Business Wire | Jan 4, 2021 04:15PM EST

Jefferies Financial Group Announces 2020 Financial Results

Jan. 04, 2021

NEW YORK--(BUSINESS WIRE)--Jan. 04, 2021--Jefferies Financial Group Inc. (NYSE: JEF) today announced its financial results for the three and twelve month periods ended November 30, 2020. In addition, the Jefferies Board of Directors declared a quarterly cash dividend equal to $0.20 per Jefferies common share payable on February 26, 2021 to record holders of Jefferies common shares on February 12, 2021. The Jefferies Board of Directors also increased the Company's stock buyback authorization by $193 million to a total of $250 million. We expect to file our Form 10-K on or about January 28, 2021.

Highlights for the three months ended November 30, 2020:

* Jefferies Group LLC recorded record quarterly net revenues of $1,609 million, record pre-tax income of $406 million, record net earnings of $307 million and return on tangible equity of 26.2%1 Record quarterly Investment Banking net revenues of $916 million, including record Equity Underwriting net revenues of $341 million, record Advisory net revenues of $357 million, and record Debt Underwriting net revenues of $209 million Combined Capital Markets net revenues of $590 million; record quarterly Equities net revenues of $327 million and Fixed Income net revenues of $263 million Asset Management revenues (before allocated net interest2) of $83 million * Merchant Banking recorded pre-tax income of $33 million, reflecting record quarterly results from Idaho Timber and mark-to-market increases in the value of several of our investments in public companies * Net income attributable to Jefferies Financial Group common shareholders was $307 million, or $1.11 per diluted share * We repurchased 9.5 million shares for $193 million, or an average price of $20.34 per share; 249.8 million shares were outstanding and 273.6 million shares were outstanding on a fully diluted basis3 at November 30, 2020; Jefferies book value per share was $37.65 and tangible book value per fully diluted share4 was $27.38 at the end of the fourth quarter * Jefferies Financial Group had parent company liquidity of $1.9 billion at November 30, 2020. Jefferies Group had a record liquidity buffer of $8.6 billion of cash and unencumbered liquid collateral at November 30, 2020, which represented 18% of its total balance sheet.

Highlights for the twelve months ended November 30, 2020:

* Jefferies Group LLC recorded record twelve months net revenues of $5,197 million, record pre-tax income of $1,177 million, record net earnings of $875 million and return on tangible equity of 20.4%5 Record twelve months Investment Banking net revenues of $2,398 million, including record Advisory net revenues of $1,054 million, record Equity Underwriting net revenues of $902 million and Debt Underwriting net revenues of $546 million Record combined twelve months Capital Markets net revenues of $2,470 million, including record Equities net revenues of $1,129 million and record Fixed Income net revenues of $1,341 million Record Asset Management revenues (before allocated net interest2) of $257 million * Merchant Banking pre-tax loss of $25 million, reflecting record performance from Idaho Timber, a positive contribution from Vitesse, and the previously reported gain of about $60 million from effective short-term hedges in the first quarter, more than offset by $145 million in previously reported non-cash charges in the first half of 2020 related to write-downs of our investments in WeWork, JETX and some of the real estate assets of HomeFed * Net income attributable to Jefferies Financial Group common shareholders of $770 million, or $2.65 per diluted share * Repurchases of 42.1 million shares for $813 million, or an average price of $19.29 per share; together with $161 million in dividends, an aggregate of $974 million was returned to shareholders in 2020; over the past three fiscal years, Jefferies has returned to shareholders nearly $3.4 billion

Rich Handler, our CEO, and Brian Friedman, our President, said:

"The results for our fourth quarter and full year 2020 are outstanding and testament to the relentless dedication and tireless effort of the entire Jefferies team. We gained market share and have established Jefferies at yet another higher level of achievement and potential. We are optimistic that our momentum and strength will be sustained in 2021."

Please refer to the Jefferies Financial Group Annual Letter from our CEO and President for broader perspective on 2020, as well as our strategy and outlook.

* * * *

Amounts herein pertaining to November 30, 2020 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 month periods ended November 30, 2020 will be provided upon filing our Annual Report on Form 10-K with the SEC.

This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements 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," 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 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.

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).

___________________

Return on tangible equity (a non-GAAP financial measure) equals our three months ended November 30, 2020 annualized net earnings attributable to Jefferies Group LLC divided by our tangible Jefferies Group LLC member's1 equity (a non-GAAP financial measure) of $4,682 million at August 31, 2020. Tangible Jefferies Group LLC member's equity at August 31, 2020 equals Jefferies Group LLC member's equity of $6,488 million less goodwill and identifiable intangibles assets of $1,806 million.

Allocated net interest represents the allocation of a ratable portion of Jefferies Group LLC's long-term debt interest expense to Jefferies Group LLC's Asset Management reportable segment, net of interest income on2 Jefferies Group LLC's Cash and cash equivalents and other sources of liquidity, which allocation is consistent with Jefferies Group LLC's policy of allocating such items to all its business lines. Refer to Jefferies Group LLC's summary of Net Revenues by Source on pages 9 and 10.

Shares outstanding on a fully diluted basis, a non-GAAP measure, is defined3 as Jefferies Financial Group's common shares outstanding plus restricted stock units and other shares. Refer to schedule on page 14 for reconciliation to U.S. GAAP amounts.

Tangible book value per fully diluted share, a non-GAAP measure, is defined as Tangible book value divided by shares outstanding on a fully diluted basis. Tangible book value, a non-GAAP measure, is defined as Jefferies4 Financial Group shareholders' equity (book value) less Intangible assets, net and goodwill. Shares outstanding on a fully diluted basis, a non-GAAP measure, is defined as Jefferies Financial Group's common shares outstanding plus restricted stock units and other shares. Refer to schedule on page 14 for reconciliation to U.S. GAAP amounts.

Return on tangible equity (a non-GAAP financial measure) equals our twelve months ended November 30, 2020 net earnings attributable to Jefferies Group LLC divided by our tangible Jefferies Group LLC member's equity (a non-GAAP5 financial measure) of $4,311 million at November 30, 2019. Tangible Jefferies Group LLC member's equity at November 30, 2019 equals Jefferies Group LLC member's equity of $6,125 million less goodwill and identifiable intangibles assets of $1,814 million.

Summary for Jefferies Financial Group Inc. and Subsidiaries

(In thousands, except per share amounts)

(Unaudited)

Three Months EndedNovember 30, 2020

Three Months EndedNovember 30, 2019

Twelve Months EndedNovember 30, 2020

Twelve Months EndedNovember 30, 2019

Net revenues

$

1,860,787

$

1,106,098

$

6,010,874

$

3,892,976

Income before income taxes and income (loss) related to associated companies

$

427,500

$

151,320

$

1,142,566

$

275,613

Income (loss) related to associated companies

(5,960)

81,229

(75,483)

202,995

Income before income taxes

421,540

232,549

1,067,083

478,608

Income tax provision (benefit)

113,535

38,671

298,673

(483,955)

Net income

308,005

193,878

768,410

962,563

Net loss attributable to the noncontrolling interests

238

2,606

5,271

1,847

Net loss attributable to the redeemable noncontrolling interests

428

333

1,558

286

Preferred stock dividends

(1,404)

(1,276)

(5,634)

(5,103)

Net income attributable to Jefferies Financial Group Inc. common shareholders

$

307,267

$

195,541

$

769,605

$

959,593

Basic earnings per common share attributable to Jefferies Financial Group Inc. common shareholders:

Net income

$

1.12

$

0.63

$

2.68

$

3.07

Number of shares in calculation

272,901

310,266

285,693

310,694

Diluted earnings per common share attributable to Jefferies Financial Group Inc. common shareholders:

Net income

$

1.11

$

0.62

$

2.65

$

3.03

Number of shares in calculation

277,342

316,566

290,490

317,032

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

Summary for Jefferies Financial Group Inc. and Subsidiaries

(In thousands, except per share amounts)

(Unaudited)

Three Months Three Months Twelve Months Twelve Months Ended Ended Ended Ended November 30, November 30, November 30, November 30, 2020 2019 2020 2019



Net revenues $ 1,860,787 $ 1,106,098 $ 6,010,874 $ 3,892,976



Income beforeincome taxes andincome (loss) $ 427,500 $ 151,320 $ 1,142,566 $ 275,613 related toassociatedcompanies

Income (loss)related to (5,960) 81,229 (75,483) 202,995 associatedcompanies

Income before 421,540 232,549 1,067,083 478,608 income taxes

Income taxprovision 113,535 38,671 298,673 (483,955) (benefit)

Net income 308,005 193,878 768,410 962,563

Net lossattributable tothe 238 2,606 5,271 1,847 noncontrollinginterests

Net lossattributable tothe redeemable 428 333 1,558 286 noncontrollinginterests

Preferred stock (1,404) (1,276) (5,634) (5,103) dividends

Net incomeattributable toJefferies $ 307,267 $ 195,541 $ 769,605 $ 959,593 Financial GroupInc. commonshareholders



Basic earningsper common shareattributable toJefferies Financial GroupInc. commonshareholders:

Net income $ 1.12 $ 0.63 $ 2.68 $ 3.07



Number of shares 272,901 310,266 285,693 310,694 in calculation



Diluted earningsper common shareattributable toJefferies Financial GroupInc. commonshareholders:

Net income $ 1.11 $ 0.62 $ 2.65 $ 3.03



Number of shares 277,342 316,566 290,490 317,032 in calculation

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

Investment Asset Parent Banking and Management Merchant Corporate Company Consolidation Total Capital (1) Banking (1) Interest Adjustments Markets (1)

Net revenues $ 1,537,362 $ 88,977 $ 231,852 $ 1,350 $ - $ 1,246 $ 1,860,787



Expenses:

Compensation 842,513 30,152 25,336 13,365 - - 911,366 and benefits

Cost of 59,968 5,221 102,717 - - - 167,906 sales (2)

Interest - - 6,972 - 13,672 - 20,644 expense

Depreciationand 21,012 471 16,735 865 - - 39,083 amortization

Selling,general and 239,795 9,328 41,138 6,513 - (2,486) 294,288 otherexpenses

Total 1,163,288 45,172 192,898 20,743 13,672 (2,486) 1,433,287 expenses

Income(loss)beforeincome taxes 374,074 43,805 38,954 (19,393) (13,672) 3,732 427,500 and lossrelated toassociatedcompanies

Loss relatedto - - (5,960) - - - (5,960) associatedcompanies

Income(loss) $ 374,074 $ 43,805 $ 32,994 $ (19,393) $ (13,672) $ 3,732 421,540 beforeincome taxes

Income tax 113,535 provision

Net income $ 308,005

A summary of results for the three months ended November 30, 2019 is as follows (in thousands):

Investment Asset Parent Banking and Management Merchant Corporate Company Consolidation Total Capital (1) Banking (1) Interest Adjustments Markets (1)

Net revenues $ 761,104 $ (10,554) $ 343,388 $ 10,699 $ - $ 1,461 $ 1,106,098



Expenses:

Compensation 409,899 14,556 17,129 16,273 - - 457,857 and benefits

Cost of 53,713 6,314 86,532 - - - 146,559 sales (2)

Interest - - 8,608 - 8,750 - 17,358 expense

Depreciationand 20,877 570 19,901 923 - - 42,271 amortization

Selling,general and 213,457 11,010 51,557 14,963 - (254) 290,733 otherexpenses

Total 697,946 32,450 183,727 32,159 8,750 (254) 954,778 expenses

Income(loss)beforeincome taxesand income 63,158 (43,004) 159,661 (21,460) (8,750) 1,715 151,320 (loss)related toassociatedcompanies

Income(loss)related to - (133) 81,294 - - 68 81,229 associatedcompanies

Income(loss) $ 63,158 $ (43,137) $ 240,955 $ (21,460) $ (8,750) $ 1,783 232,549 beforeincome taxes

Income tax 38,671 provision

Net income $ 193,878

(1)

We now present Asset Management as a separate reporting segment. Prior year amounts have been reclassified to conform to current segment disclosure.

(2)

Includes Floor brokerage and clearing fees.

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

We now present Asset Management as a separate reporting segment. Prior(1) year amounts have been reclassified to conform to current segment disclosure.

(2) Includes Floor brokerage and clearing fees.

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

Investment Asset Parent Banking and Management Merchant Corporate Company Consolidation Total Capital (1) Banking (1) Interest Adjustments Markets (1)

Net revenues $ 4,989,138 $ 235,255 $ 764,460 $ 13,258 $ - $ 8,763 $ 6,010,874



Expenses:

Compensation 2,735,080 89,527 77,072 39,184 - - 2,940,863 and benefits

Cost of 241,083 25,509 338,588 - - - 605,180 sales (2)

Interest - - 31,425 - 53,445 - 84,870 expense

Depreciationand 82,334 5,247 67,362 3,496 - - 158,439 amortization

Selling,general and 810,753 46,045 199,128 26,197 - (3,167) 1,078,956 otherexpenses

Total 3,869,250 166,328 713,575 68,877 53,445 (3,167) 4,868,308 expenses

Income(loss)beforeincome taxes 1,119,888 68,927 50,885 (55,619) (53,445) 11,930 1,142,566 and lossrelated toassociatedcompanies

Loss relatedto - - (75,483) - - - (75,483) associatedcompanies

Income(loss) $ 1,119,888 $ 68,927 $ (24,598) $ (55,619) $ (53,445) $ 11,930 1,067,083 beforeincome taxes

Income tax 298,673 provision

Net income $ 768,410

A summary of results for the twelve months ended November 30, 2019 is as follows (in thousands):

Investment Asset Parent Banking and Management Merchant Corporate Company Consolidation Total Capital (1) Banking (1) Interest Adjustments Markets (1)

Net revenues $ 3,035,988 $ 84,894 $ 735,213 $ 32,833 $ - $ 4,048 $ 3,892,976



Expenses:

Compensation 1,641,814 63,305 61,767 58,005 - - 1,824,891 and benefits

Cost of 202,425 20,715 319,641 - - - 542,781 sales (2)

Interest - - 34,129 - 53,048 - 87,177 expense

Depreciationand 77,549 2,042 69,805 3,475 - - 152,871 amortization

Selling,general and 767,150 40,432 162,832 39,820 - (591) 1,009,643 otherexpenses

Total 2,688,938 126,494 648,174 101,300 53,048 (591) 3,617,363 expenses

Income(loss)beforeincome taxes 347,050 (41,600) 87,039 (68,467) (53,048) 4,639 275,613 and incomerelated toassociatedcompanies

Incomerelated to - 474 202,453 - - 68 202,995 associatedcompanies

Income(loss) $ 347,050 $ (41,126) $ 289,492 $ (68,467) $ (53,048) $ 4,707 478,608 beforeincome taxes

Income tax (483,955) benefit

Net income $ 962,563

(1)

We now present Asset Management as a separate reporting segment. Prior year amounts have been reclassified to conform to current segment disclosure.

(2)

Includes Floor brokerage and clearing fees.

The following financial tables provide information for the results of Jefferies Group LLC and should be read in conjunction with Jefferies Group LLC's Annual Report on Form 10-K for the year ended November 30, 2019. Amounts herein pertaining to November 30, 2020 represent a preliminary estimate as of the date of this earnings release and may be revised in Jefferies Group LLC's Annual Report on Form 10-K for the year ended November 30, 2020.

We now present Asset Management as a separate reporting segment. Prior(1) year amounts have been reclassified to conform to current segment disclosure.

(2) Includes Floor brokerage and clearing fees.

The following financial tables provide information for the results of Jefferies Group LLC and should be read in conjunction with Jefferies Group LLC's Annual Report on Form 10-K for the year ended November 30, 2019. Amounts herein pertaining to November 30, 2020 represent a preliminary estimate as of the date of this earnings release and may be revised in Jefferies Group LLC's Annual Report on Form 10-K for the year ended November 30, 2020.

Jefferies Group LLC and Subsidiaries

Consolidated Statements of Earnings

(Amounts in Thousands)

(Unaudited)



Quarter Ended

November 30, August 31, November 30, 2020 2020 2019

Revenues:

Commissions and other fees $ 196,143 $ 204,313 $ 182,466

Principal transactions 467,163 560,665 137,256

Investment banking 906,164 615,837 400,513

Asset management fees and revenues 5,626 6,772 3,935

Interest 191,646 195,960 333,507

Other 43,652 11,526 15,859

Total revenues 1,810,394 1,595,073 1,073,536

Interest expense 201,424 211,629 325,734

Net revenues 1,608,970 1,383,444 747,802



Non-interest expenses:

Compensation and benefits 860,243 725,555 422,548



Non-compensation expenses:

Floor brokerage and clearing fees 65,189 66,744 58,773

Technology and communications 99,417 102,635 87,931

Occupancy and equipment rental 28,229 27,053 31,885

Business development 21,650 7,637 34,728

Professional services 52,056 41,173 45,296

Underwriting costs 36,551 29,071 14,617

Other 39,828 20,175 28,153

Total non-compensation expenses 342,920 294,488 301,383

Total non-interest expenses 1,203,163 1,020,043 723,931

Earnings before income taxes 405,807 363,401 23,871

Income tax expense 98,893 95,870 495

Net earnings 306,914 267,531 23,376

Net loss attributable to (200) (531) (1,784) noncontrolling interests

Net earnings attributable to $ 307,114 $ 268,062 $ 25,160 Jefferies Group LLC



Pre-tax operating margin 25.2 % 26.3 % 3.2 %

Effective tax rate 24.4 % 26.4 % 2.1 %





Jefferies Group LLC and Subsidiaries

Consolidated Statements of Earnings

(Amounts in Thousands)

(Unaudited)

Twelve Months Ended

November 30, 2020

November 30, 2019

Revenues:

Commissions and other fees

$

823,258

$

676,309

Principal transactions

1,867,013

769,258

Investment banking

2,501,494

1,528,729

Asset management fees and revenues

28,694

20,285

Interest

894,215

1,496,529

Other

37,632

93,422

Total revenues

6,152,306

4,584,532

Interest expense

954,829

1,472,002

Net revenues

5,197,477

3,112,530

Non-interest expenses:

Compensation and benefits

2,792,575

1,684,054

Non-compensation expenses:

Floor brokerage and clearing fees

270,132

227,471

Technology and communications

386,830

335,395

Occupancy and equipment rental

107,180

119,472

Business development

67,603

138,158

Professional services

179,888

162,668

Underwriting costs

95,636

50,662

Other

120,179

69,981

Total non-compensation expenses

1,227,448

1,103,807

Total non-interest expenses

4,020,023

2,787,861

Earnings before income taxes

1,177,454

324,669

Income tax expense

302,748

80,284

Net earnings

874,706

244,385

Net loss attributable to noncontrolling interests

(4,597)

(1,644)

Net earnings attributable to Jefferies Group LLC

$

879,303

$

246,029

Pre-tax operating margin

22.7

%

10.4

%

Effective tax rate

25.7

%

24.7

%

Jefferies Group LLC and Subsidiaries

Consolidated Statements of Earnings

(Amounts in Thousands)

(Unaudited)



Twelve Months Ended

November 30, November 30, 2020 2019

Revenues:

Commissions and other fees $ 823,258 $ 676,309

Principal transactions 1,867,013 769,258

Investment banking 2,501,494 1,528,729

Asset management fees and revenues 28,694 20,285

Interest 894,215 1,496,529

Other 37,632 93,422

Total revenues 6,152,306 4,584,532

Interest expense 954,829 1,472,002

Net revenues 5,197,477 3,112,530



Non-interest expenses:

Compensation and benefits 2,792,575 1,684,054



Non-compensation expenses:

Floor brokerage and clearing fees 270,132 227,471

Technology and communications 386,830 335,395

Occupancy and equipment rental 107,180 119,472

Business development 67,603 138,158

Professional services 179,888 162,668

Underwriting costs 95,636 50,662

Other 120,179 69,981

Total non-compensation expenses 1,227,448 1,103,807

Total non-interest expenses 4,020,023 2,787,861

Earnings before income taxes 1,177,454 324,669

Income tax expense 302,748 80,284

Net earnings 874,706 244,385

Net loss attributable to noncontrolling (4,597) (1,644) interests

Net earnings attributable to Jefferies Group $ 879,303 $ 246,029 LLC



Pre-tax operating margin 22.7 % 10.4 %

Effective tax rate 25.7 % 24.7 %





Jefferies Group LLC and Subsidiaries

Selected Statistical Information

(Amounts in Thousands, Except Other Data)

(Unaudited)

Quarter Ended

November 30, 2020

August 31, 2020

November 30, 2019

Net Revenues by Source:

Advisory

$

356,823

$

171,438

$

195,035

Equity underwriting

340,561

305,380

105,119

Debt underwriting

208,780

139,019

100,359

Total underwriting

549,341

444,399

205,478

Other investment banking

9,446

(27,013)

(7,501)

Total investment banking

915,610

588,824

393,012

Equities

327,314

318,824

200,128

Fixed income

263,119

336,347

163,016

Total capital markets

590,433

655,171

363,144

Other

31,319

30,120

4,948

Total Investment Banking and Capital Markets (1) (2)

1,537,362

1,274,115

761,104

Asset management fees and revenues

5,626

6,772

3,935

Investment return (3) (4)

77,790

115,556

(7,637)

Allocated net interest (3) (5)

(11,808)

(12,999)

(9,600)

Total Asset Management

71,608

109,329

(13,302)

Net Revenues

$

1,608,970

$

1,383,444

$

747,802

Other Data:

Number of trading days

63

65

63

Number of trading loss days

3

8

10

Average firmwide VaR (in millions) (6)

$

14.92

$

10.46

$

7.70

Jefferies Group LLC and Subsidiaries

Selected Statistical Information

(Amounts in Thousands, Except Other Data)

(Unaudited)



Quarter Ended

November 30, August 31, November 2020 2020 30, 2019

Net Revenues by Source:



Advisory $ 356,823 $ 171,438 $ 195,035



Equity underwriting 340,561 305,380 105,119

Debt underwriting 208,780 139,019 100,359

Total underwriting 549,341 444,399 205,478

Other investment banking 9,446 (27,013) (7,501)

Total investment banking 915,610 588,824 393,012



Equities 327,314 318,824 200,128

Fixed income 263,119 336,347 163,016

Total capital markets 590,433 655,171 363,144



Other 31,319 30,120 4,948



Total Investment Banking and Capital 1,537,362 1,274,115 761,104 Markets (1) (2)



Asset management fees and revenues 5,626 6,772 3,935

Investment return (3) (4) 77,790 115,556 (7,637)

Allocated net interest (3) (5) (11,808) (12,999) (9,600)

Total Asset Management 71,608 109,329 (13,302)



Net Revenues $ 1,608,970 $ 1,383,444 $ 747,802



Other Data:

Number of trading days 63 65 63

Number of trading loss days 3 8 10



Average firmwide VaR (in millions) $ 14.92 $ 10.46 $ 7.70 (6)

(1)

Includes net interest revenues of $6.9 million, $3.3 million and $22.6 million for the quarters ended November 30, 2020, August 31, 2020 and November 30, 2019, respectively.

(2)

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.

(3)

Net revenues attributed to the Investment return in Jefferies Group LLC Asset Management have been disaggregated to separately present Investment return and Allocated net interest (see footnote 5 below). This disaggregation is intended 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 Jefferies Group LLC's credit spreads, debt maturity profile, capital structure, liquidity risks and allocation methods.

(4)

Includes net interest expense of $4.9 million, $6.0 million and $5.2 million for the quarters ended November 30, 2020, August 31, 2020 and November 30, 2019, respectively.

(5)

Allocated net interest represents the allocation of Jefferies Group LLC's long-term debt interest expense to Jefferies Group LLC's Asset Management, net of interest income on Jefferies Group LLC's Cash and cash equivalents and other sources of liquidity (refer to page 11).

(6)

VaR estimates the potential loss in value of Jefferies Group LLC's trading positions due to adverse market movements over a one-day time horizon with a 95% confidence level. For a further discussion of the calculation of VaR, see "Value-at-Risk" in Part II, Item 7 "Management's Discussion and Analysis" in Jefferies Group LLC's Annual Report on Form 10-K for the year ended November 30, 2019.

Includes net interest revenues of $6.9 million, $3.3 million and $22.6(1) million for the quarters ended November 30, 2020, August 31, 2020 and November 30, 2019, respectively.

Allocated net interest is not separately disaggregated for Investment(2) Banking and Capital Markets. This presentation is aligned to our Investment Banking and Capital Markets internal performance measurement.

Net revenues attributed to the Investment return in Jefferies Group LLC Asset Management have been disaggregated to separately present Investment return and Allocated net interest (see footnote 5 below). This disaggregation is intended to increase transparency and to make clearer(3) 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 Jefferies Group LLC's credit spreads, debt maturity profile, capital structure, liquidity risks and allocation methods.

Includes net interest expense of $4.9 million, $6.0 million and $5.2(4) million for the quarters ended November 30, 2020, August 31, 2020 and November 30, 2019, respectively.

Allocated net interest represents the allocation of Jefferies Group LLC's(5) long-term debt interest expense to Jefferies Group LLC's Asset Management, net of interest income on Jefferies Group LLC's Cash and cash equivalents and other sources of liquidity (refer to page 11).

VaR estimates the potential loss in value of Jefferies Group LLC's trading positions due to adverse market movements over a one-day time horizon with(6) a 95% confidence level. For a further discussion of the calculation of VaR, see "Value-at-Risk" in Part II, Item 7 "Management's Discussion and Analysis" in Jefferies Group LLC's Annual Report on Form 10-K for the year ended November 30, 2019.

Jefferies Group LLC and Subsidiaries

Selected Statistical Information

(Amounts in Thousands, Except Other Data)

(Unaudited)

Twelve Months Ended

November 30, 2020

November 30, 2019

Net Revenues by Source:

Advisory

$

1,053,500

$

767,421

Equity underwriting

902,016

361,972

Debt underwriting

545,978

407,336

Total underwriting

1,447,994

769,308

Other investment banking

(103,330)

(14,617)

Total investment banking

2,398,164

1,522,112

Equities

1,128,910

773,979

Fixed income

1,340,792

681,362

Total capital markets

2,469,702

1,455,341

Other

121,272

58,535

Total Investment Banking and Capital Markets (1) (2)

4,989,138

3,035,988

Asset management fees and revenues

28,694

20,285

Investment return (3) (4)

228,129

96,805

Allocated net interest (3) (5)

(48,484)

(40,548)

Total Asset Management

208,339

76,542

Net Revenues

$

5,197,477

$

3,112,530

Other Data:

Number of trading days

252

250

Number of trading loss days

26

33

Average firmwide VaR (in millions) (6)

$

10.51

$

8.79

Jefferies Group LLC and Subsidiaries

Selected Statistical Information

(Amounts in Thousands, Except Other Data)

(Unaudited)



Twelve Months Ended

November 30, November 30, 2020 2019

Net Revenues by Source:



Advisory $ 1,053,500 $ 767,421



Equity underwriting 902,016 361,972

Debt underwriting 545,978 407,336

Total underwriting 1,447,994 769,308

Other investment banking (103,330) (14,617)

Total investment banking 2,398,164 1,522,112



Equities 1,128,910 773,979

Fixed income 1,340,792 681,362

Total capital markets 2,469,702 1,455,341



Other 121,272 58,535



Total Investment Banking and Capital Markets 4,989,138 3,035,988 (1) (2)



Asset management fees and revenues 28,694 20,285

Investment return (3) (4) 228,129 96,805

Allocated net interest (3) (5) (48,484) (40,548)

Total Asset Management 208,339 76,542



Net Revenues $ 5,197,477 $ 3,112,530



Other Data:

Number of trading days 252 250

Number of trading loss days 26 33



Average firmwide VaR (in millions) (6) $ 10.51 $ 8.79

(1)

Includes net interest revenues of $12.3 million and $74.0 million for the twelve months ended November 30, 2020 and 2019, respectively.

(2)

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.

(3)

Net revenues attributed to the Investment return in Jefferies Group LLC Asset Management have been disaggregated to separately present Investment return and Allocated net interest (see footnote 5 below). This disaggregation is intended 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 Jefferies Group LLC's credit spreads, debt maturity profile, capital structure, liquidity risks and allocation methods.

(4)

Includes net interest expenses of $24.5 million and $8.9 million for the twelve months ended November 30, 2020 and 2019, respectively.

(5)

Allocated net interest represents the allocation of Jefferies Group LLC's long-term debt interest expense to Jefferies Group LLC's Asset Management, net of interest income on Jefferies Group LLC's Cash and cash equivalents and other sources of liquidity (refer to page 11).

(6)

VaR estimates the potential loss in value of Jefferies Group LLC's trading positions due to adverse market movements over a one-day time horizon with a 95% confidence level. For a further discussion of the calculation of VaR, see "Value-at-Risk" in Part II, Item 7 "Management's Discussion and Analysis" in Jefferies Group LLC's Annual Report on Form 10-K for the year ended November 30, 2019.

(1) Includes net interest revenues of $12.3 million and $74.0 million for the twelve months ended November 30, 2020 and 2019, respectively.

Allocated net interest is not separately disaggregated for Investment(2) Banking and Capital Markets. This presentation is aligned to our Investment Banking and Capital Markets internal performance measurement.

Net revenues attributed to the Investment return in Jefferies Group LLC Asset Management have been disaggregated to separately present Investment return and Allocated net interest (see footnote 5 below). This disaggregation is intended to increase transparency and to make clearer(3) 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 Jefferies Group LLC's credit spreads, debt maturity profile, capital structure, liquidity risks and allocation methods.

(4) Includes net interest expenses of $24.5 million and $8.9 million for the twelve months ended November 30, 2020 and 2019, respectively.

Allocated net interest represents the allocation of Jefferies Group LLC's(5) long-term debt interest expense to Jefferies Group LLC's Asset Management, net of interest income on Jefferies Group LLC's Cash and cash equivalents and other sources of liquidity (refer to page 11).

VaR estimates the potential loss in value of Jefferies Group LLC's trading positions due to adverse market movements over a one-day time horizon with(6) a 95% confidence level. For a further discussion of the calculation of VaR, see "Value-at-Risk" in Part II, Item 7 "Management's Discussion and Analysis" in Jefferies Group LLC's Annual Report on Form 10-K for the year ended November 30, 2019.

Jefferies Group LLC and Subsidiaries

Financial Highlights

(Amounts in Millions, Except Where Noted)

(Unaudited)

Quarter Ended

November 30, 2020

August 31, 2020

November 30, 2019

Financial position:

Total assets (1)

$

47,752

$

46,660

$

43,516

Average total assets for the period (1)

$

56,503

$

54,654

$

52,539

Average total assets less goodwill and intangible assets for the period (1)

$

54,807

$

52,965

$

50,727

Cash and cash equivalents (1)

$

7,112

$

6,750

$

5,568

Cash and cash equivalents and other sources of liquidity (1) (2)

$

8,605

$

8,089

$

6,918

Cash and cash equivalents and other sources of liquidity - % total assets (1) (2)

18.0

%

17.3

%

15.9

%

Cash and cash equivalents and other sources of liquidity - % total assets less goodwill and intangible assets (1) (2)

18.7

%

18.0

%

16.6

%

Financial instruments owned (1)

$

17,686

$

17,556

$

16,363

Goodwill and intangible assets (1)

$

1,805

$

1,806

$

1,814

Right-of-use assets (1) (3)

$

487

$

500

N/A

Total equity (including noncontrolling interests) (1)

$

6,366

$

6,504

$

6,130

Total Jefferies Group LLC member's equity (1)

$

6,349

$

6,488

$

6,125

Tangible Jefferies Group LLC member's equity (1) (4)

$

4,543

$

4,682

$

4,311

Level 3 financial instruments:

Level 3 financial instruments owned (1) (5)

$

379

$

433

$

307

Level 3 financial instruments owned - % total assets (1) (5)

0.8

%

0.9

%

0.7

%

Level 3 financial instruments owned - % total financial instruments (1) (5)

2.1

%

2.5

%

1.9

%

Level 3 financial instruments owned - % tangible Jefferies Group LLC member's equity (1) (5)

8.3

%

9.2

%

7.1

%

Other data and financial ratios:

Total long-term capital (1) (6)

$

13,022

$

12,492

$

12,343

Leverage ratio (1) (7)

7.5

7.2

7.1

Tangible gross leverage ratio (1) (8)

10.1

9.6

9.7

Adjusted tangible gross leverage ratio (1) (3) (9)

11.2

10.6

N/A

Number of trading days

63

65

63

Number of trading loss days

3

8

10

Average firmwide VaR (10)

$

14.92

$

10.46

$

7.70

Number of employees, at period end

3,922

3,893

3,815

N/A - Not Applicable

Jefferies Group LLC and Subsidiaries

Financial Highlights

(Amounts in Millions, Except Where Noted)

(Unaudited)



Quarter Ended

November August 31, November 30, 2020 30, 2020 2019

Financial position:

Total assets (1) $ 47,752 $ 46,660 $ 43,516

Average total assets for the period (1) $ 56,503 $ 54,654 $ 52,539

Average total assets less goodwill and $ 54,807 $ 52,965 $ 50,727 intangible assets for the period (1)



Cash and cash equivalents (1) $ 7,112 $ 6,750 $ 5,568

Cash and cash equivalents and other $ 8,605 $ 8,089 $ 6,918 sources of liquidity (1) (2)

Cash and cash equivalents and othersources of liquidity - % total assets (1) 18.0 % 17.3 % 15.9 %(2)

Cash and cash equivalents and othersources of liquidity - % total assets less 18.7 % 18.0 % 16.6 %goodwill and intangible assets (1) (2)



Financial instruments owned (1) $ 17,686 $ 17,556 $ 16,363

Goodwill and intangible assets (1) $ 1,805 $ 1,806 $ 1,814

Right-of-use assets (1) (3) $ 487 $ 500 N/A



Total equity (including noncontrolling $ 6,366 $ 6,504 $ 6,130 interests) (1)

Total Jefferies Group LLC member's equity $ 6,349 $ 6,488 $ 6,125 (1)

Tangible Jefferies Group LLC member's $ 4,543 $ 4,682 $ 4,311 equity (1) (4)



Level 3 financial instruments:

Level 3 financial instruments owned (1) $ 379 $ 433 $ 307 (5)

Level 3 financial instruments owned - % 0.8 % 0.9 % 0.7 %total assets (1) (5)

Level 3 financial instruments owned - % 2.1 % 2.5 % 1.9 %total financial instruments (1) (5)

Level 3 financial instruments owned - %tangible Jefferies Group LLC member's 8.3 % 9.2 % 7.1 %equity (1) (5)



Other data and financial ratios:

Total long-term capital (1) (6) $ 13,022 $ 12,492 $ 12,343

Leverage ratio (1) (7) 7.5 7.2 7.1

Tangible gross leverage ratio (1) (8) 10.1 9.6 9.7

Adjusted tangible gross leverage ratio (1) 11.2 10.6 N/A(3) (9)



Number of trading days 63 65 63

Number of trading loss days 3 8 10

Average firmwide VaR (10) $ 14.92 $ 10.46 $ 7.70



Number of employees, at period end 3,922 3,893 3,815

N/A - Not Applicable

Jefferies Group LLC and Subsidiaries

Financial Highlights - Footnotes



Amounts pertaining to November 30, 2020 represent a preliminary estimate as(1) of the date of this earnings release and may be revised in Jefferies Group LLC's Annual Report on Form 10-K for the fiscal year ended November 30, 2020.

At November 30, 2020, other sources of liquidity include high quality sovereign government securities and reverse repurchase agreements collateralized by U.S. government securities and other high quality sovereign government securities of $1,180 million, in aggregate, and $313 million, being the estimated amount of additional secured financing that(2) could be reasonably expected to be obtained from Jefferies Group LLC's financial instruments that are currently not pledged after considering reasonable financing haircuts. The corresponding amounts included in other sources of liquidity at August 31, 2020 were $1,123 million and $216 million, respectively, and at November 30, 2019, were $973 million and $377 million, respectively.

Jefferies Group LLC adopted the new lease standard on December 1, 2019 using a modified retrospective transition approach. Accordingly, reported financial information for historical comparable periods is not revised and continues to be reported under the accounting standards in effect during(3) those historical periods. We elected not to reassess whether existing contracts are or contain leases, or the lease classification and initial direct costs of existing leases upon transition. At transition on December 1, 2019, the adoption of this standard resulted in the recognition of right-of-use assets of $520 million, reflected in Premises and equipment in Jefferies Group LLC's Consolidated Statement of Financial Condition.

Tangible Jefferies Group LLC member's equity (a non-GAAP financial measure) represents total Jefferies Group LLC member's equity less goodwill and(4) identifiable intangible assets. We believe that tangible Jefferies Group LLC member's equity is meaningful for valuation purposes, as financial companies are often measured as a multiple of tangible equity, making these ratios meaningful for investors.

Level 3 financial instruments represent those financial instruments(5) classified as such under Accounting Standards Codification 820, accounted for at fair value and included within Financial instruments owned.

At November 30, 2020, August 31, 2020 and November 30, 2019, total long-term capital includes Jefferies Group LLC's long-term debt of $6,656 million,(6) $5,987 million and $6,214 million, respectively, and total equity. Long-term debt included in total long-term capital is reduced by amounts outstanding under the revolving credit facility, amounts from secured term loans and the amount of debt maturing in less than one year, as applicable.

(7) Leverage ratio equals total assets divided by total equity.

Tangible gross leverage ratio (a non-GAAP financial measure) equals total(8) assets less goodwill and identifiable intangible assets divided by tangible Jefferies Group LLC member's equity. The tangible gross leverage ratio is used by rating agencies in assessing Jefferies Group LLC's leverage ratio.

Adjusted tangible gross leverage ratio (a non-GAAP financial measure) equals(9) total assets less goodwill and identifiable intangible assets and right-of-use assets divided by tangible Jefferies Group LLC member's equity less right-of-use assets.

VaR estimates the potential loss in value of Jefferies Group LLC's trading positions due to adverse market movements over a one-day time horizon with a(10) 95% confidence level. For a further discussion of the calculation of VaR, see "Value-at-Risk" in Part II, Item 7 "Management's Discussion and Analysis" in Jefferies Group LLC's Annual Report on Form 10-K for the year ended November 30, 2019.

Merchant Banking Net Asset Overview

The table below presents estimated fair values of our largest Merchant Banking investments. We anticipate discontinuing this disclosure going forward as we believe the wind down of the portfolio diminishes the value of this information, which requires meaningful management time and expenditure to produce. We will continue to discuss developments at the portfolio companies as they arise.

As of November30, 2020

($ Millions)

(Unaudited) Estimated Book Value Fair Basis for Fair Value Estimate Value (2)

Linkem $ 199 $ 685 Income approach and market comparable method

Real estate 532 542 Variousassets (1)

Oil and Gas Income approach, market comparable(Vitesse and 527 529 and market transaction methodJETX)

Idaho Timber 86 165 Income approach and market comparable method

FXCM 133 164 Income approach and market comparable method

Investments in 192 192 Mark-to-market (same for GAAP bookPublic Companies value)

Other 271 382 Various

Total Portfolio $ 1,940 $ 2,659

(1)

Primarily HomeFed

(2)

The following table reconciles financial results reported in accordance with U.S. GAAP to non-GAAP financial results. The table above contains non-GAAP financial information to aid investors in viewing our businesses and investments through the eyes of management while facilitating a comparison across historical periods. However, these non-GAAP financial measures should be viewed in addition to, and not as a substitute for, reported results prepared in accordance with U.S. GAAP.

(1) Primarily HomeFed

The following table reconciles financial results reported in accordance with U.S. GAAP to non-GAAP financial results. The table above contains non-GAAP financial information to aid investors in viewing our businesses(2) and investments through the eyes of management while facilitating a comparison across historical periods. However, these non-GAAP financial measures should be viewed in addition to, and not as a substitute for, reported results prepared in accordance with U.S. GAAP.

Reconciliation of Book Value of Merchant Banking Investments to Estimated Fair Value

($ Millions)

(Unaudited)Book ValueNovember 30, 2020

Fair Value Adjustments

EstimatedFair ValueNovember 30, 2020

(GAAP)

(Non-GAAP)

Linkem

$

199

$

486

$

685

Real estate assets

532

10

542

Oil and Gas (Vitesse and JETX)

527

2

529

Idaho Timber

86

79

165

FXCM

133

31

164

Investments in Public Companies

192

-

192

Other

271

111

382

Total Portfolio

$

1,940

$

719

$

2,659

Jefferies Financial Group Inc. Non-GAAP Reconciliation

The following table reconciles Jefferies Financial Group 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.

Jefferies Financial Group Book Value and Shares Outstanding GAAP Reconciliation

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

Reconciliation of Book Value of Merchant Banking Investments to EstimatedFair Value

($ Millions)

(Unaudited) Estimated Book Value Fair Value Fair Value November 30, Adjustments November 30, 2020 2020

(GAAP) (Non-GAAP)

Linkem $ 199 $ 486 $ 685

Real estate assets 532 10 542

Oil and Gas (Vitesse and JETX) 527 2 529

Idaho Timber 86 79 165

FXCM 133 31 164

Investments in Public Companies 192 - 192

Other 271 111 382

Total Portfolio $ 1,940 $ 719 $ 2,659

Jefferies Financial Group Inc. Non-GAAP Reconciliation

The following table reconciles Jefferies Financial Group 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.

Jefferies Financial Group Book Value and Shares Outstanding GAAP Reconciliation

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

As Reported, November 30, 2020



Book value (GAAP) $ 9,403,893

Less: Intangibles assets, net and goodwill (1,913,467)

Tangible book value (non-GAAP) $ 7,490,426



Common shares outstanding (GAAP) 249,751

Restricted stock units ("RSUs") 22,753

Other 1,115

Fully diluted shares outstanding (non-GAAP) (1) 273,619



Book value per share outstanding $ 37.65

Tangible book value per fully diluted share outstanding $ 27.38



(1) Fully diluted shares outstanding exclude preferred shares as they are antidilutive. Fully diluted shares outstanding include vested RSUs as well as the target number of RSUs issuable under the senior executive compensation plans.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210104005798/en/

CONTACT: Teresa S. Gendron Chief Financial Officer Jefferies Financial Group Inc. Tel. (212) 460-1932 Matt Larson Chief Financial Officer Jefferies Group LLC Tel. (212) 284-2338