Segment Reporting

3 Months Ended

Feb. 28, 2019

We operate in two reportable business segments – Capital Markets and Asset Management. The Capital Markets reportable business segment includes our securities, commodities, futures and foreign exchange trading activities and investment banking business, which is composed of underwriting and financial advisory activities. The Capital Markets reportable business segment provides the sales, trading, origination and advisory effort for various fixed income, equity and advisory products and services. The Asset Management reportable business segment provides investment management services to investors in the U.S. and overseas and invests capital in hedge funds, separately managed accounts and third-party asset managers.

Our reportable business segment information is prepared using the following methodologies:


•	Net revenues and non-interest expenses directly associated with each reportable business segment are included in determining earnings (loss) before income taxes.


•	Net revenues and non-interest expenses not directly associated with specific reportable business segments are allocated based on the most relevant measures applicable, including each reportable business segment’s net revenues, headcount and other factors.


•	Reportable business segment assets include an allocation of indirect corporate assets that have been fully allocated to our reportable business segments, generally based on each reportable business segment’s capital utilization.

In the fourth quarter of 2018, Jefferies transferred to us investments in certain separately managed accounts and funds. Due to this transfer, we have made changes to the presentation of our segment reporting in the fourth quarter of 2018 and are including investment income from our investments in these separately managed accounts and funds within our Asset Management business segment. Previously reported results are presented on a comparable basis. See Note 1, Organization and Basis of Presentation for further details on this transfer.

Our net revenues, non-interest expenses and earnings (loss) before income taxes by reportable business segment are summarized below (in millions):



	Three Months Ended February 28,
	2019		2018
Capital Markets:
Net revenues	$	658.2	$	810.7
Non-interest expenses	603.1		682.7
Earnings before income taxes	$	55.1	$	128.0
Asset Management:
Net revenues	$	27.5	$	10.5
Non-interest expenses	20.0		15.8
Earnings (loss) before income taxes	$	7.5	$	(5.3	)
Total:
Net revenues	$	685.7	$	821.2
Non-interest expenses	623.1		698.5
Earnings before income taxes	$	62.6	$	122.7

The following table summarizes our total assets by reportable business segment (in millions):



	February 28, 2019		November 30, 2018
Capital Markets	$	40,182.1	$	38,700.7
Asset Management	2,951.6		2,468.1
Total assets	$	43,133.7	$	41,168.8

Net Revenues by Geographic Region

Net revenues for the Capital Market reportable business segment are recorded in the geographic region in which the position was risk-managed or, in the case of investment banking, in which the senior coverage banker is located. For the Asset Management reportable business segment, net revenues are allocated according to the location of the investment advisor. Net revenues by geographic region were as follows (in millions):



	Three Months Ended February 28,
	2019		2018
Americas (1)	$	508.6	$	682.1
Europe (2)	151.5		118.2
Asia	25.6		20.9
Net revenues	$	685.7	$	821.2


(1)	Substantially all relates to U.S. results.

(2)

Substantially all relates to U.K. results.