Quarterly Dividend Increased 16.7% to $0.35 Per Common Share
Jefferies Financial Group Inc. (NYSE: JEF):
Q2 Financial Highlights
- Net earnings attributable to common shareholders of $146 million, or $0.64 per diluted common share. Our pre-tax income for the quarter was $228 million
- Annualized return on adjusted tangible shareholders' equity1 of 9.2%
-
Net revenues of $1.66 billion
- Investment Banking net revenues of $803 million
- Capital Markets net revenues of $691 million
- Asset Management net revenues (before allocated net interest4) of $173 million
- At May 31, 2024, we had 212.1 million common shares outstanding and 253.7 million shares outstanding on a fully diluted basis2. Our book value per common share was $46.57 and adjusted tangible book value per fully diluted share3 was $31.27 at May 31, 2024
Increased Quarterly Cash Dividend
The Jefferies Board of Directors declared a quarterly cash dividend equal to $0.35 per Jefferies common share, a 16.7% increase from the prior dividend rate, payable on August 30, 2024 to record holders of Jefferies common shares on August 19, 2024.
Management Comments
“Our second quarter net revenues of $1.66 billion reflect continued positive momentum in Investment Banking and another solid quarter in Capital Markets, with particularly strong performance in Equities.
"Investment Banking net revenues of $803 million were up 8.6% from the prior quarter and 59.4% from the same quarter last year across all lines of business. Overall, momentum continues to build across our Investment Banking business, as the market opportunity improves and the investment we have made in our platform translates to increased market share. We are increasingly optimistic about the second half of 2024 and 2025 based on our backlog and trends we observe today.
"Capital Markets net revenues of $691 million were modestly lower than the prior quarter and up 24.1% versus the same quarter last year, with strength in Equities offsetting a moderation in Fixed Income after its strong first quarter.
"Asset Management had a reasonable performance, as market conditions for trading in certain of our strategies normalized after a strong first quarter.
"Our performance this year across business lines has resulted in improved operating margins versus last year. We expect margins to continue to improve as we realize the full potential of investments we have made in our Investment Banking platform and the market for investment banking activity continues to strengthen. We believe margins also will benefit over time from maintaining a strong discipline around expenses and leveraging investments made in technology that drive innovation, increase productivity, and strengthen our offerings and capabilities.
"Overall, we feel very positive about the direction and prospects of Jefferies. Our alliance with SMBC continues to gain momentum, we closed on the sale of Foursight, we continue to make smart investments in technology that will support our future growth and, most importantly, we have an incredible culture of delivering for our clients, while supporting our people and our communities. In light of all this, our Board of Directors has increased our quarterly dividend 16.7% to $0.35 per common share."
Richard Handler, CEO, and Brian Friedman, President
Financial Summary
$ in thousands, except per share amounts |
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
||||||||||||||
|
|
2024 |
|
|
|
202313 |
|
|
% Change |
|
|
2024 |
|
|
|
202313 |
|
|
% Change |
||
Net revenues: |
|
|
|
|
|
|
|
|
|
||||||||||||
Investment Banking and Capital Markets |
$ |
1,494,447 |
|
|
$ |
1,061,019 |
|
41 |
% |
|
$ |
2,945,735 |
|
|
$ |
2,278,151 |
|
29 |
% |
||
Asset Management |
|
156,524 |
|
|
|
(30,899 |
) |
N/M |
|
|
|
429,907 |
|
|
|
37,556 |
|
N/M |
|
||
Other |
|
5,474 |
|
|
|
7,490 |
|
(27 |
)% |
|
|
19,006 |
|
|
|
5,395 |
|
252 |
% |
||
Net revenues |
|
1,656,445 |
|
|
|
1,037,610 |
|
60 |
% |
|
|
3,394,648 |
|
|
|
2,321,102 |
|
46 |
% |
||
Net earnings from continuing operations before income taxes |
|
227,754 |
|
|
|
17,919 |
|
N/M |
|
|
|
447,996 |
|
|
|
175,937 |
|
155 |
% |
||
Income tax expense |
|
73,107 |
|
|
|
9,235 |
|
692 |
% |
|
|
129,066 |
|
|
|
37,929 |
|
240 |
% |
||
Net earnings from continuing operations |
|
154,647 |
|
|
|
8,684 |
|
N/M |
|
|
|
318,930 |
|
|
|
138,008 |
|
131 |
% |
||
Net income (losses) from discontinued operations, net of income taxes |
|
40 |
|
|
|
— |
|
N/M |
|
|
|
(7,851 |
) |
|
|
— |
|
N/M |
|
||
Net earnings |
|
154,687 |
|
|
|
8,684 |
|
N/M |
|
|
|
311,079 |
|
|
|
138,008 |
|
125 |
% |
||
Net losses attributable to noncontrolling interests |
|
(4,790 |
) |
|
|
(3,513 |
) |
36 |
% |
|
|
(12,228 |
) |
|
|
(9,568 |
) |
28 |
% |
||
Net losses attributable to redeemable noncontrolling interests |
|
— |
|
|
|
(198 |
) |
(100 |
)% |
|
|
— |
|
|
|
(454 |
) |
(100 |
)% |
||
Preferred stock dividends |
|
13,741 |
|
|
|
— |
|
N/M |
|
|
|
27,930 |
|
|
|
2,016 |
|
N/M |
|
||
Net earnings attributable to common shareholders |
$ |
145,736 |
|
|
$ |
12,395 |
|
N/M |
|
|
$ |
295,377 |
|
|
$ |
146,014 |
|
102 |
% |
||
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings (losses) per common share: |
|
|
|
|
|
|
|
|
|
||||||||||||
Basic from continuing operations |
$ |
0.66 |
|
|
$ |
0.05 |
|
N/M |
|
|
$ |
1.37 |
|
|
$ |
0.60 |
|
128 |
% |
||
Basic from discontinued operations |
|
— |
|
|
|
— |
|
N/M |
|
|
|
(0.03 |
) |
|
|
— |
|
N/M |
|
||
Basic |
$ |
0.66 |
|
|
$ |
0.05 |
|
N/M |
|
|
$ |
1.34 |
|
|
$ |
0.60 |
|
124 |
% |
||
Diluted from continuing operations |
$ |
0.64 |
|
|
$ |
0.05 |
|
N/M |
|
|
$ |
1.34 |
|
|
$ |
0.60 |
|
123 |
% |
||
Diluted from discontinued operations |
|
— |
|
|
|
— |
|
N/M |
|
|
|
(0.03 |
) |
|
|
— |
|
N/M |
|
||
Diluted |
$ |
0.64 |
|
|
$ |
0.05 |
|
N/M |
|
|
$ |
1.31 |
|
|
$ |
0.60 |
|
118 |
% |
||
|
|
|
|
|
|
|
|
|
|
||||||||||||
Weighted average common shares |
|
219,971 |
|
|
|
242,568 |
|
|
|
|
219,935 |
|
|
|
240,825 |
|
|
||||
Weighted average diluted common shares |
|
226,146 |
|
|
|
245,413 |
|
|
|
|
225,587 |
|
|
|
246,870 |
|
|
||||
N/M — Not Meaningful |
Highlights
Three Months Ended May 31, 2024 |
|
Six Months Ended May 31, 2024 |
|
|
|
|
|
|
Investment Banking and Capital Markets |
|
Investment Banking and Capital Markets |
|
|
|
Asset Management |
|
Asset Management |
|
|
|
Amounts herein pertaining to May 31, 2024 represent a preliminary estimate as of the date of this earnings release and may be revised upon filing our Quarterly Report on Form 10-Q with the Securities and Exchange Commission (“SEC”). More information on our results of operations for the three and six months ended May 31, 2024 will be provided upon filing our Quarterly Report on Form 10-Q with the SEC, which we expect to file on or about July 9, 2024.
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).
Selected Financial Information
$ in thousands (unaudited) |
Quarter Ended |
||||||||||
|
May 31,
|
|
February 29,
|
|
May 31,
|
||||||
Net revenues by source: |
|
|
|
|
|
||||||
Advisory |
$ |
283,898 |
|
|
$ |
338,567 |
|
|
$ |
254,157 |
|
Equity underwriting |
|
249,187 |
|
|
|
209,303 |
|
|
|
148,429 |
|
Debt underwriting |
|
205,499 |
|
|
|
129,194 |
|
|
|
89,889 |
|
Total underwriting |
|
454,686 |
|
|
|
338,497 |
|
|
|
238,318 |
|
Other investment banking |
|
64,594 |
|
|
|
62,608 |
|
|
|
11,458 |
|
Total Investment Banking |
|
803,178 |
|
|
|
739,672 |
|
|
|
503,933 |
|
Equities |
|
407,092 |
|
|
|
359,138 |
|
|
|
278,691 |
|
Fixed income |
|
284,177 |
|
|
|
352,478 |
|
|
|
278,395 |
|
Total Capital Markets |
|
691,269 |
|
|
|
711,616 |
|
|
|
557,086 |
|
Total Investment Banking and Capital Markets Net revenues5 |
|
1,494,447 |
|
|
|
1,451,288 |
|
|
|
1,061,019 |
|
Asset management fees and revenues6 |
|
16,818 |
|
|
|
59,657 |
|
|
|
15,929 |
|
Investment return |
|
32,942 |
|
|
|
117,640 |
|
|
|
32,477 |
|
Other investments, inclusive of net interest14 |
|
122,767 |
|
|
|
111,098 |
|
|
|
(66,180 |
) |
Allocated net interest4 |
|
(16,003 |
) |
|
|
(15,012 |
) |
|
|
(13,125 |
) |
Total Asset Management Net revenues |
|
156,524 |
|
|
|
273,383 |
|
|
|
(30,899 |
) |
Other |
|
5,474 |
|
|
|
13,532 |
|
|
|
7,490 |
|
Total Net revenues by source |
$ |
1,656,445 |
|
|
$ |
1,738,203 |
|
|
$ |
1,037,610 |
|
|
|
|
|
|
|
||||||
Non-interest expenses: |
|
|
|
|
|
||||||
Compensation and benefits |
$ |
861,993 |
|
|
$ |
926,871 |
|
|
$ |
575,868 |
|
Brokerage and clearing fees |
|
110,536 |
|
|
|
109,670 |
|
|
|
96,592 |
|
Underwriting costs |
|
18,552 |
|
|
|
18,484 |
|
|
|
13,169 |
|
Technology and communications |
|
135,238 |
|
|
|
137,512 |
|
|
|
118,936 |
|
Occupancy and equipment rental |
|
29,327 |
|
|
|
28,153 |
|
|
|
24,395 |
|
Business development |
|
68,630 |
|
|
|
57,651 |
|
|
|
43,587 |
|
Professional services |
|
75,493 |
|
|
|
77,844 |
|
|
|
68,514 |
|
Depreciation and amortization |
|
49,946 |
|
|
|
43,202 |
|
|
|
25,310 |
|
Cost of sales |
|
37,462 |
|
|
|
34,671 |
|
|
|
2,362 |
|
Other |
|
41,514 |
|
|
|
83,903 |
|
|
|
50,958 |
|
Total Non-interest expenses |
$ |
1,428,691 |
|
|
$ |
1,517,961 |
|
|
$ |
1,019,691 |
|
$ in thousands (unaudited) |
Six Months Ended May 31, |
||||||
|
|
2024 |
|
|
|
202313 |
|
Net revenues by source: |
|
|
|
||||
Advisory |
$ |
622,465 |
|
|
$ |
551,335 |
|
Equity underwriting |
|
458,490 |
|
|
|
273,874 |
|
Debt underwriting |
|
334,693 |
|
|
|
170,064 |
|
Total underwriting |
|
793,183 |
|
|
|
443,938 |
|
Other investment banking |
|
127,202 |
|
|
|
71,504 |
|
Total Investment Banking |
|
1,542,850 |
|
|
|
1,066,777 |
|
Equities |
|
766,230 |
|
|
|
583,985 |
|
Fixed income |
|
636,655 |
|
|
|
627,389 |
|
Total Capital Markets |
|
1,402,885 |
|
|
|
1,211,374 |
|
Total Investment Banking and Capital Markets Net revenues5 |
|
2,945,735 |
|
|
|
2,278,151 |
|
Asset management fees and revenues6 |
|
76,475 |
|
|
|
58,625 |
|
Investment return |
|
150,582 |
|
|
|
59,911 |
|
Other investments, inclusive of net interest14 |
|
233,865 |
|
|
|
(58,757 |
) |
Allocated net interest4 |
|
(31,015 |
) |
|
|
(22,223 |
) |
Total Asset Management Net revenues |
|
429,907 |
|
|
|
37,556 |
|
Other |
|
19,006 |
|
|
|
5,395 |
|
Total Net revenues by source |
$ |
3,394,648 |
|
|
$ |
2,321,102 |
|
|
|
|
|
||||
Non-interest expenses: |
|
|
|
||||
Compensation and benefits |
$ |
1,788,864 |
|
|
$ |
1,278,926 |
|
Brokerage and clearing fees |
|
220,206 |
|
|
|
177,066 |
|
Underwriting costs |
|
37,036 |
|
|
|
26,376 |
|
Technology and communications |
|
272,750 |
|
|
|
232,321 |
|
Occupancy and equipment rental |
|
57,480 |
|
|
|
51,710 |
|
Business development |
|
126,281 |
|
|
|
80,425 |
|
Professional services |
|
153,337 |
|
|
|
130,675 |
|
Depreciation and amortization |
|
93,148 |
|
|
|
58,602 |
|
Cost of sales |
|
72,133 |
|
|
|
4,530 |
|
Other |
|
125,417 |
|
|
|
104,534 |
|
Total Non-interest expenses |
$ |
2,946,652 |
|
|
$ |
2,145,165 |
|
|
|
|
|
Financial Data and Metrics
Unaudited |
Quarter Ended |
||||||||||
|
May 31, 2024 |
|
February 29, 2024 |
|
May 31, 2023 |
||||||
Other Data: |
|
|
|
|
|
||||||
Number of trading days |
|
64 |
|
|
|
61 |
|
|
|
64 |
|
Number of trading loss days7 |
|
1 |
|
|
3 |
|
|
10 |
|||
Average VaR (in millions)8 |
$ |
13.36 |
|
|
$ |
15.13 |
|
|
$ |
15.14 |
|
|
|
|
|
|
|
||||||
|
|
|
Six Months Ended May 31, |
||||||||
|
|
|
|
2024 |
|
|
|
2023 |
|
||
Other Data: |
|
|
|
|
|
||||||
Number of trading days |
|
|
|
125 |
|
|
|
124 |
|
||
Number of trading loss days7 |
|
|
|
4 |
|
|
|
13 |
|
||
Average VaR (in millions)8 |
|
|
$ |
14.22 |
|
|
$ |
14.03 |
|
In millions, except other data (unaudited) |
Quarter Ended |
||||||||||
|
May 31, 2024 |
|
February 29, 2024 |
|
May 31, 2023 |
||||||
Financial position: |
|
|
|
|
|
||||||
Total assets |
$ |
63,001 |
|
|
$ |
60,933 |
|
|
$ |
53,740 |
|
Cash and cash equivalents |
|
10,842 |
|
|
|
7,616 |
|
|
|
8,005 |
|
Financial instruments owned |
|
22,787 |
|
|
|
23,212 |
|
|
|
21,002 |
|
Level 3 financial instruments owned9 |
|
691 |
|
|
|
589 |
|
|
|
860 |
|
Goodwill and intangible assets |
|
2,057 |
|
|
|
2,064 |
|
|
|
1,873 |
|
Total equity |
|
9,952 |
|
|
|
9,867 |
|
|
|
9,765 |
|
Total shareholders' equity |
|
9,875 |
|
|
|
9,780 |
|
|
|
9,696 |
|
Tangible shareholders' equity10 |
|
7,818 |
|
|
7,716 |
|
|
7,823 |
|||
Other data and financial ratios: |
|
|
|
|
|
||||||
Leverage ratio11 |
|
6.3 |
|
|
|
6.2 |
|
|
|
5.5 |
|
Tangible gross leverage ratio12 |
|
7.8 |
|
|
|
7.6 |
|
|
|
6.6 |
|
Number of employees at period end |
|
7,611 |
|
|
|
7,745 |
|
|
|
5,335 |
|
Number of employees excluding OpNet and Stratos at period end |
|
5,635 |
|
|
|
5,790 |
|
|
|
5,335 |
|
Components of Numerators and Denominators for Earnings Per Common Share
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
In thousands, except per share amounts |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Numerator for earnings per common share from continuing operations: |
|
|
|
|
|
|
|
|
||||||||
Net earnings from continuing operations |
|
$ |
154,647 |
|
|
$ |
8,684 |
|
|
$ |
318,930 |
|
|
$ |
138,008 |
|
Less: Net losses attributable to noncontrolling interests |
|
|
(3,785 |
) |
|
|
(3,711 |
) |
|
|
(10,237 |
) |
|
|
(10,022 |
) |
Mandatorily redeemable convertible preferred share dividends |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,016 |
) |
Allocation of earnings to participating securities |
|
|
(13,741 |
) |
|
|
(4 |
) |
|
|
(27,930 |
) |
|
|
(830 |
) |
Net earnings from continuing operations attributable to common shareholders for basic earnings per share |
|
$ |
144,691 |
|
|
$ |
12,391 |
|
|
$ |
301,237 |
|
|
$ |
145,184 |
|
Adjustment to allocation of earnings to participating securities related to diluted shares |
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
(31 |
) |
Mandatorily redeemable convertible preferred share dividends |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,016 |
|
Net earnings from continuing operations attributable to common shareholders for diluted earnings per share |
|
$ |
144,691 |
|
|
$ |
12,390 |
|
|
$ |
301,237 |
|
|
$ |
147,169 |
|
|
|
|
|
|
|
|
|
|
||||||||
Numerator for earnings per common share from discontinued operations: |
|
|
|
|
|
|
|
|
||||||||
Net earnings (losses) from discontinued operations, net of taxes |
|
$ |
40 |
|
|
$ |
— |
|
|
$ |
(7,851 |
) |
|
$ |
— |
|
Less: Net losses attributable to noncontrolling interests |
|
|
(1,005 |
) |
|
|
— |
|
|
|
(1,991 |
) |
|
|
— |
|
Net earnings (losses) from discontinued operations attributable to common shareholders for basic and diluted earnings per share |
|
$ |
1,045 |
|
|
$ |
— |
|
|
$ |
(5,860 |
) |
|
$ |
— |
|
Net earnings attributable to common shareholders for basic earnings per share |
|
$ |
145,736 |
|
|
$ |
12,391 |
|
|
$ |
295,377 |
|
|
$ |
145,184 |
|
Net earnings attributable to common shareholders for diluted earnings per share |
|
$ |
145,736 |
|
|
$ |
12,390 |
|
|
$ |
295,377 |
|
|
$ |
147,169 |
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator for earnings per common share: |
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding |
|
|
212,039 |
|
|
|
232,842 |
|
|
|
211,787 |
|
|
|
230,193 |
|
Weighted average shares of restricted stock outstanding with future service required |
|
|
(2,329 |
) |
|
|
(1,853 |
) |
|
|
(2,366 |
) |
|
|
(1,989 |
) |
Weighted average restricted stock units outstanding with no future service required |
|
|
10,261 |
|
|
|
11,579 |
|
|
|
10,514 |
|
|
|
12,621 |
|
Weighted average common shares |
|
|
219,971 |
|
|
|
242,568 |
|
|
|
219,935 |
|
|
|
240,825 |
|
Stock options and other share-based awards |
|
|
3,470 |
|
|
|
1,618 |
|
|
|
3,124 |
|
|
|
2,086 |
|
Senior executive compensation plan restricted stock unit awards |
|
|
2,705 |
|
|
|
1,227 |
|
|
|
2,528 |
|
|
|
2,072 |
|
Mandatorily redeemable convertible preferred shares |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,887 |
|
Weighted average diluted common shares |
|
|
226,146 |
|
|
|
245,413 |
|
|
|
225,587 |
|
|
|
246,870 |
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings (losses) per common share: |
|
|
|
|
|
|
|
|
||||||||
Basic from continuing operations |
|
$ |
0.66 |
|
|
$ |
0.05 |
|
|
$ |
1.37 |
|
|
$ |
0.60 |
|
Basic from discontinued operations |
|
|
— |
|
|
|
— |
|
|
|
(0.03 |
) |
|
|
— |
|
Basic |
|
$ |
0.66 |
|
|
$ |
0.05 |
|
|
$ |
1.34 |
|
|
$ |
0.60 |
|
Diluted from continuing operations |
|
$ |
0.64 |
|
|
$ |
0.05 |
|
|
$ |
1.34 |
|
|
$ |
0.60 |
|
Diluted from discontinued operations |
|
|
— |
|
|
|
— |
|
|
|
(0.03 |
) |
|
|
— |
|
Diluted |
|
$ |
0.64 |
|
|
$ |
0.05 |
|
|
$ |
1.31 |
|
|
$ |
0.60 |
|
Notes
- Annualized return on adjusted tangible shareholders' equity represents a non-GAAP financial measure. Refer to schedule on page 11 for a reconciliation to U.S. GAAP amounts.
- Shares outstanding on a fully diluted basis (a non-GAAP financial measure) is defined as common shares outstanding plus preferred shares, restricted stock units, stock options and other shares. Refer to schedule on page 12 for a reconciliation to U.S. GAAP amounts.
- Adjusted 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 12 for a reconciliation to U.S. GAAP amounts.
- 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 present direct Asset Management revenues. We believe that aggregating Allocated net interest would obscure the revenue results by including an amount that is unique to our credit spreads, debt maturity profile, capital structure, liquidity risks and allocation methods.
- 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.
- Asset management fees and revenues include 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.
- Number of trading loss days is calculated based on trading activities in our Investment Banking and Capital Markets and Asset Management business segments, excluding certain Other investments.
- VaR estimates the potential loss in value of 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 7A "Quantitative and Qualitative Disclosures About Market Risk" in our Annual Report on Form 10-K for the year ended November 30, 2023.
- 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.
- Tangible shareholders' equity (a non-GAAP financial measure) is defined as shareholders' equity less Intangible assets and goodwill. We believe that tangible shareholders' equity is meaningful for valuation purposes, as financial companies are often measured as a multiple of tangible shareholders' equity, making these ratios meaningful for investors.
- Leverage ratio equals total assets divided by total equity.
- Tangible gross leverage ratio (a non-GAAP financial measure) equals total assets less goodwill and intangible assets divided by tangible shareholders' equity. The tangible gross leverage ratio is used by rating agencies in assessing our leverage ratio.
- During the third quarter of 2023, we refined our allocated net interest methodology to better reflect net interest expense across our business units based on use of capital. As a result, the presentation of Net revenues and Net revenues by source has been recast to conform with the revised methodology.
- Beginning in fiscal 2024, we now refer to "Merchant banking" as “Other investments” in our Asset Management reportable segment.
Non-GAAP Reconciliations
The following tables reconcile our non-GAAP financial measures to their respective U.S. GAAP financial measures. Management believes such non-GAAP financial 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.
Annualized Return on Adjusted Tangible Equity Reconciliation
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
$ in thousands |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net earnings attributable to common shareholders (GAAP) |
|
$ |
145,736 |
|
|
$ |
12,395 |
|
|
$ |
295,377 |
|
|
$ |
146,014 |
|
Intangible amortization and impairment expense, net of tax |
|
|
5,799 |
|
|
|
1,193 |
|
|
|
9,946 |
|
|
|
3,220 |
|
Adjusted net earnings to common shareholders (non-GAAP) |
|
|
151,535 |
|
|
|
13,588 |
|
|
|
305,323 |
|
|
|
149,234 |
|
Preferred stock dividends |
|
|
13,741 |
|
|
|
— |
|
|
|
27,930 |
|
|
|
2,016 |
|
Adjusted net earnings to total shareholders (non-GAAP) |
|
$ |
165,276 |
|
|
$ |
13,588 |
|
|
$ |
333,253 |
|
|
$ |
151,250 |
|
|
|
|
|
|
|
|
|
|
||||||||
Annualized adjusted net earnings to total shareholders (non-GAAP) |
|
$ |
661,104 |
|
|
$ |
54,352 |
|
|
$ |
666,506 |
|
|
$ |
302,500 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net earnings impact for net (earnings) losses from discontinued operations, net of noncontrolling interests |
|
|
(1,045 |
) |
|
|
— |
|
|
|
5,861 |
|
|
|
— |
|
Adjusted net earnings to total shareholders from continuing operations (non-GAAP) |
|
|
164,231 |
|
|
|
13,588 |
|
|
|
339,114 |
|
|
|
151,250 |
|
Annualized adjusted net earnings to total shareholders from continuing operations (non-GAAP) |
|
|
656,924 |
|
|
|
54,352 |
|
|
|
678,228 |
|
|
|
302,500 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
February 29, |
|
November 30, |
||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
Shareholders' equity (GAAP) |
|
$ |
9,780,097 |
|
|
$ |
9,755,243 |
|
|
$ |
9,709,827 |
|
|
$ |
10,232,845 |
|
Less: Intangible assets, net and goodwill |
|
|
(2,063,956 |
) |
|
|
(1,872,850 |
) |
|
|
(2,044,776 |
) |
|
|
(1,875,576 |
) |
Less: Deferred tax asset, net |
|
|
(466,468 |
) |
|
|
(486,012 |
) |
|
|
(458,343 |
) |
|
|
(387,862 |
) |
Less: Weighted average impact of dividends and share repurchases |
|
|
(49,053 |
) |
|
|
(70,895 |
) |
|
|
(115,344 |
) |
|
|
(195,393 |
) |
Adjusted tangible shareholders' equity (non-GAAP) |
|
$ |
7,200,620 |
|
|
$ |
7,325,486 |
|
|
$ |
7,091,364 |
|
|
$ |
7,774,014 |
|
|
|
|
|
|
|
|
|
|
||||||||
Annualized return on adjusted tangible shareholders' equity (non-GAAP) |
|
|
9.2 |
% |
|
|
0.7 |
% |
|
|
9.4 |
% |
|
|
3.9 |
% |
Annualized adjusted net earnings to shareholders on adjusted tangible shareholders' equity from continuing operations (non-GAAP) |
|
|
9.1 |
% |
|
|
0.7 |
% |
|
|
9.6 |
% |
|
|
3.9 |
% |
Adjusted Tangible Book Value and Fully Diluted Shares Outstanding GAAP Reconciliation
Reconciliation of book value (shareholders' equity) to adjusted tangible book value and common shares outstanding to fully diluted shares outstanding:
$ in thousands, except per share amounts |
May 31, 2024 |
||
Book value (GAAP) |
$ |
9,875,056 |
|
Stock options(1) |
|
114,939 |
|
Intangible assets, net and goodwill |
|
(2,057,302 |
) |
Adjusted tangible book value (non-GAAP) |
$ |
7,932,693 |
|
|
|
||
Common shares outstanding (GAAP) |
|
212,053 |
|
Preferred shares |
|
21,000 |
|
Restricted stock units ("RSUs") |
|
14,180 |
|
Stock options(1) |
|
5,065 |
|
Other |
|
1,365 |
|
Adjusted fully diluted shares outstanding (non-GAAP)(2) |
|
253,663 |
|
|
|
||
Book value per common share outstanding |
$ |
46.57 |
|
Adjusted tangible book value per fully diluted share outstanding (non-GAAP) |
$ |
31.27 |
|
(1) |
Stock options added to book value are equal to the total number of stock options outstanding as of May 31, 2024 of 5.1 million multiplied by the weighted average exercise price of $22.69 on May 31, 2024. |
|
(2) |
Fully diluted shares outstanding include vested and unvested RSUs as well as the target number of RSUs issuable under the senior executive compensation plans until the performance period is complete. Fully diluted shares outstanding also include all stock options and the impact of mandatorily convertible preferred shares if-converted to common shares. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240626864565/en/
Contacts
FOR MORE INFORMATION
Jonathan Freedman 212.778.8913