Schedule I (PARENT COMPANY ONLY) |
JEFFERIES FINANCIAL GROUP INC. (PARENT COMPANY ONLY) CONDENSED STATEMENTS OF FINANCIAL CONDITION (In thousands, except share and per share amounts) | | | | | | | | | | | | | November 30, | | 2023 | | 2022 | ASSETS | | | | Cash and cash equivalents | $ | 2,455,437 | | | $ | 2,411,270 | | Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations | 68,076 | | | 57,876 | | Financial instruments owned, at fair value | 80,567 | | | 97,870 | | Investments in and loans to related parties | 630,705 | | | 637,302 | | Investment in subsidiaries | 7,248,785 | | | 7,567,225 | | Advances to subsidiaries | 4,393,104 | | | 3,486,572 | | Subordinated notes receivable | 4,277,788 | | | 3,867,931 | | Other assets | 1,025,140 | | | 821,634 | | Total assets | $ | 20,179,602 | | | $ | 18,947,680 | | LIABILITIES AND EQUITY | | | | Short-term borrowings | $ | — | | | $ | 10,868 | | Financial instruments sold, not yet purchased, at fair value | 690 | | | 4,873 | | Advances from subsidiaries | 1,253,151 | | | 430,846 | | | | | | Accrued expenses and other liabilities | 718,634 | | | 668,717 | | Long-term debt | 8,497,300 | | | 7,474,530 | | Total liabilities | 10,469,775 | | | 8,589,834 | | MEZZANINE EQUITY | | | | Mandatorily redeemable convertible preferred shares | — | | | 125,000 | | EQUITY | | | | Preferred shares, par value of $1 per share, authorized 70,000 shares; 42,000 shares issued and outstanding; liquidation preference of $17,500 per share | 42 | | | — | | Common shares, par value $1 per share, authorized 565,000,000 shares; 210,626,642 and 226,129,626 shares issued and outstanding, after deducting 110,491,428 and 90,334,082 shares held in treasury | 210,627 | | | 226,130 | | Additional paid-in capital | 2,044,859 | | | 1,967,781 | | Accumulated other comprehensive loss | (395,545) | | | (379,419) | | Retained earnings | 7,849,844 | | | 8,418,354 | | Total Jefferies Financial Group Inc. shareholders’ equity | 9,709,827 | | | 10,232,846 | | Total liabilities and equity | $ | 20,179,602 | | | $ | 18,947,680 | |
See accompanying notes to condensed financial statements. JEFFERIES FINANCIAL GROUP INC. (PARENT COMPANY ONLY) CONDENSED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (In thousands) | | | | | | | | | | | | | | | | | | | Year Ended November 30, | | 2023 | | 2022 | | 2021 | Revenues: | | | | | | Principal transactions | $ | (95,642) | | | $ | (61,407) | | | $ | 98,373 | | | | | | | | Interest | 580,485 | | | 317,020 | | | 213,910 | | Other | (3,654) | | | (66,539) | | | 101,203 | | Total revenues | 481,189 | | | 189,074 | | | 413,486 | | Interest expense | 446,786 | | | 317,916 | | | 318,138 | | Net revenues | 34,403 | | | (128,842) | | | 95,348 | | Non-interest expenses: | | | | | | Total non-interest expenses | 34,462 | | | 69,962 | | | 147,761 | | Losses before income taxes | (59) | | | (198,804) | | | (52,413) | | Income tax benefit | (42,322) | | | (78,338) | | | (11,806) | | Net earnings (losses) before undistributed earnings of subsidiaries | 42,263 | | | (120,466) | | | (40,607) | | Undistributed earnings of subsidiaries | 235,425 | | | 905,915 | | | 1,714,959 | | Net earnings | 277,688 | | | 785,449 | | | 1,674,352 | | Preferred stock dividends | 14,616 | | | 8,281 | | | 6,949 | | Net earnings attributable to Jefferies Financial Group Inc. common shareholders | 263,072 | | | 777,168 | | | 1,667,403 | | Other comprehensive income (loss), net of tax: | | | | | | Currency translation adjustments and other | 57,530 | | | (53,572) | | | (9,781) | | Change in fair value related to instrument-specific credit risk | (77,420) | | | 49,146 | | | (82,521) | | | | | | | | Minimum pension liability adjustments | 2,467 | | | 3,311 | | | 9,320 | | Unrealized gain (losses) on available-for-sale securities | 1,297 | | | (6,161) | | | (244) | | Total other comprehensive loss, net of tax | (16,126) | | | (7,276) | | | (83,226) | | Comprehensive income attributable to Jefferies Financial Group Inc. common shareholders | $ | 246,946 | | | $ | 769,892 | | | $ | 1,584,177 | |
See accompanying notes to condensed financial statements. JEFFERIES FINANCIAL GROUP INC. (PARENT COMPANY ONLY) CONDENSED STATEMENTS OF CASH FLOWS (In thousands)
| | | | | | | | | | | | | | | | | | | Year Ended November 30, | | 2023 | | 2022 | | 2021 | Cash flows from operating activities: | | | | | | Net earnings | $ | 277,688 | | | $ | 785,449 | | | $ | 1,674,352 | | Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: | | | | | | Deferred income taxes | 53,728 | | | (38,875) | | | 27,933 | | Share-based compensation | 45,360 | | | 43,919 | | | 78,160 | | Amortization | 1,040 | | | 1,322 | | | (24,379) | | Undistributed earnings of subsidiaries | (235,425) | | | (905,915) | | | (1,714,959) | | (Income) loss on investments in and loans to related parties | 6,808 | | | 71,405 | | | (101,302) | | | | | | | | Other adjustments | (438,649) | | | (560,325) | | | (203,947) | | Net change in assets and liabilities: | | | | | | Financial instruments owned | 17,303 | | | 200,903 | | | (76,852) | | Other assets | (67,626) | | | 129,322 | | | (171,933) | | Financial instruments sold, not yet purchased | (4,183) | | | 1,382 | | | 3,491 | | Income taxes receivable/payable, net | (189,608) | | | (158,732) | | | (62,531) | | Accrued expenses and other liabilities | 49,916 | | | 233,217 | | | (126,894) | | Net cash used in operating activities | (483,648) | | | (196,928) | | | (698,861) | | Cash flows from investing activities: | | | | | | Contributions to investments in and loans to related parties | (211) | | | (118) | | | — | | Capital distributions from investments and repayments of loans from related parties | — | | | 22 | | | 50,000 | | Advances on loan receivables | — | | | — | | | (50,000) | | | | | | | | Distribution (to) from subsidiaries, net | 887,895 | | | 2,921,528 | | | 456,220 | | | | | | | | Other | — | | | — | | | (611) | | Net cash provided by investing activities | 887,684 | | | 2,921,432 | | | 455,609 | | Cash flows from financing activities: | | | | | | Proceeds from short-term borrowings | — | | | 4,068 | | | — | | Payments on short-term borrowings | (10,868) | | | — | | | (5,090) | | Proceeds from issuance of long-term debt, net of issuance costs | 1,718,992 | | | 400,059 | | | 1,681,058 | | Repayments of long-term debt | (813,182) | | | (202,172) | | | (1,256,495) | | Advances (to) from subsidiaries, net | (828,114) | | | 30,428 | | | (341,327) | | Issuances of common shares | — | | | 2,752 | | | 2,107 | | Purchase of common shares for treasury | (169,402) | | | (859,593) | | | (269,400) | | Proceeds from conversion of common to preferred shares | 31,500 | | | — | | | — | | Dividends paid | (278,595) | | | (280,104) | | | (222,798) | | Net cash used in financing activities | (349,669) | | | (904,562) | | | (411,945) | | Net increase (decrease) in cash and cash equivalents and restricted cash | 54,367 | | | 1,819,942 | | | (655,197) | | Cash, cash equivalents and restricted cash at beginning of period | 2,469,146 | | | 649,204 | | | 1,304,401 | | Cash, cash equivalents and restricted cash at end of period | $ | 2,523,513 | | | $ | 2,469,146 | | | $ | 649,204 | | | | | | | | | | | | | | | | | | | | | Year Ended November 30, | | 2023 | | 2022 | | 2021 | Supplemental disclosures of cash flow information: | | | | | | Cash paid (received) during the period for: | | | | | | Interest | $ | 176,981 | | | $ | 484,349 | | | $ | 381,117 | | Income taxes, net | 95,634 | | | 124,516 | | | 625,072 | | Non-cash investing activities: | | | | | | Investments contributed to subsidiary | $ | — | | | $ | — | | | $ | 5,451 | | Dividends received from subsidiaries | — | | | — | | | 1,970 | |
The following presents the Parent Company’s cash, cash equivalents and restricted cash by category within the Condensed Statements of Financial Condition (in thousands): | | | | | | | | | | | | | November 30, | | 2023 | | 2022 | Cash and cash equivalents | $ | 2,455,437 | | | $ | 2,411,270 | | Cash and securities segregated and on deposit for regulatory purposes with clearing and depository organizations | 68,076 | | | 57,876 | | Total cash, cash equivalents and restricted cash | $ | 2,523,513 | | | $ | 2,469,146 | |
See accompanying notes to condensed financial statements. Introduction and Basis of PresentationThe accompanying condensed financial statements (the “Parent Company Financial Statements”), including the notes thereto, should be read in conjunction with the consolidated financial statements of Jefferies Financial Group Inc. (the “Company”) and the notes thereto found in the Company’s Annual Report on Form 10-K for the year ended November 30, 2023. For purposes of these condensed financial statements, the Company’s wholly-owned and majority owned subsidiaries are accounted for using the equity method of accounting (“equity method subsidiaries”). The Parent Company Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for financial information. The significant accounting policies of the Parent Company Financial Statements are those used by the Company on a consolidated basis, to the extent applicable. For further information regarding the significant accounting policies refer to Note 2, Summary of Significant Accounting Policies in the Company’s consolidated financial statements included in the Annual Report on Form 10-K for the year ended November 30, 2023. The Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with U.S. GAAP. The most important of these estimates and assumptions relate to fair value measurements, compensation and benefits, goodwill and intangible assets, the ability to realize deferred tax assets and the recognition and measurement of uncertain tax positions. Although these and other estimates and assumptions are based on the best available information, actual results could be materially different from these estimates. Transactions with SubsidiariesThe Parent Company has transactions with its consolidated subsidiaries and certain other affiliated entities determined on an agreed upon basis and has guaranteed certain unsecured lines of credit and contractual obligations of certain equity method subsidiaries. GuaranteesIn the normal course of its business, the Parent Company issues guarantees in respect of obligations of certain of its wholly- owned subsidiaries under trading and other financial arrangements, including guarantees to various trading counterparties and banks. The Parent Company records all derivative contracts and Financial instruments owned and Financial instruments sold, not yet purchased at fair value in its Consolidated Statements of Financial Condition. Certain of the Parent Company’s equity method subsidiaries are members of various exchanges and clearing houses. In the normal course of business, the Parent Company provides guarantees to securities clearinghouses and exchanges. These guarantees generally are required under the standard membership agreements, such that members are required to guarantee the performance of other members. Additionally, if a member becomes unable to satisfy its obligations to the clearinghouse, other members would be required to meet these shortfalls. To mitigate these performance risks, the exchanges and clearinghouses often require members to post collateral. The Parent Company’s obligations under such guarantees could exceed the collateral amounts posted. The maximum potential liability under these arrangements cannot be quantified; however, the potential for the Parent Company to be required to make payments under such guarantees is deemed remote. Accordingly, no liability has been recognized for these arrangements. The Parent Company guarantees certain financing arrangements of subsidiaries. The maximum amount payable under these guarantees is $875.0 million at November 30, 2023. For further information, refer to Note 18, Short-Term Borrowings and Note 19, Long-Term Debt in the Company’s consolidated financial statements included in the Annual Report on Form 10-K for the year ended November 30, 2023.
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