently executed transactions to develop market-clearing spread and yield curve assumptions. Valuation inputs with regard to the underlying collateral incorporate weighted average coupon, loan-to-value, credit scores, geographic location, maximum and average loan size, originator, servicer, and weighted average loan age. Agency Inverse IOs are categorized within Level 2 or Level 3 of the fair value hierarchy. We also use vendor data in developing our assumptions, as appropriate.
|
·
|
Non-Agency Residential Mortgage-Backed Securities: Fair values are determined primarily using discounted cash flow methodologies and securities are categorized within Level 2 or Level 3 of the fair value hierarchy based on the observability and significance of the pricing inputs used. Performance attributes of the underlying mortgage loans are evaluated to estimate pricing inputs, such as prepayment rates, default rates and the severity of credit losses. Attributes of the underlying mortgage loans that affect the pricing inputs include, but are not limited to, weighted average coupon; average and maximum loan size; loan-to-value; credit scores; documentation type; geographic location; weighted average loan age; originator; servicer; historical prepayment, default and loss severity experience of the mortgage loan pool; and delinquency rate. Yield curves used in the discounted cash flow models are based on observed market prices for comparable securities and published interest rate data to estimate market yields.
|
·
|
Agency Commercial Mortgage-Backed Securities: GNMA project loan bonds and FNMA Delegated Underwriting and Servicing ("DUS") mortgage-backed securities are generally measured by using prices observed for recently executed market transactions to estimate market-clearing spread levels for purposes of estimating fair value. GNMA project loan bonds and FNMA DUS mortgage-backed securities are categorized within Level 2 of the fair value hierarchy.
|
·
|
Non-Agency Commercial Mortgage-Backed Securities: Non-agency commercial mortgage-backed securities are measured using pricing data obtained from external pricing services and prices observed for recently executed market transactions and are categorized within Level 2 and Level 3 of the fair value hierarchy.
|
·
|
Corporate Loans: Corporate loans categorized within Level 2 of the fair value hierarchy are measured based on market price quotations where market price quotations from external pricing services are supported by market transaction data. Corporate loans categorized within Level 3 of the fair value hierarchy are measured based on market price quotations that are considered to be less transparent, market prices for debt securities of the same creditor, and estimates of future cash flow incorporating assumptions regarding creditor default and recovery rates and consideration of the issuer’s capital structure.
|
·
|
Participation Certificates in GNMA Project and Construction Loans: Valuations of participation certificates in GNMA project and construction loans are based on observed market prices of recently executed purchases of similar loans which are then used to derive a market implied spread, which in turn is used as the primary input in estimating the fair value of loans at the measurement date. The loan participation certificates are categorized within Level 2 of the fair value hierarchy given the observability and volume of recently executed transactions.
|
·
|
Project Loans: Valuation of project loans are based on benchmarks of prices for recently executed transactions of related realized collateralized securities and are categorized within Level 2 of the fair value hierarchy.
|
·
|
Escrow and Trade Claim Receivables: Escrow and trade claim receivables are categorized within Level 3 of the fair value hierarchy where fair value is estimated based on reference to market prices and implied yields of debt securities of the same or similar issuers. Escrow and trade claim receivables are categorized within Level 2 of the fair value hierarchy where fair value is based on recent trade activity in the same security.
|
·
|
Listed Derivative Contracts: Listed derivative contracts that are actively traded are measured based on quoted exchange prices, which are generally obtained from external pricing services, and are categorized within Level 1 of the fair value hierarchy. Listed derivatives for which there is limited trading activity are measured based on incorporating the closing auction price of the underlying equity security, use similar valuation approaches as those applied to over-the-counter derivative contracts and are categorized within Level 2 of the fair value hierarchy.
|
·
|
OTC Derivative Contracts: Over-the-counter ("OTC") derivative contracts are generally valued using models, whose inputs reflect assumptions that we believe market participants would use in valuing the derivative in a current period transaction. Inputs to valuation models are appropriately calibrated to market data. For many OTC derivative contracts, the valuation models do not involve material subjectivity as the methodologies do not entail significant judgment and the inputs to valuation models do not involve a high degree of subjectivity as the valuation model inputs are readily observable or can be derived from actively quoted markets. OTC derivative contracts are primarily categorized within Level 2 of the fair value hierarchy given the observability and significance of the inputs to the valuation models. Where significant inputs to the valuation are unobservable, derivative instruments are categorized within Level 3 of the fair value hierarchy.
|
September 30, 2014
|
||||||||||||
|
Fair Value (1)
|
Unfunded
Commitments
|
Redemption
Frequency
(if currently eligible)
|
|||||||||
Equity Long/Short Hedge Funds (2)
|
$
|
141,448
|
$
|
–
|
Monthly/Quarterly
|
|||||||
High Yield Hedge Funds (3)
|
210
|
–
|
–
|
|||||||||
Fund of Funds (4)
|
334
|
94
|
–
|
|||||||||
Equity Funds (5)
|
69,232
|
26,023
|
–
|
|||||||||
Convertible Bond Funds (6)
|
3,590
|
–
|
At Will
|
|||||||||
Multi-strategy Fund (7)
|
104,122
|
–
|
–
|
|||||||||
Total (8)
|
$
|
318,936
|
$
|
26,117
|
December 31, 2013
|
||||||||||||
|
Fair Value (1)
|
Unfunded
Commitments
|
Redemption
Frequency
(if currently eligible)
|
|||||||||
Equity Long/Short Hedge Funds (2)
|
$
|
20,927
|
$
|
–
|
Monthly/Quarterly
|
|||||||
High Yield Hedge Funds (3)
|
244
|
–
|
–
|
|||||||||
Fund of Funds (4)
|
494
|
94
|
–
|
|||||||||
Equity Funds (5)
|
66,495
|
40,816
|
–
|
|||||||||
Convertible Bond Funds (6)
|
3,473
|
–
|
At Will
|
|||||||||
Total (8)
|
$
|
91,633
|
$
|
40,910
|
(1)
|
Where fair value is calculated based on net asset value, fair value has been derived from each of the funds’ capital statements.
|
(2)
|
This category includes investments in hedge funds that invest, long and short, in equity securities in domestic and international markets in both the public and private sectors. At September 30, 2014 and December 31, 2013, investments representing approximately 99% and 98%, respectively, of the fair value of investments in this category are redeemable with 30 to 65 days prior written notice, and includes an investment in a private asset management fund managed by us with a fair value of $118.0 million at September 30, 2014.
|
(3)
|
Includes investments in funds that invest in domestic and international public high yield debt, private high yield investments, senior bank loans, public leveraged equities, distressed debt, and private equity investments. There are no redemption provisions. The underlying assets of the funds are being liquidated and we are unable to estimate when the underlying assets will be fully liquidated.
|
(4)
|
Includes investments in fund of funds that invest in various private equity funds. At September 30, 2014 and December 31, 2013, approximately 96% and 98%, respectively, of the fair value of investments in this category is managed by us and has no redemption provisions, instead distributions are received through the liquidation of the underlying assets of the fund of funds, which are estimated to be liquidated in approximately two years. For the remaining investments, we have requested redemption; however, we are unable to estimate when these funds will be received.
|
(5)
|
At September 30, 2014 and December 31, 2013, investments representing approximately 99% and 99%, respectively, of the fair value of investments in this category include investments in equity funds that invest in the equity of various U.S. and foreign private companies in the energy, technology, internet service and telecommunication service industries. These investments cannot be redeemed, instead distributions are received through the liquidation of the underlying assets of the funds which are expected to liquidate in one to eight years. The remaining investments are in liquidation and we are unable to estimate when the underlying assets will be fully liquidated. At September 30, 2014 and December 31, 2013, this category includes investments in equity funds managed by us with a fair value of $58.8 million and $54.4 million, respectively, and unfunded commitments of $24.4 million and $39.2 million, respectively.
|
(6)
|
Investment in the Jefferies Umbrella Fund, an open-ended investment company managed by us that invests primarily in convertible bonds. The investment is redeemable with 5 days prior written notice.
|
(7)
|
Investment in private asset management fund managed by us that employs a variety of investment strategies and can invest in U.S. and non-U.S. equity and equity related securities, futures, exchange traded funds, fixed income securities, preferred securities, options, forward contracts and swaps. Withdrawals from the fund prior to the first year anniversary of the investment are subject to a 5% withdrawal fee and withdrawals during any calendar quarter are limited to 25% of the fund’s net asset value. Both of these restrictions can be waived by us, in our sole discretion.
|
(8)
|
Investments at fair value in the Consolidated Statements of Financial Condition at September 30, 2014 and December 31, 2013, include $110.1 million and $66.9 million, respectively, of direct investments which do not have the characteristics of investment companies and therefore not included within this table.
|
|
September 30, 2014
|
December 31, 2013
|
||||||||||||||
|
Trading Assets
|
Trading Liabilities
|
Trading Assets
|
Trading Liabilities
|
||||||||||||
Exchange closing prices
|
13
|
%
|
18
|
%
|
12
|
%
|
25
|
%
|
||||||||
Recently observed transaction prices
|
3
|
%
|
3
|
%
|
5
|
%
|
4
|
%
|
||||||||
External pricing services
|
70
|
%
|
72
|
%
|
68
|
%
|
66
|
%
|
||||||||
Broker quotes
|
4
|
%
|
3
|
%
|
3
|
%
|
3
|
%
|
||||||||
Valuation techniques
|
10
|
%
|
4
|
%
|
12
|
%
|
2
|
%
|
||||||||
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
Three Months Ended September 30, 2014
|
||||||||||||||||||||||||||||||||||||
Balance,
June 30,
2014
|
Total gains (losses)
(realized and unrealized) (1)
|
Purchases
|
Sales
|
Settlements
|
Issuances
|
Net transfers
into (out of)
Level 3
|
Balance,
September 30,
2014
|
Changes in
unrealized gains (losses) relating to instruments still held at
September 30, 2014 (1)
|
||||||||||||||||||||||||||||
Assets:
|
||||||||||||||||||||||||||||||||||||
Trading assets:
|
||||||||||||||||||||||||||||||||||||
Corporate equity securities
|
$
|
16,402
|
$
|
(480
|
)
|
$
|
4,528
|
$
|
(529
|
)
|
$
|
–
|
$
|
–
|
$
|
(12,144
|
)
|
$
|
7,777
|
$
|
(286
|
)
|
||||||||||||||
Corporate debt securities
|
31,648
|
5,454
|
21,793
|
(15,713
|
)
|
(34
|
)
|
–
|
(6,264
|
)
|
36,884
|
3,470
|
||||||||||||||||||||||||
Collateralized debt obligations
|
42,313
|
(845
|
)
|
7,613
|
(15,204
|
)
|
–
|
–
|
9,863
|
43,740
|
(1,575
|
)
|
||||||||||||||||||||||||
U.S. government and federal
|
||||||||||||||||||||||||||||||||||||
agency securities
|
–
|
(11
|
)
|
2,505
|
–
|
–
|
–
|
–
|
2,494
|
(11
|
)
|
|||||||||||||||||||||||||
Residential mortgage-backed
|
||||||||||||||||||||||||||||||||||||
securities
|
71,962
|
(2,557
|
)
|
3,981
|
(9,635
|
)
|
(325
|
)
|
–
|
17,608
|
81,034
|
(302
|
)
|
|||||||||||||||||||||||
Commercial mortgage-backed
|
||||||||||||||||||||||||||||||||||||
securities
|
24,246
|
(256
|
)
|
641
|
(7,068
|
)
|
–
|
–
|
1,764
|
19,327
|
(832
|
)
|
||||||||||||||||||||||||
Other asset-backed securities
|
45,444
|
1,272
|
50,620
|
(49,411
|
)
|
(8,774
|
)
|
–
|
(37,072
|
)
|
2,079
|
(3
|
)
|
|||||||||||||||||||||||
Loans and other receivables
|
138,643
|
(8,074
|
)
|
194,387
|
(96,340
|
)
|
(40,617
|
)
|
–
|
26
|
188,025
|
(7,967
|
)
|
|||||||||||||||||||||||
Investments at fair value
|
140,452
|
706
|
500
|
(7,232
|
)
|
(305
|
)
|
–
|
5,357
|
139,478
|
815
|
|||||||||||||||||||||||||
Investments in managed funds
|
56,119
|
734
|
1,469
|
–
|
–
|
–
|
–
|
58,322
|
734
|
|||||||||||||||||||||||||||
Liabilities:
|
||||||||||||||||||||||||||||||||||||
Trading liabilities:
|
||||||||||||||||||||||||||||||||||||
Corporate equity securities
|
$
|
38
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
38
|
$
|
–
|
||||||||||||||||||
Corporate debt securities
|
2,780
|
(101
|
)
|
(2,566
|
)
|
–
|
–
|
–
|
129
|
242
|
67
|
|||||||||||||||||||||||||
Net derivatives (2)
|
15,282
|
(1,632
|
)
|
(74
|
)
|
74
|
(70
|
)
|
–
|
–
|
13,580
|
70
|
||||||||||||||||||||||||
Loans
|
31,534
|
–
|
(16,307
|
)
|
–
|
–
|
–
|
(8,566
|
)
|
6,661
|
–
|
|||||||||||||||||||||||||
Other secured financings
|
20,288
|
–
|
–
|
–
|
(7,570
|
)
|
18,948
|
–
|
31,666
|
–
|
(1) | Realized and unrealized gains (losses) are reported in Principal transactions in the Consolidated Statements of Operations. |
(2) | Net derivatives represent Trading assets - Derivatives and Trading liabilities - Derivatives. |
·
|
Non-agency residential mortgage-backed securities of $30.1 million, commercial mortgage-backed securities of $6.8 million and other asset-backed securities of $1.5 million for which no recent trade activity was observed for purposes of determining observable inputs;
|
·
|
Loans and other receivables of $25.1 million and investments at fair value of $5.4 million due to a lower number of contributors comprising vendor quotes to support classification within Level 2;
|
·
|
Collateralized debt obligations of $15.2 million which have little to no transparency related to trade activity.
|
·
|
Non-agency residential mortgage-backed securities of $12.5 million, commercial mortgage-backed securities of $5.0 million and other asset-backed securities of $38.6 million for which market trades were observed in the period for either identical or similar securities;
|
·
|
Collateralized debt obligations of $5.3 million and loans and other receivables of $25.1 million due to a greater number of contributors for certain vendor quotes supporting classification into Level 2;
|
·
|
Corporate equity securities of $13.9 million due to an increase in observable market transactions.
|
Nine Months Ended September 30, 2014
|
||||||||||||||||||||||||||||||||||||
Balance, December 31, 2013
|
Total gains (losses)
(realized and unrealized) (1)
|
Purchases
|
Sales
|
Settlements
|
Issuances
|
Net transfers
into (out of)
Level 3
|
Balance,
September 30,
2014
|
Changes in
unrealized gains (losses) relating to instruments still held at
September 30,
2014 (1)
|
||||||||||||||||||||||||||||
Assets:
|
||||||||||||||||||||||||||||||||||||
Trading assets:
|
||||||||||||||||||||||||||||||||||||
Corporate equity securities
|
$
|
9,884
|
$
|
(1,528
|
)
|
$
|
36,661
|
$
|
(31,444
|
)
|
$
|
–
|
$
|
–
|
$
|
(5,796
|
)
|
$
|
7,777
|
$
|
(400
|
)
|
||||||||||||||
Corporate debt securities
|
25,666
|
10,727
|
137,164
|
(128,733
|
)
|
–
|
–
|
(7,940
|
)
|
36,884
|
10,177
|
|||||||||||||||||||||||||
Collateralized debt obligations
|
37,216
|
5,198
|
94,743
|
(99,661
|
)
|
–
|
–
|
6,244
|
43,740
|
(6,283
|
)
|
|||||||||||||||||||||||||
U.S. government and federal
|
||||||||||||||||||||||||||||||||||||
agency securities
|
–
|
(11
|
)
|
2,505
|
–
|
–
|
–
|
–
|
2,494
|
(11
|
)
|
|||||||||||||||||||||||||
Residential mortgage-backed
|
||||||||||||||||||||||||||||||||||||
securities
|
105,492
|
(6,974
|
)
|
44,454
|
(65,229
|
)
|
(812
|
)
|
–
|
4,103
|
81,034
|
(3,564
|
)
|
|||||||||||||||||||||||
Commercial mortgage-backed
|
||||||||||||||||||||||||||||||||||||
securities
|
17,568
|
(3,120
|
)
|
34,959
|
(32,774
|
)
|
(1,315
|
)
|
–
|
4,009
|
19,327
|
(3,380
|
)
|
|||||||||||||||||||||||
Other asset-backed securities
|
12,611
|
256
|
52,495
|
(52,282
|
)
|
(8,804
|
)
|
–
|
(2,197
|
)
|
2,079
|
–
|
||||||||||||||||||||||||
Loans and other receivables
|
145,890
|
(9,028
|
)
|
247,383
|
(147,851
|
)
|
(61,791
|
)
|
–
|
13,422
|
188,025
|
(8,961
|
)
|
|||||||||||||||||||||||
Investments at fair value
|
101,242
|
30,393
|
30,660
|
(20,954
|
)
|
(945
|
)
|
–
|
(918
|
)
|
139,478
|
15,904
|
||||||||||||||||||||||||
Investments in managed funds
|
57,285
|
(10,515
|
)
|
14,875
|
–
|
–
|
–
|
(3,323
|
)
|
58,322
|
(10,515
|
)
|
||||||||||||||||||||||||
Liabilities:
|
||||||||||||||||||||||||||||||||||||
Trading liabilities:
|
||||||||||||||||||||||||||||||||||||
Corporate equity securities
|
$
|
38
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
–
|
38
|
$
|
–
|
|||||||||||||||||||
Corporate debt securities
|
–
|
163
|
(7
|
)
|
97
|
–
|
–
|
(11
|
)
|
242
|
163
|
|||||||||||||||||||||||||
Net derivatives (2)
|
6,905
|
9,959
|
(124
|
)
|
(76
|
)
|
248
|
–
|
(3,332
|
)
|
13,580
|
(10,519
|
)
|
|||||||||||||||||||||||
Loans
|
22,462
|
–
|
(15,472
|
)
|
3,549
|
–
|
–
|
(3,878
|
)
|
6,661
|
–
|
|||||||||||||||||||||||||
Other secured financings
|
8,711
|
–
|
–
|
–
|
(16,684
|
)
|
39,639
|
–
|
31,666
|
–
|
(1) | Realized and unrealized gains (losses) are reported in Principal transactions in the Consolidated Statements of Operations. |
(2) | Net derivatives represent Trading assets - Derivatives and Trading liabilities - Derivatives. |
·
|
Non-agency residential mortgage-backed securities of $27.2 million, commercial mortgage-backed securities of $4.6 million and other asset-backed securities of $1.3 million for which no recent trade activity was observed for purposes of determining observable inputs;
|
·
|
Loans and other receivables of $31.4 million due to a lower number of contributors comprising vendor quotes to support classification within Level 2;
|
·
|
Collateralized debt obligations of $7.5 million which have little to no transparency related to trade activity;
|
·
|
Investments at fair value of $6.5 million due to a lack of observable market transactions.
|
·
|
Non-agency residential mortgage-backed securities of $23.1 million, commercial mortgage-backed securities of $0.5 million and other asset-backed securities of $3.5 million for which market trades were observed in the period for either identical or similar securities;
|
·
|
Collateralized debt obligations of $1.3 million, loans and other receivables of $18.0 million and investments at fair value of $7.4 million due to a greater number of contributors for certain vendor quotes supporting classification into Level 2;
|
·
|
Corporate equity securities of $6.5 million, corporate debt securities of $8.0 million and investments in managed funds of $3.5 million due to an increase in observable market transactions.
|
Three Months Ended September 30, 2013 (3)
|
||||||||||||||||||||||||||||||||
Beginning Balance
|
Total gains (losses)
(realized and unrealized) (1)
|
Purchases
|
Sales
|
Settlements
|
Net transfers
into (out of)
Level 3
|
Ending
Balance
|
Changes in
unrealized gains (losses) relating to instruments still held at
September 30, 2013 (1)
|
|||||||||||||||||||||||||
Assets:
|
||||||||||||||||||||||||||||||||
Trading assets:
|
||||||||||||||||||||||||||||||||
Corporate equity securities
|
$
|
19,577
|
$
|
(788
|
)
|
$
|
–
|
$
|
(930
|
)
|
$
|
–
|
$
|
(1,780
|
)
|
$
|
16,079
|
$
|
(786
|
)
|
||||||||||||
Corporate debt securities
|
18,615
|
(4,285
|
)
|
68
|
(571
|
)
|
–
|
6,806
|
20,633
|
(4,342
|
)
|
|||||||||||||||||||||
Collateralized debt obligations
|
45,124
|
(1,903
|
)
|
8,222
|
(4,236
|
)
|
–
|
(1,335
|
)
|
45,872
|
(2,388
|
)
|
||||||||||||||||||||
Residential mortgage-backed
|
||||||||||||||||||||||||||||||||
securities
|
143,766
|
(1,876
|
)
|
33,831
|
(50,938
|
)
|
(2,306
|
)
|
9,706
|
132,183
|
(3,898
|
)
|
||||||||||||||||||||
Commercial mortgage-backed
|
||||||||||||||||||||||||||||||||
securities
|
16,068
|
2,033
|
130
|
(310
|
)
|
(3,703
|
)
|
205
|
14,423
|
(1,106
|
)
|
|||||||||||||||||||||
Other asset-backed securities
|
1,444
|
2,170
|
7,576
|
(3,279
|
)
|
–
|
659
|
8,570
|
2,142
|
|||||||||||||||||||||||
Loans and other receivables
|
117,496
|
(198
|
)
|
52,246
|
(12,139
|
)
|
(25,395
|
)
|
(1,558
|
)
|
130,452
|
609
|
||||||||||||||||||||
Investments at fair value
|
76,364
|
1,848
|
–
|
(101
|
)
|
(710
|
)
|
(3,949
|
)
|
73,452
|
2,002
|
|||||||||||||||||||||
Investments in managed funds
|
55,141
|
4,034
|
6,598
|
–
|
(9,876
|
)
|
–
|
55,897
|
4,034
|
|||||||||||||||||||||||
Liabilities:
|
||||||||||||||||||||||||||||||||
Trading liabilities:
|
||||||||||||||||||||||||||||||||
Corporate equity securities
|
$
|
38
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
38
|
$
|
–
|
||||||||||||||||
Net derivatives (2)
|
10,799
|
3,899
|
–
|
–
|
(60
|
)
|
–
|
14,638
|
(3,899
|
)
|
||||||||||||||||||||||
Loans
|
15,212
|
–
|
(14,952
|
)
|
716
|
–
|
–
|
976
|
–
|
|||||||||||||||||||||||
Other secured financings
|
2,294
|
731
|
–
|
–
|
–
|
–
|
3,025
|
(731
|
)
|
(1) | Realized and unrealized gains (losses) are reported in Principal transactions in the Consolidated Statements of Operations. |
(2) | Net derivatives represent Trading assets - Derivatives and Trading liabilities - Derivatives. |
(3) | There were no issuances during the three months ended September 30, 2013. |
·
|
Non-agency residential mortgage-backed securities of $50.3 million and commercial mortgage-backed securities of $2.4 million for which no recent trade activity was observed for purposes of determining observable inputs;
|
·
|
Corporate equity securities of $5.6 million and corporate debt securities of $8.3 million due to lack of observable market transactions;
|
·
|
Collateralized debt obligations of $22.3 million which have little to no transparency in trade activity.
|
·
|
Non-agency residential mortgage-backed securities of $40.6 million and commercial mortgage-backed securities of $2.2 million for which market trades were observed in the period for either identical or similar securities;
|
·
|
Collateralized debt obligations of $23.6 million and loans and other receivables of $1.6 million due to a greater number of contributors for certain vendor quotes supporting classification into Level 2;
|
·
|
Corporate equity securities of $7.4 million and corporate debt securities of $1.5 million due to an increase in observable market transactions.
|
Period from the Jefferies Acquisition through September 30, 2013 (3)
|
||||||||||||||||||||||||||||||||
Beginning Balance
|
Total gains (losses)
(realized and unrealized) (1)
|
Purchases
|
Sales
|
Settlements
|
Net transfers
into (out of)
Level 3
|
Ending
Balance
|
Changes in
unrealized gains (losses) relating to instruments still held at
September 30, 2013 (1)
|
|||||||||||||||||||||||||
Assets:
|
||||||||||||||||||||||||||||||||
Trading assets:
|
||||||||||||||||||||||||||||||||
Corporate equity securities
|
$
|
13,234
|
$
|
1,053
|
$
|
213
|
$
|
(753
|
)
|
$
|
266
|
$
|
2,066
|
$
|
16,079
|
$
|
1,243
|
|||||||||||||||
Corporate debt securities
|
31,820
|
(17,415
|
)
|
708
|
(2,556
|
)
|
–
|
8,076
|
20,633
|
(6,933
|
)
|
|||||||||||||||||||||
Collateralized debt obligations
|
29,776
|
(2,008
|
)
|
43,152
|
(27,676
|
)
|
–
|
2,628
|
45,872
|
(3,830
|
)
|
|||||||||||||||||||||
Residential mortgage-backed
|
||||||||||||||||||||||||||||||||
securities
|
169,426
|
5,594
|
79,531
|
(105,671
|
)
|
(4,851
|
)
|
(11,846
|
)
|
132,183
|
586
|
|||||||||||||||||||||
Commercial mortgage-backed
|
||||||||||||||||||||||||||||||||
securities
|
17,794
|
(735
|
)
|
1,533
|
(3,054
|
)
|
(5,281
|
)
|
4,166
|
14,423
|
(5,007
|
)
|
||||||||||||||||||||
Other asset-backed securities
|
1,252
|
2,168
|
7,618
|
(3,127
|
)
|
–
|
659
|
8,570
|
2,077
|
|||||||||||||||||||||||
Loans and other receivables
|
170,986
|
(5,103
|
)
|
206,672
|
(26,630
|
)
|
(213,662
|
)
|
(1,811
|
)
|
130,452
|
(8,063
|
)
|
|||||||||||||||||||
Investments at fair value
|
70,067
|
653
|
5,000
|
(102
|
)
|
(3,204
|
)
|
1,038
|
73,452
|
668
|
||||||||||||||||||||||
Investments in managed funds
|
59,976
|
3,108
|
9,130
|
–
|
(16,439
|
)
|
122
|
55,897
|
3,108
|
|||||||||||||||||||||||
Liabilities:
|
||||||||||||||||||||||||||||||||
Trading liabilities:
|
||||||||||||||||||||||||||||||||
Corporate equity securities
|
$
|
38
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
38
|
$
|
–
|
||||||||||||||||
Residential mortgage-backed
|
||||||||||||||||||||||||||||||||
securities
|
1,542
|
(1,542
|
)
|
–
|
–
|
–
|
–
|
–
|
–
|
|||||||||||||||||||||||
Net derivatives (2)
|
11,185
|
3,453
|
–
|
–
|
–
|
–
|
14,638
|
(3,453
|
)
|
|||||||||||||||||||||||
Loans
|
7,398
|
–
|
(20,221
|
)
|
13,799
|
–
|
–
|
976
|
–
|
|||||||||||||||||||||||
Other secured financings
|
–
|
731
|
–
|
–
|
–
|
2,294
|
3,025
|
(731
|
)
|
(1) | Realized and unrealized gains (losses) are reported in Principal transactions in the Consolidated Statements of Operations. |
(2) | Net derivatives represent Trading assets - Derivatives and Trading liabilities - Derivatives. |
(3) | There were no issuances. |
·
|
Non-agency residential mortgage-backed securities of $17.9 million and commercial mortgage-backed securities of $5.3 million for which no recent trade activity was observed for purposes of determining observable inputs;
|
·
|
Loans and other receivables of $0.4 million due to a lower number of contributors comprising vendor quotes to support classification within Level 2;
|
·
|
Corporate equity securities of $7.0 million and corporate debt securities of $8.5 million due to lack of observable market transactions;
|
·
|
Collateralized debt obligations of $12.1 million which have little to no transparency in trade activity.
|
·
|
Non-agency residential mortgage-backed securities of $29.7 million and commercial mortgage-backed securities of $1.2 million for which market trades were observed in the period for either identical or similar securities;
|
·
|
Collateralized debt obligations of $9.5 million and loans and other receivables of $2.2 million due to a greater number of contributors for certain vendor quotes supporting classification into Level 2;
|
·
|
Corporate equity securities of $4.9 million and corporate debt securities of $0.4 million due to an increase in observable market transactions.
|
September 30, 2014
|
||||||||||||||
Financial Instruments Owned
|
Fair Value
(in thousands)
|
Valuation
Technique
|
Significant
Unobservable Input(s)
|
Input/Range
|
Weighted
Average
|
|||||||||
Corporate equity securities
|
$
|
7,777
|
||||||||||||
Non-exchange traded securities
|
Market approach
|
EBITDA (a) multiple
|
3.05
|
–
|
||||||||||
Transaction Level
|
2.95
|
–
|
||||||||||||
Corporate debt securities
|
$
|
34,965
|
Market approach
|
Yield
|
3.7% to 4.4
|
% |
4.2
|
%
|
||||||
Convertible bond model
|
Discount rate/yield
|
31.9
|
%
|
–
|
||||||||||
Discounted cash flows
|
Constant prepayment rate
|
20.0
|
%
|
–
|
||||||||||
Constant default rate
|
2.0
|
%
|
–
|
|||||||||||
Loss severity
|
25.0
|
%
|
–
|
|||||||||||
Yield
|
16.0
|
%
|
–
|
|||||||||||
Collateralized debt obligations
|
$
|
41,690
|
Discounted cash flows
|
Constant prepayment rate
|
10% to 20
|
% |
15.29
|
%
|
||||||
Constant default rate
|
2
|
%
|
–
|
|||||||||||
Loss severity
|
25% to 95
|
% |
55.70
|
%
|
||||||||||
Yield
|
0% to 47.3
|
% |
7.83
|
%
|
||||||||||
U.S. government and federal agency securities
|
$
|
2,494
|
Market approach
|
Transaction level
|
$
|
100
|
–
|
|||||||
Residential mortgage-backed securities
|
$
|
81,034
|
Discounted cash flows
|
Constant prepayment rate
|
3% to 50
|
% |
11.9
|
%
|
||||||
Constant default rate
|
1% to 100
|
% |
14.5
|
%
|
||||||||||
Loss severity
|
20% to 80
|
% |
48.4
|
%
|
||||||||||
Yield
|
1.2% to 12.6
|
% |
6.0
|
%
|
||||||||||
Commercial mortgage-backed securities
|
$
|
19,327
|
Discounted cash flows
|
Yield
|
7.6% to 15
|
% |
11.6
|
%
|
||||||
Cumulative loss rate
|
4.6% to 74
|
% |
16.7
|
%
|
||||||||||
Other asset-backed securities
|
$
|
2,079
|
Discounted cash flows
|
Constant prepayment rate
|
0
|
%
|
–
|
|||||||
Constant default rate
|
0
|
%
|
–
|
|||||||||||
Loss severity
|
0
|
%
|
–
|
|||||||||||
Yield
|
7
|
%
|
–
|
|||||||||||
Loans and other receivables
|
$
|
179,189
|
Comparable pricing
|
Comparable bond or loan price
|
$
|
92.5 to $100
|
$
|
99.63
|
||||||
Market approach
|
Yield
|
2.6% to 4.6
|
% |
3.9
|
%
|
|||||||||
EBITDA (a) multiple
|
3.05 to 7
|
6.64
|
||||||||||||
Scenario analysis
|
Estimated recovery percentage
|
10.33% to 81.3
|
% |
70.9
|
%
|
|||||||||
Investments at fair value
|
||||||||||||||
Private equity securities
|
$
|
52,226
|
Comparable pricing
|
Comparable share price
|
$
|
26.80
|
–
|
|||||||
Market approach
|
Transaction Level
|
$
|
50.36
|
–
|
||||||||||
Market approach
|
Discount rate
|
15% to 30
|
% |
23
|
%
|
|||||||||
Trading Liabilities
|
Fair Value
(in thousands)
|
Valuation
Technique
|
Significant
Unobservable Input(s)
|
Input/Range
|
Weighted
Average
|
|||||||||
Derivatives
|
||||||||||||||
Unfunded commitments
|
$
|
14,784
|
Comparable pricing
|
Comparable loan price
|
$
|
93.5 to $99.625
|
$
|
94.64
|
||||||
Market approach
|
Yield
|
4.582
|
%
|
–
|
December 31, 2013
|
||||||||||||||
Financial Instruments Owned
|
Fair Value
(in thousands)
|
Valuation
Technique
|
Significant
Unobservable Input(s)
|
Input/Range
|
Weighted
Average
|
|||||||||
Corporate equity securities
|
$
|
8,034
|
||||||||||||
Non-exchange traded securities
|
Market approach
|
EBITDA (a) multiple
|
4.0 to 5.5
|
4.53
|
||||||||||
Warrants
|
Option model
|
Volatility
|
36
|
%
|
–
|
|||||||||
Corporate debt securities
|
$
|
17,699
|
Scenario analysis
|
Estimated recovery percentage
|
24
|
%
|
–
|
|||||||
Comparable pricing
|
Comparable bond or loan price
|
$
|
69.10 to $70.50
|
$
|
69.91
|
|||||||||
Market approach
|
Yield
|
13
|
%
|
–
|
||||||||||
Collateralized debt obligations
|
$
|
34,316
|
Discounted cash flows
|
Constant prepayment rate
|
0% to 20
|
% |
13
|
%
|
||||||
Constant default rate
|
2% to 3
|
% |
2
|
%
|
||||||||||
Loss severity
|
30% to 85
|
% |
38
|
%
|
||||||||||
Yield
|
3% to 91
|
% |
28
|
%
|
||||||||||
Residential mortgage-backed securities
|
$
|
105,492
|
Discounted cash flows
|
Constant prepayment rate
|
2% to 50
|
% |
11
|
%
|
||||||
Constant default rate
|
1% to 100
|
% |
17
|
%
|
||||||||||
Loss severity
|
30% to 90
|
% |
48
|
%
|
||||||||||
Yield
|
0% to 20
|
% |
7
|
%
|
||||||||||
Commercial mortgage-backed securities
|
$
|
17,568
|
Discounted cash flows
|
Yield
|
12% to 20
|
% |
14
|
%
|
||||||
Cumulative loss rate
|
5% to 28.2
|
% |
11
|
%
|
||||||||||
Other asset-backed securities
|
$
|
12,611
|
Discounted cash flows
|
Constant prepayment rate
|
4% to 30
|
% |
17
|
%
|
||||||
Constant default rate
|
2% to 11
|
% |
7
|
%
|
||||||||||
Loss severity
|
40% to 92
|
% |
64
|
%
|
||||||||||
Yield
|
3% to 29
|
% |
18
|
%
|
||||||||||
Loans and other receivables
|
$
|
101,931
|
Comparable pricing
|
Comparable bond or loan price
|
$
|
91 to $101
|
$
|
98.90
|
||||||
Market approach
|
Yield
|
8.75% to 13.5
|
% |
10
|
%
|
|||||||||
EBITDA (a) multiple
|
6.9
|
–
|
||||||||||||
Scenario analysis
|
Estimated recovery percentage
|
16.9% to 92
|
% |
74
|
%
|
|||||||||
Derivatives
|
||||||||||||||
Loan commitments
|
$
|
1,493
|
Comparable pricing
|
Comparable bond or loan price
|
$
|
100.875
|
–
|
|||||||
Investments at fair value
|
||||||||||||||
Private equity securities
|
$
|
30,203
|
Comparable pricing
|
Comparable share price
|
$
|
414
|
–
|
|||||||
Market approach
|
Discount rate
|
15% to 30
|
% |
23
|
%
|
|||||||||
Trading Liabilities
|
Fair Value
(in thousands)
|
Valuation
Technique
|
Significant
Unobservable Input(s)
|
Input/Range
|
Weighted
Average
|
|||||||||
Derivatives
|
||||||||||||||
Equity options
|
$
|
8,398
|
Option model
|
Volatility
|
36.25% to 41
|
% |
39
|
%
|
||||||
Loans
|
$
|
8,106
|
Comparable pricing
|
Comparable bond or loan price
|
$
|
101.88
|
–
|
(a)
|
Earnings before interest, taxes, depreciation and amortization (“EBITDA”).
|
·
|
Private equity securities, corporate debt securities, loans and other receivables and loan commitments using comparable pricing valuation techniques. A significant increase (decrease) in the comparable share, bond or loan price in isolation would result in a significant higher (lower) fair value measurement.
|
·
|
Non-exchange traded securities, corporate debt securities, and loans and other receivables using a market approach valuation technique. A significant increase (decrease) in the EBITDA or other multiples in isolation would result in a significantly higher (lower) fair value measurement. A significant increase (decrease) in the yield of a corporate debt security, loan and other receivable would result in a significantly lower (higher) fair value measurement. A significant increase (decrease) in the discount rate of a private equity security would result in a significantly lower (higher) fair value measurement.
|
·
|
Corporate debt securities and loans and other receivables using scenario analysis. A significant increase (decrease) in the possible recovery rates of the cash flow outcomes underlying the investment would result in a significantly higher (lower) fair value measurement for the financial instrument.
|
·
|
Collateralized debt obligations, residential and commercial mortgage-backed securities and other asset-backed securities using a discounted cash flow valuation technique. A significant increase (decrease) in isolation in the constant default rate, loss severities or cumulative loss rate and discount rate would result in a significantly lower (higher) fair value measurement. The impact of changes in the constant prepayment rate would have differing impacts depending on the capital structure of the security. A significant increase (decrease) in the loan or bond yield would result in a significant lower (higher) fair value measurement.
|
·
|
Derivative equity options and equity warrants using an option model. A significant increase (decrease) in volatility would result in a significant higher (lower) fair value measurement.
|
·
|
Private equity securities using a net asset value technique. A significant increase (decrease) in the discount applied to net asset value would result in a significant (lower) higher fair value measurement.
|
For the Three Month
|
For the Nine Month
|
|||||||||||||||
Period Ended September 30,
|
Period Ended September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Financial Instruments Owned:
|
||||||||||||||||
Loans and other receivables
|
$
|
(15,002
|
)
|
$
|
1,097
|
$
|
(12,841
|
)
|
$
|
2,284
|
||||||
Financial Instruments Sold:
|
||||||||||||||||
Loans
|
$
|
103
|
$
|
–
|
$
|
(751
|
)
|
$
|
–
|
|||||||
Loan commitments
|
$
|
1,338
|
$
|
4,440
|
$
|
(10,299
|
)
|
$
|
(2,059
|
)
|
September 30,
2014
|
December 31, 2013
|
|||||||
Loans and other receivables (1)
|
$
|
333,925
|
$
|
264,896
|
||||
Loans and other receivables greater than 90 days past due (1)
|
$
|
4,443
|
$
|
–
|
||||
Loans and other receivables on nonaccrual status (1) (2)
|
$
|
(42,085
|
)
|
$
|
–
|
(1)
|
Interest income is recognized separately from other changes in fair value and is included within Interest income in the Consolidated Statements of Operations.
|
(2)
|
Amount includes all loans and other receivables greater than 90 or more days past due.
|
|
September 30, 2014
|
|||||||||||||||
|
Assets
|
Liabilities
|
||||||||||||||
|
Fair Value
|
Number of
Contracts
|
Fair Value
|
Number of
Contracts
|
||||||||||||
Interest rate contracts
|
$
|
1,829,309
|
59,651
|
$
|
1,823,874
|
83,274
|
||||||||||
Foreign exchange contracts
|
732,665
|
28,336
|
655,320
|
35,409
|
||||||||||||
Equity contracts
|
708,905
|
1,889,845
|
679,152
|
1,886,849
|
||||||||||||
Commodity contracts
|
179,957
|
1,122,124
|
169,710
|
1,127,472
|
||||||||||||
Credit contracts: centrally cleared swaps
|
55,293
|
51
|
58,196
|
52
|
||||||||||||
Credit contracts: other credit derivatives
|
1,365
|
15
|
20,888
|
29
|
||||||||||||
Total
|
3,507,494
|
3,407,140
|
||||||||||||||
Counterparty/cash-collateral netting
|
(3,148,819
|
)
|
(3,140,135
|
)
|
||||||||||||
Total per Consolidated Statement of Financial Condition
|
$
|
358,675
|
$
|
267,005
|
|
December 31, 2013
|
|||||||||||||||
|
Assets
|
Liabilities
|
||||||||||||||
|
Fair Value
|
Number of
Contracts
|
Fair Value
|
Number of
Contracts
|
||||||||||||
Interest rate contracts
|
$
|
1,165,977
|
63,967
|
$
|
1,131,166
|
77,338
|
||||||||||
Foreign exchange contracts
|
653,772
|
118,707
|
693,658
|
112,417
|
||||||||||||
Equity contracts
|
501,784
|
1,742,343
|
474,985
|
1,800,603
|
||||||||||||
Commodity contracts
|
141,280
|
797,529
|
173,119
|
788,717
|
||||||||||||
Credit contracts: centrally cleared swaps
|
49,531
|
49
|
51,632
|
46
|
||||||||||||
Credit contracts: other credit derivatives
|
2,339
|
16
|
8,130
|
19
|
||||||||||||
Total
|
2,514,683
|
2,532,690
|
||||||||||||||
Counterparty/cash-collateral netting
|
(2,253,589
|
)
|
(2,352,611
|
)
|
||||||||||||
Total per Consolidated Statement of Financial Condition
|
$
|
261,094
|
$
|
180,079
|
For the Three Month
|
For the Nine Month
|
|||||||||||||||
Period Ended September 30,
|
Period Ended September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Interest rate contracts
|
$
|
(3,803
|
)
|
$
|
130,178
|
$
|
(46,376
|
)
|
$
|
177,796
|
||||||
Foreign exchange contracts
|
6,697
|
(3,930
|
)
|
8,294
|
(25
|
)
|
||||||||||
Equity contracts
|
(49,422
|
)
|
25,509
|
(220,774
|
)
|
37,588
|
||||||||||
Commodity contracts
|
(4,991
|
)
|
15,080
|
32,989
|
36,593
|
|||||||||||
Credit contracts
|
(1,330
|
)
|
(904
|
)
|
(17,318
|
)
|
(13,425
|
)
|
||||||||
Total
|
$
|
(52,849
|
)
|
$
|
165,933
|
$
|
(243,185
|
)
|
$
|
238,527
|
|
OTC Derivative Assets (1) (2) (3)
|
|||||||||||||||||||
|
0-12 Months
|
1-5 Years
|
Greater Than
5 Years
|
Cross-
Maturity
Netting (4)
|
Total
|
|||||||||||||||
Commodity swaps, options and forwards
|
$
|
62,219
|
$
|
7,459
|
$
|
-
|
$
|
(2,344
|
)
|
$
|
67,334
|
|||||||||
Equity swaps and options
|
1,980
|
36,355
|
5,911
|
-
|
44,246
|
|||||||||||||||
Total return swaps
|
2,816
|
2
|
-
|
-
|
2,818
|
|||||||||||||||
Foreign currency forwards, swaps and options
|
179,297
|
31,983
|
3,255
|
(16,960
|
)
|
197,575
|
||||||||||||||
Interest rate swaps, options and forwards
|
49,095
|
107,025
|
152,536
|
(62,126
|
)
|
246,530
|
||||||||||||||
Total
|
$
|
295,407
|
$
|
182,824
|
$
|
161,702
|
$
|
(81,430
|
)
|
558,503
|
||||||||||
Cross product counterparty netting
|
(8,871
|
)
|
||||||||||||||||||
Total OTC derivative assets included in
|
||||||||||||||||||||
Trading assets
|
$
|
549,632
|
(1) | At September 30, 2014, we held exchange traded derivative assets and other credit agreements with a fair value of $69.0 million, which are not included in this table. |
(2) | OTC derivative assets in the table above are gross of collateral received. OTC derivative assets are recorded net of collateral received in the Consolidated Statements of Financial Condition. At September 30, 2014, cash collateral received was $260.0 million. |
(3) | Derivative fair values include counterparty netting within product category. |
(4) | Amounts represent the netting of receivable balances with payable balances for the same counterparty within product category across maturity categories. |
|
OTC Derivative Liabilities (1) (2) (3)
|
|||||||||||||||||||
|
0-12 Months
|
1-5 Years
|
Greater Than
5 Years
|
Cross-Maturity
Netting (4)
|
Total
|
|||||||||||||||
Commodity swaps, options and forwards
|
$
|
58,743
|
$
|
7,042
|
$
|
-
|
$
|
(2,344
|
)
|
$
|
63,441
|
|||||||||
Credit default swaps
|
62
|
7,892
|
747
|
-
|
8,701
|
|||||||||||||||
Equity swaps and options
|
-
|
9,977
|
58,712
|
-
|
68,689
|
|||||||||||||||
Total return swaps
|
1,704
|
-
|
-
|
-
|
1,704
|
|||||||||||||||
Foreign currency forwards, swaps and options
|
106,582
|
27,173
|
3,084
|
(16,960
|
)
|
119,879
|
||||||||||||||
Interest rate swaps, options and forwards
|
39,104
|
91,001
|
177,410
|
(62,126
|
)
|
245,389
|
||||||||||||||
Total
|
$
|
206,195
|
$
|
143,085
|
$
|
239,953
|
$
|
(81,430
|
)
|
507,803
|
||||||||||
Cross product counterparty netting
|
(8,871
|
)
|
||||||||||||||||||
Total OTC derivative liabilities included in
|
||||||||||||||||||||
Trading liabilities
|
$
|
498,932
|
(1) | At September 30, 2014, we held exchange traded derivative liabilities and other credit agreements with a fair value of $19.2 million, which are not included in this table. |
(2) | OTC derivative liabilities in the table above are gross of collateral pledged. OTC derivative liabilities are recorded net of collateral pledged in the Consolidated Statements of Financial Condition. At September 30, 2014, cash collateral pledged was $251.3 million. |
(3) | Derivative fair values include counterparty netting within product category. |
(4) | Amounts represent the netting of receivable balances with payable balances for the same counterparty within product category across maturity categories. |
Counterparty credit quality (1):
|
||||
A- or higher
|
$
|
326,452
|
||
BBB- to BBB+
|
69,223
|
|||
BB+ or lower
|
54,989
|
|||
Unrated
|
98,968
|
|||
Total
|
$
|
549,632
|
(1)
|
We utilize internal credit ratings determined by Jefferies Risk Management. Credit ratings determined by Risk Management use methodologies that produce ratings generally consistent with those produced by external rating agencies.
|
For the Three Month
|
For the Nine Month
|
|||||||||||||||
Period Ended September 30,
|
Period Ended September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Transferred assets
|
$
|
1,562.1
|
$
|
918.4
|
$
|
4,788.7
|
$
|
3,102.4
|
||||||||
Proceeds on new securitizations
|
1,567.2
|
921.5
|
4,795.4
|
3,112.5
|
||||||||||||
Cash flows received on retained interests
|
15.2
|
13.0
|
37.9
|
24.2
|
|
September 30, 2014
|
December 31, 2013
|
||||||||||||||
Securitization Type
|
Total
Assets
|
Retained
Interests
|
Total
Assets
|
Retained
Interests
|
||||||||||||
U.S. government agency residential mortgage-backed securities
|
$
|
17,478.6
|
$
|
312.5
|
$
|
11,518.4
|
$
|
281.3
|
||||||||
U.S. government agency commercial mortgage-backed securities
|
5,046.3
|
100.5
|
5,385.6
|
96.8
|
||||||||||||
Collateralized loan obligations
|
2,711.3
|
42.7
|
728.5
|
9.0
|
Gross
|
Gross
|
Estimated
|
||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
Cost
|
Gains
|
Losses
|
Value
|
|||||||||||||
September 30, 2014
|
||||||||||||||||
Bonds and notes:
|
||||||||||||||||
U.S. government securities
|
$
|
866,701
|
$
|
166
|
$
|
–
|
$
|
866,867
|
||||||||
Residential mortgage-backed securities
|
586,334
|
11,250
|
1,206
|
596,378
|
||||||||||||
Commercial mortgage-backed securities
|
45,808
|
424
|
34
|
46,198
|
||||||||||||
Other asset-backed securities
|
237,995
|
574
|
928
|
237,641
|
||||||||||||
All other corporates
|
30,638
|
48
|
99
|
30,587
|
||||||||||||
Total fixed maturities
|
1,767,476
|
12,462
|
2,267
|
1,777,671
|
||||||||||||
Equity securities:
|
||||||||||||||||
Common stocks:
|
||||||||||||||||
Banks, trusts and insurance companies
|
21,812
|
22,131
|
–
|
43,943
|
||||||||||||
Industrial, miscellaneous and all other
|
21,986
|
22,815
|
–
|
44,801
|
||||||||||||
Total equity securities
|
43,798
|
44,946
|
–
|
88,744
|
||||||||||||
$
|
1,811,274
|
$
|
57,408
|
$
|
2,267
|
$
|
1,866,415
|
|||||||||
December 31, 2013
|
||||||||||||||||
Bonds and notes:
|
||||||||||||||||
U.S. government securities
|
$
|
1,781,052
|
$
|
226
|
$
|
12
|
$
|
1,781,266
|
||||||||
Residential mortgage-backed securities
|
570,642
|
9,946
|
1,426
|
579,162
|
||||||||||||
Commercial mortgage-backed securities
|
18,271
|
13
|
299
|
17,985
|
||||||||||||
Other asset-backed securities
|
183,593
|
627
|
184
|
184,036
|
||||||||||||
All other corporates
|
50,933
|
267
|
37
|
51,163
|
||||||||||||
Total fixed maturities
|
2,604,491
|
11,079
|
1,958
|
2,613,612
|
||||||||||||
Equity securities:
|
||||||||||||||||
Common stocks:
|
||||||||||||||||
First Quantum Minerals Ltd.
|
154,281
|
–
|
5,616
|
148,665
|
||||||||||||
Banks, trusts and insurance companies
|
22,980
|
27,562
|
–
|
50,542
|
||||||||||||
Industrial, miscellaneous and all other
|
21,012
|
32,312
|
–
|
53,324
|
||||||||||||
Total equity securities
|
198,273
|
59,874
|
5,616
|
252,531
|
||||||||||||
$
|
2,802,764
|
$
|
70,953
|
$
|
7,574
|
$
|
2,866,143
|
Amortized
|
Estimated
|
|||||||
Cost
|
Fair Value
|
|||||||
(In thousands)
|
||||||||
Due within one year
|
$
|
879,125
|
$
|
879,314
|
||||
Due after one year through five years
|
18,214
|
18,140
|
||||||
Due after five years through ten years
|
–
|
–
|
||||||
Due after ten years
|
–
|
–
|
||||||
897,339
|
897,454
|
|||||||
Mortgage-backed and asset-backed securities
|
870,137
|
880,217
|
||||||
$
|
1,767,476
|
$
|
1,777,671
|
• | Purchases of securities in connection with our trading and secondary market making activities, |
• | Retained interests held as a result of securitization activities, including the resecuritization of mortgage- and other asset-backed securities and the securitization of commercial mortgage and corporate loans, |
• | Acting as placement agent and/or underwriter in connection with client-sponsored securitizations, |
• | Financing of agency and non-agency mortgage- and other asset-backed securities, |
• | Warehousing funding arrangements for client-sponsored consumer loan vehicles and collateralized loan obligations (“CLOs”) through participation certificates and revolving loan commitments, and |
• | Loans to, investments in and fees from various investment fund vehicles. |
Securitization Vehicles
|
||||||||
September 30,
2014
|
December 31, 2013
|
|||||||
(In millions)
|
||||||||
Cash
|
$
|
.1
|
$
|
–
|
||||
Financial instruments owned
|
56.9
|
97.5
|
||||||
Securities purchased under agreement to resell (1)
|
585.2
|
195.1
|
||||||
Other
|
120.3
|
2.3
|
||||||
Total assets
|
$
|
762.5
|
$
|
294.9
|
||||
Other secured financings (2)
|
$
|
754.6
|
$
|
292.5
|
||||
Other
|
7.9
|
2.1
|
||||||
Total liabilities
|
$
|
762.5
|
$
|
294.6
|
(1) | Securities purchased under agreement to resell represent an amount due under a collateralized transaction on a related consolidated entity, which is eliminated in consolidation. |
(2) | Approximately $37.9 million and $66.5 million of the secured financing represents an amount held by Jefferies in inventory and eliminated in consolidation at September 30, 2014 and December 31, 2013, respectively. |
September 30, 2014
|
||||||||||||
Variable Interests
|
||||||||||||
Financial Statement
Carrying Amount (2)
|
Maximum
Exposure to Loss
|
VIE Assets
|
||||||||||
Assets
|
||||||||||||
(In millions)
|
||||||||||||
Collateralized loan obligations
|
$
|
51.0
|
$
|
245.0
|
$
|
4,897.5
|
||||||
Consumer loan financing vehicles
|
133.6
|
367.5
|
261.8
|
|||||||||
Asset management vehicle (1)
|
3.6
|
3.6
|
310.1
|
|||||||||
Private equity vehicles (1)
|
47.2
|
62.1
|
98.8
|
|||||||||
Total
|
$
|
235.4
|
$
|
678.2
|
$
|
5,568.2
|
December 31, 2013
|
||||||||||||
Variable Interests
|
||||||||||||
Financial Statement
Carrying Amount (2)
|
Maximum
Exposure to Loss
|
VIE Assets
|
||||||||||
Assets
|
||||||||||||
(In millions)
|
||||||||||||
Collateralized loan obligations
|
$
|
11.9
|
$
|
88.8
|
$
|
1,122.3
|
||||||
Asset management vehicle (1)
|
3.5
|
3.5
|
454.2
|
|||||||||
Private equity vehicles (1)
|
40.8
|
68.8
|
89.4
|
|||||||||
Total
|
$
|
56.2
|
$
|
161.1
|
$
|
1,665.9
|
(1)
|
Assets consist of equity interests, which are included within Investments in managed funds.
|
(2)
|
There were no significant liabilities at September 30, 2014 or December 31, 2013.
|
• | Forward sale agreements whereby we commit to sell, at a fixed price, corporate loans and ownership interests in an entity holding such corporate loans to CLOs |
• | Warehouse funding arrangements in the form of participation interests in corporate loans held by CLOs and commitments to fund such participation interests |
• | Retention of unsold securities issued in a CLO transaction |
• | Investments in variable funding notes issued by CLOs |
• | A guarantee to a CLO managed by Jefferies Finance, whereby we guarantee certain of the obligations of Jefferies Finance to the CLO |
September 30,
|
December 31,
|
|||||||
2014
|
2013
|
|||||||
Jefferies Finance, LLC
|
$
|
377,448
|
$
|
470,537
|
||||
Jefferies LoanCore LLC
|
247,595
|
224,037
|
||||||
Berkadia
|
186,073
|
182,573
|
||||||
Garcadia companies
|
132,634
|
120,017
|
||||||
HomeFed
|
269,771
|
52,923
|
||||||
Linkem S.p.A.
|
153,232
|
173,577
|
||||||
Golden Queen Mining Company, LLC (1)
|
103,840
|
-
|
||||||
Other
|
38,404
|
34,677
|
||||||
Total
|
$
|
1,508,997
|
$
|
1,258,341
|
(1)
|
As discussed below, at September 30, 2014, the balance reflects $34.1 million from a noncontrolling interest.
|
For the Three Month
|
For the Nine Month
|
|||||||||||||||
Period Ended September 30,
|
Period Ended September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Berkadia
|
$
|
20,042
|
$
|
18,283
|
$
|
58,403
|
$
|
67,714
|
||||||||
Garcadia companies
|
13,798
|
11,329
|
39,100
|
31,444
|
||||||||||||
Linkem
|
(4,535
|
)
|
(7,040
|
)
|
(15,094
|
)
|
(20,562
|
)
|
||||||||
HomeFed
|
962
|
283
|
1,139
|
(313
|
)
|
|||||||||||
Jefferies High Yield Holdings, LLC (“JHYH”)
|
-
|
-
|
-
|
7,178
|
||||||||||||
Other
|
(1,350
|
)
|
1,034
|
750
|
4,099
|
|||||||||||
Total
|
$
|
28,917
|
$
|
23,889
|
$
|
84,298
|
$
|
89,560
|
For the Three Month
|
For the Nine Month
|
|||||||||||||||
Period Ended September 30,
|
Period Ended September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Jefferies Finance
|
$
|
33,983
|
$
|
18,028
|
$
|
66,257
|
$
|
29,997
|
||||||||
Jefferies LoanCore
|
2,273
|
9,076
|
8,155
|
25,799
|
||||||||||||
Other
|
(509
|
)
|
(451
|
)
|
(773
|
)
|
(603
|
)
|
||||||||
Total
|
$
|
35,747
|
$
|
26,653
|
$
|
73,639
|
$
|
55,193
|
(In thousands)
|
Gross
Amounts
|
Netting in Consolidated Statement of Financial Condition
|
Net Amounts in Consolidated Statement of Financial Condition
|
Additional Amounts Available for Setoff (1)
|
Available Collateral (2)
|
Net Amount (3)
|
||||||||||||||||||
Assets at September 30, 2014
|
||||||||||||||||||||||||
Derivative contracts
|
$
|
3,507,494
|
$
|
(3,148,819
|
)
|
$
|
358,675
|
$
|
–
|
$
|
–
|
$
|
358,675
|
|||||||||||
Securities borrowing arrangements
|
$
|
6,270,452
|
$
|
–
|
$
|
6,270,452
|
$
|
(555,662
|
)
|
$
|
(977,138
|
)
|
$
|
4,737,652
|
||||||||||
Reverse repurchase agreements
|
$
|
13,768,047
|
$
|
(9,197,514
|
)
|
$
|
4,570,533
|
$
|
(547,636
|
)
|
$
|
(3,987,093
|
)
|
$
|
35,804
|
|||||||||
Liabilities at September 30, 2014
|
||||||||||||||||||||||||
Derivative contracts
|
$
|
3,407,140
|
$
|
(3,140,135
|
)
|
$
|
267,005
|
$
|
–
|
$
|
–
|
$
|
267,005
|
|||||||||||
Securities lending arrangements
|
$
|
2,468,513
|
$
|
–
|
$
|
2,468,513
|
$
|
(555,662
|
)
|
$
|
(1,883,794
|
)
|
$
|
29,057
|
||||||||||
Repurchase agreements
|
$
|
19,729,573
|
$
|
(9,197,514
|
)
|
$
|
10,532,059
|
$
|
(547,636
|
)
|
$
|
(9,301,230
|
)
|
$
|
683,193
|
|||||||||
Assets at December 31, 2013
|
||||||||||||||||||||||||
Derivative contracts
|
$
|
2,514,683
|
$
|
(2,253,589
|
)
|
$
|
261,094
|
$
|
–
|
$
|
–
|
$
|
261,094
|
|||||||||||
Securities borrowing arrangements
|
$
|
5,359,846
|
$
|
–
|
$
|
5,359,846
|
$
|
(530,293
|
)
|
$
|
(957,140
|
)
|
$
|
3,872,413
|
||||||||||
Reverse repurchase agreements
|
$
|
12,715,449
|
$
|
(8,968,529
|
)
|
$
|
3,746,920
|
$
|
(590,754
|
)
|
$
|
(3,074,540
|
)
|
$
|
81,626
|
|||||||||
Liabilities at December 31, 2013
|
||||||||||||||||||||||||
Derivative contracts
|
$
|
2,532,690
|
$
|
(2,352,611
|
)
|
$
|
180,079
|
$
|
–
|
$
|
–
|
$
|
180,079
|
|||||||||||
Securities lending arrangements
|
$
|
2,506,122
|
$
|
–
|
$
|
2,506,122
|
$
|
(530,293
|
)
|
$
|
(1,942,271
|
)
|
$
|
33,558
|
||||||||||
Repurchase agreements
|
$
|
19,748,374
|
$
|
(8,968,529
|
)
|
$
|
10,779,845
|
$
|
(590,754
|
)
|
$
|
(8,748,641
|
)
|
$
|
1,440,450
|
(1) | Under master netting agreements with our counterparties, we have the legal right of offset with a counterparty, which incorporates all of the counterparty’s outstanding rights and obligations under the arrangement. These balances reflect additional credit risk mitigation that is available by counterparty in the event of a counterparty’s default, but which are not netted in the balance sheet because other netting provisions of U.S. GAAP are not met. Further, for derivative assets and liabilities, amounts netted include cash collateral paid or received. |
(2) | Includes securities received or paid under collateral arrangements with counterparties that could be liquidated in the event of a counterparty default and thus offset against a counterparty’s rights and obligations under the respective repurchase agreements or securities borrowing or lending arrangements. |
(3) | At September 30, 2014, amounts include $4,700.3 million of securities borrowing arrangements, for which we have received securities collateral of $4,579.8 million, and $667.4 million of repurchase agreements, for which we have pledged securities collateral of $694.5 million, which are subject to master netting agreements but we have not yet determined the agreements to be legally enforceable. At December 31, 2013, amounts include $3,818.4 million of securities borrowing arrangements, for which we have received securities collateral of $3,721.8 million, and $1,410.0 million of repurchase agreements, for which we have pledged securities collateral of $1,438.9 million, which are subject to master netting agreements but we have not yet determined the agreements to be legally enforceable. |
September 30,
|
December 31,
|
|||||||
2014
|
2013
|
|||||||
Indefinite lived intangibles:
|
||||||||
Exchange and clearing organization membership interests and registrations
|
$
|
14,752
|
$
|
14,916
|
||||
Amortizable intangibles:
|
||||||||
Customer and other relationships, net of accumulated amortization of
|
||||||||
$146,036 and $117,139
|
511,819
|
502,409
|
||||||
Trademarks and tradename, net of accumulated amortization of $42,966
|
||||||||
and $30,213
|
353,229
|
364,779
|
||||||
Supply contracts, net of accumulated amortization of $27,867 and $20,162
|
122,128
|
129,833
|
||||||
Licenses, net of accumulated amortization of $110 and $4,100
|
-
|
7,928
|
||||||
Other, net of accumulated amortization of $4,598 and $4,500
|
3,005
|
664
|
||||||
Total intangibles
|
$
|
1,004,933
|
$
|
1,020,529
|
September 30,
|
December 31,
|
|||||||
2014
|
2013
|
|||||||
National Beef
|
$
|
14,991
|
$
|
14,991
|
||||
Jefferies
|
1,725,830
|
1,724,557
|
||||||
Other operations
|
8,551
|
8,551
|
||||||
$
|
1,749,372
|
$
|
1,748,099
|
September 30,
|
December 31,
|
|||||||
2014
|
2013
|
|||||||
Finished goods
|
$
|
366,857
|
$
|
273,291
|
||||
Work in process
|
39,569
|
34,701
|
||||||
Raw materials, supplies and other
|
38,434
|
56,334
|
||||||
$
|
444,860
|
$
|
364,326
|
September 30,
|
December 31,
|
|||||||
2014
|
2013
|
|||||||
Parent Company Debt:
|
||||||||
Senior Notes:
|
||||||||
8.125% Senior Notes due September 15, 2015
|
$
|
457,411
|
$
|
456,515
|
||||
5.50% Senior Notes due October 18, 2023
|
740,547
|
739,960
|
||||||
6.625% Senior Notes due October 23, 2043
|
246,983
|
246,958
|
||||||
Subordinated Notes:
|
||||||||
3.75% Convertible Senior Subordinated Notes due April 15, 2014
|
–
|
97,581
|
||||||
Total long-term debt – Parent company
|
1,444,941
|
1,541,014
|
||||||
Subsidiary Debt (non-recourse to Parent Company):
|
||||||||
Jefferies:
|
||||||||
5.875% Senior Notes, due June 8, 2014
|
–
|
255,676
|
||||||
3.875% Senior Notes, due November 9, 2015
|
510,026
|
516,204
|
||||||
5.5% Senior Notes, due March 15, 2016
|
365,739
|
373,178
|
||||||
5.125% Senior Notes, due April 13, 2018
|
845,310
|
854,011
|
||||||
8.5% Senior Notes, due July 15, 2019
|
839,300
|
858,425
|
||||||
2.375% Euro Senior Notes, due May 20, 2020
|
655,129
|
–
|
||||||
6.875% Senior Notes, due April 15, 2021
|
856,575
|
866,801
|
||||||
2.25% Euro Medium Term Notes, due July 13, 2022
|
4,605
|
4,792
|
||||||
5.125% Senior Notes, due January 20, 2023
|
623,900
|
625,626
|
||||||
6.45% Senior Debentures, due June 8, 2027
|
381,951
|
383,224
|
||||||
3.875% Convertible Senior Debentures, due November 1, 2029
|
348,856
|
349,707
|
||||||
6.25% Senior Debentures, due January 15, 2036
|
513,122
|
513,343
|
||||||
6.50% Senior Notes, due January 20, 2043
|
422,033
|
422,245
|
||||||
Secured credit facility, due June 26, 2017
|
258,000
|
200,000
|
||||||
National Beef Term Loans
|
353,750
|
375,000
|
||||||
National Beef Revolving Credit Facility
|
106,431
|
–
|
||||||
Other
|
89,529
|
41,619
|
||||||
Total long-term debt – subsidiaries
|
7,174,256
|
6,639,851
|
||||||
Long-term debt
|
$
|
8,619,197
|
$
|
8,180,865
|
2014
|
2013
|
|||||||
As of January 1,
|
$
|
241,075
|
$
|
241,649
|
||||
Income (loss) allocated to redeemable noncontrolling interests
|
966
|
11,239
|
||||||
Net distributions to redeemable noncontrolling interests
|
(2,765
|
)
|
(8,073
|
)
|
||||
Increase (decrease) in fair value of redeemable noncontrolling
|
||||||||
interests charged to additional paid-in capital
|
(10,588
|
)
|
(41,195
|
)
|
||||
Balance, September 30,
|
$
|
228,688
|
$
|
203,620
|
Discount Rates
|
||||||||||||||
Terminal Growth Rates
|
12.28
|
%
|
12.53
|
%
|
12.78
|
%
|
||||||||
1.75
|
%
|
$
|
233.4
|
$
|
225.8
|
$
|
218.6
|
|||||||
2.00
|
%
|
$
|
236.5
|
$
|
228.7
|
$
|
221.3
|
|||||||
2.25
|
%
|
$
|
239.7
|
$
|
231.7
|
$
|
224.1
|
September 30,
|
December 31,
|
|||||||
2014
|
2013
|
|||||||
Net unrealized gains on available for sale securities
|
$
|
582,545
|
$
|
589,393
|
||||
Net unrealized foreign exchange gains
|
16,523
|
16,803
|
||||||
Net unrealized losses on derivative instruments
|
(108
|
)
|
(169
|
)
|
||||
Net minimum pension liability
|
(65,697
|
)
|
(67,977
|
)
|
||||
$
|
533,263
|
$
|
538,050
|
Details about Accumulated Other Comprehensive Income
Components
|
Amount Reclassified from Accumulated Other Comprehensive Income
|
Affected Line Item in the
Consolidated Statement
of Operations
|
|||||||
2014
|
2013
|
||||||||
Net unrealized gains (losses) on available for
|
Net realized securities gains
|
||||||||
sale securities, net of income tax provision
|
|||||||||
(benefit) of $(578) and $118,228
|
$
|
(1,041
|
)
|
$
|
212,944
|
||||
Net unrealized foreign exchange gains
net of income tax provision of $149 and $0
|
267
|
–
|
Loss from discontinued operations,
net of income tax (benefit)
|
||||||
Amortization of defined benefit pension
|
Compensation and benefits, which
|
||||||||
plan actuarial gains (losses), net of
|
includes pension expense. See the
|
||||||||
income tax provision (benefit) of $(1,266)
|
pension footnote for information on
|
||||||||
and $(1,998)
|
(2,280
|
)
|
(3,600
|
)
|
this component.
|
||||
Total reclassifications for the period,
|
|||||||||
net of tax
|
$
|
(3,054
|
)
|
$
|
209,344
|
For the Three Month
|
For the Nine Month
|
|||||||||||||||
Period Ended September 30,
|
Period Ended September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Service cost
|
$
|
11
|
$
|
72
|
$
|
33
|
$
|
144
|
||||||||
Interest cost
|
3,769
|
3,389
|
11,317
|
9,382
|
||||||||||||
Expected return on plan assets
|
(2,536
|
)
|
(2,606
|
)
|
(7,609
|
)
|
(7,138
|
)
|
||||||||
Actuarial losses
|
1,207
|
1,911
|
3,624
|
5,686
|
||||||||||||
Net pension expense
|
$
|
2,451
|
$
|
2,766
|
$
|
7,365
|
$
|
8,074
|
For the Three Month
|
For the Nine Month
|
|||||||||||||||
Period Ended September 30,
|
Period Ended September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Numerator for earnings (loss) per share:
|
||||||||||||||||
Net income attributable to Leucadia
|
||||||||||||||||
National Corporation common shareholders
|
$
|
54,679
|
$
|
2,971
|
$
|
214,069
|
$
|
360,686
|
||||||||
Less: Allocation of earnings to participating
|
||||||||||||||||
securities (1)
|
(1,264
|
)
|
(92
|
)
|
(5,167
|
)
|
(4,608
|
)
|
||||||||
Net income attributable to Leucadia National
|
||||||||||||||||
Corporation common shareholders for
|
||||||||||||||||
basic earnings (loss) per share
|
53,415
|
2,879
|
208,902
|
356,078
|
||||||||||||
Adjustment to allocation of earnings to participating securities related to diluted shares (1)
|
(16
|
)
|
(62
|
)
|
(36
|
)
|
(57
|
)
|
||||||||
Interest on 3.75% Convertible Notes
|
–
|
–
|
739
|
1,975
|
||||||||||||
Mandatorily redeemable convertible preferred share
|
||||||||||||||||
dividends
|
–
|
–
|
–
|
2,381
|
||||||||||||
Net income attributable to Leucadia
|
||||||||||||||||
National Corporation common shareholders
|
||||||||||||||||
for diluted earnings (loss) per share
|
$
|
53,399
|
$
|
2,817
|
$
|
209,605
|
$
|
360,377
|
||||||||
Denominator for earnings (loss) per share:
|
||||||||||||||||
Denominator for basic earnings (loss) per share
|
||||||||||||||||
– weighted average shares
|
373,347
|
367,641
|
371,372
|
331,091
|
||||||||||||
Stock options
|
28
|
46
|
54
|
45
|
||||||||||||
Warrants
|
–
|
–
|
–
|
–
|
||||||||||||
3.875% Convertible Senior Debentures
|
–
|
–
|
–
|
–
|
||||||||||||
3.75% Convertible Notes
|
–
|
–
|
1,839
|
4,524
|
||||||||||||
Mandatorily redeemable convertible preferred shares
|
–
|
–
|
–
|
3,237
|
||||||||||||
Denominator for diluted earnings (loss) per share
|
373,375
|
367,687
|
373,265
|
338,897
|
(1)
|
Represents dividends declared during the period on participating securities plus an allocation of undistributed earnings to participating securities. Net losses are not allocated to participating securities. Participating securities represent restricted stock and RSUs for which requisite service has not yet been rendered and amounted to weighted average shares of 8,925,200 and 11,161,200 for the three months ended September 30, 2014 and 2013, respectively, and 9,262,000 and 8,912,400 for the nine months ended September 30, 2014 and 2013, respectively. Dividends declared on participating securities were $.5 million and $.7 million during the three months ended September 30, 2014 and 2013, respectively, and $1.7 million and $2.1 million during the nine months ended September 30, 2014 and 2013, 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.
|
|
Expected Maturity Date
|
|||||||||||||||||||||||
|
2014
|
2015
|
2016
and
2017
|
2018
and
2019
|
2020
and
Later
|
Maximum
Payout
|
||||||||||||||||||
Equity commitments (1)
|
$
|
1.6
|
$
|
7.6
|
$
|
0.9
|
$
|
-
|
$
|
355.7
|
$
|
365.8
|
||||||||||||
Loan commitments (1)
|
-
|
76.7
|
615.8
|
101.1
|
-
|
793.6
|
||||||||||||||||||
Mortgage-related commitments
|
976.2
|
333.0
|
530.6
|
-
|
-
|
1,839.8
|
||||||||||||||||||
Forward starting reverse repos and repos
|
1,975.3
|
-
|
-
|
-
|
-
|
1,975.3
|
||||||||||||||||||
Other unfunded commitments (1)
|
-
|
79.5
|
-
|
-
|
23.0
|
102.5
|
||||||||||||||||||
|
$
|
2,953.1
|
$
|
496.8
|
$
|
1,147.3
|
$
|
101.1
|
$
|
378.7
|
$
|
5,077.0
|
(1)
|
Equity, loan commitments and other unfunded commitments are presented by contractual maturity date. The amounts are however available on demand.
|
Credit Ratings
|
0 - 12
Months |
1 - 5
Years |
Greater
Than 5 Years |
Total
Corporate Lending Exposure (1) |
Corporate
Lending Exposure at Fair Value (2) |
Corporate
Lending Commitments (3) |
||||||||||||||||||
Investment grade
|
$
|
-
|
$
|
55.2
|
$
|
-
|
$
|
55.2
|
$
|
-
|
$
|
55.2
|
||||||||||||
Non-investment grade
|
-
|
88.8
|
-
|
88.8
|
15.6
|
73.2
|
||||||||||||||||||
Unrated
|
1.5
|
830.4
|
-
|
831.9
|
166.7
|
665.2
|
||||||||||||||||||
Total
|
$
|
1.5
|
$
|
974.4
|
$
|
-
|
$
|
975.9
|
$
|
182.3
|
$
|
793.6
|
(1) | Total corporate lending exposure represents the potential loss assuming the fair value of funded loans and lending commitments were zero. |
(2) | The corporate lending exposure at fair value includes $196.9 million of funded loans included in Trading assets and a $14.6 million net liability related to lending commitments recorded in Trading liabilities in the Consolidated Statement of Financial Condition as of September 30, 2014. |
(3) | Amounts represent the notional amount of unfunded lending commitments. |
|
Expected Maturity Date
|
|||||||||||||||||||||||
Guarantee Type
|
2014
|
2015
|
2016
and
2017
|
2018
and
2019
|
2020
and
Later
|
Notional/
Maximum
Payout
|
||||||||||||||||||
Derivative contracts – non-credit related
|
$
|
55,067.0
|
$
|
12,274.7
|
$
|
349.4
|
$
|
1.1
|
$
|
521.5
|
$
|
68,213.7
|
||||||||||||
Written derivative contracts – credit related
|
-
|
-
|
9.0
|
-
|
1,541.5
|
1,550.5
|
||||||||||||||||||
Total derivative contracts
|
$
|
55,067.0
|
$
|
12,274.7
|
$
|
358.4
|
$
|
1.1
|
$
|
2,063.0
|
$
|
69,764.2
|
|
External Credit Rating
|
|||||||||||||||||||||||||||
|
AAA/
Aaa
|
AA/
Aa
|
A
|
|
BBB/Baa
|
Below
Investment
Grade
|
Unrated
|
Notional/
Maximum
Payout
|
||||||||||||||||||||
Credit related derivative contracts:
|
||||||||||||||||||||||||||||
Index credit default swaps
|
$
|
1,475.5
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
1,475.5
|
||||||||||||||
Single name credit default swaps
|
-
|
-
|
10.0
|
52.0
|
13.0
|
-
|
75.0
|
|
Net Capital
|
Excess Net Capital
|
||||||
Jefferies LLC
|
$
|
902,855
|
$
|
829,380
|
||||
Jefferies Execution
|
5,737
|
5,487
|
|
Adjusted Net Capital
|
Excess Net Capital
|
||||||
Jefferies Bache, LLC
|
$
|
187,645
|
$
|
84,003
|
September 30, 2014
|
December 31, 2013
|
|||||||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
|||||||||||||
Amount
|
Value
|
Amount
|
Value
|
|||||||||||||
Other Assets:
|
||||||||||||||||
Notes and loans receivable (a)
|
$
|
187,951
|
$
|
191,018
|
$
|
95,042
|
$
|
95,606
|
||||||||
Financial Liabilities:
|
||||||||||||||||
Short-term borrowings (b)
|
92,000
|
92,000
|
12,000
|
12,000
|
||||||||||||
Long-term debt (b)
|
8,619,197
|
8,962,911
|
8,180,865
|
8,230,191
|
(a) | Notes and loans receivable: The fair values are primarily measured using Level 2 and 3 inputs principally based on discounted future cash flows using market interest rates for similar instruments. |
(b) | Short-term borrowings and long-term debt: The fair values of short-term borrowings are estimated to be the carrying amount. The fair values of non-variable rate debt are estimated using quoted prices and estimated rates that would be available for debt with similar terms. The fair value of variable rate debt is estimated to be the carrying amount. |
For the Three Month
|
For the Nine Month
|
|||||||||||||||
Period Ended September 30,
|
Period Ended September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Revenues and other income:
|
||||||||||||||||
Gaming entertainment
|
$
|
3,394
|
$
|
30,132
|
$
|
67,739
|
$
|
88,477
|
||||||||
Investment and other income
|
3,763
|
2,892
|
4,675
|
3,584
|
||||||||||||
7,157
|
33,024
|
72,414
|
92,061
|
|||||||||||||
Expenses:
|
||||||||||||||||
Direct operating expenses -
|
||||||||||||||||
Gaming entertainment
|
1,526
|
21,943
|
48,877
|
64,649
|
||||||||||||
Compensation and benefits
|
1,450
|
4,785
|
4,508
|
15,150
|
||||||||||||
Depreciation and amortization
|
591
|
2,231
|
5,208
|
6,753
|
||||||||||||
Selling, general and other expenses
|
12,323
|
34,391
|
42,783
|
65,188
|
||||||||||||
15,890
|
63,350
|
101,376
|
151,740
|
|||||||||||||
Loss from discontinued
|
||||||||||||||||
operations before income taxes
|
(8,733
|
)
|
(30,326
|
)
|
(28,962
|
)
|
(59,679
|
)
|
||||||||
Income tax benefit
|
(3,057
|
)
|
(10,575
|
)
|
(10,137
|
)
|
(20,738
|
)
|
||||||||
Loss from discontinued
|
||||||||||||||||
operations after income taxes
|
$
|
(5,676
|
)
|
$
|
(19,751
|
)
|
$
|
(18,825
|
)
|
$
|
(38,941
|
)
|
2013
|
||||
Real estate
|
$
|
112,016
|
||
Investment in associated company
|
30,793
|
|||
Other, net
|
17,310
|
|||
$
|
160,119
|
For the Three Month
|
For the Nine Month
|
|||||||||||||||
Period Ended September 30,
|
Period Ended September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Net Revenues:
|
||||||||||||||||
Investment Banking & Capital Markets
|
$
|
840,350
|
$
|
502,766
|
$
|
2,460,165
|
$
|
1,154,275
|
||||||||
Beef Processing Services
|
1,983,349
|
1,921,017
|
5,879,820
|
5,630,882
|
||||||||||||
Other Operations
|
148,489
|
89,489
|
357,995
|
264,089
|
||||||||||||
Corporate
|
31,455
|
18,780
|
100,150
|
455,676
|
||||||||||||
Total consolidated net revenues
|
$
|
3,003,643
|
$
|
2,532,052
|
$
|
8,798,130
|
$
|
7,504,922
|
||||||||
Income (loss) from continuing operations before
|
||||||||||||||||
income taxes and income related to associated
|
||||||||||||||||
companies:
|
||||||||||||||||
Investment Banking & Capital Markets
|
$
|
133,917
|
$
|
9,119
|
$
|
415,855
|
$
|
86,722
|
||||||||
Beef Processing Services
|
26,308
|
48,313
|
4,813
|
55,085
|
||||||||||||
Other Operations
|
35,387
|
(2,916
|
)
|
40,483
|
(9,997
|
)
|
||||||||||
Corporate
|
(106,370
|
)
|
(21,673
|
)
|
(152,275
|
)
|
293,440
|
|||||||||
Total consolidated income from continuing
|
||||||||||||||||
operations before income taxes and income
|
||||||||||||||||
related to associated companies
|
$
|
89,242
|
$
|
32,843
|
$
|
308,876
|
$
|
425,250
|
||||||||
Depreciation and amortization expenses:
|
||||||||||||||||
Investment Banking & Capital Markets
|
$
|
19,495
|
$
|
20,679
|
$
|
54,909
|
$
|
39,613
|
||||||||
Beef Processing Services
|
21,479
|
22,250
|
63,434
|
65,838
|
||||||||||||
Other Operations
|
4,011
|
2,242
|
10,096
|
7,025
|
||||||||||||
Corporate
|
1,479
|
1,878
|
4,155
|
8,048
|
||||||||||||
Total consolidated depreciation and
|
||||||||||||||||
amortization expenses
|
$
|
46,464
|
$
|
47,049
|
$
|
132,594
|
$
|
120,524
|
For the Three Month
|
For the Nine Month
|
|||||||||||||||
Period Ended September 30,
|
Period Ended September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Income (loss) from continuing operations before
|
||||||||||||||||
income taxes and income related to associated companies:
|
||||||||||||||||
Investment Banking & Capital Markets
|
$
|
133,917
|
$
|
9,119
|
$
|
415,855
|
$
|
86,722
|
||||||||
Beef Processing Services
|
26,308
|
48,313
|
4,813
|
55,085
|
||||||||||||
Other Operations
|
35,387
|
(2,916
|
)
|
40,483
|
(9,997
|
)
|
||||||||||
Corporate, including Parent Company Interest
|
(106,370
|
)
|
(21,673
|
)
|
(152,275
|
)
|
293,440
|
|||||||||
Income from continuing operations before income
|
||||||||||||||||
taxes and income related to associated companies
|
$
|
89,242
|
$
|
32,843
|
$
|
308,876
|
$
|
425,250
|
|
||||||||||||||||
For the Nine Month
|
For the Period
|
|||||||||||||||
For the Three Month
Period Ended September 30,
|
Period Ended
September 30,
|
From the Jefferies
Acquisition Through
|
||||||||||||||
2014
|
2013
|
2014
|
September 30, 2013
|
|||||||||||||
Net revenues
|
$
|
840,350
|
$
|
502,766
|
$
|
2,460,165
|
$
|
1,154,275
|
||||||||
Expenses:
|
||||||||||||||||
Compensation and benefits
|
477,268
|
293,771
|
1,390,043
|
667,651
|
||||||||||||
Floor brokerage and clearing fees
|
55,967
|
34,500
|
159,500
|
67,491
|
||||||||||||
Depreciation and amortization
|
19,495
|
20,679
|
54,909
|
39,613
|
||||||||||||
Selling, general and other expenses
|
153,703
|
144,697
|
439,858
|
292,798
|
||||||||||||
706,433
|
493,647
|
2,044,310
|
1,067,553
|
|||||||||||||
Income before income taxes
|
$
|
133,917
|
$
|
9,119
|
$
|
415,855
|
$
|
86,722
|
For the Period
|
||||||||||||||||
For the Three Month
|
For the Nine Month
|
From the Jefferies
|
||||||||||||||
Period Ended September 30,
|
Period Ended
|
Acquisition Through
|
||||||||||||||
2014
|
2013
|
September 30, 2014
|
September 30, 2013
|
|||||||||||||
Sales and trading:
|
||||||||||||||||
Equities
|
$
|
170,176
|
$
|
135,747
|
$
|
532,117
|
$
|
285,219
|
||||||||
Fixed income
|
196,519
|
34,130
|
702,068
|
248,506
|
||||||||||||
Total sales and trading
|
366,695
|
169,877
|
1,234,185
|
533,725
|
||||||||||||
Investment banking:
|
||||||||||||||||
Capital markets:
|
||||||||||||||||
Equities
|
93,309
|
56,482
|
271,773
|
110,046
|
||||||||||||
Debt
|
175,597
|
120,187
|
495,635
|
253,901
|
||||||||||||
Advisory
|
196,286
|
142,670
|
443,253
|
232,526
|
||||||||||||
Total investment banking
|
465,192
|
319,339
|
1,210,661
|
596,473
|
||||||||||||
Other
|
8,463
|
13,550
|
15,319
|
24,077
|
||||||||||||
Total net revenues
|
$
|
840,350
|
$
|
502,766
|
$
|
2,460,165
|
$
|
1,154,275
|
For the Three Month
|
For the Nine Month
|
|||||||||||||||
Period Ended September 30,
|
Period Ended September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Net revenues
|
$
|
1,983,349
|
$
|
1,921,017
|
$
|
5,879,820
|
$
|
5,630,882
|
||||||||
Expenses:
|
||||||||||||||||
Cost of sales
|
1,917,114
|
1,832,907
|
5,750,763
|
5,457,475
|
||||||||||||
Compensation and benefits
|
8,816
|
8,395
|
29,975
|
24,966
|
||||||||||||
Interest
|
3,747
|
2,944
|
10,660
|
9,428
|
||||||||||||
Depreciation and amortization
|
21,479
|
22,250
|
63,434
|
65,838
|
||||||||||||
Selling, general and other expenses
|
5,885
|
6,208
|
20,175
|
18,090
|
||||||||||||
1,957,041
|
1,872,704
|
5,875,007
|
5,575,797
|
|||||||||||||
Income before income taxes
|
$
|
26,308
|
$
|
48,313
|
$
|
4,813
|
$
|
55,085
|
For the Three Month
|
For the Nine Month
|
|||||||||||||||
Period Ended September 30,
|
Period Ended September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Net revenues
|
$
|
148,489
|
$
|
89,489
|
$
|
357,995
|
$
|
264,089
|
||||||||
Expenses:
|
||||||||||||||||
Cost of sales
|
84,665
|
69,256
|
238,022
|
196,802
|
||||||||||||
Compensation and benefits
|
8,127
|
5,352
|
22,995
|
16,472
|
||||||||||||
Interest
|
1,471
|
173
|
2,735
|
239
|
||||||||||||
Depreciation and amortization
|
4,011
|
2,242
|
10,096
|
7,025
|
||||||||||||
Selling, general and other expenses
|
14,828
|
15,382
|
43,664
|
53,548
|
||||||||||||
113,102
|
92,405
|
317,512
|
274,086
|
|||||||||||||
Income (loss) before income taxes
|
$
|
35,387
|
$
|
(2,916
|
)
|
$
|
40,483
|
$
|
(9,997
|
)
|
For the Three Month
|
For the Nine Month
|
|||||||||||||||
Period Ended September 30,
|
Period Ended September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Net revenues
|
$
|
31,455
|
$
|
18,780
|
$
|
100,150
|
$
|
455,676
|
||||||||
Expenses:
|
||||||||||||||||
Compensation and benefits
|
22,411
|
14,145
|
63,622
|
62,316
|
||||||||||||
Parent company interest
|
24,281
|
14,117
|
73,824
|
50,094
|
||||||||||||
Depreciation and amortization
|
1,479
|
1,878
|
4,155
|
8,048
|
||||||||||||
Selling, general and other expenses
|
89,654
|
10,313
|
110,824
|
41,778
|
||||||||||||
137,825
|
40,453
|
252,425
|
162,236
|
|||||||||||||
Income (loss) before income taxes
|
$
|
(106,370
|
)
|
$
|
(21,673
|
)
|
$
|
(152,275
|
)
|
$
|
293,440
|
For the Three Month
|
For the Nine Month
|
|||||||||||||||
Period Ended September 30,
|
Period Ended September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Berkadia
|
$
|
20,042
|
$
|
18,283
|
$
|
58,403
|
$
|
67,714
|
||||||||
Garcadia companies
|
13,798
|
11,329
|
39,100
|
31,444
|
||||||||||||
Linkem
|
(4,535
|
)
|
(7,040
|
)
|
(15,094
|
)
|
(20,562
|
)
|
||||||||
HomeFed
|
962
|
283
|
1,139
|
(313
|
)
|
|||||||||||
JHYH
|
–
|
–
|
–
|
7,178
|
||||||||||||
Other
|
(1,350
|
)
|
1,034
|
750
|
4,099
|
|||||||||||
Total
|
$
|
28,917
|
$
|
23,889
|
$
|
84,298
|
$
|
89,560
|
Total equity
|
$
|
10,385,107
|
||
Less, investment in Jefferies
|
(5,568,243
|
)
|
||
Equity excluding Jefferies
|
4,816,864
|
|||
Less, our two largest investments, at book value:
|
||||
National Beef
|
(797,460
|
)
|
||
Harbinger
|
(545,792
|
)
|
||
Equity in a stressed scenario
|
3,473,612
|
|||
Less, net deferred tax asset excluding Jefferies amount
|
(1,299,746
|
)
|
||
Equity in a stressed scenario less net deferred tax asset
|
$
|
2,173,866
|
||
Balance sheet amounts:
|
||||
Available liquidity, per above
|
$
|
2,116,429
|
||
Parent company debt (see Note 14 to our Consolidated financial statements)
|
$
|
1,444,941
|
||
Ratio of parent company debt to stressed equity:
|
||||
Maximum
|
.50
|
x
|
||
Actual, equity in a stressed scenario
|
.42
|
x
|
||
Actual, equity in a stressed scenario excluding net deferred tax asset
|
.66
|
x
|
||
Ratio of available liquidity to parent company debt:
|
||||
Minimum
|
1.0
|
x
|
||
Actual
|
1.5
|
x
|
Nine Months
|
From Jefferies Acquisition
|
|||||||
Ended
|
Through
|
|||||||
September 30, 2014
|
December 31, 2013
|
|||||||
Securities purchased under agreements to resell:
|
||||||||
Period end
|
$
|
4,571
|
$
|
3,747
|
||||
Month end average
|
5,961
|
4,936
|
||||||
Maximum month end
|
8,081
|
6,007
|
||||||
Securities sold under agreements to repurchase:
|
||||||||
Period end
|
$
|
10,532
|
$
|
10,780
|
||||
Month end average
|
13,307
|
13,308
|
||||||
Maximum month end
|
16,586
|
16,502
|
Average Balance
|
||||||||
Third Quarter
|
||||||||
Actual
|
2014 (1)
|
|||||||
Cash and cash equivalents:
|
||||||||
Cash in banks
|
$
|
721,011
|
$
|
603,459
|
||||
Certificate of deposit
|
50,000
|
46,875
|
||||||
Money market investments
|
3,264,228
|
2,222,351
|
||||||
Total cash and cash equivalents
|
4,035,239
|
2,872,685
|
||||||
Other sources of liquidity:
|
||||||||
Debt securities owned and securities purchased
under agreements to resell (2)
|
1,529,586
|
1,189,258
|
||||||
Other (3)
|
348,112
|
582,585
|
||||||
Total other sources
|
1,877,698
|
1,771,843
|
||||||
Total cash and cash equivalents and other liquidity sources
|
$
|
5,912,937
|
$
|
4,644,528
|
(1)
|
Average balances are calculated based on weekly balances.
|
(2)
|
Consists of high quality sovereign government securities and reverse repurchase agreements collateralized by U.S. government securities and other high quality sovereign government securities; deposits with a central bank within the European Economic Area, Canada, Australia, Japan, Switzerland or the USA; and securities issued by a designated multilateral development bank and reverse repurchase agreements with underlying collateral comprised of these securities.
|
(3)
|
Other includes unencumbered inventory representing an estimate of the amount of additional secured financing that could be reasonably expected to be obtained from financial instruments owned that are currently not pledged after considering reasonable financing haircuts and additional funds available under the committed senior secured revolving credit facility available for working capital needs of Jefferies Bache.
|
September 30, 2014
|
December 31, 2013
|
|||||||||||||||
|
Liquid Financial
Instruments
|
Unencumbered
Liquid Financial
Instruments (2)
|
Liquid Financial
Instruments
|
Unencumbered
Liquid Financial
Instruments (2)
|
||||||||||||
Corporate equity securities
|
$
|
2,292,155
|
$
|
345,555
|
$
|
1,982,877
|
$
|
137,721
|
||||||||
Corporate debt securities
|
2,507,820
|
8,552
|
2,250,512
|
26,983
|
||||||||||||
U.S. government, agency and municipal securities
|
3,609,806
|
296,362
|
2,513,388
|
400,821
|
||||||||||||
Other sovereign obligations
|
2,240,202
|
1,310,164
|
2,346,485
|
991,774
|
||||||||||||
Agency mortgage-backed securities (1)
|
3,112,890
|
–
|
2,976,133
|
–
|
||||||||||||
Physical commodities
|
63,831
|
–
|
37,888
|
–
|
||||||||||||
|
$
|
13,826,704
|
$
|
1,960,633
|
$
|
12,107,283
|
$
|
1,557,299
|
(1)
|
Consists solely of agency mortgage-backed securities issued by Freddie Mac, Fannie Mae and Ginnie Mae. These securities include pass-through securities, securities backed by adjustable rate mortgages (“ARMs”), collateralized mortgage obligations, commercial mortgage-backed securities and interest- and principal-only securities.
|
(2)
|
Unencumbered liquid balances represent assets that can be sold or used as collateral for a loan, but have not been.
|
Rating
|
Outlook
|
|
Moody’s Investors Service
|
Baa3
|
Stable
|
Standard and Poor’s
|
BBB
|
Stable
|
Fitch Ratings
|
BBB-
|
Stable
|
|
Net Capital
|
Excess Net Capital
|
||||||
Jefferies LLC
|
$
|
902,855
|
$
|
829,380
|
||||
Jefferies Execution
|
5,737
|
5,487
|
||||||
|
Adjusted Net Capital
|
Excess Net Capital
|
||||||
Jefferies Bache, LLC
|
$
|
187,645
|
$
|
84,003
|
Daily VaR (1)
|
||||||||||||||||||||||||||||||||
Value-at-Risk In Trading Portfolios
|
||||||||||||||||||||||||||||||||
VaR as of
|
VaR as of
|
|||||||||||||||||||||||||||||||
August 31,
|
Daily VaR for the Three Months Ended
|
May 31,
|
Daily VaR for the Three Months Ended
|
|||||||||||||||||||||||||||||
Risk Categories
|
2014
|
August 31, 2014
|
2014
|
May 31, 2014
|
||||||||||||||||||||||||||||
Average
|
High
|
Low
|
Average
|
High
|
Low
|
|||||||||||||||||||||||||||
Interest Rates
|
$
|
3.92
|
$
|
4.92
|
$
|
7.90
|
$
|
3.18
|
$
|
5.58
|
$
|
6.82
|
$
|
8.62
|
$
|
5.58
|
||||||||||||||||
Equity Prices
|
12.93
|
12.01
|
14.57
|
8.60
|
9.11
|
9.97
|
14.68
|
7.85
|
||||||||||||||||||||||||
Currency Rates
|
1.33
|
1.23
|
6.59
|
0.37
|
1.14
|
0.67
|
1.95
|
0.26
|
||||||||||||||||||||||||
Commodity Prices
|
0.53
|
0.40
|
0.93
|
0.08
|
0.48
|
1.11
|
2.14
|
0.25
|
||||||||||||||||||||||||
Diversification Effect (2)
|
(4.24
|
)
|
(5.06
|
)
|
N/
|
A
|
N/
|
A
|
(0.11
|
)
|
(3.63
|
)
|
N/
|
A
|
N/
|
A
|
||||||||||||||||
Firmwide
|
$
|
14.47
|
$
|
13.50
|
$
|
17.34
|
$
|
10.31
|
$
|
16.20
|
$
|
14.94
|
$
|
19.68
|
$
|
10.70
|
(1) | VaR is the potential loss in value of Jefferies trading positions due to adverse market movements over a defined time horizon with a specific confidence level. For the VaR numbers reported above, a one-day time horizon, with a one year look-back period, and a 95% confidence level were used. |
(2) | The diversification effect is not applicable for the maximum and minimum VaR values as the Jefferies VaR and the VaR values for the four risk categories might have occurred on different days during the period. |
10% Sensitivity
|
||||
Private investments
|
$
|
32,761
|
||
Corporate debt securities in default
|
10,941
|
|||
Trade claims
|
4,488
|
·
|
defining credit limit guidelines and credit limit approval processes;
|
·
|
providing a consistent and integrated credit risk framework across the enterprise;
|
·
|
approving counterparties and counterparty limits with parameters set by its Risk Management Committee;
|
·
|
negotiating, approving and monitoring credit terms in legal and master documentation;
|
·
|
delivering credit limits to all relevant sales and trading desks;
|
·
|
maintaining credit reviews for all active and new counterparties;
|
·
|
operating a control function for exposure analytics and exception management and reporting;
|
·
|
determining the analytical standards and risk parameters for on-going management and monitoring of global credit risk books;
|
·
|
actively managing daily exposure, exceptions, and breaches;
|
·
|
monitoring daily margin call activity and counterparty performance (in concert with its Margin Department); and
|
·
|
setting the minimum global requirements for systems, reports, and technology.
|
·
|
Loans and lending arise in connection with our capital markets activities and represents the notional value of loans that have been drawn by the borrower and lending commitments outstanding.
|
·
|
Securities and margin finance includes credit exposure arising on securities financing transactions (reverse repurchase agreements, repurchase agreements and securities lending agreements) to the extent the fair value of the underlying collateral differs from the contractual agreement amount and from margin provided to customers.
|
·
|
Derivatives represent over-the-counter ("OTC") derivatives, which are reported net by counterparty when a legal right of setoff exists under an enforceable master netting agreement. Derivatives are accounted for at fair value net of cash collateral received or posted under credit support agreements. In addition, credit exposures on forward settling trades are included within Jefferies derivative credit exposures.
|
·
|
Cash and cash equivalents include both interest-bearing and non-interest bearing deposits at banks.
|
|
Loans and Lending
|
Securities and Margin
Finance |
OTC Derivatives
|
Total
|
Cash and
Cash Equivalents |
Total with Cash and
Cash Equivalents |
||||||||||||||||||||||||||||||||||||||||||
|
As of
|
As of
|
As of
|
As of
|
As of
|
As of
|
||||||||||||||||||||||||||||||||||||||||||
(in millions)
|
September
30,
2014 |
December
31,
2013 |
September
30,
2014 |
December
31,
2013 |
September
30,
2014 |
December
31,
2013 |
September
30,
2014 |
December
31,
2013
|
September
30,
2014 |
December
31,
2013 |
September
30,
2014 |
December
31,
2013
|
||||||||||||||||||||||||||||||||||||
AAA Range
|
$
|
—
|
$
|
—
|
$
|
2.9
|
$
|
0.2
|
$
|
—
|
$
|
—
|
$
|
2.9
|
$
|
0.2
|
$
|
3,264.2
|
$
|
2,680.6
|
$
|
3,267.1
|
$
|
2,680.8
|
||||||||||||||||||||||||
AA Range
|
0.7
|
—
|
94.1
|
104.8
|
9.7
|
14.7
|
104.5
|
119.5
|
31.4
|
144.1
|
135.9
|
263.6
|
||||||||||||||||||||||||||||||||||||
A Range
|
4.9
|
—
|
493.5
|
374.4
|
69.6
|
56.7
|
568.0
|
431.1
|
737.4
|
734.7
|
1,305.4
|
1,165.8
|
||||||||||||||||||||||||||||||||||||
BBB Range
|
125.0
|
71.0
|
74.1
|
39.9
|
26.1
|
16.2
|
225.2
|
127.1
|
2.2
|
1.7
|
227.4
|
128.8
|
||||||||||||||||||||||||||||||||||||
BB or Lower
|
157.0
|
120.3
|
217.8
|
115.4
|
18.3
|
9.5
|
393.1
|
245.2
|
—
|
—
|
393.1
|
245.2
|
||||||||||||||||||||||||||||||||||||
Unrated
|
116.7
|
86.6
|
—
|
—
|
0.1
|
18.6
|
116.8
|
105.2
|
—
|
—
|
116.8
|
105.2
|
||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||
Total
|
$
|
404.3
|
$
|
277.9
|
$
|
882.4
|
$
|
634.7
|
$
|
123.8
|
$
|
115.7
|
$
|
1,410.5
|
$
|
1,028.3
|
$
|
4,035.2
|
$
|
3,561.1
|
$
|
5,445.7
|
$
|
4,589.4
|
||||||||||||||||||||||||
|
|
Loans and Lending
|
Securities and Margin
Finance |
OTC Derivatives
|
Total
|
Cash and
Cash Equivalents |
Total with Cash and
Cash Equivalents |
||||||||||||||||||||||||||||||||||||||||||
|
As of
|
As of
|
As of
|
As of
|
As of
|
As of
|
||||||||||||||||||||||||||||||||||||||||||
(in millions)
|
September
30,
2014 |
December
31,
2013 |
September
30,
2014 |
December
31,
2013 |
September
30,
2014 |
December
31,
2013 |
September
30,
2014 |
December
31,
2013 |
September
30,
2014 |
December
31,
2013 |
September
30,
2014 |
December
31,
2013 |
||||||||||||||||||||||||||||||||||||
Asia/Latin America/Other
|
$
|
38.4
|
$
|
—
|
$
|
70.6
|
$
|
30.9
|
$
|
5.9
|
$
|
11.6
|
$
|
114.9
|
$
|
42.5
|
$
|
202.0
|
$
|
183.3
|
$
|
316.9
|
$
|
225.8
|
||||||||||||||||||||||||
Europe
|
11.9
|
—
|
239.2
|
180.3
|
51.7
|
47.6
|
302.8
|
227.9
|
251.3
|
269.3
|
554.1
|
497.2
|
||||||||||||||||||||||||||||||||||||
North America
|
354.0
|
277.9
|
572.6
|
423.5
|
66.2
|
56.5
|
992.8
|
757.9
|
3,581.9
|
3,108.5
|
4,574.7
|
3,866.4
|
||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||
Total
|
$
|
404.3
|
$
|
277.9
|
$
|
882.4
|
$
|
634.7
|
$
|
123.8
|
$
|
115.7
|
$
|
1,410.5
|
$
|
1,028.3
|
$
|
4,035.2
|
$
|
3,561.1
|
$
|
5,445.7
|
$
|
4,589.4
|
||||||||||||||||||||||||
|
|
Loans and Lending
|
Securities and Margin
Finance |
OTC Derivatives
|
Total
|
Cash and
Cash Equivalents |
Total with Cash and
Cash Equivalents |
||||||||||||||||||||||||||||||||||||||||||
|
As of
|
As of
|
As of
|
As of
|
As of
|
As of
|
||||||||||||||||||||||||||||||||||||||||||
(in millions)
|
September
30,
2014 |
December
31,
2013 |
September
30,
2014 |
December
31,
2013 |
September
30,
2014 |
December
31,
2013 |
September
30,
2014 |
December
31,
2013 |
September
30,
2014 |
December
31,
2013 |
September
30,
2014 |
December
31,
2013 |
||||||||||||||||||||||||||||||||||||
Asset Managers
|
$
|
—
|
$
|
—
|
$
|
23.8
|
$
|
7.1
|
$
|
0.4
|
$
|
0.5
|
$
|
24.2
|
$
|
7.6
|
$
|
3,264.2
|
$
|
2,680.7
|
$
|
3,288.4
|
$
|
2,688.3
|
||||||||||||||||||||||||
Banks, Broker-dealers
|
5.6
|
—
|
421.2
|
354.9
|
98.3
|
73.8
|
525.1
|
428.7
|
771.0
|
880.4
|
1,296.1
|
1,309.1
|
||||||||||||||||||||||||||||||||||||
Commodities
|
—
|
—
|
52.8
|
35.6
|
7.5
|
9.4
|
60.3
|
45.0
|
—
|
—
|
60.3
|
45.0
|
||||||||||||||||||||||||||||||||||||
Other
|
398.7
|
277.9
|
384.6
|
237.1
|
17.6
|
32.0
|
800.9
|
547.0
|
—
|
—
|
800.9
|
547.0
|
||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||
Total
|
$
|
404.3
|
$
|
277.9
|
$
|
882.4
|
$
|
634.7
|
$
|
123.8
|
$
|
115.7
|
$
|
1,410.5
|
$
|
1,028.3
|
$
|
4,035.2
|
$
|
3,561.1
|
$
|
5,445.7
|
$
|
4,589.4
|
||||||||||||||||||||||||
|
|
As of September 30, 2014
|
|||||||||||||||||||||||||||||||||||
|
Issuer Risk
|
Counterparty Risk
|
Issuer and Counterparty Risk
|
|||||||||||||||||||||||||||||||||
Fair Value of
Long Debt Securities |
Fair Value of
Short Debt Securities |
Net Derivative
Notional Exposure |
Loans and
Lending |
Securities and
Margin Finance |
OTC
Derivatives |
Cash and
Cash Equivalents |
Excluding Cash
and Cash Equivalents |
Including Cash
and Cash Equivalents |
||||||||||||||||||||||||||||
Germany
|
$
|
245.2
|
$
|
(196.0
|
)
|
$
|
493.8
|
$
|
—
|
$
|
105.9
|
$
|
2.7
|
$
|
34.7
|
$
|
651.6
|
$
|
686.3
|
|||||||||||||||||
Great Britain
|
397.3
|
(200.1
|
)
|
(15.3
|
)
|
4.3
|
35.4
|
20.1
|
235.1
|
241.7
|
476.8
|
|||||||||||||||||||||||||
Italy
|
1,731.2
|
(1,140.7
|
)
|
(127.9
|
)
|
—
|
1.5
|
0.3
|
—
|
464.4
|
464.4
|
|||||||||||||||||||||||||
Canada
|
187.7
|
(57.2
|
)
|
18.0
|
—
|
117.3
|
7.8
|
2.6
|
273.6
|
276.2
|
||||||||||||||||||||||||||
Belgium
|
155.5
|
(18.7
|
)
|
—
|
—
|
4.4
|
—
|
17.0
|
141.2
|
158.2
|
||||||||||||||||||||||||||
Hong Kong
|
17.4
|
(8.2
|
)
|
4.7
|
—
|
1.5
|
—
|
121.9
|
15.4
|
137.3
|
||||||||||||||||||||||||||
Puerto Rico
|
120.1
|
—
|
—
|
—
|
—
|
—
|
—
|
120.1
|
120.1
|
|||||||||||||||||||||||||||
Switzerland
|
51.4
|
(18.2
|
)
|
4.1
|
—
|
58.3
|
14.7
|
0.5
|
110.3
|
110.8
|
||||||||||||||||||||||||||
Portugal
|
213.3
|
(111.6
|
)
|
—
|
—
|
—
|
—
|
—
|
101.7
|
101.7
|
||||||||||||||||||||||||||
Spain
|
379.4
|
(286.7
|
)
|
—
|
—
|
0.1
|
0.1
|
0.7
|
92.9
|
93.6
|
||||||||||||||||||||||||||
Total
|
$
|
3,498.5
|
$
|
(2,037.4
|
)
|
$
|
377.4
|
$
|
4.3
|
$
|
324.4
|
$
|
45.7
|
$
|
412.5
|
$
|
2,212.9
|
$
|
2,625.4
|
|
As of December 31, 2013
|
|||||||||||||||||||||||||||||||||||
|
Issuer Risk
|
Counterparty Risk
|
Issuer and Counterparty Risk
|
|||||||||||||||||||||||||||||||||
Fair Value of
Long Debt Securities |
Fair Value of
Short Debt Securities |
Net Derivative
Notional Exposure |
Loans and
Lending |
Securities and
Margin Finance |
OTC
Derivatives |
Cash and
Cash Equivalents |
Excluding Cash
and Cash Equivalents |
Including Cash
and Cash Equivalents |
||||||||||||||||||||||||||||
Great Britain
|
$
|
418.8
|
$
|
(181.5
|
)
|
$
|
(27.2
|
)
|
$
|
—
|
$
|
42.5
|
$
|
20.7
|
$
|
113.1
|
$
|
273.3
|
$
|
386.4
|
||||||||||||||||
Germany
|
462.0
|
(226.1
|
)
|
(70.5
|
)
|
—
|
93.2
|
10.9
|
3.3
|
269.5
|
272.8
|
|||||||||||||||||||||||||
Netherlands
|
445.7
|
(198.8
|
)
|
(2.3
|
)
|
—
|
5.2
|
1.5
|
0.3
|
251.3
|
251.6
|
|||||||||||||||||||||||||
Italy
|
1,181.4
|
(1,017.6
|
)
|
74.2
|
—
|
1.8
|
0.1
|
—
|
239.9
|
239.9
|
||||||||||||||||||||||||||
Canada
|
140.6
|
(59.0
|
)
|
18.8
|
—
|
99.5
|
0.2
|
2.2
|
200.1
|
202.3
|
||||||||||||||||||||||||||
Spain
|
352.3
|
(159.8
|
)
|
0.3
|
—
|
3.0
|
0.2
|
0.1
|
196.0
|
196.1
|
||||||||||||||||||||||||||
Puerto Rico
|
130.1
|
—
|
—
|
—
|
—
|
—
|
—
|
130.1
|
130.1
|
|||||||||||||||||||||||||||
Luxembourg
|
75.0
|
(15.1
|
)
|
—
|
—
|
0.1
|
—
|
68.0
|
60.0
|
128.0
|
||||||||||||||||||||||||||
Hong Kong
|
33.9
|
(18.3
|
)
|
(0.9
|
)
|
—
|
0.3
|
—
|
104.3
|
15.0
|
119.3
|
|||||||||||||||||||||||||
Austria
|
130.2
|
(32.8
|
)
|
—
|
—
|
5.0
|
—
|
0.1
|
102.4
|
102.5
|
||||||||||||||||||||||||||
Total
|
$
|
3,370.0
|
$
|
(1,909.0
|
)
|
$
|
(7.6
|
)
|
$
|
—
|
$
|
250.6
|
$
|
33.6
|
$
|
291.4
|
$
|
1,737.6
|
$
|
2,029.0
|
|
||||||||||||||||||||||||
|
Fair Value
|
Notional Amount (4)
|
||||||||||||||||||||||
(in millions)
|
Long Debt
Securities (1) (2)
|
Short Debt
Securities
(2) (3)
|
Net Cash
Inventory |
Long
Derivatives |
Short
Derivatives |
Net
Derivatives |
||||||||||||||||||
Greece
|
||||||||||||||||||||||||
Sovereigns
|
$
|
2.7
|
$
|
2.5
|
$
|
0.2
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||||||
Corporations
|
11.0
|
3.5
|
7.5
|
0.1
|
0.2
|
(0.1
|
)
|
|||||||||||||||||
Financial Institutions
|
1.6
|
—
|
1.6
|
—
|
—
|
—
|
||||||||||||||||||
|
||||||||||||||||||||||||
Total Greece
|
15.3
|
6.0
|
9.3
|
0.1
|
0.2
|
(0.1
|
)
|
|||||||||||||||||
|
||||||||||||||||||||||||
Ireland
|
||||||||||||||||||||||||
Sovereigns
|
6.0
|
1.3
|
4.7
|
—
|
|
—
|
—
|
|||||||||||||||||
Corporations
|
5.4
|
0.4
|
5.0
|
0.2
|
0.3
|
(0.1
|
)
|
|||||||||||||||||
Financial Institutions
|
30.9
|
0.3
|
30.6
|
—
|
—
|
—
|
||||||||||||||||||
|
||||||||||||||||||||||||
Total Ireland
|
42.3
|
2.0
|
40.3
|
0.2
|
0.3
|
(0.1
|
)
|
|||||||||||||||||
|
||||||||||||||||||||||||
Italy
|
||||||||||||||||||||||||
Sovereigns
|
1,465.3
|
1,116.1
|
349.2
|
272.5
|
(5)
|
381.5
|
(109.0
|
)
|
||||||||||||||||
Corporations
|
15.9
|
11.9
|
4.0
|
0.8
|
19.7
|
(18.9
|
)
|
|||||||||||||||||
Financial Institutions
|
190.5
|
12.7
|
177.8
|
—
|
—
|
—
|
||||||||||||||||||
Structured Products
|
59.6
|
—
|
59.6
|
—
|
—
|
—
|
||||||||||||||||||
|
||||||||||||||||||||||||
Total Italy
|
1,731.3
|
1,140.7
|
590.6
|
273.3
|
401.2
|
(127.9
|
)
|
|||||||||||||||||
|
||||||||||||||||||||||||
Portugal
|
||||||||||||||||||||||||
Sovereigns
|
166.8
|
101.4
|
65.4
|
—
|
—
|
—
|
||||||||||||||||||
Corporations
|
0.6
|
2.4
|
(1.8
|
)
|
—
|
—
|
—
|
|||||||||||||||||
Financial Institutions
|
17.0
|
7.8
|
9.2
|
—
|
—
|
—
|
||||||||||||||||||
Structured Products
|
28.9
|
—
|
28.9
|
—
|
—
|
—
|
||||||||||||||||||
|
||||||||||||||||||||||||
Total Portugal
|
213.3
|
111.6
|
101.7
|
—
|
—
|
—
|
||||||||||||||||||
|
||||||||||||||||||||||||
Spain
|
||||||||||||||||||||||||
Sovereigns
|
248.0
|
269.3
|
(21.3
|
)
|
—
|
—
|
—
|
|||||||||||||||||
Corporations
|
22.7
|
12.7
|
10.0
|
—
|
—
|
—
|
||||||||||||||||||
Financial Institutions
|
70.2
|
4.7
|
65.5
|
—
|
—
|
—
|
||||||||||||||||||
Structured Products
|
38.4
|
—
|
38.4
|
—
|
—
|
—
|
||||||||||||||||||
|
||||||||||||||||||||||||
Total Spain
|
379.3
|
286.7
|
92.6
|
—
|
—
|
—
|
||||||||||||||||||
|
||||||||||||||||||||||||
Total
|
$
|
2,381.5
|
$
|
1,547.0
|
$
|
834.5
|
$
|
273.6
|
$
|
401.7
|
$
|
(128.1
|
)
|
|||||||||||
|
||||||||||||||||||||||||
Total Sovereign
|
$
|
1,888.8
|
$
|
1,490.6
|
$
|
398.2
|
$
|
272.5
|
$
|
381.5
|
$
|
(109.0
|
)
|
|||||||||||
|
||||||||||||||||||||||||
Total Non-sovereign
|
$
|
492.7
|
$
|
56.4
|
$
|
436.3
|
$
|
1.1
|
$
|
20.2
|
$
|
(19.1
|
)
|
|||||||||||
|
(1)
|
Long securities represent the fair value of debt securities and are presented within Trading assets on the face of the Consolidated Statement of Financial Condition and are accounted for at fair value with changes in fair value recognized in Principal transactions revenues.
|
(2)
|
Classification of securities by country and by issuer type is presented based on the view of Jefferies Risk Management Department. Jefferies Risk Management takes into account whether a particular security or issuer of a security is guaranteed or otherwise backed by a sovereign government and also takes into account whether a corporate or financial institution that issues a particular security is owned by a sovereign government when determining domicile and whether a particular security should be classified for risk purposes as a sovereign obligation. The classification of debt securities within the table above will differ from the financial statement presentation in the Consolidated Statement of Financial Condition because the classification used for financial statement presentation in the Consolidated Statement of Financial Condition classifies a debt security solely by the direct issuer and the domicile of the direct issuer.
|
(3)
|
Short securities represent the fair value of debt securities sold short and are presented within Trading liabilities on the face of the Consolidated Statement of Financial Condition and are accounted for at fair value with changes in fair value recognized in Principal transactions revenues.
|
(4)
|
Derivative contracts include credit default swaps, bond futures and listed equity options.
|
(5)
|
These positions are comprised of bond futures executed on exchanges outside Italy.
|
|
Remaining Maturity
Less Than One Year
|
Remaining Maturity
Greater Than or Equal to One Year |
Total Average
Balance
|
|||||||||
Financial instruments owned - Debt securities
|
||||||||||||
Greece
|
$
|
—
|
$
|
6.0
|
$
|
6.0
|
||||||
Ireland
|
2.9
|
4.1
|
7.0
|
|||||||||
Italy
|
567.4
|
1,819.3
|
2,386.7
|
|||||||||
Portugal
|
4.8
|
135.3
|
140.1
|
|||||||||
Spain
|
16.1
|
422.2
|
438.3
|
|||||||||
|
||||||||||||
Total average fair value of long debt securities (1)
|
591.2
|
2,386.9
|
2,978.1
|
|||||||||
|
||||||||||||
Financial instruments sold - Debt securities
|
||||||||||||
Greece
|
|
—
|
|
6.2
|
|
6.2
|
||||||
Ireland
|
1.2
|
0.8
|
2.0
|
|||||||||
Italy
|
195.7
|
1,433.1
|
1,628.8
|
|||||||||
Portugal
|
1.1
|
97.6
|
98.7
|
|||||||||
Spain
|
7.3
|
413.4
|
420.7
|
|||||||||
|
||||||||||||
Total average fair value of short debt securities
|
205.3
|
1,951.1
|
2,156.4
|
|||||||||
|
||||||||||||
Total average net fair value of debt securities
|
385.9
|
435.8
|
821.7
|
|||||||||
|
||||||||||||
Derivative contracts - long notional exposure Italy
|
—
|
129.2
|
(2)
|
129.2
|
||||||||
|
||||||||||||
Total average notional amount - long
|
—
|
129.2
|
129.2
|
|||||||||
|
||||||||||||
Derivative contracts - short notional exposure Italy
|
—
|
248.5
|
248.5
|
|||||||||
|
||||||||||||
Total average notional amount - short
|
—
|
248.5
|
248.5
|
|||||||||
|
||||||||||||
Total average net derivative notional exposure (3)
|
—
|
(119.3
|
)
|
(119.3
|
)
|
|||||||
|
||||||||||||
Total average net exposure to select European countries
|
$
|
385.9
|
$
|
316.5
|
$
|
702.4
|
||||||
|
(1)
|
Classification of securities by country and by issuer type is presented based on the view of Jefferies Risk Management Department. Jefferies Risk Management takes into account whether a particular security or issuer of a security is guaranteed or otherwise backed by a sovereign government and also takes into account whether a corporate or financial institution that issues a particular security is owned by a sovereign government when determining domicile and whether a particular security should be classified for risk purposes as a sovereign obligation. The classification of debt securities within the table above will differ from the financial statement presentation in the Consolidated Statement of Financial Condition because the classification used for financial statement presentation in the Consolidated Statement of Financial Condition classifies a debt security solely by the direct issuer and the domicile of the direct issuer.
|
(2)
|
These positions are comprised of bond futures executed on exchanges outside Italy.
|
(3)
|
Net derivative contracts reflect the notional amount of the derivative contracts and include credit default swaps and bond futures.
|
|
Reverse Repurchase
Agreements (1) |
Repurchase
Agreements (1) |
Net
|
|||||||||
Greece
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||
Ireland
|
3.7
|
115.4
|
(111.7
|
)
|
||||||||
Italy
|
1,365.0
|
1,582.4
|
(217.4
|
)
|
||||||||
Portugal
|
117.3
|
174.0
|
(56.7
|
)
|
||||||||
Spain
|
279.2
|
361.3
|
(82.1
|
)
|
||||||||
|
||||||||||||
Total
|
$
|
1,765.2
|
$
|
2,233.1
|
$
|
(467.9
|
)
|
|||||
|
(1) | Amounts represent the contract amount of the repurchase financing arrangements. |
(a) Total
Number of
Shares
Purchased (1)
|
(b) Average
Price Paid
per Share
|
(c) Total Number of
Shares Purchased as
Part of Publicly
Announced Plans
or Programs (2)
|
(d) Maximum Number
of Shares that May Yet
Be Purchased Under the
Plans or Programs
|
|||||||||||||
July 1, 2014 – July 31, 2014
|
33,857
|
$
|
25.46
|
–
|
25,000,000
|
|||||||||||
August 1, 2014 – August 31, 2014
|
35,678
|
$
|
24.96
|
–
|
25,000,000
|
|||||||||||
September 1, 2014 – September 30, 2014
|
54,240
|
$
|
25.58
|
–
|
25,000,000
|
|||||||||||
Total
|
123,775
|
–
|
(1)
|
Includes an aggregate of 123,775 shares repurchased other than as part of our publicly announced Board authorized repurchase program. We repurchased these securities in connection with our share compensation plans which allow participants to use shares to satisfy certain tax liabilities arising from the vesting of restricted shares and the distribution of restricted share units. The total number of shares purchased does not include unvested shares forfeited back to us pursuant to the terms of our share compensation plans.
|
(2)
|
In November 2012, our Board of Directors authorized the repurchase, from time to time, of up to an aggregate of 25,000,000 of our common shares, inclusive of prior authorizations.
|
Item 6. | Exhibits. |
10.1
|
Employment Agreement between Leucadia National Corporation and Teresa S. Gendron dated July 2, 2014*
|
31.1
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101
|
Financial statements from the Quarterly Report on Form 10-Q of Leucadia National Corporation for the quarter ended September 30, 2014, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Statements of Financial Condition, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income (Loss), (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Changes in Equity and (vi) the Notes to Consolidated Financial Statements.
|
10.1
|
Employment Agreement between Leucadia National Corporation and Teresa S. Gendron dated July 2, 2014*
|
31.1
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101
|
Financial statements from the Quarterly Report on Form 10-Q of Leucadia National Corporation for the quarter ended September 30, 2014, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Statements of Financial Condition, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income (Loss), (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Changes in Equity and (vi) the Notes to Consolidated Financial Statements.
|
On or prior to the first anniversary of the Start Date
|
$600,000
|
After the first anniversary of the Start Date and on or prior to the second anniversary
of the Start Date
|
$400,000
|
After the second anniversary of the Start Date and on or prior to the third anniversary
of the Start Date
|
$200,000
|
After the third anniversary of the Start Date
|
Zero
|
On or prior to the first anniversary of the Home Reimbursement payment date
|
100%
|
After the first anniversary of the Home Reimbursement payment date and on or prior to the second anniversary thereof
|
66%
|
After the second anniversary of the Home Reimbursement payment date and on or prior to the third anniversary thereof
|
33%
|
After the third anniversary of the Home Reimbursement payment date
|
Zero
|
1. | I have reviewed this quarterly report on Form 10-Q of Leucadia National Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: November 7, 2014
|
|
By: /s/ Richard B. Handler
|
|
Richard B. Handler
|
|
Chief Executive Officer
|
1. | I have reviewed this quarterly report on Form 10-Q of Leucadia National Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: November 7, 2014
|
|
By: /s/ Teresa S. Gendron
|
|
Teresa S. Gendron
|
|
Chief Financial Officer
|
Date: November 7, 2014
|
|
By: /s/ Richard B. Handler
|
|
Richard B. Handler
|
|
Chief Executive Officer
|
Date: November 7, 2014
|
|
By: /s/ Teresa S. Gendron
|
|
Teresa S. Gendron
|
|
Chief Financial Officer
|
1 Year Leucadia Chart |
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