Segment Information

6 Months Ended

May 31, 2022

Segment Reporting [Abstract]

Segment Information

Segment Information

We are engaged in investment banking and capital markets, and asset management. We also own a legacy portfolio of businesses and investments that we historically denominated as our "Merchant Banking" business.

On December 1, 2021, we made a $477 million contribution of net assets, including both Merchant Banking and Asset Management investments, to Jefferies Group. The transferred Merchant Banking investments are now being managed by a different management team, while the Asset Management investments continue to be managed by the co-Presidents of Asset Management who oversee all asset management activities across the Company. As a result, we transferred $194 million of net assets out of our Merchant Banking segment: $139 million of these net assets, including $48 million of net assets relating to Foursight, were transferred into our Investment Banking and Capital Markets segment; the remaining $55 million of net assets transferred are now managed by the co-Presidents of Asset Management and are included in our Asset Management segment. Prior year amounts have been reclassified to conform to current segment reporting.

The Investment Banking and Capital Markets reportable segment includes investment banking, capital markets and other related services. Investment banking provides underwriting and financial advisory services to clients across most industry sectors in the Americas, Europe, the Middle East and Africa, and Asia Pacific. Capital markets businesses operate across the spectrum of equities and fixed income products.

Within Asset Management, we manage, invest in and provide services to a diverse group of alternative asset management platforms across a spectrum of investment strategies and asset classes. Asset Management offers institutional clients an innovative range of investment strategies through its affiliated managers.

Our Merchant Banking reportable segment consists of our various merchant banking businesses and investments, primarily including Linkem, Vitesse Energy and JETX Energy, real estate, Idaho Timber and FXCM.

Corporate assets primarily consist of cash and cash equivalents. Corporate revenues primarily include interest income.

Certain information concerning our segments is presented in the following tables (in thousands):

	For the Three Months Ended May 31,				For the Six Months Ended May 31,
	2022		2021		2022		2021
Net revenues:
Reportable Segments:
Investment Banking and Capital Markets	$	1,098,378	$	1,598,862	$	2,580,196	$	3,586,358
Asset Management	31,147		50,675		91,103		279,877
Merchant Banking	238,255		296,815		427,790		563,819
Corporate	1,818		724		2,564		1,314
Total net revenues related to reportable segments	1,369,598		1,947,076		3,101,653		4,431,368
Reconciling items - Consolidation adjustments	(516)		3,431		(656)		6,081
Total consolidated revenues	$	1,369,082	$	1,950,507	$	3,100,997	$	4,437,449
Income (loss) before income taxes:
Reportable Segments:
Investment Banking and Capital Markets	$	188,063	$	435,015	$	608,948	$	991,246
Asset Management	973		7,148		16,982		191,080
Merchant Banking	(3,628)		54,448		(28,035)		146,650
Corporate	(10,126)		(12,099)		(21,890)		(32,576)
Income before income taxes related to reportable segments	175,282		484,512		576,005		1,296,400
Reconciling items - Parent Company interest	(8,385)		(13,829)		(16,776)		(27,731)
Reconciling items - Consolidation adjustments	(356)		3,456		(356)		6,255
Total consolidated income before income taxes	$	166,541	$	474,139	$	558,873	$	1,274,924
Depreciation and amortization expenses:
Reportable Segments:
Investment Banking and Capital Markets	$	22,766	$	20,805	$	46,321	$	41,515
Asset Management	467		489		829		968
Merchant Banking	16,655		17,268		38,251		33,982
Corporate	419		878		843		1,742
Total consolidated depreciation and amortization expenses	$	40,307	$	39,440	$	86,244	$	78,207

	May 31, 2022		November 30, 2021
Identifiable Assets Employed:
Reportable Segments:
Investment Banking and Capital Markets	$	49,754,402	$	52,903,374
Asset Management	3,461,539		3,205,799
Merchant Banking	2,323,547		2,263,050
Corporate	1,902,875		2,432,927
Identifiable assets related to reportable segments	57,442,363		60,805,150
Reconciling items - Consolidation adjustments	(228,553)		(401,040)
Total consolidated assets	$	57,213,810	$	60,404,110

Interest expense classified as a component of Net revenues relates to Jefferies Group. For the three months ended May 31, 2022 and 2021, interest expense classified as a component of Expenses was primarily comprised of parent company interest ($8.4 million and $13.8 million, respectively) and Merchant Banking ($0.9 million and $0.8 million, respectively). For the six months ended May 31, 2022 and 2021, interest expense classified as a component of Expenses was primarily comprised of parent company interest ($16.8 million and $27.7 million, respectively) and Merchant Banking ($1.6 million and $1.8 million, respectively). Additionally, for the three and six months ended May 31, 2021, interest expense classified as a component of Expenses in the Investment Banking and Capital Markets reportable segment includes $5.3 million and $10.8 million, respectively, related to Foursight.