Jefferies Announces 2021 Financial Results for the Three Months and Year Ended November 30, 2021

Rhea-AI Summary

Jefferies Financial Group reported an all-time record annual pre-tax income with a 24.5% return on adjusted tangible equity for 2021. In Q4, net income attributable to shareholders was $325 million or $1.20 per diluted share, with adjusted net income of $369 million or $1.36 per diluted share. Investment Banking net revenues reached $1.18 billion, while asset management suffered a 52% decline in revenues compared to the previous year. The quarterly dividend was increased by 20% to $0.30 per share.

Positive

• Record annual pre-tax income and 24.5% return on adjusted tangible equity for 2021.
• 20% increase in quarterly dividend to $0.30 per share.
• Increased share buyback authorization by $88 million, totaling $250 million.

Negative

• Asset Management net revenues decreased by 52% year-over-year.
• Combined Capital Markets net revenues down 30% compared to the previous year quarter.

All-Time Record Annual Pre-Tax Income; 24.5% 2021 Return on Adjusted Tangible Equity¹

Quarterly Dividend Increased 20% to $0.30 Per Share

NEW YORK--(BUSINESS WIRE)-- Jefferies Financial Group Inc. (NYSE: JEF)

Q4 Financial Highlights

• Net income attributable to common shareholders of $325 million, or $1.20 per diluted share; adjusted net income attributable to common shareholders² of $369 million, or $1.36 per diluted share, after removing fourth quarter expenses of $59 million related to bondholder make-whole and tender premium payments on an aggregate of $1.06 billion in debt which will reduce our future interest expense
• Quarterly Investment Banking net revenues of $1.18 billion
• Combined Capital Markets and Other net revenues of $438 million
• Asset Management net revenues (before allocated net interest³) of $55 million
• Annualized return on adjusted tangible equity of 16.5%¹; adjusted annualized return on adjusted tangible equity of 18.7%⁴
• Repurchased 2.0 million shares of common stock for $88 million, or an average price of $42.91 per share; our Board of Directors has increased our share buyback authorization by $88 million back to a total of $250 million

"What a year! Once again, Jefferies delivered record results in Investment Banking and Capital Markets and Asset Management. Our performance and momentum are the direct result of the persistent hard work and dedication of our 4,508 Jefferies Group employee-partners around the globe, decades of investment to create strong breadth and depth of capabilities across our integrated Investment Banking and Capital Markets platforms, our unique partnership culture and a supportive operating environment. Those factors have driven Jefferies to an important position of scale within our industry, and a meaningful and sustainable step change in our market position and brand. We have never wavered in prioritizing the needs and interests of our clients. We believe our momentum is excellent and, while there will be inevitable bumps in the road, our growth prospects are terrific.

"Our results and momentum derive from our incredible and increasingly global team. Jefferies' strategy is based substantially on human capital, with the right amount of supporting financial capital commensurate with market opportunity. We are committed to recruiting and growing great talent at all levels. We are thrilled that we enter fiscal 2022 with 278 Managing Directors in Investment Banking, a 24% increase from one year prior. This increase was driven equally by internal promotion of talented people we nurtured and trained, and external recruiting of experienced professionals. Our overall Jefferies Group headcount grew by 15% in 2021, enabling us to keep up with the demands from our clients and to support further growth. We have been investing for many years now in enhanced efforts to train, support, develop and grow our human capital, and we see further opportunity in this regard ahead.

"We believe Jefferies' future growth will be fueled by the continued buildout of our Investment Banking effort, enhancing our Capital Markets businesses, and further developing our Leucadia Asset Management alternative asset management platform. We will continue winding down our legacy Merchant Banking portfolio prudently and patiently, and are confident that, as we have proven in the past, there is value to be realized in excess of tangible book value.

"Our Investment Banking backlog⁵ is robust and consistent with levels from a year ago.

"In light of our performance and prospects, as well as our limited need for incremental equity capital, our Board of Directors has increased our quarterly dividend to $0.30 per share, a 140% increase from two years ago. We will continue also to return capital to shareholders via share buybacks as well as, if financial conditions and circumstances permit, in-kind distributions or special cash dividends as we continue to wind down the legacy merchant banking portfolio."

Richard Handler, CEO, and Brian Friedman, President

Please refer to the just-released Jefferies Financial Group Annual Letter from our CEO and President for broader perspective on 2021, as well as our strategy and outlook.

Financial Summary

(Dollars in thousands, except per share amounts)
	Three Months Ended November 30,							Twelve Months Ended November 30,
	2021			2020		% Change		2021			2020		% Change
Net revenues:
Investment Banking and Capital Markets	$	1,613,362		$	1,537,362	5%		$	6,796,631		$	4,989,138	36%
Asset Management	42,798			88,977		(52)%		336,690			235,255		43%
Merchant Banking	152,794			231,852		(34)%		1,040,733			764,460		36%
Corporate	773			1,350		(43)%		3,042			13,258		(77)%
Consolidation Adjustments	(831)			1,246		(167)%		8,233			8,763		(6)%
Total net revenues	$	1,808,896		$	1,860,787	(3)%		$	8,185,329		$	6,010,874	36%
Income before income taxes	$	425,565		$	421,540	1%		$	2,254,105		$	1,067,083	111%
Net income attributable to common shareholders	$	324,913		$	307,267	6%		$	1,667,403		$	769,605	117%
Diluted earnings per share	$	1.20		$	1.11	8%		$	6.13		$	2.65	131%
Weighted average diluted shares	270,743			277,342				271,501			290,490
Annualized return on adjusted tangible equity1	16.5%			17.5%				24.5%			11.7%

Highlights

Three months ended November 30, 2021		Twelve months ended November 30, 2021
Adjusted net income attributable to common shareholders2 of $369 million, or $1.36 per diluted share. We repurchased 2.0 million shares for $88 million, or an average price of $42.91 per share. Our Board of Directors has increased our share buyback authorization by $88 million back to a total of $250 million.		Adjusted net income attributable to common shareholders2 was $1.71 billion, or $6.29 per diluted share. We repurchased 8.5 million shares for $267 million, or an average price of $31.25 per share. We had 244 million shares outstanding and 274 million shares outstanding on a fully diluted basis6 at year end. Our book value per share was $43.33 and tangible book value per fully diluted share7 was $32.45 at year end.

Investment Banking and Capital Markets		Investment Banking and Capital Markets
Investment Banking net revenues of $1.18 billion were driven by all-time record quarterly Advisory net revenues and stronger results in Equity and Debt Underwriting as compared with the prior year quarter. Combined Capital Markets and Other net revenues of $438 million were 30% lower as compared to prior year quarter, primarily due to challenging market conditions for fixed income trading leading to lower volumes, as compared with the prior year quarter, which benefited from high levels of client activity due to more favorable market conditions.		Record Investment Banking net revenues of $4.42 billion were driven by record Advisory net revenues, as well as record Equity and Debt Underwriting net revenues on more deals being completed and an increase in average transaction fees. Combined Capital Markets and Other net revenues of $2.37 billion reflecting Equities net revenues driven by strong client activity and trading performance as a result of meaningful growth across all of our products and regions, and solid Fixed Income net revenues.

Three months ended November 30, 2021		Twelve months ended November 30, 2021
Asset Management		Asset Management
Asset Management net revenues reflects lower investment returns compared to the prior year quarter, partially offset by an increase in management, performance and similar fees and revenues.		Record Asset Management revenues (before allocated net interest3) of $382 million were significantly higher than prior year revenues due to $121 million in management, performance and similar fees and revenues in the current year, an increase of 355% over the prior year.

Legacy Merchant Banking		Legacy Merchant Banking
Merchant Banking results reflect the normalization of the results of Idaho Timber and a decline in the value of several of our investments in public companies.		Merchant Banking full year results reflect record revenue and pre-tax income from Idaho Timber and mark-to-market increases in the value of several of our investments in public and private companies.

Quarterly Cash Dividend

The Jefferies Board of Directors declared a quarterly cash dividend equal to $0.30 per Jefferies common share, payable on February 25, 2022 to record holders of Jefferies common shares on February 14, 2022.

* * * *

Amounts herein pertaining to November 30, 2021 represent a preliminary estimate as of the date of this earnings release and may be revised upon filing our Annual Report on Form 10-K with the Securities and Exchange Commission (“SEC”). More information on our results of operations for the three and twelve months ended November 30, 2021 will be provided upon filing our Annual Report on Form 10-K with the SEC, which we expect to file on or about January 28, 2022.

This press release contains certain “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current views and include statements about our future and statements that are not historical facts. These forward-looking statements are usually preceded by the words “should,” “expect,” “intend,” “may,” “will,” "would," or similar expressions. Forward-looking statements may contain expectations regarding revenues, earnings, operations, and other results, and may include statements of future performance, plans, and objectives. Forward-looking statements may also include statements pertaining to our strategies for future development of our businesses and products. Forward-looking statements represent only our belief regarding future events, many of which by their nature are inherently uncertain. It is possible that the actual results may differ, possibly materially, from the anticipated results indicated in these forward-looking statements. Information regarding important factors, including Risk Factors that could cause actual results to differ, perhaps materially, from those in our forward-looking statements is contained in reports we file with the SEC. You should read and interpret any forward-looking statement together with reports we file with the SEC. We undertake no obligation to update or revise any such forward-looking statement to reflect subsequent circumstances.

Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy will be profitable or equal the corresponding indicated performance level(s).

Notes

1. Return on adjusted tangible equity (a non-GAAP financial measure) is defined as Jefferies' annualized adjusted net income (a non-GAAP financial measure) divided by our beginning of period adjusted tangible shareholders' equity (a non-GAAP financial measure). Refer to schedule on page 12 for reconciliation to U.S. GAAP amounts.
2. Adjusted net income attributable to common shareholders (a non-GAAP financial measure) excludes the total expense of $59 million ($44 million net of taxes) related to $1.06 billion of debt repurchases in the fourth quarter. Refer to schedule on page 12 for reconciliation to U.S. GAAP.
3. Allocated net interest represents an allocation to Asset Management of certain of our long-term debt interest expense, net of interest income on our Cash and cash equivalents and other sources of liquidity. Allocated net interest has been disaggregated to increase transparency and to make clearer actual Investment return. Refer to Selected Financial and Statistical Information on pages 8 - 10.
4. Adjusted return on adjusted tangible equity (a non-GAAP financial measure) is defined as Jefferies' annualized adjusted net income excluding the net income impact of the $59 million of total expense ($44 million net of taxes) related to $1.06 million of debt repurchases in the fourth quarter (a non-GAAP financial measure) divided by our beginning of period adjusted tangible shareholders' equity (a non-GAAP financial measure). Refer to schedule on page 13 for reconciliation to U.S. GAAP amounts.
5. Backlog represents an estimate of our net revenues from expected future transactions. As an indicator of net revenues in a given future period, it is subject to limitations. The time frame for the realization of revenues from these expected transactions varies and is influenced by factors we do not control. Transactions not included in the estimate may occur, and expected transactions may also be modified or cancelled.
6. Shares outstanding on a fully diluted basis (a non-GAAP financial measure) is defined as Jefferies common shares outstanding plus restricted stock units, stock options, conversion of redeemable convertible preferred shares and other shares. Refer to schedule on page 14 for reconciliation to U.S. GAAP amounts.
7. Tangible book value per fully diluted share (a non-GAAP financial measure) is defined as adjusted tangible book value (a non-GAAP financial measure) divided by shares outstanding on a fully diluted basis (a non-GAAP financial measure). Refer to schedule on page 14 for reconciliation to U.S. GAAP amounts.

Summary

(In thousands, except per share amounts) (Unaudited)
	Three Months Ended November 30,								Twelve Months Ended November 30,
	2021				2020				2021				2020
Net revenues	$	1,808,896			$	1,860,787			$	8,185,329			$	6,010,874
Income before income taxes and loss related to associated companies	$	458,714			$	427,500			$	2,348,524			$	1,142,566
Loss related to associated companies	(33,149)				(5,960)				(94,419)				(75,483)
Income before income taxes	425,565				421,540				2,254,105				1,067,083
Income tax provision	91,973				113,535				576,729				298,673
Net income	333,592				308,005				1,677,376				768,410
Net (income) loss attributable to the noncontrolling interests	(6,586)				238				(3,850)				5,271
Net (income) loss attributable to the redeemable noncontrolling interests	(245)				428				826				1,558
Preferred stock dividends	(1,848)				(1,404)				(6,949)				(5,634)
Net income attributable to common shareholders	$	324,913			$	307,267			$	1,667,403			$	769,605
Basic earnings per common share attributable to Jefferies common shareholders:
Net income	$	1.23			$	1.12			$	6.29			$	2.68
Basic: weighted average shares	261,637				272,901				263,595				285,693
Diluted earnings per common share attributable to Jefferies common shareholders:
Net income	$	1.20			$	1.11			$	6.13			$	2.65
Diluted: weighted average shares	270,743				277,342				271,501				290,490

A summary of results for the three months ended November 30, 2021 is as follows (in thousands):

	Investment Banking and Capital Markets				Asset Management				Merchant Banking				Corporate				Parent Company Interest				Consolidation Adjustments				Total
Net revenues	$	1,613,362			$	42,798			$	152,794			$	773			$	—			$	(831)			$	1,808,896
Expenses:
Cost of sales	—				—				79,954				—				—				—				79,954
Compensation and benefits	684,294				22,802				31,424				6,576				—				—				745,096
Non-compensation expenses:
Floor brokerage and clearing fees	68,809				10,843				—				—				—				—				79,652
Selling, general and other expenses	300,211				15,294				41,259				5,299				26,004				(379)				387,688
Interest expense	—				—				5,628				—				11,628				—				17,256
Depreciation and amortization	22,681				439				16,958				458				—				—				40,536
Total non-compensation expenses	391,701				26,576				63,845				5,757				37,632				(379)				525,132
Total expenses	1,075,995				49,378				175,223				12,333				37,632				(379)				1,350,182
Income (loss) before income taxes and loss related to associated companies	537,367				(6,580)				(22,429)				(11,560)				(37,632)				(452)				458,714
Loss related to associated companies	—				—				(33,149)				—				—				—				(33,149)
Income (loss) before income taxes	$	537,367			$	(6,580)			$	(55,578)			$	(11,560)			$	(37,632)			$	(452)			425,565
Income tax provision																									91,973
Net income																									$	333,592

A summary of results for the three months ended November 30, 2020 is as follows (in thousands):

	Investment Banking and Capital Markets				Asset Management				Merchant Banking				Corporate				Parent Company Interest				Consolidation Adjustments				Total
Net revenues	$	1,537,362			$	88,977			$	231,852			$	1,350			$	—			$	1,246			$	1,860,787
Expenses:
Cost of sales	—				—				102,717				—				—				—				102,717
Compensation and benefits	842,513				30,152				25,336				13,365				—				—				911,366
Non-compensation expenses:
Floor brokerage and clearing fees	59,968				5,221				—				—				—				—				65,189
Selling, general and other expenses	239,795				9,328				41,138				6,513				—				(2,486)				294,288
Interest expense	—				—				6,972				—				13,672				—				20,644
Depreciation and amortization	21,012				471				16,735				865				—				—				39,083
Total non-compensation expenses	320,775				15,020				64,845				7,378				13,672				(2,486)				419,204
Total expenses	1,163,288				45,172				192,898				20,743				13,672				(2,486)				1,433,287
Income (loss) before income taxes and loss related to associated companies	374,074				43,805				38,954				(19,393)				(13,672)				3,732				427,500
Loss related to associated companies	—				—				(5,960)				—				—				—				(5,960)
Income (loss) before income taxes	$	374,074			$	43,805			$	32,994			$	(19,393)			$	(13,672)			$	3,732			421,540
Income tax provision																									113,535
Net income																									$	308,005

A summary of results for the twelve months ended November 30, 2021 is as follows (in thousands):

	Investment Banking and Capital Markets				Asset Management				Merchant Banking				Corporate				Parent Company Interest				Consolidation Adjustments				Total
Net revenues	$	6,796,631			$	336,690			$	1,040,733			$	3,042			$	—			$	8,233			$	8,185,329
Expenses:
Cost of sales	—				—				470,870				—				—				—				470,870
Compensation and benefits	3,323,601				82,726				109,186				35,611				—				—				3,551,124
Non-compensation expenses:
Floor brokerage and clearing fees	266,035				35,825				—				—				—				—				301,860
Selling, general and other expenses	1,024,617				48,913				160,337				19,253				26,004				(677)				1,278,447
Interest expense	—				—				23,951				—				53,133				—				77,084
Depreciation and amortization	85,178				1,901				67,577				2,764				—				—				157,420
Total non-compensation expenses	1,375,830				86,639				251,865				22,017				79,137				(677)				1,814,811
Total expenses	4,699,431				169,365				831,921				57,628				79,137				(677)				5,836,805
Income (loss) before income taxes and loss related to associated companies	2,097,200				167,325				208,812				(54,586)				(79,137)				8,910				2,348,524
Loss related to associated companies	—				—				(94,419)				—				—				—				(94,419)
Income (loss) before income taxes	$	2,097,200			$	167,325			$	114,393			$	(54,586)			$	(79,137)			$	8,910			2,254,105
Income tax provision																									576,729
Net income																									$	1,677,376

A summary of results for the twelve months ended November 30, 2020 is as follows (in thousands):

	Investment Banking and Capital Markets					Asset Management					Merchant Banking							Corporate							Parent Company Interest							Consolidation Adjustments						Total
Net revenues	$		4,989,138			$		235,255			$		764,460					$		13,258					$		—					$		8,763				$	6,010,874
Expenses:
Cost of sales			—					—					338,588							—							—							—				338,588
Compensation and benefits			2,735,080					89,527					77,072							39,184							—							—				2,940,863
Non-compensation expenses:
Floor brokerage and clearing fees			241,083					25,509					—							—							—							—				266,592
Selling, general and other expenses			810,753					46,045					199,128							26,197							—							(3,167	)			1,078,956
Interest expense			—					—					31,425							—							53,445							—				84,870
Depreciation and amortization			82,334					5,247					67,362							3,496							—							—				158,439
Total non-compensation expenses			1,134,170					76,801					297,915							29,693							53,445							(3,167	)			1,588,857
Total expenses			3,869,250					166,328					713,575							68,877							53,445							(3,167	)			4,868,308
Income (loss) before income taxes and loss related to associated companies			1,119,888					68,927					50,885							(55,619	)						(53,445	)						11,930				1,142,566
Loss related to associated companies			—					—					(75,483	)						—							—							—				(75,483		)
Income (loss) before income taxes	$		1,119,888			$		68,927			$		(24,598		)			$		(55,619		)			$		(53,445		)			$		11,930				1,067,083
Income tax provision																																						298,673
Net income																																						$	768,410

Selected Financial and Statistical Information

(Amounts in Thousands, Except Other Data) (Unaudited)
	Quarter Ended
	November 30, 2021			August 31, 2021			November 30, 2020
Investment Banking, Capital Markets and Asset Management Net Revenues:
Advisory	$	587,726		$	583,887		$	356,823
Equity underwriting	370,636			367,460			340,561
Debt underwriting	222,655			229,329			208,780
Total underwriting	593,291			596,789			549,341
Other investment banking	(5,240)			(360)			9,446
Total investment banking	1,175,777			1,180,316			915,610
Equities	290,380			236,532			327,314
Fixed income	132,771			205,795			263,119
Total capital markets	423,151			442,327			590,433
Other	14,434			28,153			31,319
Total Investment Banking and Capital Markets Net Revenues (1)	1,613,362			1,650,796			1,537,362
Asset management fees and revenues (2)	13,065			18,869			6,936
Investment return (3)	41,647			4,890			93,849
Allocated net interest (3)	(11,914)			(11,155)			(11,808)
Total Asset Management Net Revenues	42,798			12,604			88,977
Total Investment Banking, Capital Markets and Asset Management Net Revenues	$	1,656,160		$	1,663,400		$	1,626,339
Investment Banking, Capital Markets and Asset Management Non-compensation Expenses:
Floor brokerage and clearing fees	$	79,652		$	68,982		$	65,189
Underwriting costs	26,932			21,474			36,551
Technology and communications	101,523			93,801			86,639
Occupancy and equipment rental	24,859			24,694			24,011
Business development	42,386			24,380			21,651
Professional services	54,758			49,298			42,490
Depreciation and amortization	23,120			21,529			21,483
Other	65,047			13,851			37,781
Total Investment Banking, Capital Markets and Asset Management Non-compensation Expenses	$	418,277		$	318,009		$	335,795

(Amounts in Thousands, Except Other Data) (Unaudited)
	Twelve Months Ended
	November 30, 2021			November 30, 2020
Investment Banking, Capital Markets and Asset Management Net Revenues:
Advisory	$	1,873,560		$	1,053,500
Equity underwriting	1,557,364			902,016
Debt underwriting	935,131			545,978
Total underwriting	2,492,495			1,447,994
Other investment banking	57,196			(103,330)
Total investment banking	4,423,251			2,398,164
Equities	1,300,877			1,128,910
Fixed income	959,122			1,340,792
Total capital markets	2,259,999			2,469,702
Other	113,381			121,272
Total Investment Banking and Capital Markets Net Revenues (1)	6,796,631			4,989,138
Asset management fees and revenues (2)	120,733			26,539
Investment return (3)	260,864			257,200
Allocated net interest (3)	(44,907)			(48,484)
Total Asset Management Net Revenues	336,690			235,255
Total Investment Banking, Capital Markets and Asset Management Net Revenues	$	7,133,321		$	5,224,393
Investment Banking, Capital Markets and Asset Management Non-compensation Expenses:
Floor brokerage and clearing fees	$	301,860		$	266,592
Underwriting costs	117,572			95,636
Technology and communications	382,502			334,322
Occupancy and equipment rental	101,900			91,442
Business development	111,796			67,807
Professional services	196,467			159,045
Depreciation and amortization	87,079			87,581
Other	163,293			108,546
Total Investment Banking, Capital Markets and Asset Management Non- compensation Expenses	$	1,462,469		$	1,210,971

(Amounts in Thousands, Except Other Data) (Unaudited)
	Quarter Ended
	November 30, 2021			August 31, 2021			November 30, 2020
Other Data:
Number of trading days	63			65			63
Number of trading loss days (4)	11			20			3
Average VaR (in millions) (5)	$	10.14		$	12.69		$	14.92
				Twelve Months Ended
				November 30, 2021			November 30, 2020
Other Data:
Number of trading days				252			252
Number of trading loss days (4)				60			26
Average VaR (in millions) (5)				$	13.63		$	10.51

(1)		Allocated net interest is not separately disaggregated for Investment Banking and Capital Markets. This presentation is aligned to our Investment Banking and Capital Markets internal performance measurement.
(2)		Includes management and performance fees from funds and accounts managed by us as well as our share of fees received by affiliated asset management companies with which we have revenue and profit share arrangements, as well as earnings on our ownership interest in affiliated asset managers.
(3)		Allocated net interest represents an allocation to Asset Management of certain of our long-term debt interest expense, net of interest income on our Cash and cash equivalents and other sources of liquidity. Allocated net interest has been disaggregated to increase transparency and to make clearer actual Investment return. We believe that aggregating Investment return and Allocated net interest would obscure the Investment return by including an amount that is unique to our credit spreads, debt maturity profile, capital structure, liquidity risks and allocation methods.
(4)		Number of trading loss days is calculated based on trading activities in our Investment Banking and Capital Markets and Asset Management business segments.
(5)		VaR estimates the potential loss in value of trading positions in our Investment Banking and Capital Markets and Asset Management business segments due to adverse market movements over a one-day time horizon with a 95% confidence level. For a further discussion of the calculation of VaR, see "Value-at-Risk" in Part II, Item 7A "Quantitative and Qualitative Disclosures About Market Risk" in our Annual Report on Form 10-K for the year ended November 30, 2020.

Financial Data and Metrics

(Amounts in Millions, Except Other Data) (Unaudited)
	Quarter Ended
	November 30, 2021				August 31, 2021				November 30, 2020
Financial position (1):
Total assets	$	60,404			$	58,037			$	53,118
Total assets less goodwill and intangible assets for the period	$	58,506			$	56,132			$	51,205
Cash and cash equivalents	$	10,755			$	9,481			$	9,055
Financial instruments owned	$	19,829			$	19,735			$	18,125
Level 3 financial instruments owned (2)	$	579			$	671			$	651
Goodwill and intangible assets	$	1,898			$	1,905			$	1,913
Total equity	$	10,580			$	10,401			$	9,439
Total shareholders' equity	$	10,554			$	10,382			$	9,404
Tangible equity (3)	$	8,656			$	8,477			$	7,490
Other data and financial ratios:
Leverage ratio (1) (4)	5.7				5.6				5.6
Tangible gross leverage ratio (1) (5)	6.8				6.6				6.8
Number of employees, at period end	5,556				5,493				4,945

(1)		Amounts pertaining to November 30, 2021 represent a preliminary estimate as of the date of this earnings release and may be revised in our Annual Report on Form 10-K for the year ended November 30, 2021.
(2)		Level 3 financial instruments represent those financial instruments classified as such under Accounting Standards Codification 820, accounted for at fair value and included within Financial instruments owned.
(3)		Tangible equity (a non-GAAP financial measure) represents total Jefferies shareholders' equity less goodwill and identifiable intangible assets. We believe that tangible equity is meaningful for valuation purposes, as financial companies are often measured as a multiple of tangible equity, making these ratios meaningful for investors.
(4)		Leverage ratio equals total assets divided by total equity.
(5)		Tangible gross leverage ratio (a non-GAAP financial measure) equals total assets less goodwill and identifiable intangible assets divided by tangible equity. The tangible gross leverage ratio is used by rating agencies in assessing our leverage ratio.

Non-GAAP Reconciliations

The following tables reconcile our non-GAAP measures to their respective U.S. GAAP measures. Management believes such non-GAAP measures are useful to investors as they allow them to view our results through the eyes of management, while facilitating a comparison across historical periods. These measures should not be considered a substitute for, or superior to, measures prepared in accordance with U.S. GAAP.

Net Income Attributable to Common Shareholders and Earnings Per Share GAAP Reconciliation

Reconciliation of Jefferies net income attributable to common shareholders to adjusted net income attributable to common shareholders (a non-GAAP measure) and diluted earnings per share to adjusted earnings per share (a non-GAAP measure) (in thousands, except per share amounts):

		Three Months Ended November 30, 2021				Twelve Months Ended November 30, 2021
	Net income attributable to common shareholders (GAAP)	$	324,913			$	1,667,403
	Net income impact for calling Jefferies Group 2023 Notes	25,016				25,016
	Net income impact for repurchasing Jefferies Financial Group 2023 Notes	19,251				19,251
	Adjusted net income attributable to common shareholders (non-GAAP)	$	369,180			$	1,711,670
	Jefferies Financial Group diluted earnings per share (GAAP)	$	1.20			$	6.13
	Diluted earnings per share impact for calling Jefferies Group 2023 Notes	0.09				0.09
	Diluted earnings per share impact for repurchasing Jefferies Financial Group 2023 Notes	0.07				0.07
	Adjusted Jefferies Financial Group diluted earnings per share (non-GAAP)	$	1.36			$	6.29

Return on Adjusted Tangible Equity Reconciliation

The table below reconciles our Net income attributable to common shareholders to adjusted net income and our Shareholders' equity to adjusted tangible shareholders' equity (in thousands):

			Three Months Ended November 30, 2021				Three Months Ended November 30, 2020				Twelve Months Ended November 30, 2021				Twelve Months Ended November 30, 2020
	Net income attributable to common shareholders (GAAP)		$	324,913			$	307,267			$	1,667,403			$	769,605
	Intangible amortization and impairment expense, net of tax		2,773				2,814				10,649				11,370
	Adjusted net income (non-GAAP)		$	327,686			$	310,081			$	1,678,052			$	780,975
	Annualized adjusted net income (non-GAAP)		$	1,310,744			$	1,240,324			$	1,678,052			$	780,975
			August 31, 2021				August 31, 2020				November 30, 2020				November 30, 2019
	Shareholders' equity (GAAP)		$	10,381,883			$	9,410,665			$	9,403,893			$	9,579,705
	Less: Intangible assets, net and goodwill		(1,905,163)				(1,914,542)				(1,913,467)				(1,922,934)
	Less: Deferred tax asset		(479,016)				(312,600)				(393,687)				(462,468)
	Less: Weighted average quarter-to-date or year- to-date impact of cash dividends and share repurchases		(62,644)				(111,613)				(243,003)				(545,398)
	Adjusted tangible shareholders' equity (non-GAAP)		$	7,935,060			$	7,071,910			$	6,853,736			$	6,648,905
	Return on adjusted tangible equity		16.5		%		17.5		%		24.5		%		11.7		%

Adjusted Return on Adjusted Tangible Equity Reconciliation

The table below reconciles our Net income attributable to common shareholders to adjusted net income excluding debt repurchase expense and our Shareholders' equity to adjusted tangible shareholders' equity (in thousands):

			Three Months Ended November 30, 2021
	Net income attributable to common shareholders (GAAP)		$	324,913
	Intangible amortization and impairment expense, net of tax		2,773
	Net income impact for calling Jefferies Group 2023 Notes		25,016
	Net income impact for repurchasing Jefferies Financial Group 2023 Notes		19,251
	Adjusted net income excluding debt repurchase expense (non-GAAP)		$	371,953
	Annualized adjusted net income excluding debt repurchase expense (non-GAAP)		$	1,487,812
			August 31, 2021
	Shareholders' equity (GAAP)		$	10,381,883
	Less: Intangible assets, net and goodwill		(1,905,163)
	Less: Deferred tax asset		(479,016)
	Less: Weighted average quarter-to-date impact of cash dividends and share repurchases		(62,644)
	Adjusted tangible shareholders' equity (non-GAAP)		$	7,935,060
	Adjusted return on adjusted tangible equity		18.7		%

Jefferies Book Value and Shares Outstanding GAAP Reconciliation

The table below reconciles our book value (shareholders' equity) to adjusted tangible book value and our common shares outstanding to fully diluted shares outstanding (in thousands, except per share amounts):

				November 30, 2021
	Book value (GAAP)			$	10,553,755
	Redeemable convertible preferred shares converted to common shares (1)			125,000
	Stock options (2)			121,085
	Intangible assets, net and goodwill			(1,897,500)
	Adjusted tangible book value (non-GAAP)			$	8,902,340
	Common shares outstanding (GAAP)			243,541
	Restricted stock units ("RSUs")			20,108
	Redeemable convertible preferred shares converted to common shares (1)			4,441
	Stock options (2)			5,109
	Other			1,126
	Fully diluted shares outstanding (non-GAAP) (3)			274,325
	Book value per share outstanding			$	43.33
	Tangible book value per fully diluted share outstanding			$	32.45

	(1)		Redeemable convertible preferred shares added to book value and fully diluted shares assume that the redeemable convertible preferred shares are converted to common shares.
	(2)		Stock options added to book value are equal to the total number of stock options outstanding as of November 30, 2021 of 5,109,000 multiplied by the weighted average exercise price of $23.70 on November 30, 2021. Stock options added to fully diluted shares are equal to the total stock options outstanding on November 30, 2021.
	(3)		Fully diluted shares outstanding include vested and unvested RSUs as well as the target number of RSUs issuable under the senior executive compensation plans. Fully diluted shares outstanding also include all stock options and the additional common shares if our redeemable convertible preferred shares were converted to common shares.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220111006125/en/

Jonathan Freedman 212.778.8973

Source: Care of Jefferies Financial Group Inc. and Jefferies Group LLC

FAQ

What are the Q4 earnings results for Jefferies Financial Group (JEF)?

In Q4, Jefferies reported a net income of $325 million, or $1.20 per diluted share.

What is the quarterly dividend for Jefferies Financial Group (JEF)?

Jefferies has increased its quarterly dividend to $0.30 per share.

What were the annual revenues for Jefferies Financial Group in 2021?

Jefferies reported total net revenues of $8.19 billion for the year ended November 30, 2021.

What is the return on adjusted tangible equity for Jefferies Financial Group (JEF)?

Jefferies achieved a return on adjusted tangible equity of 24.5% for the year 2021.