2016 | 2015 | 2014 | |||||||||
Net unrealized gains on available for sale securities | $ | 561,497 | $ | 557,601 | $ | 577,588 | |||||
Net unrealized foreign exchange losses | (184,829 | ) | (63,248 | ) | (26,771 | ) | |||||
Net change in instrument specific credit risk | (6,494 | ) | — | — | |||||||
Net minimum pension liability | (59,477 | ) | (55,560 | ) | (103,735 | ) | |||||
$ | 310,697 | $ | 438,793 | $ | 447,082 |
Details about Accumulated Other Comprehensive Income Components | Amount Reclassified from Accumulated Other Comprehensive Income | Affected Line Item in the Consolidated Statement of Operations | ||||||||
2016 | 2015 | |||||||||
Net unrealized gains (losses) on available for sale securities, net of income tax provision of $2 and $6,068 | $ | 4 | $ | 10,930 | Net realized securities gains | |||||
Amortization of defined benefit pension plan actuarial gains (losses), net of income tax (benefit) of $(700) and $(17,159) | (1,534 | ) | (31,102 | ) | Compensation and benefits, which includes pension expense. See Note 20 for information on this component. | |||||
Total reclassifications for the period, net of tax | $ | (1,530 | ) | $ | (20,172 | ) |
Amortized Cost | Estimated Fair Value | ||||||
(In thousands) | |||||||
Due within one year | $ | 174,938 | $ | 174,933 | |||
Due after one year through five years | 180 | 179 | |||||
175,118 | 175,112 | ||||||
Mortgage-backed and asset-backed securities | 46,322 | 46,512 | |||||
$ | 221,440 | $ | 221,624 |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||
2016 | |||||||||||||||
Bonds and notes: | |||||||||||||||
U.S. government securities | $ | 174,938 | $ | 8 | $ | 13 | $ | 174,933 | |||||||
Residential mortgage-backed securities | 19,129 | 108 | 104 | 19,133 | |||||||||||
Commercial mortgage-backed securities | 8,275 | 64 | 2 | 8,337 | |||||||||||
Other asset-backed securities | 18,918 | 124 | — | 19,042 | |||||||||||
All other corporates | 180 | — | 1 | 179 | |||||||||||
Total fixed maturities | 221,440 | 304 | 120 | 221,624 | |||||||||||
Equity securities: | |||||||||||||||
Common stocks: | |||||||||||||||
Banks, trusts and insurance companies | 35,071 | 15,115 | — | 50,186 | |||||||||||
Industrial, miscellaneous and all other | 17,946 | 11,293 | — | 29,239 | |||||||||||
Total equity securities | 53,017 | 26,408 | — | 79,425 | |||||||||||
$ | 274,457 | $ | 26,712 | $ | 120 | $ | 301,049 | ||||||||
2015 | |||||||||||||||
Bonds and notes: | |||||||||||||||
U.S. government securities | $ | 63,968 | $ | 2 | $ | 25 | $ | 63,945 | |||||||
Residential mortgage-backed securities | 23,033 | 308 | 101 | 23,240 | |||||||||||
Commercial mortgage-backed securities | 2,392 | — | 18 | 2,374 | |||||||||||
Other asset-backed securities | 39,633 | — | 160 | 39,473 | |||||||||||
All other corporates | 4,794 | 7 | 57 | 4,744 | |||||||||||
Total fixed maturities | 133,820 | 317 | 361 | 133,776 | |||||||||||
Equity securities: | |||||||||||||||
Common stocks: | |||||||||||||||
Banks, trusts and insurance companies | 35,071 | 10,201 | — | 45,272 | |||||||||||
Industrial, miscellaneous and all other | 17,946 | 10,361 | — | 28,307 | |||||||||||
Total equity securities | 53,017 | 20,562 | — | 73,579 | |||||||||||
$ | 186,837 | $ | 20,879 | $ | 361 | $ | 207,355 |
(In thousands) | Gross Amounts | Netting in Consolidated Statement of Financial Condition | Net Amounts in Consolidated Statement of Financial Condition | Additional Amounts Available for Setoff (1) | Available Collateral (2) | Net Amount (3) | |||||||||||||||||
Assets at December 31, 2016 | |||||||||||||||||||||||
Derivative contracts | $ | 4,627,076 | $ | (4,255,998 | ) | $ | 371,078 | $ | — | $ | — | $ | 371,078 | ||||||||||
Securities borrowing arrangements | $ | 7,743,562 | $ | — | $ | 7,743,562 | $ | (710,611 | ) | $ | (647,290 | ) | $ | 6,385,661 | |||||||||
Reverse repurchase agreements | $ | 14,083,144 | $ | (10,220,656 | ) | $ | 3,862,488 | $ | (176,275 | ) | $ | (3,591,654 | ) | $ | 94,559 | ||||||||
Liabilities at December 31, 2016 | |||||||||||||||||||||||
Derivative contracts | $ | 4,880,022 | $ | (4,229,213 | ) | $ | 650,809 | $ | — | $ | — | $ | 650,809 | ||||||||||
Securities lending arrangements | $ | 2,819,132 | $ | — | $ | 2,819,132 | $ | (710,611 | ) | $ | (2,064,299 | ) | $ | 44,222 | |||||||||
Repurchase agreements | $ | 17,012,332 | $ | (10,220,656 | ) | $ | 6,791,676 | $ | (176,275 | ) | $ | (5,780,909 | ) | $ | 834,492 | ||||||||
Assets at December 31, 2015 | |||||||||||||||||||||||
Derivative contracts | $ | 4,428,245 | $ | (4,165,446 | ) | $ | 262,799 | $ | — | $ | — | $ | 262,799 | ||||||||||
Securities borrowing arrangements | $ | 6,975,136 | $ | — | $ | 6,975,136 | $ | (478,991 | ) | $ | (667,099 | ) | $ | 5,829,046 | |||||||||
Reverse repurchase agreements | $ | 14,046,300 | $ | (10,191,554 | ) | $ | 3,854,746 | $ | (83,452 | ) | $ | (3,745,215 | ) | $ | 26,079 | ||||||||
Liabilities at December 31, 2015 | |||||||||||||||||||||||
Derivative contracts | $ | 4,476,241 | $ | (4,257,998 | ) | $ | 218,243 | $ | — | $ | — | $ | 218,243 | ||||||||||
Securities lending arrangements | $ | 3,014,300 | $ | — | $ | 3,014,300 | $ | (478,991 | ) | $ | (2,499,395 | ) | $ | 35,914 | |||||||||
Repurchase agreements | $ | 20,158,422 | $ | (10,191,554 | ) | $ | 9,966,868 | $ | (83,452 | ) | $ | (8,068,468 | ) | $ | 1,814,948 |
(1) | Under master netting agreements with our counterparties, we have the legal right of offset with a counterparty, which incorporates all of the counterparty’s outstanding rights and obligations under the arrangement. These balances reflect additional credit risk mitigation that is available by a counterparty in the event of a counterparty’s default, but which are not netted in the balance sheet because other provisions of GAAP are not met. Further, for derivative assets and liabilities, amounts netted include cash collateral paid or received. |
(2) | Includes securities received or paid under collateral arrangements with counterparties that could be liquidated in the event of a counterparty default and thus offset against a counterparty’s rights and obligations under the respective repurchase agreements or securities borrowing or lending arrangements. |
(3) | At December 31, 2016, amounts include $6,337.5 million of securities borrowing arrangements, for which we have received securities collateral of $6,146.0 million, and $810.4 million of repurchase agreements, for which we have pledged securities collateral of $834.2 million, which are subject to master netting agreements but we have not yet determined the agreements to be legally enforceable. At December 31, 2015, amounts include $5,796.1 million of securities borrowing arrangements, for which we have received securities collateral of $5,613.3 million, and $1,807.2 million of repurchase agreements, for which we have pledged securities collateral of $1,875.3 million, which are subject to master netting agreements but we have not yet determined the agreements to be legally enforceable. |
Collateral Pledged | Securities Lending Arrangements | Repurchase Agreements | Total | |||||||||
December 31, 2016 | ||||||||||||
Corporate equity securities | $ | 2,046,243 | $ | 66,291 | $ | 2,112,534 | ||||||
Corporate debt securities | 731,276 | 1,907,888 | 2,639,164 | |||||||||
Mortgage- and asset-backed securities | — | 2,171,480 | 2,171,480 | |||||||||
U.S. government and federal agency securities | 41,613 | 9,232,624 | 9,274,237 | |||||||||
Municipal securities | — | 553,010 | 553,010 | |||||||||
Sovereign securities | — | 2,625,079 | 2,625,079 | |||||||||
Loans and other receivables | — | 455,960 | 455,960 | |||||||||
Total | $ | 2,819,132 | $ | 17,012,332 | $ | 19,831,464 | ||||||
December 31, 2015 | ||||||||||||
Corporate equity securities | $ | 2,200,273 | $ | 271,519 | $ | 2,471,792 | ||||||
Corporate debt securities | 779,044 | 1,721,583 | 2,500,627 | |||||||||
Mortgage- and asset-backed securities | — | 3,537,812 | 3,537,812 | |||||||||
U.S. government and federal agency securities | 34,983 | 12,003,521 | 12,038,504 | |||||||||
Municipal securities | — | 357,350 | 357,350 | |||||||||
Sovereign securities | — | 1,804,103 | 1,804,103 | |||||||||
Loans and other receivables | — | 462,534 | 462,534 | |||||||||
Total | $ | 3,014,300 | $ | 20,158,422 | $ | 23,172,722 |
Contractual Maturity | ||||||||||||||||||||
Overnight and Continuous | Up to 30 Days | 30 to 90 Days | Greater than 90 Days | Total | ||||||||||||||||
December 31, 2016 | ||||||||||||||||||||
Securities lending arrangements | $ | 2,131,891 | $ | 39,673 | $ | 104,516 | $ | 543,052 | $ | 2,819,132 | ||||||||||
Repurchase agreements | 9,147,176 | 2,008,119 | 3,809,533 | 2,047,504 | 17,012,332 | |||||||||||||||
Total | $ | 11,279,067 | $ | 2,047,792 | $ | 3,914,049 | $ | 2,590,556 | $ | 19,831,464 | ||||||||||
December 31, 2015 | ||||||||||||||||||||
Securities lending arrangements | $ | 1,522,475 | $ | — | $ | 973,201 | $ | 518,624 | $ | 3,014,300 | ||||||||||
Repurchase agreements | 7,848,231 | 5,218,059 | 5,291,729 | 1,800,403 | 20,158,422 | |||||||||||||||
Total | $ | 9,370,706 | $ | 5,218,059 | $ | 6,264,930 | $ | 2,319,027 | $ | 23,172,722 | ||||||||||
External Credit Rating | |||||||||||||||||||||||||||
AAA/ Aaa | AA/ Aa | A | BBB/Baa | Below Investment Grade | Unrated | Notional/ Maximum Payout | |||||||||||||||||||||
Credit related derivative contracts: | |||||||||||||||||||||||||||
Index credit default swaps | $ | 54.0 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 54.0 | |||||||||||||
Single name credit default swaps | — | — | 79.5 | 42.9 | 261.2 | — | 383.6 |
2016 | 2015 | 2014 | |||||||||
Components of net periodic pension cost: | |||||||||||
Interest cost | $ | 8,464 | $ | 12,958 | $ | 14,239 | |||||
Expected return on plan assets | (7,589 | ) | (10,581 | ) | (10,115 | ) | |||||
Settlement charge | — | 40,973 | — | ||||||||
Actuarial losses | 1,908 | 6,963 | 4,634 | ||||||||
Net periodic pension cost | $ | 2,783 | $ | 50,313 | $ | 8,758 | |||||
Amounts recognized in other comprehensive income (loss): | |||||||||||
Net (gain) loss arising during the period | $ | 6,811 | $ | (24,186 | ) | $ | 52,027 | ||||
Settlement charge | — | (40,973 | ) | — | |||||||
Amortization of net loss | (1,908 | ) | (6,963 | ) | (4,634 | ) | |||||
Total recognized in other comprehensive income (loss) | $ | 4,903 | $ | (72,122 | ) | $ | 47,393 | ||||
Net amount recognized in net periodic benefit cost and other | |||||||||||
comprehensive income (loss) | $ | 7,686 | $ | (21,809 | ) | $ | 56,151 |
December 31, 2016 | December 31, 2015 | ||||||||||
Securitization Vehicles | Real Estate Investment Vehicle | Securitization Vehicles | |||||||||
Cash | $ | 18.4 | $ | 2.2 | $ | 1.1 | |||||
Financial instruments owned | 86.6 | — | 68.3 | ||||||||
Securities purchased under agreement to resell (1) | 733.5 | — | 717.3 | ||||||||
Receivables | 277.7 | 296.9 | 149.8 | ||||||||
Loans to and investments in associated companies | — | 108.7 | — | ||||||||
Other | 14.5 | 10.8 | 8.8 | ||||||||
Total assets | $ | 1,130.7 | $ | 418.6 | $ | 945.3 | |||||
Other secured financings (2) | $ | 1,083.8 | $ | — | $ | 930.8 | |||||
Long-term debt | 24.1 | 243.9 | — | ||||||||
Other | 22.3 | 11.7 | 14.5 | ||||||||
Total liabilities | $ | 1,130.2 | $ | 255.6 | $ | 945.3 | |||||
Noncontrolling interests | $ | — | $ | 98.7 | $ | — |
(1) | Securities purchased under agreement to resell represent an amount due under a collateralized transaction on a related consolidated entity, which is eliminated in consolidation. |
(2) | Approximately $57.6 million and $22.1 million of the secured financing represents an amount held by Jefferies in inventory and eliminated in consolidation at December 31, 2016 and 2015, respectively. |
Counterparty credit quality (1): | |||
A- or higher | $ | 380,574 | |
BBB- to BBB+ | 39,595 | ||
BB+ or lower | 51,834 | ||
Unrated | 80,554 | ||
Total | $ | 552,557 |
(1) | Jefferies utilizes internal credit ratings determined by the Jefferies Risk Management department. Credit ratings determined by Risk Management use methodologies that produce ratings generally consistent with those produced by external rating agencies. |
Year Ended December 31, 2015 | |||||||||||||||||||||||||||||||||||
Balance, December 31, 2014 | Total gains (losses) (realized and unrealized) (1) | Purchases | Sales | Settlements | Issuances | Net transfers into (out of) Level 3 | Balance at December 31 ,2015 | Changes in unrealized gains (losses) relating to instruments still held at December 31, 2015 (1) | |||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||
Trading assets: | |||||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 20,964 | $ | 11,154 | $ | 21,385 | $ | (6,391 | ) | $ | — | $ | — | $ | (6,206 | ) | $ | 40,906 | $ | 11,424 | |||||||||||||||
Corporate debt securities | 22,766 | (11,013 | ) | 21,534 | (14,636 | ) | — | — | 7,225 | $ | 25,876 | (9,443 | ) | ||||||||||||||||||||||
CDOs and CLOS | 124,650 | (66,332 | ) | 104,998 | (107,381 | ) | (5,754 | ) | — | 34,911 | $ | 85,092 | (48,514 | ) | |||||||||||||||||||||
Municipal securities | — | 10 | — | — | (21,551 | ) | — | 21,541 | — | — | |||||||||||||||||||||||||
Sovereign obligations | — | 47 | 1,032 | (1,031 | ) | — | — | 72 | 120 | 39 | |||||||||||||||||||||||||
Residential mortgage backed securities | 82,557 | (12,951 | ) | 18,961 | (31,762 | ) | (597 | ) | — | 14,055 | $ | 70,263 | (4,498 | ) | |||||||||||||||||||||
Commercial mortgage-backed securities | 26,655 | (3,813 | ) | 3,480 | (10,146 | ) | (6,861 | ) | — | 5,011 | $ | 14,326 | (3,205 | ) | |||||||||||||||||||||
Other asset-backed securities | 2,294 | (990 | ) | 42,922 | (1,299 | ) | (2 | ) | — | — | $ | 42,925 | (254 | ) | |||||||||||||||||||||
Loans and other receivables | 97,258 | (14,755 | ) | 792,345 | (576,536 | ) | (124,365 | ) | — | 15,342 | $ | 189,289 | (16,802 | ) | |||||||||||||||||||||
Investments at fair value | 77,047 | 62,804 | 5,510 | (425 | ) | (4,093 | ) | — | 58,951 | $ | 199,794 | (1,964 | ) | ||||||||||||||||||||||
Investment in FXCM | — | 491,341 | 279,000 | — | (144,652 | ) | — | — | 625,689 | 491,341 | |||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||
Trading liabilities: | |||||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 38 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 38 | $ | — | |||||||||||||||||
Corporate debt securities | 223 | (110 | ) | (6,804 | ) | 6,691 | — | — | — | $ | — | — | |||||||||||||||||||||||
Net derivatives (2) | (4,638 | ) | (7,310 | ) | (6,705 | ) | 13,522 | 37 | 2,437 | 2,415 | $ | (242 | ) | 4,754 | |||||||||||||||||||||
Loans | 14,450 | (163 | ) | (2,059 | ) | 229 | — | — | (1,988 | ) | $ | 10,469 | 104 | ||||||||||||||||||||||
Other secured financings | 30,825 | — | — | — | (15,704 | ) | 36,995 | (51,572 | ) | $ | 544 | — |
(1) | Realized and unrealized gains (losses) are reported in Principal transactions in the Consolidated Statements of Operations. |
(2) | Net derivatives represent Trading assets - Derivatives and Trading liabilities - Derivatives. |
Year Ended December 31, 2016 | |||||||||||||||||||||||||||||||||||
Balance, December 31, 2015 | Total gains (losses) (realized and unrealized) (1) | Purchases | Sales | Settlements | Issuances | Net transfers into (out of) Level 3 | Balance at December 31, 2016 | Changes in unrealized gains (losses) relating to instruments still held at December 31, 2016 (1) | |||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||
Trading assets: | |||||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 40,906 | $ | (8,463 | ) | $ | 3,365 | $ | (49 | ) | $ | (671 | ) | $ | — | $ | (13,349 | ) | $ | 21,739 | $ | 291 | |||||||||||||
Corporate debt securities | 25,876 | (16,230 | ) | 27,242 | (29,347 | ) | (7,223 | ) | — | 24,687 | 25,005 | (18,799 | ) | ||||||||||||||||||||||
CDOs and CLOs | 85,092 | (14,918 | ) | 52,316 | (69,394 | ) | (2,750 | ) | — | 4,008 | 54,354 | (7,628 | ) | ||||||||||||||||||||||
Municipal securities | — | (1,462 | ) | — | — | — | — | 28,719 | 27,257 | (1,462 | ) | ||||||||||||||||||||||||
Sovereign obligations | 120 | 5 | — | (125 | ) | — | — | — | — | — | |||||||||||||||||||||||||
Residential mortgage-backed securities | 70,263 | (9,612 | ) | 623 | (12,249 | ) | (931 | ) | — | (9,322 | ) | 38,772 | (1,095 | ) | |||||||||||||||||||||
Commercial mortgage-backed securities | 14,326 | (7,550 | ) | 3,132 | (2,024 | ) | (2,229 | ) | — | 14,925 | 20,580 | (7,243 | ) | ||||||||||||||||||||||
Other asset-backed securities | 42,925 | (14,381 | ) | 133,986 | (102,952 | ) | (8,769 | ) | — | (9,898 | ) | 40,911 | (18,056 | ) | |||||||||||||||||||||
Loans and other receivables | 189,289 | (42,566 | ) | 75,264 | (69,262 | ) | (46,851 | ) | — | (24,002 | ) | 81,872 | (52,003 | ) | |||||||||||||||||||||
Investments at fair value | 199,794 | 54,538 | 29,728 | (542 | ) | (1,107 | ) | — | 31,948 | 314,359 | 54,608 | ||||||||||||||||||||||||
Investment in FXCM (2) | 625,689 | (54,634 | ) | — | — | (406,555 | ) | — | — | 164,500 | (1,014 | ) | |||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||
Trading liabilities: | |||||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 38 | $ | — | $ | — | $ | 313 | $ | (38 | ) | $ | — | $ | — | $ | 313 | $ | — | ||||||||||||||||
Corporate debt securities | — | (27 | ) | — | 550 | — | — | — | 523 | — | |||||||||||||||||||||||||
Net derivatives (3) | (242 | ) | (1,760 | ) | — | 11,101 | 31 | 2,067 | (7,756 | ) | 3,441 | (6,458 | ) | ||||||||||||||||||||||
Loans | 10,469 | — | — | 378 | — | — | (10,469 | ) | 378 | — | |||||||||||||||||||||||||
Other secured financings | 544 | (126 | ) | — | — | — | — | — | 418 | (126 | ) |
Year Ended December 31, 2014 | |||||||||||||||||||||||||||||||||||
Balance, December 31, 2013 | Total gains (losses) (realized and unrealized) (1) | Purchases | Sales | Settlements | Issuances | Net transfers into (out of) Level 3 | Balance at December 31, 2014 | Changes in unrealized gains (losses) relating to instruments still held at December 31, 2014 (1) | |||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||
Trading assets: | |||||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 9,884 | $ | 957 | $ | 18,138 | $ | (12,826 | ) | $ | — | $ | — | $ | 4,811 | $ | 20,964 | $ | 2,324 | ||||||||||||||||
Corporate debt securities | 25,666 | 6,629 | 38,316 | (40,328 | ) | — | — | (7,517 | ) | 22,766 | 8,982 | ||||||||||||||||||||||||
CDOs and CLOs | 37,216 | (6,386 | ) | 204,337 | (181,757 | ) | (1,297 | ) | — | 72,537 | 124,650 | (1,141 | ) | ||||||||||||||||||||||
U.S. government and federal agency securities | — | 13 | 2,505 | (2,518 | ) | — | — | — | — | — | |||||||||||||||||||||||||
Residential mortgage-backed securities | 105,492 | (9,870 | ) | 42,632 | (61,689 | ) | (1,847 | ) | — | 7,839 | 82,557 | (4,679 | ) | ||||||||||||||||||||||
Commercial mortgage-backed securities | 17,568 | (4,237 | ) | 49,159 | (51,360 | ) | (782 | ) | — | 16,307 | 26,655 | (2,384 | ) | ||||||||||||||||||||||
Other asset-backed securities | 12,611 | 1,784 | 4,987 | (18,002 | ) | — | — | 914 | 2,294 | 1,484 | |||||||||||||||||||||||||
Loans and other receivables | 145,890 | (31,311 | ) | 130,169 | (92,140 | ) | (60,390 | ) | — | 5,040 | 97,258 | (26,864 | ) | ||||||||||||||||||||||
Investments at fair value | 66,931 | 17,642 | 32,493 | (23,324 | ) | (1,243 | ) | — | (15,452 | ) | 77,047 | 1,985 | |||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||
Trading liabilities: | |||||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 38 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 38 | $ | — | |||||||||||||||||
Corporate debt securities | — | (149 | ) | (565 | ) | 960 | — | — | (23 | ) | 223 | (8 | ) | ||||||||||||||||||||||
Net derivatives (2) | 6,905 | 15,055 | (24,682 | ) | 1,094 | 322 | — | (3,332 | ) | (4,638 | ) | (15,615 | ) | ||||||||||||||||||||||
Loans | 22,462 | — | (18,332 | ) | 11,338 | — | — | (1,018 | ) | 14,450 | — | ||||||||||||||||||||||||
Other secured financings | 8,711 | — | — | — | (17,525 | ) | 39,639 | — | 30,825 | — |
(1) | Realized and unrealized gains (losses) are reported in Principal transactions in the Consolidated Statements of Operations. |
(2) | Net derivatives represent Trading assets - Derivatives and Trading liabilities - Derivatives. |
December 31, 2016 | |||||||||||||
Financial Instruments Owned | Fair Value (in thousands) | Valuation Technique | Significant Unobservable Input(s) | Input/Range | Weighted Average | ||||||||
Corporate equity securities | $ | 19,799 | |||||||||||
Non-exchange traded securities | Market approach | Underlying stock price | $3 to $75 | $15.0 | |||||||||
Comparable pricing | Underlying stock price | $218 | — | ||||||||||
Comparable asset price | $11 | — | |||||||||||
Present value | Average silver production (tons per day) | 666 | — | ||||||||||
Corporate debt securities | $ | 25,005 | Convertible bond model | Discount rate/yield | 9% | — | |||||||
Volatility | 40% | — | |||||||||||
Market approach | Transaction level | $30 | — | ||||||||||
CDOs and CLOs | $ | 33,016 | Discounted cash flows | Constant prepayment rate | 10% to 20% | 19 | % | ||||||
Constant default rate | 2% to 4% | 2 | % | ||||||||||
Loss severity | 25% to 70% | 40 | % | ||||||||||
Yield | 7% to 17% | 12 | % | ||||||||||
Scenario analysis | Estimated recovery percentage | 28% to 38% | 31 | % | |||||||||
Residential mortgage-backed securities | $ | 38,772 | Discounted cash flows | Constant prepayment rate | 0% to 11% | 5 | % | ||||||
Constant default rate | 1% to 7% | 3 | % | ||||||||||
Loss severity | 35% to 100% | 62 | % | ||||||||||
Yield | 2% to 10% | 6 | % | ||||||||||
Commercial mortgage-backed securities | $ | 20,580 | Discounted cash flows | Yield | 6% to 11% | 8 | % | ||||||
Cumulative loss rate | 5% to 95% | 39 | % | ||||||||||
Other asset-backed securities | $ | 40,911 | Discounted cash flows | Constant prepayment rate | 4% to 20% | 14 | % | ||||||
Constant default rate | 0% to 31% | 13 | % | ||||||||||
Loss severity | 0% to 100% | 90 | % | ||||||||||
Yield | 4% to 17% | 15 | % | ||||||||||
Market approach | Price | $72 | — | ||||||||||
Loans and other receivables | $ | 54,347 | Market approach | Discount rate/yield | 2% to 4% | 3 | % | ||||||
EBITDA (a) multiple | 3.3 | — | |||||||||||
Transaction level | $0.42 | — | |||||||||||
Present value | Average silver production (tons per day) | 666 | — | ||||||||||
Scenario analysis | Estimated recovery percentage | 6% to 50% | 37 | % | |||||||||
Derivatives | $ | 6,429 | |||||||||||
Equity swaps | Comparable pricing | Comparable asset price | $102 | — | |||||||||
Credit default swaps | Market approach | Credit spread | 265 bps | — | |||||||||
Investments at fair value | |||||||||||||
Private equity securities | $ | 67,383 | Market approach | Transaction Level | $250 | — | |||||||
Price | $25,815,720 | — | |||||||||||
Discount rate | 15% to 30% | 23 | % | ||||||||||
Investment in FXCM | |||||||||||||
Term loan | $ | 164,500 | Discounted cash flows | Term based on the pay off | 0 months to .5 years | 0.4 years | |||||||
Trading Liabilities | Fair Value (in thousands) | Valuation Technique | Significant Unobservable Input(s) | Input/Range | Weighted Average | ||||||||
Derivatives | $ | 9,870 | |||||||||||
Equity options | Option model | Volatility | 45% | — | |||||||||
Default rate | Default probability | 0% | — | ||||||||||
Equity swaps | Comparable pricing | Comparable asset price | $102 | — | |||||||||
Unfunded commitments | Market approach | Discount rate/yield | 4% | — | |||||||||
Variable funding note swaps | Discounted cash flows | Constant prepayment rate | 20% | — | |||||||||
Constant default rate | 2% | — | |||||||||||
Loss severity | 25% | — | |||||||||||
Yield | 16% | — |
December 31, 2015 | |||||||||||||
Financial Instruments Owned | Fair Value (in thousands) | Valuation Technique | Significant Unobservable Input(s) | Input/Range | Weighted Average | ||||||||
Corporate equity securities | $ | 20,285 | |||||||||||
Non-exchange traded securities | Market approach | EBITDA (a) multiple | 4.4 | — | |||||||||
Transaction level | $1 | — | |||||||||||
Underlying stock price | $5 to $102 | $19.0 | |||||||||||
Corporate debt securities | $ | 20,257 | Convertible bond model | Discount rate/yield | 86% | — | |||||||
Market approach | Transaction level | $59 | — | ||||||||||
CDOs and CLOs | $ | 49,923 | Discounted cash flows | Constant prepayment rate | 5% to 20% | 13 | % | ||||||
Constant default rate | 2% to 8% | 2 | % | ||||||||||
Loss severity | 25% to 90% | 52 | % | ||||||||||
Yield | 6% to 13% | 10 | % | ||||||||||
Residential mortgage-backed securities | $ | 70,263 | Discounted cash flows | Constant prepayment rate | 0% to 50% | 13 | % | ||||||
Constant default rate | 1% to 9% | 3 | % | ||||||||||
Loss severity | 25% to 70% | 39 | % | ||||||||||
Yield | 1% to 9% | 6 | % | ||||||||||
Commercial mortgage-backed securities | $ | 14,326 | Discounted cash flows | Yield | 7% to 30% | 16 | % | ||||||
Cumulative loss rate | 2% to 63% | 23 | % | ||||||||||
Other asset-backed securities | $ | 21,463 | Discounted cash flows | Constant prepayment rate | 6% to 8% | 7 | % | ||||||
Constant default rate | 3% to 5% | 4 | % | ||||||||||
Loss severity | 55% to 75% | 62 | % | ||||||||||
Yield | 7% to 22% | 18 | % | ||||||||||
Over-collateralization | Over-collateralization percentage | 117% to 125% | 118 | % | |||||||||
Loans and other receivables | $ | 161,470 | Comparable pricing | Comparable asset price | $99 to $100 | $99.7 | |||||||
Market approach | Yield | 2% to 17% | 12 | % | |||||||||
EBITDA (a) multiple | 10.0 | — | |||||||||||
Scenario analysis | Estimated recovery percentage | 6% to 100% | 83 | % | |||||||||
Derivatives | $ | 19,785 | |||||||||||
Commodity forwards | Market approach | Discount rate/yield | 47% | — | |||||||||
Transaction level | $9,500,000 | — | |||||||||||
Unfunded commitment | Comparable pricing | Comparable asset price | $100 | — | |||||||||
Market approach | Credit spread | 298 bps | — | ||||||||||
Total return swap | Comparable pricing | Comparable asset price | $91.7 to $92.4 | $92.1 | |||||||||
Investments at fair value | |||||||||||||
Private equity securities | $ | 29,940 | Market approach | Transaction Level | $64 | — | |||||||
Price | $5,200,000 | — | |||||||||||
Discount rate | 15% to 30% | 23 | % | ||||||||||
Investment in FXCM | |||||||||||||
Term loan | $ | 203,700 | Discounted cash flows | Term based on the pay off | 0 months to 1.0 year | 0.4 years | |||||||
Rights | 422,000 | Option pricing model | Volatility | 110% | — | ||||||||
$ | 625,700 | ||||||||||||
Trading Liabilities | Fair Value (in thousands) | Valuation Technique | Significant Unobservable Input(s) | Input/Range | Weighted Average | ||||||||
Derivatives | $ | 19,543 | |||||||||||
Equity options | Option model | Volatility | 45% | — | |||||||||
Default rate | Default probability | 0% | — | ||||||||||
Unfunded commitments | Comparable pricing | Comparable asset price | $79 to $100 | $82.6 | |||||||||
Market approach | Discount rate/yield | 3% to 10% | 10 | % | |||||||||
Discounted cash flows | Constant prepayment rate | 20% | — | ||||||||||
Constant default rate | 2% | — | |||||||||||
Loss severity | 25% | — | |||||||||||
Yield | 11% | — | |||||||||||
Total return swaps | Comparable pricing | Comparable asset price | $91.7 to $92.4 | $92.1 | |||||||||
Loans | $ | 10,469 | Comparable pricing | Comparable asset price | $100 | — |
Fair Value (1) | Unfunded Commitments | Redemption Frequency (if currently eligible) | |||||||
December 31, 2016 | |||||||||
Equity Long/Short Hedge Funds (2) | $ | 363,256 | $ | — | (2) | ||||
Fixed Income and High Yield Hedge Funds (3) | 772 | — | — | ||||||
Fund of Funds (4) | 230 | — | — | ||||||
Equity Funds (5) | 42,179 | 20,295 | — | ||||||
Multi-strategy Fund (6) | 133,190 | — | Monthly/Quarterly | ||||||
Total | $ | 539,627 | $ | 20,295 | |||||
December 31, 2015 (7) | |||||||||
Equity Long/Short Hedge Funds (2) | $ | 430,207 | $ | — | (2) | ||||
Fixed Income and High Yield Hedge Funds (3) | 1,703 | — | — | ||||||
Fund of Funds (4) | 287 | 94 | — | ||||||
Equity Funds (5) | 42,111 | 20,791 | — | ||||||
Multi-strategy Fund (6) | 165,821 | — | Monthly/Quarterly | ||||||
Convertible Bond Funds (8) | 326 | — | At Will | ||||||
Total | $ | 640,455 | $ | 20,885 | |||||
(1) | Where fair value is calculated based on NAV, fair value has been derived from each of the funds' capital statements. |
(2) | This category includes investments in hedge funds that invest, long and short, in primarily equity securities in domestic and international markets in both the public and private sectors. At December 31, 2016 and 2015, investments with a fair value of $363.3 million and $54.7 million, respectively, are redeemable with 15 to 90 days prior written notice. |
(3) | This category includes investments in funds that invest in loans secured by a first trust deed on property, domestic and international public high yield debt, private high yield investments, senior bank loans, public leveraged equities, distressed debt, and private equity investments. There are no redemption provisions. At December 31, 2015, the underlying assets of 8% of these funds were being liquidated and we are unable to estimate when the underlying assets will be fully liquidated. |
(4) | This category includes investments in fund of funds that invest in various private equity funds. At December 31, 2016 and 2015, approximately 100% and 95%, respectively, of the fair value of investments in this category are managed by us and have no redemption provisions. The investments in this category are gradually being liquidated or we have requested redemption, however, we are unable to estimate when these funds will be received. |
(5) | At December 31, 2016 and 2015, the fair value of investments in this category include investments in equity funds that invest in the equity of various U.S. and foreign private companies in the energy, technology, internet service and telecommunication service industries. These investments cannot be redeemed; instead distributions are received through the liquidation of the underlying assets of the funds, which are expected to liquidate in one to seven years. |
(6) | This category includes investments in hedge funds that invest, long and short, primarily in multi-strategy securities in domestic and international markets in both the public and private sectors. At December 31, 2016 and 2015, investments representing approximately 12% and 32%, respectively, of the fair value of investments in this category are redeemable with 30 to 90 days prior written notice. |
(7) | Certain prior period amounts have been recast to conform to the current year's presentation due to the presentation of multi-strategy funds. Previously, these investments had been classified within equity long/short hedge funds. |
(8) | Investment in the Jefferies Umbrella Fund, an open-ended investment company managed by Jefferies that invested primarily in convertible bonds. The underlying assets were fully liquidated during the year ended December 31, 2016. |
2016 | 2015 | ||||||
As of January 1, | $ | 189,358 | $ | 184,333 | |||
Income (loss) allocated to redeemable noncontrolling interests | 68,811 | (26,465 | ) | ||||
Contributions from redeemable noncontrolling interests | — | 5,263 | |||||
Distributions to redeemable noncontrolling interests | (53,701 | ) | — | ||||
Increase in fair value of redeemable noncontrolling interests charged to additional paid-in capital | 117,494 | 26,227 | |||||
Balance, December 31, | $ | 321,962 | $ | 189,358 |
Discount Rates | |||||||||||||
Terminal Growth Rates | 10.65% | 10.90% | 11.15% | ||||||||||
1.75 | % | $ | 326.5 | $ | 317.8 | $ | 309.6 | ||||||
2.00 | % | $ | 331.0 | $ | 322.0 | $ | 313.4 | ||||||
2.25 | % | $ | 335.7 | $ | 326.3 | $ | 317.5 |
Net Capital | Excess Net Capital | ||||||
Jefferies LLC | $ | 1,467,729 | $ | 1,398,748 | |||
Jefferies Execution | 8,260 | 8,010 |
Financial Statement Carrying Amount | Maximum Exposure to Loss | VIE Assets | |||||||||||||
Assets | Liabilities | ||||||||||||||
December 31, 2016 | |||||||||||||||
CLOs | $ | 264.7 | $ | 4.8 | $ | 930.0 | $ | 4,472.9 | |||||||
Consumer loan vehicles | 90.3 | — | 219.6 | 985.5 | |||||||||||
Related party private equity vehicles | 37.6 | — | 63.6 | 155.6 | |||||||||||
Real estate investment vehicle | 90.3 | — | 101.8 | 85.6 | |||||||||||
Other private investment vehicles | 84.0 | — | 95.8 | 4,529.7 | |||||||||||
Total | $ | 566.9 | $ | 4.8 | $ | 1,410.8 | $ | 10,229.3 | |||||||
December 31, 2015 | |||||||||||||||
CLOs | $ | 73.6 | $ | 0.2 | $ | 458.1 | $ | 6,368.7 | |||||||
Consumer loan vehicles | 188.3 | — | 845.8 | 1,133.0 | |||||||||||
Related party private equity vehicles | 39.3 | — | 65.8 | 168.2 | |||||||||||
Other private investment vehicles | 88.0 | — | 91.4 | 4,846.1 | |||||||||||
Total | $ | 389.2 | $ | 0.2 | $ | 1,461.1 | $ | 12,516.0 |
(In thousands) | Gross Amounts | Netting in Consolidated Statement of Financial Condition | Net Amounts in Consolidated Statement of Financial Condition | Additional Amounts Available for Setoff (1) | Available Collateral (2) | Net Amount (3) | |||||||||||||||||
Assets at December 31, 2016 | |||||||||||||||||||||||
Derivative contracts | $ | 4,627,076 | $ | (4,255,998 | ) | $ | 371,078 | $ | — | $ | — | $ | 371,078 | ||||||||||
Securities borrowing arrangements | $ | 7,743,562 | $ | — | $ | 7,743,562 | $ | (710,611 | ) | $ | (647,290 | ) | $ | 6,385,661 | |||||||||
Reverse repurchase agreements | $ | 14,083,144 | $ | (10,220,656 | ) | $ | 3,862,488 | $ | (176,275 | ) | $ | (3,591,654 | ) | $ | 94,559 | ||||||||
Liabilities at December 31, 2016 | |||||||||||||||||||||||
Derivative contracts | $ | 4,880,022 | $ | (4,229,213 | ) | $ | 650,809 | $ | — | $ | — | $ | 650,809 | ||||||||||
Securities lending arrangements | $ | 2,819,132 | $ | — | $ | 2,819,132 | $ | (710,611 | ) | $ | (2,064,299 | ) | $ | 44,222 | |||||||||
Repurchase agreements | $ | 17,012,332 | $ | (10,220,656 | ) | $ | 6,791,676 | $ | (176,275 | ) | $ | (5,780,909 | ) | $ | 834,492 | ||||||||
Assets at December 31, 2015 | |||||||||||||||||||||||
Derivative contracts | $ | 4,428,245 | $ | (4,165,446 | ) | $ | 262,799 | $ | — | $ | — | $ | 262,799 | ||||||||||
Securities borrowing arrangements | $ | 6,975,136 | $ | — | $ | 6,975,136 | $ | (478,991 | ) | $ | (667,099 | ) | $ | 5,829,046 | |||||||||
Reverse repurchase agreements | $ | 14,046,300 | $ | (10,191,554 | ) | $ | 3,854,746 | $ | (83,452 | ) | $ | (3,745,215 | ) | $ | 26,079 | ||||||||
Liabilities at December 31, 2015 | |||||||||||||||||||||||
Derivative contracts | $ | 4,476,241 | $ | (4,257,998 | ) | $ | 218,243 | $ | — | $ | — | $ | 218,243 | ||||||||||
Securities lending arrangements | $ | 3,014,300 | $ | — | $ | 3,014,300 | $ | (478,991 | ) | $ | (2,499,395 | ) | $ | 35,914 | |||||||||
Repurchase agreements | $ | 20,158,422 | $ | (10,191,554 | ) | $ | 9,966,868 | $ | (83,452 | ) | $ | (8,068,468 | ) | $ | 1,814,948 |
(1) | Under master netting agreements with our counterparties, we have the legal right of offset with a counterparty, which incorporates all of the counterparty’s outstanding rights and obligations under the arrangement. These balances reflect additional credit risk mitigation that is available by a counterparty in the event of a counterparty’s default, but which are not netted in the balance sheet because other provisions of GAAP are not met. Further, for derivative assets and liabilities, amounts netted include cash collateral paid or received. |
(2) | Includes securities received or paid under collateral arrangements with counterparties that could be liquidated in the event of a counterparty default and thus offset against a counterparty’s rights and obligations under the respective repurchase agreements or securities borrowing or lending arrangements. |
(3) | At December 31, 2016, amounts include $6,337.5 million of securities borrowing arrangements, for which we have received securities collateral of $6,146.0 million, and $810.4 million of repurchase agreements, for which we have pledged securities collateral of $834.2 million, which are subject to master netting agreements but we have not yet determined the agreements to be legally enforceable. At December 31, 2015, amounts include $5,796.1 million of securities borrowing arrangements, for which we have received securities collateral of $5,613.3 million, and $1,807.2 million of repurchase agreements, for which we have pledged securities collateral of $1,875.3 million, which are subject to master netting agreements but we have not yet determined the agreements to be legally enforceable. |
December 31, 2016 | December 31, 2015 | ||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Other Assets: | |||||||||||||||
Notes and loans receivable (1) | $ | 962,938 | $ | 958,377 | $ | 488,690 | $ | 490,208 | |||||||
Financial Liabilities: | |||||||||||||||
Short-term borrowings (2) | 525,842 | 525,842 | 310,659 | 310,659 | |||||||||||
Long-term debt (2) | 7,131,587 | 7,221,459 | 7,400,582 | 7,299,405 |
(1) | Notes and loans receivable: The fair values are primarily measured using Level 2 and 3 inputs principally based on discounted future cash flows using market interest rates for similar instruments. |
(2) | Short-term borrowings and long-term debt: The fair values of short-term borrowings are estimated to be the carrying amount. The fair values of non-variable rate debt are estimated using quoted prices and estimated rates that would be available for debt with similar terms. The fair value of variable rate debt is estimated to be the carrying amount. |
December 31, 2016 | December 31, 2015 | ||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Other Assets: | |||||||||||||||
Notes and loans receivable (1) | $ | 962,938 | $ | 958,377 | $ | 488,690 | $ | 490,208 | |||||||
Financial Liabilities: | |||||||||||||||
Short-term borrowings (2) | 525,842 | 525,842 | 310,659 | 310,659 | |||||||||||
Long-term debt (2) | 7,131,587 | 7,221,459 | 7,400,582 | 7,299,405 |
(1) | Notes and loans receivable: The fair values are primarily measured using Level 2 and 3 inputs principally based on discounted future cash flows using market interest rates for similar instruments. |
(2) | Short-term borrowings and long-term debt: The fair values of short-term borrowings are estimated to be the carrying amount. The fair values of non-variable rate debt are estimated using quoted prices and estimated rates that would be available for debt with similar terms. The fair value of variable rate debt is estimated to be the carrying amount. |
2016 | 2015 | 2014 | |||||||||
Manufacturing revenues | $ | 412,826 | $ | 391,920 | $ | 379,274 | |||||
Income (loss) from managed funds | (69,038 | ) | (37,237 | ) | 12,251 | ||||||
Asset management fees | 29,492 | 34,777 | 27,990 | ||||||||
Dividend income | 3,856 | 5,482 | 7,379 | ||||||||
Income from associated companies classified as other revenues | 17,184 | 75,717 | 90,242 | ||||||||
Revenues of oil and gas exploration and development businesses | 49,890 | 45,939 | 19,373 | ||||||||
Gain on sale of equity interest | — | — | 22,714 | ||||||||
Other | 43,976 | 32,630 | 11,242 | ||||||||
$ | 488,186 | $ | 549,228 | $ | 570,465 |
Net Capital | Excess Net Capital | ||||||
Jefferies LLC | $ | 1,467,729 | $ | 1,398,748 | |||
Jefferies Execution | 8,260 | 8,010 |
OTC Derivative Assets (1) (2) (3) | |||||||||||||||||||
0-12 Months | 1-5 Years | Greater Than 5 Years | Cross- Maturity Netting (4) | Total | |||||||||||||||
Equity swaps and options | $ | 27,436 | $ | 5,727 | $ | — | $ | — | $ | 33,163 | |||||||||
Credit default swaps | — | 4,542 | 3,463 | (1,588 | ) | 6,417 | |||||||||||||
Total return swaps | 20,749 | 389 | — | (200 | ) | 20,938 | |||||||||||||
Foreign currency forwards, swaps and options | 95,112 | 35,988 | — | (10,547 | ) | 120,553 | |||||||||||||
Interest rate swaps, options and forwards | 120,053 | 189,153 | 134,507 | (71,604 | ) | 372,109 | |||||||||||||
Total | $ | 263,350 | $ | 235,799 | $ | 137,970 | $ | (83,939 | ) | 553,180 | |||||||||
Cross product counterparty netting | (623 | ) | |||||||||||||||||
Total OTC derivative assets included in Trading assets | $ | 552,557 |
(1) | At December 31, 2016, we held exchange traded derivative assets and other credit agreements with a fair value of $25.4 million, which are not included in this table. |
(2) | OTC derivative assets in the table above are gross of collateral received. OTC derivative assets are recorded net of collateral received in the Consolidated Statements of Financial Condition. At December 31, 2016, cash collateral received was $217.4 million. |
(3) | Derivative fair values include counterparty netting within product category. |
(4) | Amounts represent the netting of receivable balances with payable balances for the same counterparty within product category across maturity categories. |
OTC Derivative Liabilities (1) (2) (3) | ||||||||||||||||||||
0-12 Months | 1-5 Years | Greater Than 5 Years | Cross-Maturity Netting (4) | Total | ||||||||||||||||
Commodity swaps, options and forwards | $ | 3,214 | $ | 1,218 | $ | — | $ | — | $ | 4,432 | ||||||||||
Equity swaps and options | 10,993 | 20,354 | — | — | 31,347 | |||||||||||||||
Credit default swaps | 16 | 1,594 | 7,147 | (1,588 | ) | 7,169 | ||||||||||||||
Total return swaps | 12,088 | 2,407 | — | (200 | ) | 14,295 | ||||||||||||||
Foreign currency forwards, swaps and options | 92,375 | 26,011 | — | (10,547 | ) | 107,839 | ||||||||||||||
Fixed income forwards | 3,401 | — | — | — | 3,401 | |||||||||||||||
Interest rate swaps, options and forwards | 108,085 | 121,975 | 92,029 | (71,604 | ) | 250,485 | ||||||||||||||
Total | $ | 230,172 | $ | 173,559 | $ | 99,176 | $ | (83,939 | ) | 418,968 | ||||||||||
Cross product counterparty netting | (623 | ) | ||||||||||||||||||
Total OTC derivative liabilities included in Trading liabilities | $ | 418,345 |
(1) | At December 31, 2016, we held exchange traded derivative liabilities and other credit agreements with a fair value of $414.2 million, which are not included in this table. |
(2) | OTC derivative liabilities in the table above are gross of collateral pledged. OTC derivative liabilities are recorded net of collateral pledged in the Consolidated Statements of Financial Condition. At December 31, 2016, cash collateral pledged was $190.6 million. |
(3) | Derivative fair values include counterparty netting within product category. |
(4) | Amounts represent the netting of receivable balances with payable balances for the same counterparty within product category across maturity categories. |
December 31, 2016 | December 31, 2015 | ||||||
Financial Instruments Owned: | |||||||
Loans and other receivables (1) | $ | 1,325,938 | $ | 408,369 | |||
Loans and other receivables on nonaccrual status and/or greater than 90 days past due (1) (2) | $ | 205,746 | $ | 54,652 | |||
Long-term Debt | $ | 20,202 | $ | — |
(1) | Interest income is recognized separately from other changes in fair value and is included within Interest income in the Consolidated Statements of Operations. |
(2) | Amounts include all loans and other receivables greater than 90 or more days past due of $64.6 million and $29.7 million at December 31, 2016 and 2015, respectively. |
2016 | 2015 | 2014 | |||||||||
Manufacturing revenues | $ | 412,826 | $ | 391,920 | $ | 379,274 | |||||
Income (loss) from managed funds | (69,038 | ) | (37,237 | ) | 12,251 | ||||||
Asset management fees | 29,492 | 34,777 | 27,990 | ||||||||
Dividend income | 3,856 | 5,482 | 7,379 | ||||||||
Income from associated companies classified as other revenues | 17,184 | 75,717 | 90,242 | ||||||||
Revenues of oil and gas exploration and development businesses | 49,890 | 45,939 | 19,373 | ||||||||
Gain on sale of equity interest | — | — | 22,714 | ||||||||
Other | 43,976 | 32,630 | 11,242 | ||||||||
$ | 488,186 | $ | 549,228 | $ | 570,465 |
2016 | 2015 | ||||||
As of January 1, | $ | 189,358 | $ | 184,333 | |||
Income (loss) allocated to redeemable noncontrolling interests | 68,811 | (26,465 | ) | ||||
Contributions from redeemable noncontrolling interests | — | 5,263 | |||||
Distributions to redeemable noncontrolling interests | (53,701 | ) | — | ||||
Increase in fair value of redeemable noncontrolling interests charged to additional paid-in capital | 117,494 | 26,227 | |||||
Balance, December 31, | $ | 321,962 | $ | 189,358 |
2016 | 2015 | ||||||||||
Assets | $ | 16,964,850 | $ | 18,489,684 | |||||||
Liabilities | 13,097,022 | 14,990,876 | |||||||||
Noncontrolling interest | 132,789 | 39,038 | |||||||||
2016 | 2015 | 2014 | |||||||||
Revenues | $ | 4,275,016 | $ | 3,946,252 | $ | 3,201,823 | |||||
Income from continuing operations before extraordinary items | $ | 422,167 | $ | 398,369 | $ | 431,654 | |||||
Net income | $ | 430,291 | $ | 398,369 | $ | 431,654 | |||||
The Company’s income related to associated companies | $ | 171,782 | $ | 185,998 | $ | 228,769 |
Collateral Pledged | Securities Lending Arrangements | Repurchase Agreements | Total | |||||||||
December 31, 2016 | ||||||||||||
Corporate equity securities | $ | 2,046,243 | $ | 66,291 | $ | 2,112,534 | ||||||
Corporate debt securities | 731,276 | 1,907,888 | 2,639,164 | |||||||||
Mortgage- and asset-backed securities | — | 2,171,480 | 2,171,480 | |||||||||
U.S. government and federal agency securities | 41,613 | 9,232,624 | 9,274,237 | |||||||||
Municipal securities | — | 553,010 | 553,010 | |||||||||
Sovereign securities | — | 2,625,079 | 2,625,079 | |||||||||
Loans and other receivables | — | 455,960 | 455,960 | |||||||||
Total | $ | 2,819,132 | $ | 17,012,332 | $ | 19,831,464 | ||||||
December 31, 2015 | ||||||||||||
Corporate equity securities | $ | 2,200,273 | $ | 271,519 | $ | 2,471,792 | ||||||
Corporate debt securities | 779,044 | 1,721,583 | 2,500,627 | |||||||||
Mortgage- and asset-backed securities | — | 3,537,812 | 3,537,812 | |||||||||
U.S. government and federal agency securities | 34,983 | 12,003,521 | 12,038,504 | |||||||||
Municipal securities | — | 357,350 | 357,350 | |||||||||
Sovereign securities | — | 1,804,103 | 1,804,103 | |||||||||
Loans and other receivables | — | 462,534 | 462,534 | |||||||||
Total | $ | 3,014,300 | $ | 20,158,422 | $ | 23,172,722 |
Contractual Maturity | ||||||||||||||||||||
Overnight and Continuous | Up to 30 Days | 30 to 90 Days | Greater than 90 Days | Total | ||||||||||||||||
December 31, 2016 | ||||||||||||||||||||
Securities lending arrangements | $ | 2,131,891 | $ | 39,673 | $ | 104,516 | $ | 543,052 | $ | 2,819,132 | ||||||||||
Repurchase agreements | 9,147,176 | 2,008,119 | 3,809,533 | 2,047,504 | 17,012,332 | |||||||||||||||
Total | $ | 11,279,067 | $ | 2,047,792 | $ | 3,914,049 | $ | 2,590,556 | $ | 19,831,464 | ||||||||||
December 31, 2015 | ||||||||||||||||||||
Securities lending arrangements | $ | 1,522,475 | $ | — | $ | 973,201 | $ | 518,624 | $ | 3,014,300 | ||||||||||
Repurchase agreements | 7,848,231 | 5,218,059 | 5,291,729 | 1,800,403 | 20,158,422 | |||||||||||||||
Total | $ | 9,370,706 | $ | 5,218,059 | $ | 6,264,930 | $ | 2,319,027 | $ | 23,172,722 | ||||||||||
December 31, 2016 | December 31, 2015 | ||||||||||||||
Securitization Type | Total Assets | Retained Interests | Total Assets | Retained Interests | |||||||||||
U.S. government agency residential mortgage-backed securities | $ | 7,584.9 | $ | 31.0 | $ | 10,901.9 | $ | 203.6 | |||||||
U.S. government agency commercial mortgage-backed securities | 1,806.3 | 29.6 | 2,313.4 | 87.2 | |||||||||||
CLOs | 4,102.2 | 37.0 | 4,538.4 | 51.5 | |||||||||||
Consumer and other loans | 395.7 | 25.3 | 655.0 | 31.0 |
2016 | 2015 | 2014 | |||||||||
Transferred assets | $ | 5,786.0 | $ | 5,770.5 | $ | 6,112.6 | |||||
Proceeds on new securitizations | 5,809.0 | 5,811.3 | 6,221.1 | ||||||||
Cash flows received on retained interests | 28.2 | 31.2 | 46.3 |
December 31, 2016 | December 31, 2015 | ||||||||||||||
Securitization Type | Total Assets | Retained Interests | Total Assets | Retained Interests | |||||||||||
U.S. government agency residential mortgage-backed securities | $ | 7,584.9 | $ | 31.0 | $ | 10,901.9 | $ | 203.6 | |||||||
U.S. government agency commercial mortgage-backed securities | 1,806.3 | 29.6 | 2,313.4 | 87.2 | |||||||||||
CLOs | 4,102.2 | 37.0 | 4,538.4 | 51.5 | |||||||||||
Consumer and other loans | 395.7 | 25.3 | 655.0 | 31.0 |
Discount Rates | |||||||||||||
Terminal Growth Rates | 10.65% | 10.90% | 11.15% | ||||||||||
1.75 | % | $ | 326.5 | $ | 317.8 | $ | 309.6 | ||||||
2.00 | % | $ | 331.0 | $ | 322.0 | $ | 313.4 | ||||||
2.25 | % | $ | 335.7 | $ | 326.3 | $ | 317.5 |
2016 | 2015 | 2014 | |||||||||
Net realized gains (losses) on securities | $ | (286 | ) | $ | 14,112 | $ | 30,686 | ||||
Other (1) | 29,828 | 48,845 | (292 | ) | |||||||
$ | 29,542 | $ | 62,957 | $ | 30,394 |
2016 | 2015 | 2014 | |||||||||
Transferred assets | $ | 5,786.0 | $ | 5,770.5 | $ | 6,112.6 | |||||
Proceeds on new securitizations | 5,809.0 | 5,811.3 | 6,221.1 | ||||||||
Cash flows received on retained interests | 28.2 | 31.2 | 46.3 |
• | Purchases of securities in connection with our trading and secondary market making activities, |
• | Retained interests held as a result of securitization activities, including the resecuritization of mortgage- and other asset-backed securities and the securitization of commercial mortgage, corporate and consumer loans, |
• | Acting as placement agent and/or underwriter in connection with client-sponsored securitizations, |
• | Financing of agency and non-agency mortgage- and other asset-backed securities, |
• | Real estate investments, |
• | Warehousing funding arrangements for client-sponsored consumer loan vehicles and CLOs through participation certificates and revolving loan and note commitments, and |
• | Loans to, investments in and fees from various investment fund vehicles. |
December 31, 2016 | December 31, 2015 | ||||||||||
Securitization Vehicles | Real Estate Investment Vehicle | Securitization Vehicles | |||||||||
Cash | $ | 18.4 | $ | 2.2 | $ | 1.1 | |||||
Financial instruments owned | 86.6 | — | 68.3 | ||||||||
Securities purchased under agreement to resell (1) | 733.5 | — | 717.3 | ||||||||
Receivables | 277.7 | 296.9 | 149.8 | ||||||||
Loans to and investments in associated companies | — | 108.7 | — | ||||||||
Other | 14.5 | 10.8 | 8.8 | ||||||||
Total assets | $ | 1,130.7 | $ | 418.6 | $ | 945.3 | |||||
Other secured financings (2) | $ | 1,083.8 | $ | — | $ | 930.8 | |||||
Long-term debt | 24.1 | 243.9 | — | ||||||||
Other | 22.3 | 11.7 | 14.5 | ||||||||
Total liabilities | $ | 1,130.2 | $ | 255.6 | $ | 945.3 | |||||
Noncontrolling interests | $ | — | $ | 98.7 | $ | — |
(1) | Securities purchased under agreement to resell represent an amount due under a collateralized transaction on a related consolidated entity, which is eliminated in consolidation. |
(2) | Approximately $57.6 million and $22.1 million of the secured financing represents an amount held by Jefferies in inventory and eliminated in consolidation at December 31, 2016 and 2015, respectively. |
Financial Statement Carrying Amount | Maximum Exposure to Loss | VIE Assets | |||||||||||||
Assets | Liabilities | ||||||||||||||
December 31, 2016 | |||||||||||||||
CLOs | $ | 264.7 | $ | 4.8 | $ | 930.0 | $ | 4,472.9 | |||||||
Consumer loan vehicles | 90.3 | — | 219.6 | 985.5 | |||||||||||
Related party private equity vehicles | 37.6 | — | 63.6 | 155.6 | |||||||||||
Real estate investment vehicle | 90.3 | — | 101.8 | 85.6 | |||||||||||
Other private investment vehicles | 84.0 | — | 95.8 | 4,529.7 | |||||||||||
Total | $ | 566.9 | $ | 4.8 | $ | 1,410.8 | $ | 10,229.3 | |||||||
December 31, 2015 | |||||||||||||||
CLOs | $ | 73.6 | $ | 0.2 | $ | 458.1 | $ | 6,368.7 | |||||||
Consumer loan vehicles | 188.3 | — | 845.8 | 1,133.0 | |||||||||||
Related party private equity vehicles | 39.3 | — | 65.8 | 168.2 | |||||||||||
Other private investment vehicles | 88.0 | — | 91.4 | 4,846.1 | |||||||||||
Total | $ | 389.2 | $ | 0.2 | $ | 1,461.1 | $ | 12,516.0 |
• | Forward sale agreements whereby Jefferies commits to sell, at a fixed price, corporate loans and ownership interests in an entity holding such corporate loans to CLOs, |
• | Warehouse funding arrangements in the form of participation interests in corporate loans held by CLOs and commitments to fund such participation interests, |
• | Trading positions in securities issued in a CLO transaction, |
• | Investments in variable funding notes issued by CLOs, and |
• | A guarantee to a CLO managed by Jefferies Finance, whereby Jefferies guarantees certain of the obligations of Jefferies Finance to the CLO. |
2017 | $ | 91,057 | |
2018 | 87,405 | ||
2019 | 76,194 | ||
2020 | 62,186 | ||
2021 | 57,704 | ||
Thereafter | 572,845 | ||
947,391 | |||
Less: sublease income | (19,204 | ) | |
$ | 928,187 |
Expected Maturity Date | |||||||||||||||||||||||
2017 | 2018 | 2019 and 2020 | 2021 and 2022 | 2023 and Later | Maximum Payout | ||||||||||||||||||
Equity commitments (1) | $ | 192.4 | $ | 22.1 | $ | 13.0 | $ | — | $ | 243.3 | $ | 470.8 | |||||||||||
Loan commitments (1) | 315.3 | 16.9 | 71.6 | 44.0 | — | 447.8 | |||||||||||||||||
Underwriting commitments | 349.4 | — | — | — | — | 349.4 | |||||||||||||||||
Forward starting reverse repos (2) | 4,668.7 | — | — | — | — | 4,668.7 | |||||||||||||||||
Forward starting repos (2) | 2,539.2 | — | — | — | — | 2,539.2 | |||||||||||||||||
Other unfunded commitments (1) | — | 37.0 | 4.8 | 33.8 | 13.2 | 88.8 | |||||||||||||||||
$ | 8,065.0 | $ | 76.0 | $ | 89.4 | $ | 77.8 | $ | 256.5 | $ | 8,564.7 |
(1) | Equity commitments, loan commitments and other unfunded commitments are presented by contractual maturity date. The amounts are however mostly available on demand. |
(2) | At December 31, 2016, $4,592.9 million within forward starting reverse repos and $2,464.6 million within repos settled within three business days. |
Expected Maturity Date | |||||||||||||||||||||||
Guarantee Type | 2017 | 2018 | 2019 and 2020 | 2021 and 2022 | 2023 and Later | Notional/ Maximum Payout | |||||||||||||||||
Derivative contracts – non-credit related | $ | 18,838.6 | $ | 820.4 | $ | — | $ | — | $ | 421.8 | $ | 20,080.8 | |||||||||||
Written derivative contracts – credit related | — | 52.2 | 24.6 | 360.8 | — | 437.6 | |||||||||||||||||
Total derivative contracts | $ | 18,838.6 | $ | 872.6 | $ | 24.6 | $ | 360.8 | $ | 421.8 | $ | 20,518.4 |
External Credit Rating | |||||||||||||||||||||||||||
AAA/ Aaa | AA/ Aa | A | BBB/Baa | Below Investment Grade | Unrated | Notional/ Maximum Payout | |||||||||||||||||||||
Credit related derivative contracts: | |||||||||||||||||||||||||||
Index credit default swaps | $ | 54.0 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 54.0 | |||||||||||||
Single name credit default swaps | — | — | 79.5 | 42.9 | 261.2 | — | 383.6 |
2016 | 2015 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 105,222 | $ | 353 | |||
Financial instruments owned: | |||||||
Trading assets, at fair value | 223,218 | 750,116 | |||||
Available for sale securities | 15,635 | 14,104 | |||||
Total financial instruments owned | 238,853 | 764,220 | |||||
Investments in subsidiaries | 18,412,037 | 18,348,067 | |||||
Advances to subsidiaries | 235,879 | 123,805 | |||||
Investments in associated companies | 273,518 | 244,206 | |||||
Deferred tax asset, net | 346,684 | 221,310 | |||||
Other assets | 13,993 | 64,572 | |||||
Total | $ | 19,626,186 | $ | 19,766,533 | |||
LIABILITIES | |||||||
Accrued interest payable | $ | 11,447 | $ | 11,447 | |||
Pension liabilities | 69,152 | 78,007 | |||||
Other payables, expense accruals and other liabilities | 39,284 | 103,438 | |||||
Advances from subsidiaries | 8,265,312 | 8,060,608 | |||||
Long-term debt | 987,891 | 986,822 | |||||
Total liabilities | 9,373,086 | 9,240,322 | |||||
Commitments and contingencies | |||||||
MEZZANINE EQUITY | |||||||
Mandatorily redeemable convertible preferred shares | 125,000 | 125,000 | |||||
EQUITY | |||||||
Common shares, par value $1 per share, authorized 600,000,000 shares; 359,425,061 and 362,617,423 shares issued and outstanding, after deducting 56,947,654 and 53,755,292 shares held in treasury | 359,425 | 362,617 | |||||
Additional paid-in capital | 4,812,587 | 4,986,819 | |||||
Accumulated other comprehensive income | 310,697 | 438,793 | |||||
Retained earnings | 4,645,391 | 4,612,982 | |||||
Total Leucadia National Corporation shareholders’ equity | 10,128,100 | 10,401,211 | |||||
Total | $ | 19,626,186 | $ | 19,766,533 |
2016 | 2015 | 2014 | |||||||||
Revenues: | |||||||||||
Principal transactions | $ | 16,735 | $ | 491,341 | $ | — | |||||
Net realized securities gains (losses) | — | — | — | ||||||||
Other | 2,300 | 1,477 | 752 | ||||||||
Total revenues | 19,035 | 492,818 | 752 | ||||||||
Expenses: | |||||||||||
Compensation and benefits | 39,693 | 58,899 | 60,830 | ||||||||
WilTel pension | 2,989 | 50,836 | 9,298 | ||||||||
Interest | 58,881 | 87,181 | 99,895 | ||||||||
Intercompany interest expense | 293,527 | 241,906 | 178,027 | ||||||||
Selling, general and other expenses | 19,244 | 26,784 | 113,383 | ||||||||
414,334 | 465,606 | 461,433 | |||||||||
Income (loss) from continuing operations before income taxes, income related to associated companies and equity in earnings of subsidiaries | (395,299 | ) | 27,212 | (460,681 | ) | ||||||
Income related to associated companies | 21,195 | 3,479 | 3,763 | ||||||||
Income (loss) from continuing operations before income taxes and equity in earnings of subsidiaries | (374,104 | ) | 30,691 | (456,918 | ) | ||||||
Income tax provision (benefit) | (117,699 | ) | 267 | (139,832 | ) | ||||||
Income (loss) from continuing operations before equity in earnings of subsidiaries | (256,405 | ) | 30,424 | (317,086 | ) | ||||||
Equity in earnings of subsidiaries, net of taxes | 386,406 | 247,704 | 541,680 | ||||||||
Income from continuing operations | 130,001 | 278,128 | 224,594 | ||||||||
Equity in income (loss) from discontinued operations, net of taxes | — | 429 | (17,893 | ) | |||||||
Equity in gain on disposal of discontinued operations, net of taxes | — | 5,093 | 1,667 | ||||||||
Net income | 130,001 | 283,650 | 208,368 | ||||||||
Preferred stock dividends | (4,063 | ) | (4,063 | ) | (4,062 | ) | |||||
Net income attributable to Leucadia National Corporation common shareholders | $ | 125,938 | $ | 279,587 | $ | 204,306 | |||||
Basic earnings (loss) per common share attributable to Leucadia National Corporation common shareholders: | |||||||||||
Income from continuing operations | $ | 0.34 | $ | 0.73 | $ | 0.58 | |||||
Income (loss) from discontinued operations | — | — | (0.05 | ) | |||||||
Gain on disposal of discontinued operations | — | 0.01 | 0.01 | ||||||||
Net income | $ | 0.34 | $ | 0.74 | $ | 0.54 | |||||
Diluted earnings (loss) per common share attributable to Leucadia National Corporation common shareholders: | |||||||||||
Income from continuing operations | $ | 0.34 | $ | 0.73 | $ | 0.58 | |||||
Income (loss) from discontinued operations | — | — | (0.05 | ) | |||||||
Gain on disposal of discontinued operations | — | 0.01 | 0.01 | ||||||||
Net income | $ | 0.34 | $ | 0.74 | $ | 0.54 |
2016 | 2015 | 2014 | |||||||||
Net income | $ | 130,001 | $ | 283,650 | $ | 208,368 | |||||
Other comprehensive income (loss): | |||||||||||
Net unrealized holding gains (losses) on investments arising during the period, net of income tax provision (benefit) of $2,262, $(5,029) and $(4,923) | 3,900 | (9,057 | ) | (8,866 | ) | ||||||
Less: reclassification adjustment for net (gains) losses included in net income (loss), net of income tax provision (benefit) of $2, $6,068 and $1,631 | (4 | ) | (10,930 | ) | (2,939 | ) | |||||
Net change in unrealized holding gains (losses) on investments, net of income tax provision (benefit) of $2,260, $(11,097) and $(6,554) | 3,896 | (19,987 | ) | (11,805 | ) | ||||||
Net unrealized foreign exchange gains (losses) arising during the period, net of income tax provision (benefit) of $(3,530), $(5,174) and $(6,837) | (121,581 | ) | (36,477 | ) | (43,307 | ) | |||||
Less: reclassification adjustment for foreign exchange (gains) losses included in net income (loss), net of income tax provision (benefit) of $0, $0 and $149 | — | — | (267 | ) | |||||||
Net change in unrealized foreign exchange gains (losses), net of income tax provision (benefit) of $(3,530), $(5,174) and $(6,986) | (121,581 | ) | (36,477 | ) | (43,574 | ) | |||||
Net unrealized gains (losses) on instrument specific credit risk arising during the period, net of income tax provision (benefit) of $(4,251), $0 and $0 | (6,494 | ) | — | — | |||||||
Less: reclassification adjustment for instrument specific credit risk (gains) losses included in net income (loss), net of income tax provision (benefit) of $0, $0 and $0 | — | — | — | ||||||||
Net change in unrealized instrument specific credit risk gains (losses), net of income tax provision (benefit) of $(4,251), $0 and $0 | (6,494 | ) | — | — | |||||||
Net unrealized gains (losses) on derivatives arising during the period, net of income tax provision (benefit) of $0, $0 and $0 | — | — | — | ||||||||
Less: reclassification adjustment for derivative (gains) losses included in net income (loss), net of income tax provision (benefit) of $0, $0 and $(95) | — | — | 169 | ||||||||
Net change in unrealized derivative gains (losses), net of income tax provision (benefit) of $0, $0 and $95 | — | — | 169 | ||||||||
Net pension gains (losses) arising during the period, net of income tax provision (benefit) of $(2,516), $7,152 and $(17,698) | (5,451 | ) | 17,073 | (38,959 | ) | ||||||
Less: reclassification adjustment for pension (gains) losses included in net income (loss), net of income tax provision (benefit) of $(700), $(17,159) and $(1,676) | 1,534 | 31,102 | 3,201 | ||||||||
Net change in pension liability benefits, net of income tax provision (benefit) of $(1,816), $24,311 and $(16,022) | (3,917 | ) | 48,175 | (35,758 | ) | ||||||
Other comprehensive loss, net of income taxes | (128,096 | ) | (8,289 | ) | (90,968 | ) | |||||
Comprehensive income | 1,905 | 275,361 | 117,400 | ||||||||
Preferred stock dividends | (4,063 | ) | (4,063 | ) | (4,062 | ) | |||||
Comprehensive income (loss) attributable to Leucadia National Corporation common shareholders | $ | (2,158 | ) | $ | 271,298 | $ | 113,338 |
2016 | 2015 | 2014 | |||||||||
Net cash flows from operating activities: | |||||||||||
Net income | $ | 130,001 | $ | 283,650 | $ | 208,368 | |||||
Adjustments to reconcile net income to net cash used for operations: | |||||||||||
Deferred income tax benefit | (12,220 | ) | (2,457 | ) | (15,302 | ) | |||||
Accretion of interest | 921 | 1,788 | 2,029 | ||||||||
Share-based compensation | 33,597 | 74,087 | 109,838 | ||||||||
Equity in earnings of subsidiaries | (386,406 | ) | (253,226 | ) | (525,454 | ) | |||||
Income related to associated companies | (21,195 | ) | (3,479 | ) | (3,763 | ) | |||||
Distributions from associated companies | 1,861 | 312 | 2,429 | ||||||||
Change in estimated litigation reserve | — | (88,500 | ) | 88,500 | |||||||
Net change in: | |||||||||||
Trading assets | (40,235 | ) | (615,768 | ) | — | ||||||
Other assets | (708 | ) | (49,006 | ) | (1,384 | ) | |||||
Accrued interest payable | — | (10,982 | ) | (762 | ) | ||||||
Pension liabilities | (13,111 | ) | 49,835 | 9,299 | |||||||
Other payables, expense accruals and other liabilities | (23,218 | ) | 558 | (15,127 | ) | ||||||
Income taxes receivable/payable, net | (90,898 | ) | 6,640 | (5,374 | ) | ||||||
Other | 1,262 | 5,110 | 4,153 | ||||||||
Net cash used for operating activities | (420,349 | ) | (601,438 | ) | (142,550 | ) | |||||
Net cash flows from investing activities: | |||||||||||
Investments in subsidiaries | (427,933 | ) | (637,400 | ) | (1,460,159 | ) | |||||
Distributions from subsidiaries | 868,612 | 119,695 | 97,331 | ||||||||
Advances on notes, loans and other receivables | — | (279,000 | ) | (6,500 | ) | ||||||
Collections on notes, loans and other receivables | 16,233 | 144,652 | 6,500 | ||||||||
Investments in associated companies | (11,611 | ) | (8,101 | ) | (1,399 | ) | |||||
Capital distributions from associated companies | 1,501 | 1,317 | 730 | ||||||||
Purchases of investments (other than short-term) | (2,242 | ) | (7,968 | ) | (11,628 | ) | |||||
Other | 150 | 276 | 184 | ||||||||
Net cash provided by (used for) investing activities | 444,710 | (666,529 | ) | (1,374,941 | ) |
2016 | 2015 | 2014 | |||||||||
Net cash flows from financing activities: | |||||||||||
Repayment of debt | $ | — | $ | (458,641 | ) | $ | (34 | ) | |||
Advances from (to) subsidiaries, net | 265,762 | 1,943,961 | 1,683,949 | ||||||||
Issuance of common shares | 1,062 | 1,223 | 2,190 | ||||||||
Purchase of common shares for treasury | (95,020 | ) | (125,754 | ) | (75,728 | ) | |||||
Dividends paid | (91,296 | ) | (92,550 | ) | (93,071 | ) | |||||
Net cash provided by financing activities | 80,508 | 1,268,239 | 1,517,306 | ||||||||
Net increase (decrease) in cash and cash equivalents | 104,869 | 272 | (185 | ) | |||||||
Cash and cash equivalents at January 1, | 353 | 81 | 266 | ||||||||
Cash and cash equivalents at December 31, | $ | 105,222 | $ | 353 | $ | 81 | |||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash paid during the year for: | |||||||||||
Interest | $ | 57,813 | $ | 95,074 | $ | 96,847 | |||||
Income tax payments, net | $ | (10,199 | ) | $ | (2,332 | ) | $ | 13,463 | |||
Non-cash investing activities: | |||||||||||
Investments contributed to subsidiary | $ | 423,009 | $ | — | $ | 5,000 | |||||
Investments transferred from subsidiary | $ | 2,022 | $ | — | $ | 43,602 | |||||
Non-cash financing activities: | |||||||||||
Issuance of common shares for debt conversion | $ | — | $ | — | $ | 97,546 |
Expected Maturity Date | |||||||||||||||||||||||
2017 | 2018 | 2019 and 2020 | 2021 and 2022 | 2023 and Later | Maximum Payout | ||||||||||||||||||
Equity commitments (1) | $ | 192.4 | $ | 22.1 | $ | 13.0 | $ | — | $ | 243.3 | $ | 470.8 | |||||||||||
Loan commitments (1) | 315.3 | 16.9 | 71.6 | 44.0 | — | 447.8 | |||||||||||||||||
Underwriting commitments | 349.4 | — | — | — | — | 349.4 | |||||||||||||||||
Forward starting reverse repos (2) | 4,668.7 | — | — | — | — | 4,668.7 | |||||||||||||||||
Forward starting repos (2) | 2,539.2 | — | — | — | — | 2,539.2 | |||||||||||||||||
Other unfunded commitments (1) | — | 37.0 | 4.8 | 33.8 | 13.2 | 88.8 | |||||||||||||||||
$ | 8,065.0 | $ | 76.0 | $ | 89.4 | $ | 77.8 | $ | 256.5 | $ | 8,564.7 |
(1) | Equity commitments, loan commitments and other unfunded commitments are presented by contractual maturity date. The amounts are however mostly available on demand. |
(2) | At December 31, 2016, $4,592.9 million within forward starting reverse repos and $2,464.6 million within repos settled within three business days. |
2016 | 2015 | ||||||
Parent Company Debt: | |||||||
Senior Notes: | |||||||
5.50% Senior Notes due October 18, 2023, $750,000 principal | $ | 741,264 | $ | 740,239 | |||
6.625% Senior Notes due October 23, 2043, $250,000 principal | 246,627 | 246,583 | |||||
Total long-term debt – Parent Company | 987,891 | 986,822 | |||||
Subsidiary Debt (non-recourse to Parent Company): | |||||||
Jefferies: | |||||||
5.5% Senior Notes, due March 15, 2016, $350,000 principal | — | 353,025 | |||||
5.125% Senior Notes, due April 13, 2018, $800,000 principal | 817,813 | 830,298 | |||||
8.5% Senior Notes, due July 15, 2019, $700,000 principal | 778,367 | 806,125 | |||||
2.375% Euro Senior Notes, due May 20, 2020, $529,975 and $528,625 principal | 528,250 | 526,436 | |||||
6.875% Senior Notes, due April 15, 2021, $750,000 principal | 823,797 | 838,765 | |||||
2.25% Euro Medium Term Notes, due July 13, 2022, $4,240 and $4,229 principal | 3,848 | 3,779 | |||||
5.125% Senior Notes, due January 20, 2023, $600,000 principal | 618,355 | 620,890 | |||||
6.45% Senior Debentures, due June 8, 2027, $350,000 principal | 377,806 | 379,711 | |||||
3.875% Convertible Senior Debentures, due November 1, 2029, $345,000 principal | 346,163 | 347,307 | |||||
6.25% Senior Debentures, due January 15, 2036, $500,000 principal | 512,396 | 512,730 | |||||
6.50% Senior Notes, due January 20, 2043, $400,000 principal | 421,333 | 421,656 | |||||
Structured Notes (1) (2) | 255,203 | — | |||||
National Beef Term Loan | 273,811 | 310,000 | |||||
National Beef Revolving Credit Facility | — | 120,080 | |||||
54 Madison Term Loans | 406,028 | 116,211 | |||||
Foursight Capital Credit Facilities | 97,138 | 109,501 | |||||
Other | 132,244 | 117,246 | |||||
Total long-term debt – subsidiaries | 6,392,552 | 6,413,760 | |||||
Long-term debt | $ | 7,380,443 | $ | 7,400,582 |
Assets | Liabilities | ||||||||||||
Fair Value | Number of Contracts | Fair Value | Number of Contracts | ||||||||||
December 31, 2016 | |||||||||||||
Interest rate contracts | $ | 3,282,245 | 29,032 | $ | 3,159,457 | 34,845 | |||||||
Foreign exchange contracts | 529,669 | 7,826 | 516,869 | 8,319 | |||||||||
Equity contracts | 786,987 | 2,843,329 | 1,169,201 | 2,414,715 | |||||||||
Commodity contracts | 1,906 | 2,766 | 6,430 | 7,289 | |||||||||
Credit contracts: centrally cleared swaps | 7,044 | 98 | 2,562 | 19,900 | |||||||||
Credit contracts: other credit derivatives | 19,225 | 213 | 25,503 | 184 | |||||||||
Total | 4,627,076 | 4,880,022 | |||||||||||
Counterparty/cash-collateral netting | (4,255,998 | ) | (4,229,213 | ) | |||||||||
Total per Consolidated Statement of Financial Condition | $ | 371,078 | $ | 650,809 | |||||||||
December 31, 2015 | |||||||||||||
Interest rate contracts | $ | 2,910,093 | 56,748 | $ | 2,849,958 | 74,904 | |||||||
Foreign exchange contracts (1) | 453,527 | 8,089 | 466,021 | 7,376 | |||||||||
Equity contracts | 1,017,611 | 3,057,754 | 1,094,597 | 2,947,416 | |||||||||
Commodity contracts (1) | 27,590 | 2,896 | 5,510 | 2,001 | |||||||||
Credit contracts: centrally cleared swaps | 2,447 | 299 | 841 | 44 | |||||||||
Credit contracts: other credit derivatives | 16,977 | 100 | 59,314 | 135 | |||||||||
Total | 4,428,245 | 4,476,241 | |||||||||||
Counterparty/cash-collateral netting | (4,165,446 | ) | (4,257,998 | ) | |||||||||
Total per Consolidated Statement of Financial Condition | $ | 262,799 | $ | 218,243 |
(1) | Commodity contracts increased in assets by a fair value of $19.3 million and by 29 contracts and in liabilities by a fair value of $4.6 million and by 28 contracts with corresponding decreases in foreign exchange contracts from those amounts previously reported to correct for the classification of certain contracts. The total amount of contracts remained unchanged. |
2016 | 2015 | 2014 | |||||||||
Interest rate contracts | $ | (36,559 | ) | $ | (36,792 | ) | $ | (149,587 | ) | ||
Foreign exchange contracts | 20,401 | 36,233 | 39,872 | ||||||||
Equity contracts | (635,305 | ) | (137,219 | ) | (327,978 | ) | |||||
Commodity contracts | (3,339 | ) | (13,625 | ) | 58,746 | ||||||
Credit contracts | 5,013 | (16,223 | ) | (23,934 | ) | ||||||
Total | $ | (649,789 | ) | $ | (167,626 | ) | $ | (402,881 | ) |
OTC Derivative Assets (1) (2) (3) | |||||||||||||||||||
0-12 Months | 1-5 Years | Greater Than 5 Years | Cross- Maturity Netting (4) | Total | |||||||||||||||
Equity swaps and options | $ | 27,436 | $ | 5,727 | $ | — | $ | — | $ | 33,163 | |||||||||
Credit default swaps | — | 4,542 | 3,463 | (1,588 | ) | 6,417 | |||||||||||||
Total return swaps | 20,749 | 389 | — | (200 | ) | 20,938 | |||||||||||||
Foreign currency forwards, swaps and options | 95,112 | 35,988 | — | (10,547 | ) | 120,553 | |||||||||||||
Interest rate swaps, options and forwards | 120,053 | 189,153 | 134,507 | (71,604 | ) | 372,109 | |||||||||||||
Total | $ | 263,350 | $ | 235,799 | $ | 137,970 | $ | (83,939 | ) | 553,180 | |||||||||
Cross product counterparty netting | (623 | ) | |||||||||||||||||
Total OTC derivative assets included in Trading assets | $ | 552,557 |
(1) | At December 31, 2016, we held exchange traded derivative assets and other credit agreements with a fair value of $25.4 million, which are not included in this table. |
(2) | OTC derivative assets in the table above are gross of collateral received. OTC derivative assets are recorded net of collateral received in the Consolidated Statements of Financial Condition. At December 31, 2016, cash collateral received was $217.4 million. |
(3) | Derivative fair values include counterparty netting within product category. |
(4) | Amounts represent the netting of receivable balances with payable balances for the same counterparty within product category across maturity categories. |
OTC Derivative Liabilities (1) (2) (3) | ||||||||||||||||||||
0-12 Months | 1-5 Years | Greater Than 5 Years | Cross-Maturity Netting (4) | Total | ||||||||||||||||
Commodity swaps, options and forwards | $ | 3,214 | $ | 1,218 | $ | — | $ | — | $ | 4,432 | ||||||||||
Equity swaps and options | 10,993 | 20,354 | — | — | 31,347 | |||||||||||||||
Credit default swaps | 16 | 1,594 | 7,147 | (1,588 | ) | 7,169 | ||||||||||||||
Total return swaps | 12,088 | 2,407 | — | (200 | ) | 14,295 | ||||||||||||||
Foreign currency forwards, swaps and options | 92,375 | 26,011 | — | (10,547 | ) | 107,839 | ||||||||||||||
Fixed income forwards | 3,401 | — | — | — | 3,401 | |||||||||||||||
Interest rate swaps, options and forwards | 108,085 | 121,975 | 92,029 | (71,604 | ) | 250,485 | ||||||||||||||
Total | $ | 230,172 | $ | 173,559 | $ | 99,176 | $ | (83,939 | ) | 418,968 | ||||||||||
Cross product counterparty netting | (623 | ) | ||||||||||||||||||
Total OTC derivative liabilities included in Trading liabilities | $ | 418,345 |
(1) | At December 31, 2016, we held exchange traded derivative liabilities and other credit agreements with a fair value of $414.2 million, which are not included in this table. |
(2) | OTC derivative liabilities in the table above are gross of collateral pledged. OTC derivative liabilities are recorded net of collateral pledged in the Consolidated Statements of Financial Condition. At December 31, 2016, cash collateral pledged was $190.6 million. |
(3) | Derivative fair values include counterparty netting within product category. |
(4) | Amounts represent the netting of receivable balances with payable balances for the same counterparty within product category across maturity categories. |
Counterparty credit quality (1): | |||
A- or higher | $ | 380,574 | |
BBB- to BBB+ | 39,595 | ||
BB+ or lower | 51,834 | ||
Unrated | 80,554 | ||
Total | $ | 552,557 |
(1) | Jefferies utilizes internal credit ratings determined by the Jefferies Risk Management department. Credit ratings determined by Risk Management use methodologies that produce ratings generally consistent with those produced by external rating agencies. |
Weighted- Average Grant Date Fair Value | ||||||
Balance at January 1, 2014 | 5,242 | $ | 26.94 | |||
Grants | 864 | $ | 27.03 | |||
Forfeited | (202 | ) | $ | 26.90 | ||
Fulfillment of service requirement | (2,521 | ) | $ | 26.89 | ||
Balance at December 31, 2014 | 3,383 | $ | 27.00 | |||
Grants | 602 | $ | 18.63 | |||
Forfeited | (94 | ) | $ | 28.12 | ||
Fulfillment of service requirement | (1,887 | ) | $ | 26.87 | ||
Balance at December 31, 2015 | 2,004 | $ | 24.56 | |||
Grants | 356 | $ | 18.23 | |||
Forfeited | (24 | ) | $ | 26.90 | ||
Fulfillment of service requirement | (974 | ) | $ | 25.65 | ||
Balance at December 31, 2016 | 1,362 | $ | 22.09 |
Future Service Required | No Future Service Required | Future Service Required | No Future Service Required | ||||||||||
Balance at January 1, 2014 | 4,793 | 8,316 | $ | 26.90 | $ | 26.86 | |||||||
Grants | — | 97 | $ | — | $ | 20.89 | |||||||
Distributions of underlying shares | — | (366 | ) | $ | — | $ | 26.85 | ||||||
Forfeited | (135 | ) | — | $ | 26.90 | $ | — | ||||||
Fulfillment of service requirement | (420 | ) | 420 | $ | 26.90 | $ | 26.90 | ||||||
Balance at December 31, 2014 | 4,238 | 8,467 | $ | 26.90 | $ | 26.79 | |||||||
Grants | — | 121 | $ | — | $ | 18.95 | |||||||
Distributions of underlying shares | — | (229 | ) | $ | — | $ | 22.34 | ||||||
Forfeited | (626 | ) | — | $ | 26.90 | $ | — | ||||||
Fulfillment of service requirement | (224 | ) | 224 | $ | 26.90 | $ | 26.90 | ||||||
Balance at December 31, 2015 | 3,388 | 8,583 | $ | 26.90 | $ | 26.68 | |||||||
Grants | — | 128 | $ | — | $ | 14.21 | |||||||
Distributions of underlying shares | — | (1,683 | ) | $ | — | $ | 26.59 | ||||||
Forfeited | — | — | $ | — | $ | — | |||||||
Fulfillment of service requirement | (3,320 | ) | 3,320 | $ | 26.90 | $ | 26.90 | ||||||
Balance at December 31, 2016 | 68 | 10,348 | $ | 26.90 | $ | 26.61 |
Target Number of Shares | Weighted- Average Grant Date Fair Value | |||||
Balance at December 31, 2015 | — | $ | — | |||
Grants | 3,434 | $ | 9.68 | |||
Forfeited | — | $ | — | |||
Balance at December 31, 2016 | 3,434 | $ | 9.68 |
• | 1999 Stock Option Plan. This plan provided for the issuance of stock options and stock appreciation rights to non-employee directors and certain employees at not less than the fair market value of the underlying stock at the date of grant. Options granted to employees under this plan were intended to qualify as incentive stock options to the extent permitted under the Internal Revenue Code and became exercisable in five equal annual installments starting one year from date of grant. Options granted to non-employee directors became exercisable in four equal annual installments starting one year from date of grant. No stock appreciation rights have been granted. In March 2014, we ceased issuing options and rights under our option plan. No shares remain available for future grants under this plan. |
• | Senior Executive Warrant Plan. The warrants to purchase 2,000,000 common shares that were granted in 2011 to each of our then Chairman and then President expired unexercised during the first quarter of 2016. We had recorded share-based compensation expense related to this grant of warrants of $1.0 million and $5.3 million for the years ended December 31, 2015 and 2014, respectively. No shares remain available for future grants under this warrant plan. |
Common Shares Subject to Option | Weighted- Average Exercise Prices | Weighted- Average Remaining Contractual Term | Aggregate Intrinsic Value | |||||||||
Balance at December 31, 2013 | 2,417,248 | $ | 25.64 | |||||||||
Granted | — | $ | — | |||||||||
Exercised | (35,536 | ) | $ | 22.87 | $ | 58,000 | ||||||
Cancelled | (741,678 | ) | $ | 27.39 | ||||||||
Balance at December 31, 2014 | 1,640,034 | $ | 24.91 | |||||||||
Granted | — | $ | — | |||||||||
Exercised | (2,030 | ) | $ | 21.66 | $ | 6,000 | ||||||
Cancelled | (976,732 | ) | $ | 24.88 | ||||||||
Balance at December 31, 2015 | 661,272 | $ | 24.97 | |||||||||
Granted | — | $ | — | |||||||||
Exercised | — | $ | — | $ | — | |||||||
Cancelled | (19,794 | ) | $ | 30.49 | ||||||||
Balance at December 31, 2016 | 641,478 | $ | 24.80 | 1.1 years | $ | 144,000 | ||||||
Exercisable at December 31, 2016 | 503,430 | $ | 25.31 | 0.8 years | $ | 93,000 |
Cash | $ | 5,206 | ||
Receivables | 15,297 | |||
Property, equipment and leasehold improvements, net | 18,664 | |||
Intangible assets, net and goodwill | 56,854 | |||
Inventory | 19,069 | |||
Other assets | 12,993 | |||
$ | 128,083 |
Revenues and other income: | ||||
Gaming entertainment | $ | 67,739 | ||
Investment and other income | 4,700 | |||
72,439 | ||||
Expenses: | ||||
Direct operating expenses - Gaming entertainment | 48,877 | |||
Compensation and benefits | 4,503 | |||
Depreciation and amortization | 5,208 | |||
Selling, general and other expenses | 41,378 | |||
99,966 | ||||
Loss from discontinued operations before income taxes | (27,527 | ) | ||
Income tax (benefit) | (9,634 | ) | ||
Loss from discontinued operations after income taxes | $ | (17,893 | ) |
2016 | 2015 | 2014 | |||||||||
Numerator for earnings (loss) per share: | |||||||||||
Net income attributable to Leucadia National Corporation common shareholders | $ | 125,938 | $ | 279,587 | $ | 204,306 | |||||
Allocation of earnings to participating securities (1) | (574 | ) | (4,711 | ) | (4,761 | ) | |||||
Net income attributable to Leucadia National Corporation common shareholders for basic earnings (loss) per share | 125,364 | 274,876 | 199,545 | ||||||||
Adjustment to allocation of earnings to participating securities related to diluted shares (1) | (19 | ) | (34 | ) | (75 | ) | |||||
Mandatorily redeemable convertible preferred share dividends | — | — | — | ||||||||
Interest on 3.75% Convertible Notes | — | — | 739 | ||||||||
Net income attributable to Leucadia National Corporation common shareholders for diluted earnings (loss) per share | $ | 125,345 | $ | 274,842 | $ | 200,209 | |||||
Denominator for earnings (loss) per share: | |||||||||||
Denominator for basic earnings (loss) per share – weighted-average shares | 371,211 | 372,430 | 371,889 | ||||||||
Stock options | — | 1 | 29 | ||||||||
Warrants | — | — | — | ||||||||
Senior executive compensation plan awards | 307 | — | — | ||||||||
Mandatorily redeemable convertible preferred shares | — | — | — | ||||||||
3.875% Convertible Senior Debentures | — | — | — | ||||||||
3.75% Convertible Notes | — | — | 1,415 | ||||||||
Denominator for diluted earnings (loss) per share | 371,518 | 372,431 | 373,333 |
(1) | Represents dividends declared during the period on participating securities plus an allocation of undistributed earnings to participating securities. Net losses are not allocated to participating securities. Participating securities represent restricted stock and RSUs for which requisite service has not yet been rendered and amounted to weighted-average shares of 1,986,800, 6,500,000 and 9,040,900 for the years ended December 31, 2016, 2015 and 2014, respectively. Dividends declared on participating securities during the years ended December 31, 2016, 2015 and 2014 were $0.4 million, $1.5 million and $2.2 million, respectively. Undistributed earnings are allocated to participating securities based upon their right to share in earnings if all earnings for the period had been distributed. |
Loans to and investments in associated companies as of December 31, 2015 | Income (losses) related to associated companies | Income (losses) related to associated companies classified as other revenues | Contributions to (distributions from) associated companies, net | Other, including foreign exchange and unrealized gains (losses) | Loans to and investments in associated companies as of December 31, 2016 | ||||||||||||||||||
Jefferies Finance | $ | 528,575 | $ | — | $ | (1,761 | ) | $ | (36,350 | ) | $ | — | $ | 490,464 | |||||||||
Jefferies LoanCore | 288,741 | — | 21,221 | (155,231 | ) | — | 154,731 | ||||||||||||||||
Berkadia | 190,986 | 94,201 | — | (100,766 | ) | 22 | 184,443 | ||||||||||||||||
FXCM (1) | — | 1,919 | — | — | 334,339 | 336,258 | |||||||||||||||||
Garcadia Companies | 172,660 | 52,266 | — | (39,111 | ) | — | 185,815 | ||||||||||||||||
Linkem | 150,149 | (22,867 | ) | — | 33,303 | (6,585 | ) | 154,000 | |||||||||||||||
HomeFed | 275,378 | 23,893 | — | 2,960 | — | 302,231 | |||||||||||||||||
Golden Queen (2) | 114,323 | (3,021 | ) | — | — | — | 111,302 | ||||||||||||||||
54 Madison (3) | — | 4,255 | — | 153,503 | 3,642 | 161,400 | |||||||||||||||||
Other | 36,557 | 3,952 | (2,276 | ) | 9,622 | (3,401 | ) | 44,454 | |||||||||||||||
Total | $ | 1,757,369 | $ | 154,598 | $ | 17,184 | $ | (132,070 | ) | $ | 328,017 | $ | 2,125,098 |
Loans to and investments in associated companies as of December 31, 2014 | Income (losses) related to associated companies | Income (losses) related to associated companies classified as other revenues | Contributions to (distributions from) associated companies, net | Other, including foreign exchange and unrealized gains (losses) | Loans to and investments in associated companies as of December 31, 2015 | ||||||||||||||||||
Jefferies Finance | $ | 508,891 | $ | — | $ | 40,884 | $ | (21,200 | ) | $ | — | $ | 528,575 | ||||||||||
Jefferies LoanCore | 258,947 | — | 36,554 | (6,760 | ) | — | 288,741 | ||||||||||||||||
Berkadia | 208,511 | 78,092 | — | (89,560 | ) | (6,057 | ) | 190,986 | |||||||||||||||
Garcadia Companies | 167,939 | 53,182 | — | (48,461 | ) | — | 172,660 | ||||||||||||||||
Linkem | 159,054 | (15,577 | ) | — | 21,138 | (14,466 | ) | 150,149 | |||||||||||||||
HomeFed | 271,782 | 3,596 | — | — | — | 275,378 | |||||||||||||||||
Golden Queen (2) | 103,598 | (1,775 | ) | — | 12,500 | — | 114,323 | ||||||||||||||||
Other | 33,846 | (7,237 | ) | (1,721 | ) | 11,483 | 186 | 36,557 | |||||||||||||||
Total | $ | 1,712,568 | $ | 110,281 | $ | 75,717 | $ | (120,860 | ) | $ | (20,337 | ) | $ | 1,757,369 |
Loans to and investments in associated companies as of December 31, 2013 | Income (losses) related to associated companies | Income (losses) related to associated companies classified as other revenues | Contributions to (distributions from) associated companies, net | Other, including foreign exchange and unrealized gains (losses) | Loans to and investments in associated companies as of December 31, 2014 | ||||||||||||||||||
Jefferies Finance | $ | 470,537 | $ | — | $ | 72,701 | $ | (34,347 | ) | $ | — | $ | 508,891 | ||||||||||
Jefferies LoanCore | 224,037 | — | 18,793 | 16,117 | — | 258,947 | |||||||||||||||||
Berkadia | 182,573 | 101,187 | — | (72,721 | ) | (2,528 | ) | 208,511 | |||||||||||||||
Garcadia Companies | 120,017 | 49,416 | — | (1,494 | ) | — | 167,939 | ||||||||||||||||
Linkem | 173,577 | (14,633 | ) | — | 18,390 | (18,280 | ) | 159,054 | |||||||||||||||
HomeFed | 52,923 | 3,150 | — | — | 215,709 | 271,782 | |||||||||||||||||
Golden Queen (2) | — | (1,402 | ) | — | 105,000 | — | 103,598 | ||||||||||||||||
Other | 34,677 | 809 | (1,252 | ) | (4,067 | ) | 3,679 | 33,846 | |||||||||||||||
Total | $ | 1,258,341 | $ | 138,527 | $ | 90,242 | $ | 26,878 | $ | 198,580 | $ | 1,712,568 |
(1) | As discussed more fully in Note 4, on September 1, 2016, we amended the terms of our loan and associated rights with FXCM. Through the amendments, we converted our participation rights for a 49.9% common membership ownership in FXCM. Our term loan remains classified within Trading assets, at fair value. |
(2) | At December 31, 2016, 2015 and 2014, the balance reflects $32.8 million, $33.7 million and $33.7 million, respectively, related to a noncontrolling interest. |
(3) | At December 31, 2016, the balance reflects $95.3 million related to noncontrolling interests. |
2016 | 2015 | ||||||||||
Assets | $ | 16,964,850 | $ | 18,489,684 | |||||||
Liabilities | 13,097,022 | 14,990,876 | |||||||||
Noncontrolling interest | 132,789 | 39,038 | |||||||||
2016 | 2015 | 2014 | |||||||||
Revenues | $ | 4,275,016 | $ | 3,946,252 | $ | 3,201,823 | |||||
Income from continuing operations before extraordinary items | $ | 422,167 | $ | 398,369 | $ | 431,654 | |||||
Net income | $ | 430,291 | $ | 398,369 | $ | 431,654 | |||||
The Company’s income related to associated companies | $ | 171,782 | $ | 185,998 | $ | 228,769 |
December 31, 2016 | |||||||||||||||||||
Level 1 (1) | Level 2 (1) | Level 3 | Counterparty and Cash Collateral Netting (2) | Total | |||||||||||||||
Assets: | |||||||||||||||||||
Trading assets, at fair value: | |||||||||||||||||||
Corporate equity securities | $ | 2,522,977 | $ | 92,839 | $ | 21,739 | $ | — | $ | 2,637,555 | |||||||||
Corporate debt securities | — | 2,675,020 | 25,005 | — | 2,700,025 | ||||||||||||||
CDOs and CLOs | — | 54,306 | 54,354 | — | 108,660 | ||||||||||||||
U.S. government and federal agency securities | 2,389,397 | 56,726 | — | — | 2,446,123 | ||||||||||||||
Municipal securities | — | 708,469 | 27,257 | — | 735,726 | ||||||||||||||
Sovereign obligations | 1,432,556 | 990,492 | — | — | 2,423,048 | ||||||||||||||
Residential mortgage-backed securities | — | 960,494 | 38,772 | — | 999,266 | ||||||||||||||
Commercial mortgage-backed securities | — | 296,405 | 20,580 | — | 316,985 | ||||||||||||||
Other asset-backed securities | — | 63,587 | 40,911 | — | 104,498 | ||||||||||||||
Loans and other receivables | — | 1,557,233 | 81,872 | — | 1,639,105 | ||||||||||||||
Derivatives | 3,825 | 4,616,822 | 6,429 | (4,255,998 | ) | 371,078 | |||||||||||||
Investments at fair value | — | — | 314,359 | — | 314,359 | ||||||||||||||
Investment in FXCM | — | — | 164,500 | — | 164,500 | ||||||||||||||
Total trading assets, excluding investments at fair value based on NAV | $ | 6,348,755 | $ | 12,072,393 | $ | 795,778 | $ | (4,255,998 | ) | $ | 14,960,928 | ||||||||
Available for sale securities: | |||||||||||||||||||
Corporate equity securities | $ | 79,425 | $ | — | $ | — | $ | — | $ | 79,425 | |||||||||
Corporate debt securities | — | 179 | — | — | 179 | ||||||||||||||
U.S. government securities | 174,933 | — | — | — | 174,933 | ||||||||||||||
Residential mortgage-backed securities | — | 19,133 | — | — | 19,133 | ||||||||||||||
Commercial mortgage-backed securities | — | 8,337 | — | — | 8,337 | ||||||||||||||
Other asset-backed securities | — | 19,042 | — | — | 19,042 | ||||||||||||||
Total available for sale securities | $ | 254,358 | $ | 46,691 | $ | — | $ | — | $ | 301,049 | |||||||||
Liabilities: | |||||||||||||||||||
Trading liabilities: | |||||||||||||||||||
Corporate equity securities | $ | 1,593,548 | $ | 16,806 | $ | 313 | $ | — | $ | 1,610,667 | |||||||||
Corporate debt securities | — | 1,718,424 | 523 | — | 1,718,947 | ||||||||||||||
U.S. government and federal agency securities | 976,497 | — | — | — | 976,497 | ||||||||||||||
Sovereign obligations | 1,375,590 | 1,253,754 | — | — | 2,629,344 | ||||||||||||||
Loans | — | 801,977 | 378 | — | 802,355 | ||||||||||||||
Derivatives | 2,566 | 4,867,586 | 9,870 | (4,229,213 | ) | 650,809 | |||||||||||||
Total trading liabilities | $ | 3,948,201 | $ | 8,658,547 | $ | 11,084 | $ | (4,229,213 | ) | $ | 8,388,619 | ||||||||
Other secured financings | $ | — | $ | 41,350 | $ | 418 | $ | — | $ | 41,768 | |||||||||
Long-term debt - structured notes | $ | — | $ | 248,856 | $ | — | $ | — | $ | 248,856 |
December 31, 2015 | |||||||||||||||||||
Level 1 (1) | Level 2 (1) | Level 3 | Counterparty and Cash Collateral Netting (2) | Total | |||||||||||||||
Assets: | |||||||||||||||||||
Trading assets, at fair value: | |||||||||||||||||||
Corporate equity securities | $ | 2,803,243 | $ | 133,732 | $ | 40,906 | $ | — | $ | 2,977,881 | |||||||||
Corporate debt securities | — | 2,867,165 | 25,876 | — | 2,893,041 | ||||||||||||||
CDOs and CLOs | — | 89,144 | 85,092 | — | 174,236 | ||||||||||||||
U.S. government and federal agency securities | 2,555,018 | 90,633 | — | — | 2,645,651 | ||||||||||||||
Municipal securities | — | 487,141 | — | — | 487,141 | ||||||||||||||
Sovereign obligations | 1,251,366 | 1,407,955 | 120 | — | 2,659,441 | ||||||||||||||
Residential mortgage-backed securities | — | 2,731,070 | 70,263 | — | 2,801,333 | ||||||||||||||
Commercial mortgage-backed securities | — | 1,014,913 | 14,326 | — | 1,029,239 | ||||||||||||||
Other asset-backed securities | — | 118,629 | 42,925 | — | 161,554 | ||||||||||||||
Loans and other receivables | — | 1,123,044 | 189,289 | — | 1,312,333 | ||||||||||||||
Derivatives | 2,253 | 4,406,207 | 19,785 | (4,165,446 | ) | 262,799 | |||||||||||||
Investments at fair value | — | 26,224 | 199,794 | — | 226,018 | ||||||||||||||
Investment in FXCM | — | — | 625,689 | — | 625,689 | ||||||||||||||
Total trading assets, excluding investments at fair value based on NAV | $ | 6,611,880 | $ | 14,495,857 | $ | 1,314,065 | $ | (4,165,446 | ) | $ | 18,256,356 | ||||||||
Available for sale securities: | |||||||||||||||||||
Corporate equity securities | $ | 73,579 | $ | — | $ | — | $ | — | $ | 73,579 | |||||||||
Corporate debt securities | — | 4,744 | — | — | 4,744 | ||||||||||||||
U.S. government securities | 63,945 | — | — | — | 63,945 | ||||||||||||||
Residential mortgage-backed securities | — | 23,240 | — | — | 23,240 | ||||||||||||||
Commercial mortgage-backed securities | — | 2,374 | — | — | 2,374 | ||||||||||||||
Other asset-backed securities | — | 39,473 | — | — | 39,473 | ||||||||||||||
Total available for sale securities | $ | 137,524 | $ | 69,831 | $ | — | $ | — | $ | 207,355 | |||||||||
Liabilities: | |||||||||||||||||||
Trading liabilities: | |||||||||||||||||||
Corporate equity securities | $ | 1,428,048 | $ | 36,518 | $ | 38 | $ | — | $ | 1,464,604 | |||||||||
Corporate debt securities | — | 1,556,941 | — | — | 1,556,941 | ||||||||||||||
U.S. government and federal agency securities (3) | 1,488,121 | — | — | — | 1,488,121 | ||||||||||||||
Sovereign obligations (3) | 837,614 | 505,382 | — | — | 1,342,996 | ||||||||||||||
Residential mortgage-backed securities (3) | — | 117 | — | — | 117 | ||||||||||||||
Loans | — | 758,939 | 10,469 | — | 769,408 | ||||||||||||||
Derivatives | 364 | 4,456,334 | 19,543 | (4,257,998 | ) | 218,243 | |||||||||||||
Total trading liabilities | $ | 3,754,147 | $ | 7,314,231 | $ | 30,050 | $ | (4,257,998 | ) | $ | 6,840,430 | ||||||||
Other secured financings (4) | $ | — | $ | 67,801 | $ | 544 | $ | — | $ | 68,345 |
(1) | There were no material transfers between Level 1 and Level 2 during the years ended December 31, 2016 and 2015. |
(2) | Represents counterparty and cash collateral netting across the levels of the fair value hierarchy for positions with the same counterparty. |
(3) | There was an immaterial revision in the row labeling in our Annual Report on Form 10-K for the year ended December 31, 2015. We have revised the labels to \"U.S. government and federal agency securities\" (originally reported as \"Collateralized debt obligations\"), \"Sovereign obligations\" (originally reported as \"U.S. government and federal agency securities\") and \"Residential mortgage-backed securities\" (originally reported as \"Sovereign obligations\"). |
(4) | Level 2 liabilities include $67.8 million of other secured financings that were previously not disclosed in our Annual Report on Form 10-K for the year ended December 31, 2015. |
• | Exchange Traded Equity Securities: Exchange traded equity securities are measured based on quoted closing exchange prices, which are generally obtained from external pricing services, and are categorized within Level 1 of the fair value hierarchy, otherwise they are categorized within Level 2 of the fair value hierarchy. |
• | Non-exchange Traded Equity Securities: Non-exchange traded equity securities are measured primarily using broker quotations, pricing data from external pricing services and prices observed for recently executed market transactions and are categorized within Level 2 of the fair value hierarchy. Where such information is not available, non-exchange traded equity securities are categorized within Level 3 of the fair value hierarchy and measured using valuation techniques involving quoted prices of or market data for comparable companies, similar company ratios and multiples (e.g., price/Earnings before interest, taxes, depreciation and amortization (\"EBITDA\"), price/book value), discounted cash flow analyses and transaction prices observed for subsequent financing or capital issuance by the company. When using pricing data of comparable companies, judgment must be applied to adjust the pricing data to account for differences between the measured security and the comparable security (e.g., issuer market capitalization, yield, dividend rate, geographical concentration). |
• | Equity Warrants: Non-exchange traded equity warrants are measured primarily using pricing data from external pricing services, prices observed for recently executed market transactions and broker quotations are categorized within Level 2 of the fair value hierarchy. Where such information is not available, non-exchange traded equity warrants are generally categorized within Level 3 of the fair value hierarchy and are measured using the Black-Scholes model with key inputs impacting the valuation including the underlying security price, implied volatility, dividend yield, interest rate curve, strike price and maturity date. |
• | Corporate Bonds: Corporate bonds are measured primarily using pricing data from external pricing services and broker quotations, where available, prices observed for recently executed market transactions and bond spreads or credit default swap spreads of the issuer adjusted for basis differences between the swap curve and the bond curve. Corporate bonds measured using these valuation methods are categorized within Level 2 of the fair value hierarchy. If broker quotes, pricing data or spread data is not available, alternative valuation techniques are used including cash flow models incorporating interest rate curves, single name or index credit default swap curves for comparable issuers and recovery rate assumptions. Corporate bonds measured using alternative valuation techniques are categorized within Level 3 of the fair value hierarchy and are a limited portion of our corporate bonds. |
• | High Yield Corporate and Convertible Bonds: A significant portion of our high yield corporate and convertible bonds are categorized within Level 2 of the fair value hierarchy and are measured primarily using broker quotations and pricing data from external pricing services, where available, and prices observed for recently executed market transactions of comparable size. Where pricing data is less observable, valuations are categorized within Level 3 and are based on pending transactions involving the issuer or comparable issuers, prices implied from an issuer’s subsequent financings or recapitalizations, models incorporating financial ratios and projected cash flows of the issuer and market prices for comparable issuers. |
• | U.S. Treasury Securities: U.S. Treasury securities are measured based on quoted market prices and categorized within Level 1 of the fair value hierarchy. |
• | U.S. Agency Issued Debt Securities: Callable and non-callable U.S. agency issued debt securities are measured primarily based on quoted market prices obtained from external pricing services and are generally categorized within Level 1 or Level 2 of the fair value hierarchy. |
• | Agency Residential Mortgage-Backed Securities: Agency residential mortgage-backed securities include mortgage pass-through securities (fixed and adjustable rate), collateralized mortgage obligations and interest-only and principal-only securities and are generally measured using market price quotations from external pricing services and categorized within Level 2 of the fair value hierarchy. |
• | Agency Residential Interest-Only and Inverse Interest-Only Securities (\"Agency Inverse IOs\"): The fair value of Agency Inverse IOs is estimated using expected future cash flow techniques that incorporate prepayment models and other prepayment assumptions to amortize the underlying mortgage loan collateral. We use prices observed for recently executed transactions to develop market-clearing spread and yield curve assumptions. Valuation inputs with regard to the underlying collateral incorporate weighted average coupon, loan-to-value, credit scores, geographic location, maximum and average loan size, originator, servicer, and weighted average loan age. Agency Inverse IOs are categorized within Level 2 of the fair value hierarchy. We also use vendor data in developing our assumptions, as appropriate. |
• | Non-Agency Residential Mortgage-Backed Securities: Fair values are determined primarily using discounted cash flow methodologies and securities are categorized within Level 2 or Level 3 of the fair value hierarchy based on the observability and significance of the pricing inputs used. Performance attributes of the underlying mortgage loans are evaluated to estimate pricing inputs, such as prepayment rates, default rates and the severity of credit losses. Attributes of the underlying mortgage loans that affect the pricing inputs include, but are not limited to, weighted average coupon; average and maximum loan size; loan-to-value; credit scores; documentation type; geographic location; weighted average loan age; originator; servicer; historical prepayment, default and loss severity experience of the mortgage loan pool; and delinquency rate. Yield curves used in the discounted cash flow models are based on observed market prices for comparable securities and published interest rate data to estimate market yields. |
• | Agency Commercial Mortgage-Backed Securities: Government National Mortgage Association (“GNMA”) project loans are measured based on inputs corroborated from and benchmarked to observed prices of recent securitization transactions of similar securities with adjustments incorporating an evaluation for various factors, including prepayment speeds, default rates, and cash flow structures as well as the likelihood of pricing levels in the current market environment. Federal National Mortgage Association (“FNMA”) Delegated Underwriting and Servicing (“DUS”) mortgage-backed securities are generally measured by using prices observed for recently executed market transactions to estimate market-clearing spread levels for purposes of estimating fair value. GNMA project loan bonds and FNMA DUS mortgage-backed securities are categorized within Level 2 of the fair value hierarchy. |
• | Non-Agency Commercial Mortgage-Backed Securities: Non-agency commercial mortgage-backed securities are measured using pricing data obtained from external pricing services and prices observed for recently executed market transactions and are categorized within Level 2 and Level 3 of the fair value hierarchy. |
• | Corporate Loans: Corporate loans categorized within Level 2 of the fair value hierarchy are measured based on market price quotations where market price quotations from external pricing services are supported by transaction data. Corporate loans categorized within Level 3 of the fair value hierarchy are measured based on price quotations that are considered to be less transparent, market prices for debt securities of the same creditor, and estimates of future cash flow incorporating assumptions regarding creditor default and recovery rates and consideration of the issuer’s capital structure. |
• | Participation Certificates in Agency Residential Loans: Valuations of participation certificates in agency residential loans are based on observed market prices of recently executed purchases and sales of similar loans. The loan participation certificates are categorized within Level 2 of the fair value hierarchy given the observability and volume of recently executed transactions and availability of data provider pricing. |
• | Project Loans and Participation Certificates in GNMA Project and Construction Loans: Valuations of participation certificates in GNMA project and construction loans are based on inputs corroborated from and benchmarked to observed prices of recent securitizations of assets with similar underlying loan collateral to derive an implied spread. Securitization prices are adjusted to estimate the fair value of the loans incorporating an evaluation for various factors, including prepayment speeds, default rates, and cash flow structures as well as the likelihood of pricing levels in the current market environment. The measurements are categorized within Level 2 of the fair value hierarchy given the observability and volume of recently executed transactions. |
• | Consumer Loans and Funding Facilities: Consumer and small business whole loans and related funding facilities are valued based on observed market transactions incorporating additional valuation inputs including, but not limited to, delinquency and default rates, prepayment rates, borrower characteristics, loan risk grades and loan age. These assets are categorized within Level 2 or Level 3 of the fair value hierarchy. |
• | Escrow and Trade Claim Receivables: Escrow and trade claim receivables are categorized within Level 3 of the fair value hierarchy where fair value is estimated based on reference to market prices and implied yields of debt securities of the same or similar issuers. Escrow and trade claim receivables are categorized within Level 2 of the fair value hierarchy where fair value is based on recent trade activity in the same security. |
• | Listed Derivative Contracts: Listed derivative contracts that are actively traded are measured based on quoted exchange prices, which are generally obtained from external pricing services, and are categorized within Level 1 of the fair value hierarchy. Listed derivatives for which there is limited trading activity are measured based on incorporating the closing auction price of the underlying equity security, use similar valuation approaches as those applied to over-the-counter derivative contracts and are categorized within Level 2 of the fair value hierarchy. |
• | OTC Derivative Contracts: Over-the-counter (\"OTC\") derivative contracts are generally valued using models, whose inputs reflect assumptions that we believe market participants would use in valuing the derivative in a current period transaction. Inputs to valuation models are appropriately calibrated to market data. For many OTC derivative contracts, the valuation models do not involve material subjectivity as the methodologies do not entail significant judgment and the inputs to valuation models do not involve a high degree of subjectivity as the valuation model inputs are readily observable or can be derived from actively quoted markets. OTC derivative contracts are primarily categorized within Level 2 of the fair value hierarchy given the observability and significance of the inputs to the valuation models. Where significant inputs to the valuation are unobservable, derivative instruments are categorized within Level 3 of the fair value hierarchy. |
• | National Beef Derivatives: National Beef uses futures contracts in order to reduce its exposure associated with entering into firm commitments to purchase live cattle at prices determined prior to the delivery of the cattle as well as firm commitments to sell certain beef products at sales prices determined prior to shipment. The futures contracts and their related firm purchase commitments are accounted for at fair value, which are classified as Level 1 or Level 2 within the fair value hierarchy. Certain firm commitments for live cattle purchases and all firm commitments for sales are treated as normal purchases and sales and therefore not marked to market. Fair values classified as Level 1 are calculated based on the quoted market prices of identical assets or liabilities compared to National Beef's cost of those same assets or liabilities. Fair values classified as Level 2 are calculated based on the difference between the contracted price for live cattle and the relevant quoted market price for live cattle futures. |
• | Oil Futures Derivatives: Vitesse uses swaps and call and put options in order to reduce exposure to future oil price fluctuations. Vitesse accounts for the derivative instruments at fair value, which are classified as Level 2 within the fair value hierarchy. Fair values classified as Level 2 are determined under the income valuation technique using an option-pricing model that is based on directly or indirectly observable inputs. |
Fair Value (1) | Unfunded Commitments | Redemption Frequency (if currently eligible) | |||||||
December 31, 2016 | |||||||||
Equity Long/Short Hedge Funds (2) | $ | 363,256 | $ | — | (2) | ||||
Fixed Income and High Yield Hedge Funds (3) | 772 | — | — | ||||||
Fund of Funds (4) | 230 | — | — | ||||||
Equity Funds (5) | 42,179 | 20,295 | — | ||||||
Multi-strategy Fund (6) | 133,190 | — | Monthly/Quarterly | ||||||
Total | $ | 539,627 | $ | 20,295 | |||||
December 31, 2015 (7) | |||||||||
Equity Long/Short Hedge Funds (2) | $ | 430,207 | $ | — | (2) | ||||
Fixed Income and High Yield Hedge Funds (3) | 1,703 | — | — | ||||||
Fund of Funds (4) | 287 | 94 | — | ||||||
Equity Funds (5) | 42,111 | 20,791 | — | ||||||
Multi-strategy Fund (6) | 165,821 | — | Monthly/Quarterly | ||||||
Convertible Bond Funds (8) | 326 | — | At Will | ||||||
Total | $ | 640,455 | $ | 20,885 | |||||
(1) | Where fair value is calculated based on NAV, fair value has been derived from each of the funds' capital statements. |
(2) | This category includes investments in hedge funds that invest, long and short, in primarily equity securities in domestic and international markets in both the public and private sectors. At December 31, 2016 and 2015, investments with a fair value of $363.3 million and $54.7 million, respectively, are redeemable with 15 to 90 days prior written notice. |
(3) | This category includes investments in funds that invest in loans secured by a first trust deed on property, domestic and international public high yield debt, private high yield investments, senior bank loans, public leveraged equities, distressed debt, and private equity investments. There are no redemption provisions. At December 31, 2015, the underlying assets of 8% of these funds were being liquidated and we are unable to estimate when the underlying assets will be fully liquidated. |
(4) | This category includes investments in fund of funds that invest in various private equity funds. At December 31, 2016 and 2015, approximately 100% and 95%, respectively, of the fair value of investments in this category are managed by us and have no redemption provisions. The investments in this category are gradually being liquidated or we have requested redemption, however, we are unable to estimate when these funds will be received. |
(5) | At December 31, 2016 and 2015, the fair value of investments in this category include investments in equity funds that invest in the equity of various U.S. and foreign private companies in the energy, technology, internet service and telecommunication service industries. These investments cannot be redeemed; instead distributions are received through the liquidation of the underlying assets of the funds, which are expected to liquidate in one to seven years. |
(6) | This category includes investments in hedge funds that invest, long and short, primarily in multi-strategy securities in domestic and international markets in both the public and private sectors. At December 31, 2016 and 2015, investments representing approximately 12% and 32%, respectively, of the fair value of investments in this category are redeemable with 30 to 90 days prior written notice. |
(7) | Certain prior period amounts have been recast to conform to the current year's presentation due to the presentation of multi-strategy funds. Previously, these investments had been classified within equity long/short hedge funds. |
(8) | Investment in the Jefferies Umbrella Fund, an open-ended investment company managed by Jefferies that invested primarily in convertible bonds. The underlying assets were fully liquidated during the year ended December 31, 2016. |
Year Ended December 31, 2016 | |||||||||||||||||||||||||||||||||||
Balance, December 31, 2015 | Total gains (losses) (realized and unrealized) (1) | Purchases | Sales | Settlements | Issuances | Net transfers into (out of) Level 3 | Balance at December 31, 2016 | Changes in unrealized gains (losses) relating to instruments still held at December 31, 2016 (1) | |||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||
Trading assets: | |||||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 40,906 | $ | (8,463 | ) | $ | 3,365 | $ | (49 | ) | $ | (671 | ) | $ | — | $ | (13,349 | ) | $ | 21,739 | $ | 291 | |||||||||||||
Corporate debt securities | 25,876 | (16,230 | ) | 27,242 | (29,347 | ) | (7,223 | ) | — | 24,687 | 25,005 | (18,799 | ) | ||||||||||||||||||||||
CDOs and CLOs | 85,092 | (14,918 | ) | 52,316 | (69,394 | ) | (2,750 | ) | — | 4,008 | 54,354 | (7,628 | ) | ||||||||||||||||||||||
Municipal securities | — | (1,462 | ) | — | — | — | — | 28,719 | 27,257 | (1,462 | ) | ||||||||||||||||||||||||
Sovereign obligations | 120 | 5 | — | (125 | ) | — | — | — | — | — | |||||||||||||||||||||||||
Residential mortgage-backed securities | 70,263 | (9,612 | ) | 623 | (12,249 | ) | (931 | ) | — | (9,322 | ) | 38,772 | (1,095 | ) | |||||||||||||||||||||
Commercial mortgage-backed securities | 14,326 | (7,550 | ) | 3,132 | (2,024 | ) | (2,229 | ) | — | 14,925 | 20,580 | (7,243 | ) | ||||||||||||||||||||||
Other asset-backed securities | 42,925 | (14,381 | ) | 133,986 | (102,952 | ) | (8,769 | ) | — | (9,898 | ) | 40,911 | (18,056 | ) | |||||||||||||||||||||
Loans and other receivables | 189,289 | (42,566 | ) | 75,264 | (69,262 | ) | (46,851 | ) | — | (24,002 | ) | 81,872 | (52,003 | ) | |||||||||||||||||||||
Investments at fair value | 199,794 | 54,538 | 29,728 | (542 | ) | (1,107 | ) | — | 31,948 | 314,359 | 54,608 | ||||||||||||||||||||||||
Investment in FXCM (2) | 625,689 | (54,634 | ) | — | — | (406,555 | ) | — | — | 164,500 | (1,014 | ) | |||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||
Trading liabilities: | |||||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 38 | $ | — | $ | — | $ | 313 | $ | (38 | ) | $ | — | $ | — | $ | 313 | $ | — | ||||||||||||||||
Corporate debt securities | — | (27 | ) | — | 550 | — | — | — | 523 | — | |||||||||||||||||||||||||
Net derivatives (3) | (242 | ) | (1,760 | ) | — | 11,101 | 31 | 2,067 | (7,756 | ) | 3,441 | (6,458 | ) | ||||||||||||||||||||||
Loans | 10,469 | — | — | 378 | — | — | (10,469 | ) | 378 | — | |||||||||||||||||||||||||
Other secured financings | 544 | (126 | ) | — | — | — | — | — | 418 | (126 | ) |
(1) | Realized and unrealized gains (losses) are reported in Principal transactions in the Consolidated Statements of Operations. |
(2) | Includes $334.5 million related to the settlement of our participation rights for equity ownership in FXCM on September 1, 2016. We classify the equity ownership as a Loan to and investment in associated company at December 31, 2016. |
(3) | Net derivatives represent Trading assets - Derivatives and Trading liabilities - Derivatives. |
• | CDOs and CLOs of $19.4 million, residential mortgage-backed securities of $17.5 million, commercial mortgage-backed securities of $17.4 million and other asset-backed securities of $16.9 million, for which no recent trade activity was observed for purposes of determining observable inputs; |
• | Loans and other receivables of $13.8 million due to a lower number of contributors for certain vendor quotes supporting classification within Level 2; |
• | Corporate debt securities of $28.1 million, investments at fair value of $31.9 million and municipal securities of $28.7 million due to a lack of observable market transactions. |
• | Residential mortgage-backed securities of $26.8 million, other asset-backed securities of $26.8 million and CDOs and CLOs of $15.4 million, for which market trades were observed in the year for either identical or similar securities; |
• | Loans and other receivables of $37.8 million due to a greater number of contributors for certain vendor quotes supporting classification into Level 2; |
• | Corporate equity securities of $19.2 million due to an increase in observable market transactions. |
Year Ended December 31, 2015 | |||||||||||||||||||||||||||||||||||
Balance, December 31, 2014 | Total gains (losses) (realized and unrealized) (1) | Purchases | Sales | Settlements | Issuances | Net transfers into (out of) Level 3 | Balance at December 31 ,2015 | Changes in unrealized gains (losses) relating to instruments still held at December 31, 2015 (1) | |||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||
Trading assets: | |||||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 20,964 | $ | 11,154 | $ | 21,385 | $ | (6,391 | ) | $ | — | $ | — | $ | (6,206 | ) | $ | 40,906 | $ | 11,424 | |||||||||||||||
Corporate debt securities | 22,766 | (11,013 | ) | 21,534 | (14,636 | ) | — | — | 7,225 | $ | 25,876 | (9,443 | ) | ||||||||||||||||||||||
CDOs and CLOS | 124,650 | (66,332 | ) | 104,998 | (107,381 | ) | (5,754 | ) | — | 34,911 | $ | 85,092 | (48,514 | ) | |||||||||||||||||||||
Municipal securities | — | 10 | — | — | (21,551 | ) | — | 21,541 | — | — | |||||||||||||||||||||||||
Sovereign obligations | — | 47 | 1,032 | (1,031 | ) | — | — | 72 | 120 | 39 | |||||||||||||||||||||||||
Residential mortgage backed securities | 82,557 | (12,951 | ) | 18,961 | (31,762 | ) | (597 | ) | — | 14,055 | $ | 70,263 | (4,498 | ) | |||||||||||||||||||||
Commercial mortgage-backed securities | 26,655 | (3,813 | ) | 3,480 | (10,146 | ) | (6,861 | ) | — | 5,011 | $ | 14,326 | (3,205 | ) | |||||||||||||||||||||
Other asset-backed securities | 2,294 | (990 | ) | 42,922 | (1,299 | ) | (2 | ) | — | — | $ | 42,925 | (254 | ) | |||||||||||||||||||||
Loans and other receivables | 97,258 | (14,755 | ) | 792,345 | (576,536 | ) | (124,365 | ) | — | 15,342 | $ | 189,289 | (16,802 | ) | |||||||||||||||||||||
Investments at fair value | 77,047 | 62,804 | 5,510 | (425 | ) | (4,093 | ) | — | 58,951 | $ | 199,794 | (1,964 | ) | ||||||||||||||||||||||
Investment in FXCM | — | 491,341 | 279,000 | — | (144,652 | ) | — | — | 625,689 | 491,341 | |||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||
Trading liabilities: | |||||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 38 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 38 | $ | — | |||||||||||||||||
Corporate debt securities | 223 | (110 | ) | (6,804 | ) | 6,691 | — | — | — | $ | — | — | |||||||||||||||||||||||
Net derivatives (2) | (4,638 | ) | (7,310 | ) | (6,705 | ) | 13,522 | 37 | 2,437 | 2,415 | $ | (242 | ) | 4,754 | |||||||||||||||||||||
Loans | 14,450 | (163 | ) | (2,059 | ) | 229 | — | — | (1,988 | ) | $ | 10,469 | 104 | ||||||||||||||||||||||
Other secured financings | 30,825 | — | — | — | (15,704 | ) | 36,995 | (51,572 | ) | $ | 544 | — |
(1) | Realized and unrealized gains (losses) are reported in Principal transactions in the Consolidated Statements of Operations. |
(2) | Net derivatives represent Trading assets - Derivatives and Trading liabilities - Derivatives. |
• | CDOs and CLOs of $69.8 million, non-agency residential mortgage-backed securities of $30.4 million and commercial mortgage-backed securities of $11.3 million for which no recent trade activity was observed for purposes of determining observable inputs; |
• | Municipal securities of $21.5 million and loans and other receivables of $20.1 million due to a lower number of contributors comprising vendor quotes to support classification within Level 2; |
• | Corporate debt securities of $7.4 million and investments at fair value of $74.7 million due to a lack of observable market transactions. |
• | Non-agency residential mortgage-backed securities of $16.3 million and commercial mortgage-backed securities of $6.3 million for which market trades were observed in the period for either identical or similar securities; |
• | CDOs and CLOs of $34.9 million and loans and other receivables of $4.7 million due to a greater number of contributors for certain vendor quotes supporting classification into Level 2; |
• | Investments at fair value of $15.8 million due to an increase in observable market transactions; |
• | Corporate equity securities of $7.7 million due to an increase in observable market transactions. |
Year Ended December 31, 2014 | |||||||||||||||||||||||||||||||||||
Balance, December 31, 2013 | Total gains (losses) (realized and unrealized) (1) | Purchases | Sales | Settlements | Issuances | Net transfers into (out of) Level 3 | Balance at December 31, 2014 | Changes in unrealized gains (losses) relating to instruments still held at December 31, 2014 (1) | |||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||
Trading assets: | |||||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 9,884 | $ | 957 | $ | 18,138 | $ | (12,826 | ) | $ | — | $ | — | $ | 4,811 | $ | 20,964 | $ | 2,324 | ||||||||||||||||
Corporate debt securities | 25,666 | 6,629 | 38,316 | (40,328 | ) | — | — | (7,517 | ) | 22,766 | 8,982 | ||||||||||||||||||||||||
CDOs and CLOs | 37,216 | (6,386 | ) | 204,337 | (181,757 | ) | (1,297 | ) | — | 72,537 | 124,650 | (1,141 | ) | ||||||||||||||||||||||
U.S. government and federal agency securities | — | 13 | 2,505 | (2,518 | ) | — | — | — | — | — | |||||||||||||||||||||||||
Residential mortgage-backed securities | 105,492 | (9,870 | ) | 42,632 | (61,689 | ) | (1,847 | ) | — | 7,839 | 82,557 | (4,679 | ) | ||||||||||||||||||||||
Commercial mortgage-backed securities | 17,568 | (4,237 | ) | 49,159 | (51,360 | ) | (782 | ) | — | 16,307 | 26,655 | (2,384 | ) | ||||||||||||||||||||||
Other asset-backed securities | 12,611 | 1,784 | 4,987 | (18,002 | ) | — | — | 914 | 2,294 | 1,484 | |||||||||||||||||||||||||
Loans and other receivables | 145,890 | (31,311 | ) | 130,169 | (92,140 | ) | (60,390 | ) | — | 5,040 | 97,258 | (26,864 | ) | ||||||||||||||||||||||
Investments at fair value | 66,931 | 17,642 | 32,493 | (23,324 | ) | (1,243 | ) | — | (15,452 | ) | 77,047 | 1,985 | |||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||
Trading liabilities: | |||||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 38 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 38 | $ | — | |||||||||||||||||
Corporate debt securities | — | (149 | ) | (565 | ) | 960 | — | — | (23 | ) | 223 | (8 | ) | ||||||||||||||||||||||
Net derivatives (2) | 6,905 | 15,055 | (24,682 | ) | 1,094 | 322 | — | (3,332 | ) | (4,638 | ) | (15,615 | ) | ||||||||||||||||||||||
Loans | 22,462 | — | (18,332 | ) | 11,338 | — | — | (1,018 | ) | 14,450 | — | ||||||||||||||||||||||||
Other secured financings | 8,711 | — | — | — | (17,525 | ) | 39,639 | — | 30,825 | — |
(1) | Realized and unrealized gains (losses) are reported in Principal transactions in the Consolidated Statements of Operations. |
(2) | Net derivatives represent Trading assets - Derivatives and Trading liabilities - Derivatives. |
• | Non-agency residential mortgage-backed securities of $30.3 million and commercial mortgage-backed securities of $16.6 million for which no recent trade activity was observed for purposes of determining observable inputs; |
• | Loans and other receivables of $8.5 million due to a lower number of contributors comprising vendor quotes to support classification within Level 2; |
• | Corporate equity securities of $9.7 million due to lack of observable market transactions; |
• | CDOs and CLOs of $73.0 million which have little to no transparency in trade activity. |
• | Non-agency residential mortgage-backed securities of $22.4 million for which market trades were observed in the period for either identical or similar securities; |
• | Loans and other receivables of $3.5 million and investments at fair value of $15.5 million due to a greater number of contributors for certain vendor quotes supporting classification into Level 2; |
• | Corporate equity securities of $4.9 million and corporate debt securities of $7.5 million due to an increase in observable market transactions. |
December 31, 2016 | |||||||||||||
Financial Instruments Owned | Fair Value (in thousands) | Valuation Technique | Significant Unobservable Input(s) | Input/Range | Weighted Average | ||||||||
Corporate equity securities | $ | 19,799 | |||||||||||
Non-exchange traded securities | Market approach | Underlying stock price | $3 to $75 | $15.0 | |||||||||
Comparable pricing | Underlying stock price | $218 | — | ||||||||||
Comparable asset price | $11 | — | |||||||||||
Present value | Average silver production (tons per day) | 666 | — | ||||||||||
Corporate debt securities | $ | 25,005 | Convertible bond model | Discount rate/yield | 9% | — | |||||||
Volatility | 40% | — | |||||||||||
Market approach | Transaction level | $30 | — | ||||||||||
CDOs and CLOs | $ | 33,016 | Discounted cash flows | Constant prepayment rate | 10% to 20% | 19 | % | ||||||
Constant default rate | 2% to 4% | 2 | % | ||||||||||
Loss severity | 25% to 70% | 40 | % | ||||||||||
Yield | 7% to 17% | 12 | % | ||||||||||
Scenario analysis | Estimated recovery percentage | 28% to 38% | 31 | % | |||||||||
Residential mortgage-backed securities | $ | 38,772 | Discounted cash flows | Constant prepayment rate | 0% to 11% | 5 | % | ||||||
Constant default rate | 1% to 7% | 3 | % | ||||||||||
Loss severity | 35% to 100% | 62 | % | ||||||||||
Yield | 2% to 10% | 6 | % | ||||||||||
Commercial mortgage-backed securities | $ | 20,580 | Discounted cash flows | Yield | 6% to 11% | 8 | % | ||||||
Cumulative loss rate | 5% to 95% | 39 | % | ||||||||||
Other asset-backed securities | $ | 40,911 | Discounted cash flows | Constant prepayment rate | 4% to 20% | 14 | % | ||||||
Constant default rate | 0% to 31% | 13 | % | ||||||||||
Loss severity | 0% to 100% | 90 | % | ||||||||||
Yield | 4% to 17% | 15 | % | ||||||||||
Market approach | Price | $72 | — | ||||||||||
Loans and other receivables | $ | 54,347 | Market approach | Discount rate/yield | 2% to 4% | 3 | % | ||||||
EBITDA (a) multiple | 3.3 | — | |||||||||||
Transaction level | $0.42 | — | |||||||||||
Present value | Average silver production (tons per day) | 666 | — | ||||||||||
Scenario analysis | Estimated recovery percentage | 6% to 50% | 37 | % | |||||||||
Derivatives | $ | 6,429 | |||||||||||
Equity swaps | Comparable pricing | Comparable asset price | $102 | — | |||||||||
Credit default swaps | Market approach | Credit spread | 265 bps | — | |||||||||
Investments at fair value | |||||||||||||
Private equity securities | $ | 67,383 | Market approach | Transaction Level | $250 | — | |||||||
Price | $25,815,720 | — | |||||||||||
Discount rate | 15% to 30% | 23 | % | ||||||||||
Investment in FXCM | |||||||||||||
Term loan | $ | 164,500 | Discounted cash flows | Term based on the pay off | 0 months to .5 years | 0.4 years | |||||||
Trading Liabilities | Fair Value (in thousands) | Valuation Technique | Significant Unobservable Input(s) | Input/Range | Weighted Average | ||||||||
Derivatives | $ | 9,870 | |||||||||||
Equity options | Option model | Volatility | 45% | — | |||||||||
Default rate | Default probability | 0% | — | ||||||||||
Equity swaps | Comparable pricing | Comparable asset price | $102 | — | |||||||||
Unfunded commitments | Market approach | Discount rate/yield | 4% | — | |||||||||
Variable funding note swaps | Discounted cash flows | Constant prepayment rate | 20% | — | |||||||||
Constant default rate | 2% | — | |||||||||||
Loss severity | 25% | — | |||||||||||
Yield | 16% | — |
December 31, 2015 | |||||||||||||
Financial Instruments Owned | Fair Value (in thousands) | Valuation Technique | Significant Unobservable Input(s) | Input/Range | Weighted Average | ||||||||
Corporate equity securities | $ | 20,285 | |||||||||||
Non-exchange traded securities | Market approach | EBITDA (a) multiple | 4.4 | — | |||||||||
Transaction level | $1 | — | |||||||||||
Underlying stock price | $5 to $102 | $19.0 | |||||||||||
Corporate debt securities | $ | 20,257 | Convertible bond model | Discount rate/yield | 86% | — | |||||||
Market approach | Transaction level | $59 | — | ||||||||||
CDOs and CLOs | $ | 49,923 | Discounted cash flows | Constant prepayment rate | 5% to 20% | 13 | % | ||||||
Constant default rate | 2% to 8% | 2 | % | ||||||||||
Loss severity | 25% to 90% | 52 | % | ||||||||||
Yield | 6% to 13% | 10 | % | ||||||||||
Residential mortgage-backed securities | $ | 70,263 | Discounted cash flows | Constant prepayment rate | 0% to 50% | 13 | % | ||||||
Constant default rate | 1% to 9% | 3 | % | ||||||||||
Loss severity | 25% to 70% | 39 | % | ||||||||||
Yield | 1% to 9% | 6 | % | ||||||||||
Commercial mortgage-backed securities | $ | 14,326 | Discounted cash flows | Yield | 7% to 30% | 16 | % | ||||||
Cumulative loss rate | 2% to 63% | 23 | % | ||||||||||
Other asset-backed securities | $ | 21,463 | Discounted cash flows | Constant prepayment rate | 6% to 8% | 7 | % | ||||||
Constant default rate | 3% to 5% | 4 | % | ||||||||||
Loss severity | 55% to 75% | 62 | % | ||||||||||
Yield | 7% to 22% | 18 | % | ||||||||||
Over-collateralization | Over-collateralization percentage | 117% to 125% | 118 | % | |||||||||
Loans and other receivables | $ | 161,470 | Comparable pricing | Comparable asset price | $99 to $100 | $99.7 | |||||||
Market approach | Yield | 2% to 17% | 12 | % | |||||||||
EBITDA (a) multiple | 10.0 | — | |||||||||||
Scenario analysis | Estimated recovery percentage | 6% to 100% | 83 | % | |||||||||
Derivatives | $ | 19,785 | |||||||||||
Commodity forwards | Market approach | Discount rate/yield | 47% | — | |||||||||
Transaction level | $9,500,000 | — | |||||||||||
Unfunded commitment | Comparable pricing | Comparable asset price | $100 | — | |||||||||
Market approach | Credit spread | 298 bps | — | ||||||||||
Total return swap | Comparable pricing | Comparable asset price | $91.7 to $92.4 | $92.1 | |||||||||
Investments at fair value | |||||||||||||
Private equity securities | $ | 29,940 | Market approach | Transaction Level | $64 | — | |||||||
Price | $5,200,000 | — | |||||||||||
Discount rate | 15% to 30% | 23 | % | ||||||||||
Investment in FXCM | |||||||||||||
Term loan | $ | 203,700 | Discounted cash flows | Term based on the pay off | 0 months to 1.0 year | 0.4 years | |||||||
Rights | 422,000 | Option pricing model | Volatility | 110% | — | ||||||||
$ | 625,700 | ||||||||||||
Trading Liabilities | Fair Value (in thousands) | Valuation Technique | Significant Unobservable Input(s) | Input/Range | Weighted Average | ||||||||
Derivatives | $ | 19,543 | |||||||||||
Equity options | Option model | Volatility | 45% | — | |||||||||
Default rate | Default probability | 0% | — | ||||||||||
Unfunded commitments | Comparable pricing | Comparable asset price | $79 to $100 | $82.6 | |||||||||
Market approach | Discount rate/yield | 3% to 10% | 10 | % | |||||||||
Discounted cash flows | Constant prepayment rate | 20% | — | ||||||||||
Constant default rate | 2% | — | |||||||||||
Loss severity | 25% | — | |||||||||||
Yield | 11% | — | |||||||||||
Total return swaps | Comparable pricing | Comparable asset price | $91.7 to $92.4 | $92.1 | |||||||||
Loans | $ | 10,469 | Comparable pricing | Comparable asset price | $100 | — |
• | Loans and other receivables, unfunded commitments, non-exchange traded securities, equity swaps, total return swaps and loans using comparable pricing valuation techniques. A significant increase (decrease) in the comparable asset and underlying stock price in isolation would result in a significantly higher (lower) fair value measurement. |
• | Corporate debt securities using a convertible bond model. A significant increase (decrease) in the bond discount rate/yield would result in a significantly lower (higher) fair value measurement. A significant increase (decrease) in volatility would result in a significantly higher (lower) fair value measurement. |
• | Non-exchange traded securities, corporate debt securities, loans and other receivables, unfunded commitments, commodity forwards, credit default swaps, other asset-backed securities and private equity securities using a market approach valuation technique. A significant increase (decrease) in the EBITDA or other multiples in isolation would result in a significantly higher (lower) fair value measurement. A significant increase (decrease) in the discount rate/yield of a loan and other receivable or certain derivatives would result in a significantly lower (higher) fair value measurement. A significant increase (decrease) in the transaction level of a private equity security, non-exchange traded security, corporate debt security, loan and other receivable or certain derivatives would result in a significantly higher (lower) fair value measurement. A significant increase (decrease) in the underlying stock price of the non-exchange traded securities would result in a significantly higher (lower) fair value measurement. A significant increase (decrease) in the credit spread of certain derivatives would result in a significantly (lower) higher fair value measurement. A significant increase (decrease) in the price of the private equity securities or other asset-backed securities would result in a significantly higher (lower) fair value measurement. |
• | Loans and other receivables and CDOs and CLOs using scenario analysis. A significant increase (decrease) in the possible recovery rates of the cash flow outcomes underlying the investment would result in a significantly higher (lower) fair value measurement for the financial instrument. |
• | CDOs and CLOs, residential and commercial mortgage-backed securities and other asset-backed securities, variable funding notes and unfunded commitments using a discounted cash flow valuation technique. A significant increase (decrease) in isolation in the constant default rate, loss severity or cumulative loss rate would result in a significantly lower (higher) fair value measurement. The impact of changes in the constant prepayment rate would have differing impacts depending on the capital structure of the security. A significant increase (decrease) in the security yield would result in a significantly lower (higher) fair value measurement. |
• | Certain other asset-backed securities using an over-collateralization model. A significant increase (decrease) in the over-collateralization percentage would result in a significantly higher (lower) fair value measurement. |
• | Derivative equity options using an option model. A significant increase (decrease) in volatility would result in a significantly higher (lower) fair value measurement. |
• | Derivative equity options using a default rate model. A significant increase (decrease) in default probability would result in a significantly higher (lower) fair value measurement. |
• | Non-exchange traded securities and loans and other receivables using a present value model. A significant increase (decrease) in average silver production would result in a significantly higher (lower) fair value measurement. |
• | Investment in FXCM using a discounted cash flow valuation technique and an option pricing model. A significant increase (decrease) in term based on the time to pay off the loan would result in a higher (lower) fair value measurement. A significant increase (decrease) in volatility or time to liquidity event would result in a significantly lower (higher) fair value measurement. |
2016 | 2015 | 2014 | |||||||||
Financial Instruments Owned: | |||||||||||
Loans and other receivables | $ | (68,812 | ) | $ | (17,389 | ) | $ | (24,785 | ) | ||
Financial Instruments Sold: | |||||||||||
Loans | $ | 9 | $ | (162 | ) | $ | (585 | ) | |||
Loan commitments | $ | 5,509 | $ | 7,502 | $ | (15,459 | ) | ||||
Long-term Debt: | |||||||||||
Changes in instrument specific credit risk (1) | $ | (10,745 | ) | $ | — | $ | — | ||||
Other changes in fair value (2) | $ | 30,995 | $ | — | $ | — |
(1) | Changes in instrument-specific credit risk related to structured notes are included in the Consolidated Statements of Comprehensive Income (Loss). |
(2) | Other changes in fair value are included within Principal transactions revenues in the Consolidated Statements of Operations. |
December 31, 2016 | December 31, 2015 | ||||||
Financial Instruments Owned: | |||||||
Loans and other receivables (1) | $ | 1,325,938 | $ | 408,369 | |||
Loans and other receivables on nonaccrual status and/or greater than 90 days past due (1) (2) | $ | 205,746 | $ | 54,652 | |||
Long-term Debt | $ | 20,202 | $ | — |
(1) | Interest income is recognized separately from other changes in fair value and is included within Interest income in the Consolidated Statements of Operations. |
(2) | Amounts include all loans and other receivables greater than 90 or more days past due of $64.6 million and $29.7 million at December 31, 2016 and 2015, respectively. |
Level 1: | Quoted prices are available in active markets for identical assets or liabilities as of the reported date. |
Level 2: | Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these financial instruments include cash instruments for which quoted prices are available but traded less frequently, derivative instruments fair values for which have been derived using model inputs that are directly observable in the market, or can be derived principally from or corroborated by observable market data, and instruments that are fair valued using other financial instruments, the parameters of which can be directly observed. |
Level 3: | Instruments that have little to no pricing observability as of the reported date. These financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation. |
2016 | 2015 | 2014 | |||||||||
Financial Instruments Owned: | |||||||||||
Loans and other receivables | $ | (68,812 | ) | $ | (17,389 | ) | $ | (24,785 | ) | ||
Financial Instruments Sold: | |||||||||||
Loans | $ | 9 | $ | (162 | ) | $ | (585 | ) | |||
Loan commitments | $ | 5,509 | $ | 7,502 | $ | (15,459 | ) | ||||
Long-term Debt: | |||||||||||
Changes in instrument specific credit risk (1) | $ | (10,745 | ) | $ | — | $ | — | ||||
Other changes in fair value (2) | $ | 30,995 | $ | — | $ | — |
(1) | Changes in instrument-specific credit risk related to structured notes are included in the Consolidated Statements of Comprehensive Income (Loss). |
(2) | Other changes in fair value are included within Principal transactions revenues in the Consolidated Statements of Operations. |
2016 | 2015 | 2014 | |||||||||
Net realized gains (losses) on securities | $ | (286 | ) | $ | 14,112 | $ | 30,686 | ||||
Other (1) | 29,828 | 48,845 | (292 | ) | |||||||
$ | 29,542 | $ | 62,957 | $ | 30,394 |
2016 | 2015 | ||||||
Indefinite lived intangibles: | |||||||
Exchange and clearing organization membership interests and registrations | $ | 9,041 | $ | 11,897 | |||
Amortizable intangibles: | |||||||
Customer and other relationships, net of accumulated amortization of $198,674 and $191,761 | 378,136 | 456,222 | |||||
Trademarks and tradename, net of accumulated amortization of $78,778 and $64,052 | 309,382 | 330,172 | |||||
Supply contracts, net of accumulated amortization of $47,867 and $40,684 | 95,733 | 109,311 | |||||
Other, net of accumulated amortization of $2,914 and $5,216 | 5,672 | 4,419 | |||||
Total intangible assets, net | 797,964 | 912,021 | |||||
Goodwill: | |||||||
National Beef | 14,991 | 14,991 | |||||
Jefferies | 1,696,864 | 1,712,799 | |||||
Other operations | 3,859 | 8,551 | |||||
Total goodwill | 1,715,714 | 1,736,341 | |||||
Total intangible assets, net and goodwill | $ | 2,513,678 | $ | 2,648,362 |
2016 | 2015 | 2014 | |||||||||
Current taxes: | |||||||||||
U.S. Federal | $ | (574 | ) | $ | 709 | $ | 746 | ||||
U.S. State and local | 8,672 | (25,308 | ) | 17,232 | |||||||
Foreign | (4,620 | ) | 3,504 | 12,375 | |||||||
Total current | 3,478 | (21,095 | ) | 30,353 | |||||||
Deferred taxes: | |||||||||||
U.S. Federal | 108,241 | 134,590 | 97,190 | ||||||||
U.S. State and local | 8,335 | 4,552 | 30,707 | ||||||||
Foreign | 2,055 | (8,100 | ) | 7,721 | |||||||
Total deferred | 118,631 | 131,042 | 135,618 | ||||||||
Total income tax provision | $ | 122,109 | $ | 109,947 | $ | 165,971 |
2016 | 2015 | 2014 | |||||||||
U.S. | $ | 337,374 | $ | 336,856 | $ | 374,547 | |||||
Non-U.S. (1) | (20,944 | ) | 19,680 | 6,675 | |||||||
Income from continuing operations before income taxes | $ | 316,430 | $ | 356,536 | $ | 381,222 |
(1) | For purposes of this table, non-U.S. income is defined as income generated from operations located outside the U.S. |
2016 | 2015 | 2014 | ||||||||||||||||||
Amount | Percent | Amount | Percent | Amount | Percent | |||||||||||||||
Computed expected federal income tax | $ | 110,751 | 35.0 | % | $ | 124,788 | 35.0 | % | $ | 133,428 | 35.0 | % | ||||||||
Increase (decrease) in income taxes resulting from: | ||||||||||||||||||||
State and local income taxes, net of federal income tax benefit | 1,045 | 0.3 | (6,928 | ) | (1.9 | ) | 31,160 | 8.2 | ||||||||||||
International operations (including foreign rate differential) | (3,405 | ) | (1.1 | ) | (10,130 | ) | (2.8 | ) | (14,305 | ) | (3.8 | ) | ||||||||
Increase (decrease) in valuation allowance | 2,825 | 0.9 | (13,227 | ) | (3.7 | ) | (22,203 | ) | (5.8 | ) | ||||||||||
Permanent differences | 7,523 | 2.4 | 8,064 | 2.3 | 6,181 | 1.6 | ||||||||||||||
Tax exempt income | (4,640 | ) | (1.5 | ) | (6,789 | ) | (1.9 | ) | (6,812 | ) | (1.8 | ) | ||||||||
Income allocated to noncontrolling interest, not subject to tax | (22,512 | ) | (7.1 | ) | 11,039 | 3.1 | 3,270 | 0.9 | ||||||||||||
Excess stock detriment | 24,907 | 7.9 | — | — | — | — | ||||||||||||||
Nondeductible settlements | — | — | — | — | 24,500 | 6.4 | ||||||||||||||
Foreign taxes | 268 | 0.1 | (2,989 | ) | (1.0 | ) | 2,542 | 0.7 | ||||||||||||
Other | 5,347 | 1.7 | 6,119 | 1.7 | 8,210 | 2.1 | ||||||||||||||
Actual income tax provision | $ | 122,109 | 38.6 | % | $ | 109,947 | 30.8 | % | $ | 165,971 | 43.5 | % |
2016 | 2015 | 2014 | |||||||||
Balance at beginning of period | $ | 150,867 | $ | 148,590 | $ | 145,520 | |||||
Increases based on tax positions related to the current period | 5,045 | 3,475 | 5,630 | ||||||||
Increases based on tax positions related to prior periods | 3,697 | 22,030 | 4,340 | ||||||||
Decreases based on tax positions related to prior periods | (9,414 | ) | (15,349 | ) | (3,940 | ) | |||||
Decreases related to settlements with taxing authorities | (1,347 | ) | (7,879 | ) | (2,960 | ) | |||||
Balance at end of period | $ | 148,848 | $ | 150,867 | $ | 148,590 |
2016 | 2015 | ||||||
Deferred tax asset: | |||||||
Net operating loss carryover | $ | 1,262,584 | $ | 1,375,759 | |||
Compensation and benefits | 309,100 | 284,761 | |||||
Long-term debt | 54,102 | 89,160 | |||||
Other assets | 165,777 | 162,393 | |||||
Securities valuation reserves | 12,345 | 32,141 | |||||
Intangible assets, net and goodwill | 311 | 6,855 | |||||
Other liabilities | 39,188 | 40,393 | |||||
1,843,407 | 1,991,462 | ||||||
Valuation allowance | (106,042 | ) | (97,177 | ) | |||
1,737,365 | 1,894,285 | ||||||
Deferred tax liability: | |||||||
Unrealized gains on investments | (998 | ) | (5,335 | ) | |||
Amortization of intangible assets | (107,437 | ) | (103,561 | ) | |||
Property and equipment | (14,228 | ) | (4,151 | ) | |||
Investment in FXCM | (117,594 | ) | (147,700 | ) | |||
Other | (35,293 | ) | (58,170 | ) | |||
(275,550 | ) | (318,917 | ) | ||||
Net deferred tax asset | $ | 1,461,815 | $ | 1,575,368 |
2016 | 2015 | ||||||
Finished goods | $ | 243,488 | $ | 211,426 | |||
Work in process | 35,714 | 34,091 | |||||
Raw materials, supplies and other | 30,733 | 42,556 | |||||
$ | 309,935 | $ | 288,073 |
Loans to and investments in associated companies as of December 31, 2015 | Income (losses) related to associated companies | Income (losses) related to associated companies classified as other revenues | Contributions to (distributions from) associated companies, net | Other, including foreign exchange and unrealized gains (losses) | Loans to and investments in associated companies as of December 31, 2016 | ||||||||||||||||||
Jefferies Finance | $ | 528,575 | $ | — | $ | (1,761 | ) | $ | (36,350 | ) | $ | — | $ | 490,464 | |||||||||
Jefferies LoanCore | 288,741 | — | 21,221 | (155,231 | ) | — | 154,731 | ||||||||||||||||
Berkadia | 190,986 | 94,201 | — | (100,766 | ) | 22 | 184,443 | ||||||||||||||||
FXCM (1) | — | 1,919 | — | — | 334,339 | 336,258 | |||||||||||||||||
Garcadia Companies | 172,660 | 52,266 | — | (39,111 | ) | — | 185,815 | ||||||||||||||||
Linkem | 150,149 | (22,867 | ) | — | 33,303 | (6,585 | ) | 154,000 | |||||||||||||||
HomeFed | 275,378 | 23,893 | — | 2,960 | — | 302,231 | |||||||||||||||||
Golden Queen (2) | 114,323 | (3,021 | ) | — | — | — | 111,302 | ||||||||||||||||
54 Madison (3) | — | 4,255 | — | 153,503 | 3,642 | 161,400 | |||||||||||||||||
Other | 36,557 | 3,952 | (2,276 | ) | 9,622 | (3,401 | ) | 44,454 | |||||||||||||||
Total | $ | 1,757,369 | $ | 154,598 | $ | 17,184 | $ | (132,070 | ) | $ | 328,017 | $ | 2,125,098 |
Loans to and investments in associated companies as of December 31, 2014 | Income (losses) related to associated companies | Income (losses) related to associated companies classified as other revenues | Contributions to (distributions from) associated companies, net | Other, including foreign exchange and unrealized gains (losses) | Loans to and investments in associated companies as of December 31, 2015 | ||||||||||||||||||
Jefferies Finance | $ | 508,891 | $ | — | $ | 40,884 | $ | (21,200 | ) | $ | — | $ | 528,575 | ||||||||||
Jefferies LoanCore | 258,947 | — | 36,554 | (6,760 | ) | — | 288,741 | ||||||||||||||||
Berkadia | 208,511 | 78,092 | — | (89,560 | ) | (6,057 | ) | 190,986 | |||||||||||||||
Garcadia Companies | 167,939 | 53,182 | — | (48,461 | ) | — | 172,660 | ||||||||||||||||
Linkem | 159,054 | (15,577 | ) | — | 21,138 | (14,466 | ) | 150,149 | |||||||||||||||
HomeFed | 271,782 | 3,596 | — | — | — | 275,378 | |||||||||||||||||
Golden Queen (2) | 103,598 | (1,775 | ) | — | 12,500 | — | 114,323 | ||||||||||||||||
Other | 33,846 | (7,237 | ) | (1,721 | ) | 11,483 | 186 | 36,557 | |||||||||||||||
Total | $ | 1,712,568 | $ | 110,281 | $ | 75,717 | $ | (120,860 | ) | $ | (20,337 | ) | $ | 1,757,369 |
Loans to and investments in associated companies as of December 31, 2013 | Income (losses) related to associated companies | Income (losses) related to associated companies classified as other revenues | Contributions to (distributions from) associated companies, net | Other, including foreign exchange and unrealized gains (losses) | Loans to and investments in associated companies as of December 31, 2014 | ||||||||||||||||||
Jefferies Finance | $ | 470,537 | $ | — | $ | 72,701 | $ | (34,347 | ) | $ | — | $ | 508,891 | ||||||||||
Jefferies LoanCore | 224,037 | — | 18,793 | 16,117 | — | 258,947 | |||||||||||||||||
Berkadia | 182,573 | 101,187 | — | (72,721 | ) | (2,528 | ) | 208,511 | |||||||||||||||
Garcadia Companies | 120,017 | 49,416 | — | (1,494 | ) | — | 167,939 | ||||||||||||||||
Linkem | 173,577 | (14,633 | ) | — | 18,390 | (18,280 | ) | 159,054 | |||||||||||||||
HomeFed | 52,923 | 3,150 | — | — | 215,709 | 271,782 | |||||||||||||||||
Golden Queen (2) | — | (1,402 | ) | — | 105,000 | — | 103,598 | ||||||||||||||||
Other | 34,677 | 809 | (1,252 | ) | (4,067 | ) | 3,679 | 33,846 | |||||||||||||||
Total | $ | 1,258,341 | $ | 138,527 | $ | 90,242 | $ | 26,878 | $ | 198,580 | $ | 1,712,568 |
(1) | As discussed more fully in Note 4, on September 1, 2016, we amended the terms of our loan and associated rights with FXCM. Through the amendments, we converted our participation rights for a 49.9% common membership ownership in FXCM. Our term loan remains classified within Trading assets, at fair value. |
(2) | At December 31, 2016, 2015 and 2014, the balance reflects $32.8 million, $33.7 million and $33.7 million, respectively, related to a noncontrolling interest. |
(3) | At December 31, 2016, the balance reflects $95.3 million related to noncontrolling interests. |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||
2016 | |||||||||||||||
Bonds and notes: | |||||||||||||||
U.S. government securities | $ | 174,938 | $ | 8 | $ | 13 | $ | 174,933 | |||||||
Residential mortgage-backed securities | 19,129 | 108 | 104 | 19,133 | |||||||||||
Commercial mortgage-backed securities | 8,275 | 64 | 2 | 8,337 | |||||||||||
Other asset-backed securities | 18,918 | 124 | — | 19,042 | |||||||||||
All other corporates | 180 | — | 1 | 179 | |||||||||||
Total fixed maturities | 221,440 | 304 | 120 | 221,624 | |||||||||||
Equity securities: | |||||||||||||||
Common stocks: | |||||||||||||||
Banks, trusts and insurance companies | 35,071 | 15,115 | — | 50,186 | |||||||||||
Industrial, miscellaneous and all other | 17,946 | 11,293 | — | 29,239 | |||||||||||
Total equity securities | 53,017 | 26,408 | — | 79,425 | |||||||||||
$ | 274,457 | $ | 26,712 | $ | 120 | $ | 301,049 | ||||||||
2015 | |||||||||||||||
Bonds and notes: | |||||||||||||||
U.S. government securities | $ | 63,968 | $ | 2 | $ | 25 | $ | 63,945 | |||||||
Residential mortgage-backed securities | 23,033 | 308 | 101 | 23,240 | |||||||||||
Commercial mortgage-backed securities | 2,392 | — | 18 | 2,374 | |||||||||||
Other asset-backed securities | 39,633 | — | 160 | 39,473 | |||||||||||
All other corporates | 4,794 | 7 | 57 | 4,744 | |||||||||||
Total fixed maturities | 133,820 | 317 | 361 | 133,776 | |||||||||||
Equity securities: | |||||||||||||||
Common stocks: | |||||||||||||||
Banks, trusts and insurance companies | 35,071 | 10,201 | — | 45,272 | |||||||||||
Industrial, miscellaneous and all other | 17,946 | 10,361 | — | 28,307 | |||||||||||
Total equity securities | 53,017 | 20,562 | — | 73,579 | |||||||||||
$ | 186,837 | $ | 20,879 | $ | 361 | $ | 207,355 |
Amortized Cost | Estimated Fair Value | ||||||
(In thousands) | |||||||
Due within one year | $ | 174,938 | $ | 174,933 | |||
Due after one year through five years | 180 | 179 | |||||
175,118 | 175,112 | ||||||
Mortgage-backed and asset-backed securities | 46,322 | 46,512 | |||||
$ | 221,440 | $ | 221,624 |
Weighted- Average Grant Date Fair Value | ||||||
Balance at January 1, 2014 | 5,242 | $ | 26.94 | |||
Grants | 864 | $ | 27.03 | |||
Forfeited | (202 | ) | $ | 26.90 | ||
Fulfillment of service requirement | (2,521 | ) | $ | 26.89 | ||
Balance at December 31, 2014 | 3,383 | $ | 27.00 | |||
Grants | 602 | $ | 18.63 | |||
Forfeited | (94 | ) | $ | 28.12 | ||
Fulfillment of service requirement | (1,887 | ) | $ | 26.87 | ||
Balance at December 31, 2015 | 2,004 | $ | 24.56 | |||
Grants | 356 | $ | 18.23 | |||
Forfeited | (24 | ) | $ | 26.90 | ||
Fulfillment of service requirement | (974 | ) | $ | 25.65 | ||
Balance at December 31, 2016 | 1,362 | $ | 22.09 |
2016 | 2015 | ||||||
Change in projected benefit obligation: | |||||||
Projected benefit obligation, beginning of year | $ | 207,025 | $ | 352,126 | |||
Interest cost | 8,464 | 12,958 | |||||
Actuarial (gains) losses | (544 | ) | (35,799 | ) | |||
Benefits paid | (9,540 | ) | (122,260 | ) | |||
Projected benefit obligation, end of year | $ | 205,405 | $ | 207,025 | |||
Change in plan assets: | |||||||
Fair value of plan assets, beginning of year | $ | 117,719 | $ | 240,010 | |||
Actual return on plan assets | 2,947 | (250 | ) | ||||
Employer contributions | 19,100 | 1,000 | |||||
Benefits paid | (9,540 | ) | (122,260 | ) | |||
Administrative expenses | (2,712 | ) | (781 | ) | |||
Fair value of plan assets, end of year | $ | 127,514 | $ | 117,719 | |||
Funded status at end of year | $ | (77,891 | ) | $ | (89,306 | ) |
2016 | 2015 | 2014 | |||||||||
Components of net periodic pension cost: | |||||||||||
Interest cost | $ | 8,464 | $ | 12,958 | $ | 14,239 | |||||
Expected return on plan assets | (7,589 | ) | (10,581 | ) | (10,115 | ) | |||||
Settlement charge | — | 40,973 | — | ||||||||
Actuarial losses | 1,908 | 6,963 | 4,634 | ||||||||
Net periodic pension cost | $ | 2,783 | $ | 50,313 | $ | 8,758 | |||||
Amounts recognized in other comprehensive income (loss): | |||||||||||
Net (gain) loss arising during the period | $ | 6,811 | $ | (24,186 | ) | $ | 52,027 | ||||
Settlement charge | — | (40,973 | ) | — | |||||||
Amortization of net loss | (1,908 | ) | (6,963 | ) | (4,634 | ) | |||||
Total recognized in other comprehensive income (loss) | $ | 4,903 | $ | (72,122 | ) | $ | 47,393 | ||||
Net amount recognized in net periodic benefit cost and other | |||||||||||
comprehensive income (loss) | $ | 7,686 | $ | (21,809 | ) | $ | 56,151 |
2016 | 2015 | ||||
WilTel Plan | |||||
Discount rate used to determine benefit obligation | 3.85 | % | 4.00 | % | |
Weighted-average assumptions used to determine | |||||
net pension cost: | |||||
Discount rate | 4.00 | % | 3.76 | % | |
Expected long-term return on plan assets | 7.00 | % | 4.00 | % | |
Jefferies Plan | |||||
Discount rate used to determine benefit obligation | 3.90 | % | 4.10 | % | |
Weighted-average assumptions used to determine | |||||
net pension cost: | |||||
Discount rate | 4.10 | % | 4.30 | % | |
Expected long-term return on plan assets | 6.25 | % | 6.75 | % |
2017 | $ | 10,214 | |
2018 | 9,841 | ||
2019 | 9,879 | ||
2020 | 9,828 | ||
2021 | 9,625 | ||
2022 – 2026 | 66,359 |
Fair Value Measurements Using | |||||||||||
Total | Level 1 | Level 2 | |||||||||
2016 | |||||||||||
Cash and cash equivalents | $ | 919 | $ | 919 | $ | — | |||||
Growth Portfolio | 51,852 | — | 51,852 | ||||||||
Liability-Driven Investing Portfolio | 24,751 | — | 24,751 | ||||||||
Total | $ | 77,522 | $ | 919 | $ | 76,603 | |||||
2015 | |||||||||||
Cash and cash equivalents | $ | 3,026 | $ | 3,026 | $ | — | |||||
Fixed income securities: | |||||||||||
U.S. government and agencies | 5,988 | 5,988 | — | ||||||||
Public utilities | 8,978 | — | 8,978 | ||||||||
All other corporates | 52,696 | — | 52,696 | ||||||||
Total | $ | 70,688 | $ | 9,014 | $ | 61,674 |
• | The Growth Portfolio consists of global equities and high yield investments. |
• | The Liability-Driven Investing (\"LDI\") Portfolio consists of long duration credit bonds and a suite of long duration, Treasury-based instruments designed to provide capital-efficient interest rate exposure as well as target specific maturities. The objective of the LDI Portfolio is to seek to achieve performance similar to the WilTel plan's liability by seeking to match the interest rate sensitivity and credit sensitivity. The LDI Portfolio is managed to mitigate volatility in funded status deriving from changes in the discounted value of benefit obligations from market movements in the interest rate and credit components of the underlying discount curve. |
Fair Value Measurements Using | |||||||||||
Total (1) | Level 1 | Level 2 | |||||||||
2016 | |||||||||||
Cash and cash equivalents | $ | 1,135 | $ | 1,135 | $ | — | |||||
Listed equity securities (2) | 32,342 | 32,342 | — | ||||||||
Fixed income securities: | |||||||||||
Corporate debt securities | 4,906 | — | 4,906 | ||||||||
Foreign corporate debt securities | 1,835 | — | 1,835 | ||||||||
U.S. government securities | 5,370 | 5,370 | — | ||||||||
Agency mortgage-backed securities | 3,330 | — | 3,330 | ||||||||
Commercial mortgage-backed securities | 591 | — | 591 | ||||||||
Asset-backed securities | 483 | — | 483 | ||||||||
Total | $ | 49,992 | $ | 38,847 | $ | 11,145 | |||||
2015 | |||||||||||
Cash and cash equivalents | $ | 487 | $ | 487 | $ | — | |||||
Listed equity securities (2) | 29,156 | 29,156 | — | ||||||||
Fixed income securities: | |||||||||||
Corporate debt securities | 6,598 | — | 6,598 | ||||||||
Foreign corporate debt securities | 2,140 | — | 2,140 | ||||||||
U.S. government securities | 3,975 | 3,975 | — | ||||||||
Agency mortgage-backed securities | 3,504 | — | 3,504 | ||||||||
Commercial mortgage-backed securities | 425 | — | 425 | ||||||||
Asset-backed securities | 746 | — | 746 | ||||||||
Total | $ | 47,031 | $ | 33,618 | $ | 13,413 |
2016 | 2015 | ||||||
Change in projected benefit obligation: | |||||||
Projected benefit obligation, beginning of year | $ | 23,545 | $ | 28,434 | |||
Interest cost | 529 | 523 | |||||
Actuarial (gains) losses | 1,157 | (40 | ) | ||||
Benefits paid | (1,104 | ) | (1,069 | ) | |||
Currency adjustment | 39 | (4,303 | ) | ||||
Projected benefit obligation, end of year | $ | 24,166 | $ | 23,545 |
2016 | 2015 | 2014 | |||||||||
Components of net periodic pension cost: | |||||||||||
Service cost | $ | — | $ | — | $ | 40 | |||||
Interest cost | 529 | 523 | 801 | ||||||||
Net amortization | 326 | 325 | 244 | ||||||||
Net periodic pension cost | $ | 855 | $ | 848 | $ | 1,085 |
2016 | 2015 | ||||
Projected benefit obligation | |||||
Discount rate | 1.70 | % | 2.20 | % | |
Rate of compensation increase (1) | N/A | N/A | |||
Net periodic pension benefit cost | |||||
Discount rate | 2.20 | % | 2.10 | % | |
Rate of compensation increase (1) | N/A | N/A |
2017 | $ | 1,142 | |
2018 | 1,147 | ||
2019 | 1,122 | ||
2020 | 1,169 | ||
2021 | 1,177 | ||
2022 – 2026 | 5,814 |
Depreciable Lives (in years) | 2016 | 2015 | |||||||
Land, buildings and leasehold improvements | 5-25 | $ | 379,927 | $ | 371,383 | ||||
Beef processing machinery and equipment | 2-15 | 330,453 | 315,238 | ||||||
Other machinery and equipment | 3-15 | 30,716 | 113,412 | ||||||
Corporate aircraft | 10 | 104,862 | 104,862 | ||||||
Furniture, fixtures and office equipment | 3-10 | 323,276 | 311,845 | ||||||
Construction in progress | N/A | 54,693 | 38,903 | ||||||
Other | 3-10 | 3,441 | 4,909 | ||||||
1,227,368 | 1,260,552 | ||||||||
Accumulated depreciation and amortization | (518,126 | ) | (538,677 | ) | |||||
$ | 709,242 | $ | 721,875 |
Depreciable Lives (in years) | 2016 | 2015 | |||||||
Land, buildings and leasehold improvements | 5-25 | $ | 379,927 | $ | 371,383 | ||||
Beef processing machinery and equipment | 2-15 | 330,453 | 315,238 | ||||||
Other machinery and equipment | 3-15 | 30,716 | 113,412 | ||||||
Corporate aircraft | 10 | 104,862 | 104,862 | ||||||
Furniture, fixtures and office equipment | 3-10 | 323,276 | 311,845 | ||||||
Construction in progress | N/A | 54,693 | 38,903 | ||||||
Other | 3-10 | 3,441 | 4,909 | ||||||
1,227,368 | 1,260,552 | ||||||||
Accumulated depreciation and amortization | (518,126 | ) | (538,677 | ) | |||||
$ | 709,242 | $ | 721,875 |
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
(In thousands, except per share amounts) | |||||||||||||||
2016 | |||||||||||||||
Net revenues | $ | 2,015,106 | $ | 2,625,358 | $ | 2,676,375 | $ | 2,745,778 | |||||||
Income (loss) from continuing operations | $ | (218,602 | ) | $ | 70,612 | $ | 176,206 | $ | 166,105 | ||||||
Income from discontinued operations, net of taxes | $ | — | $ | — | $ | — | $ | — | |||||||
Gain on disposal of discontinued operations, net of taxes | $ | — | $ | — | $ | — | $ | — | |||||||
Net (income) loss attributable to the noncontrolling interest | $ | 1,052 | $ | 760 | $ | 1,870 | $ | (2,256 | ) | ||||||
Net income attributable to the redeemable noncontrolling interests | $ | (4,314 | ) | $ | (13,068 | ) | $ | (22,702 | ) | $ | (25,662 | ) | |||
Preferred stock dividends | $ | (1,016 | ) | $ | (1,015 | ) | $ | (1,016 | ) | $ | (1,016 | ) | |||
Net income (loss) attributable to Leucadia National Corporation common shareholders | $ | (222,880 | ) | $ | 57,289 | $ | 154,358 | $ | 137,171 | ||||||
Basic earnings (loss) per common share attributable to | |||||||||||||||
Leucadia National Corporation common shareholders: | |||||||||||||||
Income (loss) from continuing operations | $ | (0.60 | ) | $ | 0.15 | $ | 0.41 | $ | 0.37 | ||||||
Income from discontinued operations | — | — | — | — | |||||||||||
Gain on disposal of discontinued operations | — | — | — | — | |||||||||||
Net income (loss) | $ | (0.60 | ) | $ | 0.15 | $ | 0.41 | $ | 0.37 | ||||||
Number of shares used in calculation | 372,367 | 372,556 | 370,404 | 369,299 | |||||||||||
Diluted earnings (loss) per common share attributable to | |||||||||||||||
Leucadia National Corporation common shareholders: | |||||||||||||||
Income (loss) from continuing operations | $ | (0.60 | ) | $ | 0.15 | $ | 0.41 | $ | 0.37 | ||||||
Income from discontinued operations | — | — | — | — | |||||||||||
Gain on disposal of discontinued operations | — | — | — | — | |||||||||||
Net income (loss) | $ | (0.60 | ) | $ | 0.15 | $ | 0.41 | $ | 0.37 | ||||||
Number of shares used in calculation | 372,367 | 372,556 | 374,567 | 374,693 | |||||||||||
2015 | |||||||||||||||
Net revenues | $ | 3,184,683 | $ | 2,839,463 | $ | 2,366,096 | $ | 2,496,216 | |||||||
Income (loss) from continuing operations | $ | 374,429 | $ | 15,034 | $ | (181,912 | ) | $ | 39,038 | ||||||
Income from discontinued operations, net of taxes | $ | — | $ | — | $ | 429 | $ | — | |||||||
Gain on disposal of discontinued operations, net of taxes | $ | — | $ | — | $ | 1,300 | $ | 3,793 | |||||||
Net loss attributable to the noncontrolling interest | $ | 234 | $ | 356 | $ | 1,238 | $ | 3,168 | |||||||
Net loss attributable to the redeemable noncontrolling interests | $ | 7,112 | $ | 2,031 | $ | 6,788 | $ | 10,612 | |||||||
Preferred stock dividends | $ | (1,016 | ) | $ | (1,015 | ) | $ | (1,016 | ) | $ | (1,016 | ) | |||
Net income (loss) attributable to Leucadia National Corporation common shareholders | $ | 380,759 | $ | 16,406 | $ | (173,173 | ) | $ | 55,595 | ||||||
Basic earnings (loss) per common share attributable to | |||||||||||||||
Leucadia National Corporation common shareholders: | |||||||||||||||
Income (loss) from continuing operations | $ | 1.00 | $ | 0.04 | $ | (0.47 | ) | $ | 0.14 | ||||||
Income from discontinued operations | — | — | — | — | |||||||||||
Gain on disposal of discontinued operations | — | — | — | 0.01 | |||||||||||
Net income (loss) | $ | 1.00 | $ | 0.04 | $ | (0.47 | ) | $ | 0.15 | ||||||
Number of shares used in calculation | 373,541 | 373,654 | 372,547 | 369,840 | |||||||||||
Diluted earnings (loss) per common share attributable to | |||||||||||||||
Leucadia National Corporation common shareholders: | |||||||||||||||
Income (loss) from continuing operations | $ | 0.99 | $ | 0.04 | $ | (0.47 | ) | $ | 0.14 | ||||||
Income from discontinued operations | — | — | — | — | |||||||||||
Gain on disposal of discontinued operations | — | — | — | 0.01 | |||||||||||
Net income (loss) | $ | 0.99 | $ | 0.04 | $ | (0.47 | ) | $ | 0.15 | ||||||
Number of shares used in calculation | 377,713 | 373,662 | 372,547 | 369,840 |
Details about Accumulated Other Comprehensive Income Components | Amount Reclassified from Accumulated Other Comprehensive Income | Affected Line Item in the Consolidated Statement of Operations | ||||||||
2016 | 2015 | |||||||||
Net unrealized gains (losses) on available for sale securities, net of income tax provision of $2 and $6,068 | $ | 4 | $ | 10,930 | Net realized securities gains | |||||
Amortization of defined benefit pension plan actuarial gains (losses), net of income tax (benefit) of $(700) and $(17,159) | (1,534 | ) | (31,102 | ) | Compensation and benefits, which includes pension expense. See Note 20 for information on this component. | |||||
Total reclassifications for the period, net of tax | $ | (1,530 | ) | $ | (20,172 | ) |
2016 | 2015 | ||||||
Severance costs | $ | 279 | $ | 30,327 | |||
Accelerated amortization of restricted stock and restricted cash awards | 41 | 7,922 | |||||
Accelerated amortization of capitalized software | — | 19,745 | |||||
Contract termination costs | 1,234 | 11,247 | |||||
Selling, general and other expenses | 300 | 3,853 | |||||
Total | $ | 1,854 | $ | 73,094 |
Severance costs | Other costs | Contract termination costs | Total restructuring costs | Accelerated amortization of restricted stock and restricted cash awards | Accelerated amortization of capitalized software | Impairments | Total | ||||||||||||||||||||||||
Balance at March 31, 2015 | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||
Expenses | 30,327 | 2,774 | 11,247 | 44,348 | $ | 7,922 | $ | 19,745 | $ | 1,079 | $ | 73,094 | |||||||||||||||||||
Payments | (25,522 | ) | (2,774 | ) | (11,247 | ) | (39,543 | ) | |||||||||||||||||||||||
Liability at December 31, 2015 | 4,805 | — | — | 4,805 | |||||||||||||||||||||||||||
Expenses | 279 | 300 | 1,234 | 1,813 | $ | 41 | $ | — | $ | — | $ | 1,854 | |||||||||||||||||||
Payments | (5,084 | ) | (300 | ) | (1,234 | ) | (6,618 | ) | |||||||||||||||||||||||
Liability at December 31, 2016 | $ | — | $ | — | $ | — | $ | — |
2016 | 2015 | 2014 | |||||||||
Americas (1) | $ | 1,876,796 | $ | 1,887,899 | $ | 2,257,870 | |||||
Europe (2) | 458,046 | 510,044 | 634,358 | ||||||||
Asia | 86,213 | 78,190 | 94,097 | ||||||||
$ | 2,421,055 | $ | 2,476,133 | $ | 2,986,325 |
(1) | Substantially all relates to U.S. results. |
(2) | Substantially all relates to U.K. results. |
2016 | 2015 | 2014 | |||||||||
Net unrealized gains on available for sale securities | $ | 561,497 | $ | 557,601 | $ | 577,588 | |||||
Net unrealized foreign exchange losses | (184,829 | ) | (63,248 | ) | (26,771 | ) | |||||
Net change in instrument specific credit risk | (6,494 | ) | — | — | |||||||
Net minimum pension liability | (59,477 | ) | (55,560 | ) | (103,735 | ) | |||||
$ | 310,697 | $ | 438,793 | $ | 447,082 |
Fair Value Measurements Using | |||||||||||
Total (1) | Level 1 | Level 2 | |||||||||
2016 | |||||||||||
Cash and cash equivalents | $ | 1,135 | $ | 1,135 | $ | — | |||||
Listed equity securities (2) | 32,342 | 32,342 | — | ||||||||
Fixed income securities: | |||||||||||
Corporate debt securities | 4,906 | — | 4,906 | ||||||||
Foreign corporate debt securities | 1,835 | — | 1,835 | ||||||||
U.S. government securities | 5,370 | 5,370 | — | ||||||||
Agency mortgage-backed securities | 3,330 | — | 3,330 | ||||||||
Commercial mortgage-backed securities | 591 | — | 591 | ||||||||
Asset-backed securities | 483 | — | 483 | ||||||||
Total | $ | 49,992 | $ | 38,847 | $ | 11,145 | |||||
2015 | |||||||||||
Cash and cash equivalents | $ | 487 | $ | 487 | $ | — | |||||
Listed equity securities (2) | 29,156 | 29,156 | — | ||||||||
Fixed income securities: | |||||||||||
Corporate debt securities | 6,598 | — | 6,598 | ||||||||
Foreign corporate debt securities | 2,140 | — | 2,140 | ||||||||
U.S. government securities | 3,975 | 3,975 | — | ||||||||
Agency mortgage-backed securities | 3,504 | — | 3,504 | ||||||||
Commercial mortgage-backed securities | 425 | — | 425 | ||||||||
Asset-backed securities | 746 | — | 746 | ||||||||
Total | $ | 47,031 | $ | 33,618 | $ | 13,413 |
Fair Value Measurements Using | |||||||||||
Total | Level 1 | Level 2 | |||||||||
2016 | |||||||||||
Cash and cash equivalents | $ | 919 | $ | 919 | $ | — | |||||
Growth Portfolio | 51,852 | — | 51,852 | ||||||||
Liability-Driven Investing Portfolio | 24,751 | — | 24,751 | ||||||||
Total | $ | 77,522 | $ | 919 | $ | 76,603 | |||||
2015 | |||||||||||
Cash and cash equivalents | $ | 3,026 | $ | 3,026 | $ | — | |||||
Fixed income securities: | |||||||||||
U.S. government and agencies | 5,988 | 5,988 | — | ||||||||
Public utilities | 8,978 | — | 8,978 | ||||||||
All other corporates | 52,696 | — | 52,696 | ||||||||
Total | $ | 70,688 | $ | 9,014 | $ | 61,674 |
2016 | 2015 | ||||
Projected benefit obligation | |||||
Discount rate | 1.70 | % | 2.20 | % | |
Rate of compensation increase (1) | N/A | N/A | |||
Net periodic pension benefit cost | |||||
Discount rate | 2.20 | % | 2.10 | % | |
Rate of compensation increase (1) | N/A | N/A |
2016 | 2015 | ||||
WilTel Plan | |||||
Discount rate used to determine benefit obligation | 3.85 | % | 4.00 | % | |
Weighted-average assumptions used to determine | |||||
net pension cost: | |||||
Discount rate | 4.00 | % | 3.76 | % | |
Expected long-term return on plan assets | 7.00 | % | 4.00 | % | |
Jefferies Plan | |||||
Discount rate used to determine benefit obligation | 3.90 | % | 4.10 | % | |
Weighted-average assumptions used to determine | |||||
net pension cost: | |||||
Discount rate | 4.10 | % | 4.30 | % | |
Expected long-term return on plan assets | 6.25 | % | 6.75 | % |
2016 | 2015 | ||||||
Change in projected benefit obligation: | |||||||
Projected benefit obligation, beginning of year | $ | 23,545 | $ | 28,434 | |||
Interest cost | 529 | 523 | |||||
Actuarial (gains) losses | 1,157 | (40 | ) | ||||
Benefits paid | (1,104 | ) | (1,069 | ) | |||
Currency adjustment | 39 | (4,303 | ) | ||||
Projected benefit obligation, end of year | $ | 24,166 | $ | 23,545 |
2016 | 2015 | 2014 | |||||||||
Current taxes: | |||||||||||
U.S. Federal | $ | (574 | ) | $ | 709 | $ | 746 | ||||
U.S. State and local | 8,672 | (25,308 | ) | 17,232 | |||||||
Foreign | (4,620 | ) | 3,504 | 12,375 | |||||||
Total current | 3,478 | (21,095 | ) | 30,353 | |||||||
Deferred taxes: | |||||||||||
U.S. Federal | 108,241 | 134,590 | 97,190 | ||||||||
U.S. State and local | 8,335 | 4,552 | 30,707 | ||||||||
Foreign | 2,055 | (8,100 | ) | 7,721 | |||||||
Total deferred | 118,631 | 131,042 | 135,618 | ||||||||
Total income tax provision | $ | 122,109 | $ | 109,947 | $ | 165,971 |
2016 | 2015 | 2014 | |||||||||
Components of net periodic pension cost: | |||||||||||
Service cost | $ | — | $ | — | $ | 40 | |||||
Interest cost | 529 | 523 | 801 | ||||||||
Net amortization | 326 | 325 | 244 | ||||||||
Net periodic pension cost | $ | 855 | $ | 848 | $ | 1,085 |
2016 | 2015 | ||||||
Parent Company Debt: | |||||||
Senior Notes: | |||||||
5.50% Senior Notes due October 18, 2023, $750,000 principal | $ | 741,264 | $ | 740,239 | |||
6.625% Senior Notes due October 23, 2043, $250,000 principal | 246,627 | 246,583 | |||||
Total long-term debt – Parent Company | 987,891 | 986,822 | |||||
Subsidiary Debt (non-recourse to Parent Company): | |||||||
Jefferies: | |||||||
5.5% Senior Notes, due March 15, 2016, $350,000 principal | — | 353,025 | |||||
5.125% Senior Notes, due April 13, 2018, $800,000 principal | 817,813 | 830,298 | |||||
8.5% Senior Notes, due July 15, 2019, $700,000 principal | 778,367 | 806,125 | |||||
2.375% Euro Senior Notes, due May 20, 2020, $529,975 and $528,625 principal | 528,250 | 526,436 | |||||
6.875% Senior Notes, due April 15, 2021, $750,000 principal | 823,797 | 838,765 | |||||
2.25% Euro Medium Term Notes, due July 13, 2022, $4,240 and $4,229 principal | 3,848 | 3,779 | |||||
5.125% Senior Notes, due January 20, 2023, $600,000 principal | 618,355 | 620,890 | |||||
6.45% Senior Debentures, due June 8, 2027, $350,000 principal | 377,806 | 379,711 | |||||
3.875% Convertible Senior Debentures, due November 1, 2029, $345,000 principal | 346,163 | 347,307 | |||||
6.25% Senior Debentures, due January 15, 2036, $500,000 principal | 512,396 | 512,730 | |||||
6.50% Senior Notes, due January 20, 2043, $400,000 principal | 421,333 | 421,656 | |||||
Structured Notes (1) (2) | 255,203 | — | |||||
National Beef Term Loan | 273,811 | 310,000 | |||||
National Beef Revolving Credit Facility | — | 120,080 | |||||
54 Madison Term Loans | 406,028 | 116,211 | |||||
Foursight Capital Credit Facilities | 97,138 | 109,501 | |||||
Other | 132,244 | 117,246 | |||||
Total long-term debt – subsidiaries | 6,392,552 | 6,413,760 | |||||
Long-term debt | $ | 7,380,443 | $ | 7,400,582 |
2016 | 2015 | ||||||
Deferred tax asset: | |||||||
Net operating loss carryover | $ | 1,262,584 | $ | 1,375,759 | |||
Compensation and benefits | 309,100 | 284,761 | |||||
Long-term debt | 54,102 | 89,160 | |||||
Other assets | 165,777 | 162,393 | |||||
Securities valuation reserves | 12,345 | 32,141 | |||||
Intangible assets, net and goodwill | 311 | 6,855 | |||||
Other liabilities | 39,188 | 40,393 | |||||
1,843,407 | 1,991,462 | ||||||
Valuation allowance | (106,042 | ) | (97,177 | ) | |||
1,737,365 | 1,894,285 | ||||||
Deferred tax liability: | |||||||
Unrealized gains on investments | (998 | ) | (5,335 | ) | |||
Amortization of intangible assets | (107,437 | ) | (103,561 | ) | |||
Property and equipment | (14,228 | ) | (4,151 | ) | |||
Investment in FXCM | (117,594 | ) | (147,700 | ) | |||
Other | (35,293 | ) | (58,170 | ) | |||
(275,550 | ) | (318,917 | ) | ||||
Net deferred tax asset | $ | 1,461,815 | $ | 1,575,368 |
2016 | 2015 | ||||||
Change in projected benefit obligation: | |||||||
Projected benefit obligation, beginning of year | $ | 207,025 | $ | 352,126 | |||
Interest cost | 8,464 | 12,958 | |||||
Actuarial (gains) losses | (544 | ) | (35,799 | ) | |||
Benefits paid | (9,540 | ) | (122,260 | ) | |||
Projected benefit obligation, end of year | $ | 205,405 | $ | 207,025 | |||
Change in plan assets: | |||||||
Fair value of plan assets, beginning of year | $ | 117,719 | $ | 240,010 | |||
Actual return on plan assets | 2,947 | (250 | ) | ||||
Employer contributions | 19,100 | 1,000 | |||||
Benefits paid | (9,540 | ) | (122,260 | ) | |||
Administrative expenses | (2,712 | ) | (781 | ) | |||
Fair value of plan assets, end of year | $ | 127,514 | $ | 117,719 | |||
Funded status at end of year | $ | (77,891 | ) | $ | (89,306 | ) |
2016 | 2015 | 2014 | |||||||||
Interest rate contracts | $ | (36,559 | ) | $ | (36,792 | ) | $ | (149,587 | ) | ||
Foreign exchange contracts | 20,401 | 36,233 | 39,872 | ||||||||
Equity contracts | (635,305 | ) | (137,219 | ) | (327,978 | ) | |||||
Commodity contracts | (3,339 | ) | (13,625 | ) | 58,746 | ||||||
Credit contracts | 5,013 | (16,223 | ) | (23,934 | ) | ||||||
Total | $ | (649,789 | ) | $ | (167,626 | ) | $ | (402,881 | ) |
Assets | Liabilities | ||||||||||||
Fair Value | Number of Contracts | Fair Value | Number of Contracts | ||||||||||
December 31, 2016 | |||||||||||||
Interest rate contracts | $ | 3,282,245 | 29,032 | $ | 3,159,457 | 34,845 | |||||||
Foreign exchange contracts | 529,669 | 7,826 | 516,869 | 8,319 | |||||||||
Equity contracts | 786,987 | 2,843,329 | 1,169,201 | 2,414,715 | |||||||||
Commodity contracts | 1,906 | 2,766 | 6,430 | 7,289 | |||||||||
Credit contracts: centrally cleared swaps | 7,044 | 98 | 2,562 | 19,900 | |||||||||
Credit contracts: other credit derivatives | 19,225 | 213 | 25,503 | 184 | |||||||||
Total | 4,627,076 | 4,880,022 | |||||||||||
Counterparty/cash-collateral netting | (4,255,998 | ) | (4,229,213 | ) | |||||||||
Total per Consolidated Statement of Financial Condition | $ | 371,078 | $ | 650,809 | |||||||||
December 31, 2015 | |||||||||||||
Interest rate contracts | $ | 2,910,093 | 56,748 | $ | 2,849,958 | 74,904 | |||||||
Foreign exchange contracts (1) | 453,527 | 8,089 | 466,021 | 7,376 | |||||||||
Equity contracts | 1,017,611 | 3,057,754 | 1,094,597 | 2,947,416 | |||||||||
Commodity contracts (1) | 27,590 | 2,896 | 5,510 | 2,001 | |||||||||
Credit contracts: centrally cleared swaps | 2,447 | 299 | 841 | 44 | |||||||||
Credit contracts: other credit derivatives | 16,977 | 100 | 59,314 | 135 | |||||||||
Total | 4,428,245 | 4,476,241 | |||||||||||
Counterparty/cash-collateral netting | (4,165,446 | ) | (4,257,998 | ) | |||||||||
Total per Consolidated Statement of Financial Condition | $ | 262,799 | $ | 218,243 |
(1) | Commodity contracts increased in assets by a fair value of $19.3 million and by 29 contracts and in liabilities by a fair value of $4.6 million and by 28 contracts with corresponding decreases in foreign exchange contracts from those amounts previously reported to correct for the classification of certain contracts. The total amount of contracts remained unchanged. |
Cash | $ | 5,206 | ||
Receivables | 15,297 | |||
Property, equipment and leasehold improvements, net | 18,664 | |||
Intangible assets, net and goodwill | 56,854 | |||
Inventory | 19,069 | |||
Other assets | 12,993 | |||
$ | 128,083 |
Revenues and other income: | ||||
Gaming entertainment | $ | 67,739 | ||
Investment and other income | 4,700 | |||
72,439 | ||||
Expenses: | ||||
Direct operating expenses - Gaming entertainment | 48,877 | |||
Compensation and benefits | 4,503 | |||
Depreciation and amortization | 5,208 | |||
Selling, general and other expenses | 41,378 | |||
99,966 | ||||
Loss from discontinued operations before income taxes | (27,527 | ) | ||
Income tax (benefit) | (9,634 | ) | ||
Loss from discontinued operations after income taxes | $ | (17,893 | ) |
2016 | 2015 | 2014 | |||||||||
Numerator for earnings (loss) per share: | |||||||||||
Net income attributable to Leucadia National Corporation common shareholders | $ | 125,938 | $ | 279,587 | $ | 204,306 | |||||
Allocation of earnings to participating securities (1) | (574 | ) | (4,711 | ) | (4,761 | ) | |||||
Net income attributable to Leucadia National Corporation common shareholders for basic earnings (loss) per share | 125,364 | 274,876 | 199,545 | ||||||||
Adjustment to allocation of earnings to participating securities related to diluted shares (1) | (19 | ) | (34 | ) | (75 | ) | |||||
Mandatorily redeemable convertible preferred share dividends | — | — | — | ||||||||
Interest on 3.75% Convertible Notes | — | — | 739 | ||||||||
Net income attributable to Leucadia National Corporation common shareholders for diluted earnings (loss) per share | $ | 125,345 | $ | 274,842 | $ | 200,209 | |||||
Denominator for earnings (loss) per share: | |||||||||||
Denominator for basic earnings (loss) per share – weighted-average shares | 371,211 | 372,430 | 371,889 | ||||||||
Stock options | — | 1 | 29 | ||||||||
Warrants | — | — | — | ||||||||
Senior executive compensation plan awards | 307 | — | — | ||||||||
Mandatorily redeemable convertible preferred shares | — | — | — | ||||||||
3.875% Convertible Senior Debentures | — | — | — | ||||||||
3.75% Convertible Notes | — | — | 1,415 | ||||||||
Denominator for diluted earnings (loss) per share | 371,518 | 372,431 | 373,333 |
(1) | Represents dividends declared during the period on participating securities plus an allocation of undistributed earnings to participating securities. Net losses are not allocated to participating securities. Participating securities represent restricted stock and RSUs for which requisite service has not yet been rendered and amounted to weighted-average shares of 1,986,800, 6,500,000 and 9,040,900 for the years ended December 31, 2016, 2015 and 2014, respectively. Dividends declared on participating securities during the years ended December 31, 2016, 2015 and 2014 were $0.4 million, $1.5 million and $2.2 million, respectively. Undistributed earnings are allocated to participating securities based upon their right to share in earnings if all earnings for the period had been distributed. |
2016 | 2015 | 2014 | ||||||||||||||||||
Amount | Percent | Amount | Percent | Amount | Percent | |||||||||||||||
Computed expected federal income tax | $ | 110,751 | 35.0 | % | $ | 124,788 | 35.0 | % | $ | 133,428 | 35.0 | % | ||||||||
Increase (decrease) in income taxes resulting from: | ||||||||||||||||||||
State and local income taxes, net of federal income tax benefit | 1,045 | 0.3 | (6,928 | ) | (1.9 | ) | 31,160 | 8.2 | ||||||||||||
International operations (including foreign rate differential) | (3,405 | ) | (1.1 | ) | (10,130 | ) | (2.8 | ) | (14,305 | ) | (3.8 | ) | ||||||||
Increase (decrease) in valuation allowance | 2,825 | 0.9 | (13,227 | ) | (3.7 | ) | (22,203 | ) | (5.8 | ) | ||||||||||
Permanent differences | 7,523 | 2.4 | 8,064 | 2.3 | 6,181 | 1.6 | ||||||||||||||
Tax exempt income | (4,640 | ) | (1.5 | ) | (6,789 | ) | (1.9 | ) | (6,812 | ) | (1.8 | ) | ||||||||
Income allocated to noncontrolling interest, not subject to tax | (22,512 | ) | (7.1 | ) | 11,039 | 3.1 | 3,270 | 0.9 | ||||||||||||
Excess stock detriment | 24,907 | 7.9 | — | — | — | — | ||||||||||||||
Nondeductible settlements | — | — | — | — | 24,500 | 6.4 | ||||||||||||||
Foreign taxes | 268 | 0.1 | (2,989 | ) | (1.0 | ) | 2,542 | 0.7 | ||||||||||||
Other | 5,347 | 1.7 | 6,119 | 1.7 | 8,210 | 2.1 | ||||||||||||||
Actual income tax provision | $ | 122,109 | 38.6 | % | $ | 109,947 | 30.8 | % | $ | 165,971 | 43.5 | % |
2017 | $ | 10,214 | |
2018 | 9,841 | ||
2019 | 9,879 | ||
2020 | 9,828 | ||
2021 | 9,625 | ||
2022 – 2026 | 66,359 |
2017 | $ | 1,142 | |
2018 | 1,147 | ||
2019 | 1,122 | ||
2020 | 1,169 | ||
2021 | 1,177 | ||
2022 – 2026 | 5,814 |
December 31, 2016 | |||||||||||||||||||
Level 1 (1) | Level 2 (1) | Level 3 | Counterparty and Cash Collateral Netting (2) | Total | |||||||||||||||
Assets: | |||||||||||||||||||
Trading assets, at fair value: | |||||||||||||||||||
Corporate equity securities | $ | 2,522,977 | $ | 92,839 | $ | 21,739 | $ | — | $ | 2,637,555 | |||||||||
Corporate debt securities | — | 2,675,020 | 25,005 | — | 2,700,025 | ||||||||||||||
CDOs and CLOs | — | 54,306 | 54,354 | — | 108,660 | ||||||||||||||
U.S. government and federal agency securities | 2,389,397 | 56,726 | — | — | 2,446,123 | ||||||||||||||
Municipal securities | — | 708,469 | 27,257 | — | 735,726 | ||||||||||||||
Sovereign obligations | 1,432,556 | 990,492 | — | — | 2,423,048 | ||||||||||||||
Residential mortgage-backed securities | — | 960,494 | 38,772 | — | 999,266 | ||||||||||||||
Commercial mortgage-backed securities | — | 296,405 | 20,580 | — | 316,985 | ||||||||||||||
Other asset-backed securities | — | 63,587 | 40,911 | — | 104,498 | ||||||||||||||
Loans and other receivables | — | 1,557,233 | 81,872 | — | 1,639,105 | ||||||||||||||
Derivatives | 3,825 | 4,616,822 | 6,429 | (4,255,998 | ) | 371,078 | |||||||||||||
Investments at fair value | — | — | 314,359 | — | 314,359 | ||||||||||||||
Investment in FXCM | — | — | 164,500 | — | 164,500 | ||||||||||||||
Total trading assets, excluding investments at fair value based on NAV | $ | 6,348,755 | $ | 12,072,393 | $ | 795,778 | $ | (4,255,998 | ) | $ | 14,960,928 | ||||||||
Available for sale securities: | |||||||||||||||||||
Corporate equity securities | $ | 79,425 | $ | — | $ | — | $ | — | $ | 79,425 | |||||||||
Corporate debt securities | — | 179 | — | — | 179 | ||||||||||||||
U.S. government securities | 174,933 | — | — | — | 174,933 | ||||||||||||||
Residential mortgage-backed securities | — | 19,133 | — | — | 19,133 | ||||||||||||||
Commercial mortgage-backed securities | — | 8,337 | — | — | 8,337 | ||||||||||||||
Other asset-backed securities | — | 19,042 | — | — | 19,042 | ||||||||||||||
Total available for sale securities | $ | 254,358 | $ | 46,691 | $ | — | $ | — | $ | 301,049 | |||||||||
Liabilities: | |||||||||||||||||||
Trading liabilities: | |||||||||||||||||||
Corporate equity securities | $ | 1,593,548 | $ | 16,806 | $ | 313 | $ | — | $ | 1,610,667 | |||||||||
Corporate debt securities | — | 1,718,424 | 523 | — | 1,718,947 | ||||||||||||||
U.S. government and federal agency securities | 976,497 | — | — | — | 976,497 | ||||||||||||||
Sovereign obligations | 1,375,590 | 1,253,754 | — | — | 2,629,344 | ||||||||||||||
Loans | — | 801,977 | 378 | — | 802,355 | ||||||||||||||
Derivatives | 2,566 | 4,867,586 | 9,870 | (4,229,213 | ) | 650,809 | |||||||||||||
Total trading liabilities | $ | 3,948,201 | $ | 8,658,547 | $ | 11,084 | $ | (4,229,213 | ) | $ | 8,388,619 | ||||||||
Other secured financings | $ | — | $ | 41,350 | $ | 418 | $ | — | $ | 41,768 | |||||||||
Long-term debt - structured notes | $ | — | $ | 248,856 | $ | — | $ | — | $ | 248,856 |
December 31, 2015 | |||||||||||||||||||
Level 1 (1) | Level 2 (1) | Level 3 | Counterparty and Cash Collateral Netting (2) | Total | |||||||||||||||
Assets: | |||||||||||||||||||
Trading assets, at fair value: | |||||||||||||||||||
Corporate equity securities | $ | 2,803,243 | $ | 133,732 | $ | 40,906 | $ | — | $ | 2,977,881 | |||||||||
Corporate debt securities | — | 2,867,165 | 25,876 | — | 2,893,041 | ||||||||||||||
CDOs and CLOs | — | 89,144 | 85,092 | — | 174,236 | ||||||||||||||
U.S. government and federal agency securities | 2,555,018 | 90,633 | — | — | 2,645,651 | ||||||||||||||
Municipal securities | — | 487,141 | — | — | 487,141 | ||||||||||||||
Sovereign obligations | 1,251,366 | 1,407,955 | 120 | — | 2,659,441 | ||||||||||||||
Residential mortgage-backed securities | — | 2,731,070 | 70,263 | — | 2,801,333 | ||||||||||||||
Commercial mortgage-backed securities | — | 1,014,913 | 14,326 | — | 1,029,239 | ||||||||||||||
Other asset-backed securities | — | 118,629 | 42,925 | — | 161,554 | ||||||||||||||
Loans and other receivables | — | 1,123,044 | 189,289 | — | 1,312,333 | ||||||||||||||
Derivatives | 2,253 | 4,406,207 | 19,785 | (4,165,446 | ) | 262,799 | |||||||||||||
Investments at fair value | — | 26,224 | 199,794 | — | 226,018 | ||||||||||||||
Investment in FXCM | — | — | 625,689 | — | 625,689 | ||||||||||||||
Total trading assets, excluding investments at fair value based on NAV | $ | 6,611,880 | $ | 14,495,857 | $ | 1,314,065 | $ | (4,165,446 | ) | $ | 18,256,356 | ||||||||
Available for sale securities: | |||||||||||||||||||
Corporate equity securities | $ | 73,579 | $ | — | $ | — | $ | — | $ | 73,579 | |||||||||
Corporate debt securities | — | 4,744 | — | — | 4,744 | ||||||||||||||
U.S. government securities | 63,945 | — | — | — | 63,945 | ||||||||||||||
Residential mortgage-backed securities | — | 23,240 | — | — | 23,240 | ||||||||||||||
Commercial mortgage-backed securities | — | 2,374 | — | — | 2,374 | ||||||||||||||
Other asset-backed securities | — | 39,473 | — | — | 39,473 | ||||||||||||||
Total available for sale securities | $ | 137,524 | $ | 69,831 | $ | — | $ | — | $ | 207,355 | |||||||||
Liabilities: | |||||||||||||||||||
Trading liabilities: | |||||||||||||||||||
Corporate equity securities | $ | 1,428,048 | $ | 36,518 | $ | 38 | $ | — | $ | 1,464,604 | |||||||||
Corporate debt securities | — | 1,556,941 | — | — | 1,556,941 | ||||||||||||||
U.S. government and federal agency securities (3) | 1,488,121 | — | — | — | 1,488,121 | ||||||||||||||
Sovereign obligations (3) | 837,614 | 505,382 | — | — | 1,342,996 | ||||||||||||||
Residential mortgage-backed securities (3) | — | 117 | — | — | 117 | ||||||||||||||
Loans | — | 758,939 | 10,469 | — | 769,408 | ||||||||||||||
Derivatives | 364 | 4,456,334 | 19,543 | (4,257,998 | ) | 218,243 | |||||||||||||
Total trading liabilities | $ | 3,754,147 | $ | 7,314,231 | $ | 30,050 | $ | (4,257,998 | ) | $ | 6,840,430 | ||||||||
Other secured financings (4) | $ | — | $ | 67,801 | $ | 544 | $ | — | $ | 68,345 |
(1) | There were no material transfers between Level 1 and Level 2 during the years ended December 31, 2016 and 2015. |
(2) | Represents counterparty and cash collateral netting across the levels of the fair value hierarchy for positions with the same counterparty. |
(3) | There was an immaterial revision in the row labeling in our Annual Report on Form 10-K for the year ended December 31, 2015. We have revised the labels to \"U.S. government and federal agency securities\" (originally reported as \"Collateralized debt obligations\"), \"Sovereign obligations\" (originally reported as \"U.S. government and federal agency securities\") and \"Residential mortgage-backed securities\" (originally reported as \"Sovereign obligations\"). |
(4) | Level 2 liabilities include $67.8 million of other secured financings that were previously not disclosed in our Annual Report on Form 10-K for the year ended December 31, 2015. |
2017 | $ | 91,057 | |
2018 | 87,405 | ||
2019 | 76,194 | ||
2020 | 62,186 | ||
2021 | 57,704 | ||
Thereafter | 572,845 | ||
947,391 | |||
Less: sublease income | (19,204 | ) | |
$ | 928,187 |
Expected Maturity Date | |||||||||||||||||||||||
Guarantee Type | 2017 | 2018 | 2019 and 2020 | 2021 and 2022 | 2023 and Later | Notional/ Maximum Payout | |||||||||||||||||
Derivative contracts – non-credit related | $ | 18,838.6 | $ | 820.4 | $ | — | $ | — | $ | 421.8 | $ | 20,080.8 | |||||||||||
Written derivative contracts – credit related | — | 52.2 | 24.6 | 360.8 | — | 437.6 | |||||||||||||||||
Total derivative contracts | $ | 18,838.6 | $ | 872.6 | $ | 24.6 | $ | 360.8 | $ | 421.8 | $ | 20,518.4 |
2016 | 2015 | 2014 | |||||||||
U.S. | $ | 337,374 | $ | 336,856 | $ | 374,547 | |||||
Non-U.S. (1) | (20,944 | ) | 19,680 | 6,675 | |||||||
Income from continuing operations before income taxes | $ | 316,430 | $ | 356,536 | $ | 381,222 |
(1) | For purposes of this table, non-U.S. income is defined as income generated from operations located outside the U.S. |
2016 | 2015 | ||||||
Indefinite lived intangibles: | |||||||
Exchange and clearing organization membership interests and registrations | $ | 9,041 | $ | 11,897 | |||
Amortizable intangibles: | |||||||
Customer and other relationships, net of accumulated amortization of $198,674 and $191,761 | 378,136 | 456,222 | |||||
Trademarks and tradename, net of accumulated amortization of $78,778 and $64,052 | 309,382 | 330,172 | |||||
Supply contracts, net of accumulated amortization of $47,867 and $40,684 | 95,733 | 109,311 | |||||
Other, net of accumulated amortization of $2,914 and $5,216 | 5,672 | 4,419 | |||||
Total intangible assets, net | 797,964 | 912,021 | |||||
Goodwill: | |||||||
National Beef | 14,991 | 14,991 | |||||
Jefferies | 1,696,864 | 1,712,799 | |||||
Other operations | 3,859 | 8,551 | |||||
Total goodwill | 1,715,714 | 1,736,341 | |||||
Total intangible assets, net and goodwill | $ | 2,513,678 | $ | 2,648,362 |
2016 | 2015 | ||||||
Finished goods | $ | 243,488 | $ | 211,426 | |||
Work in process | 35,714 | 34,091 | |||||
Raw materials, supplies and other | 30,733 | 42,556 | |||||
$ | 309,935 | $ | 288,073 |
Future Service Required | No Future Service Required | Future Service Required | No Future Service Required | ||||||||||
Balance at January 1, 2014 | 4,793 | 8,316 | $ | 26.90 | $ | 26.86 | |||||||
Grants | — | 97 | $ | — | $ | 20.89 | |||||||
Distributions of underlying shares | — | (366 | ) | $ | — | $ | 26.85 | ||||||
Forfeited | (135 | ) | — | $ | 26.90 | $ | — | ||||||
Fulfillment of service requirement | (420 | ) | 420 | $ | 26.90 | $ | 26.90 | ||||||
Balance at December 31, 2014 | 4,238 | 8,467 | $ | 26.90 | $ | 26.79 | |||||||
Grants | — | 121 | $ | — | $ | 18.95 | |||||||
Distributions of underlying shares | — | (229 | ) | $ | — | $ | 22.34 | ||||||
Forfeited | (626 | ) | — | $ | 26.90 | $ | — | ||||||
Fulfillment of service requirement | (224 | ) | 224 | $ | 26.90 | $ | 26.90 | ||||||
Balance at December 31, 2015 | 3,388 | 8,583 | $ | 26.90 | $ | 26.68 | |||||||
Grants | — | 128 | $ | — | $ | 14.21 | |||||||
Distributions of underlying shares | — | (1,683 | ) | $ | — | $ | 26.59 | ||||||
Forfeited | — | — | $ | — | $ | — | |||||||
Fulfillment of service requirement | (3,320 | ) | 3,320 | $ | 26.90 | $ | 26.90 | ||||||
Balance at December 31, 2016 | 68 | 10,348 | $ | 26.90 | $ | 26.61 |
Target Number of Shares | Weighted- Average Grant Date Fair Value | |||||
Balance at December 31, 2015 | — | $ | — | |||
Grants | 3,434 | $ | 9.68 | |||
Forfeited | — | $ | — | |||
Balance at December 31, 2016 | 3,434 | $ | 9.68 |
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
(In thousands, except per share amounts) | |||||||||||||||
2016 | |||||||||||||||
Net revenues | $ | 2,015,106 | $ | 2,625,358 | $ | 2,676,375 | $ | 2,745,778 | |||||||
Income (loss) from continuing operations | $ | (218,602 | ) | $ | 70,612 | $ | 176,206 | $ | 166,105 | ||||||
Income from discontinued operations, net of taxes | $ | — | $ | — | $ | — | $ | — | |||||||
Gain on disposal of discontinued operations, net of taxes | $ | — | $ | — | $ | — | $ | — | |||||||
Net (income) loss attributable to the noncontrolling interest | $ | 1,052 | $ | 760 | $ | 1,870 | $ | (2,256 | ) | ||||||
Net income attributable to the redeemable noncontrolling interests | $ | (4,314 | ) | $ | (13,068 | ) | $ | (22,702 | ) | $ | (25,662 | ) | |||
Preferred stock dividends | $ | (1,016 | ) | $ | (1,015 | ) | $ | (1,016 | ) | $ | (1,016 | ) | |||
Net income (loss) attributable to Leucadia National Corporation common shareholders | $ | (222,880 | ) | $ | 57,289 | $ | 154,358 | $ | 137,171 | ||||||
Basic earnings (loss) per common share attributable to | |||||||||||||||
Leucadia National Corporation common shareholders: | |||||||||||||||
Income (loss) from continuing operations | $ | (0.60 | ) | $ | 0.15 | $ | 0.41 | $ | 0.37 | ||||||
Income from discontinued operations | — | — | — | — | |||||||||||
Gain on disposal of discontinued operations | — | — | — | — | |||||||||||
Net income (loss) | $ | (0.60 | ) | $ | 0.15 | $ | 0.41 | $ | 0.37 | ||||||
Number of shares used in calculation | 372,367 | 372,556 | 370,404 | 369,299 | |||||||||||
Diluted earnings (loss) per common share attributable to | |||||||||||||||
Leucadia National Corporation common shareholders: | |||||||||||||||
Income (loss) from continuing operations | $ | (0.60 | ) | $ | 0.15 | $ | 0.41 | $ | 0.37 | ||||||
Income from discontinued operations | — | — | — | — | |||||||||||
Gain on disposal of discontinued operations | — | — | — | — | |||||||||||
Net income (loss) | $ | (0.60 | ) | $ | 0.15 | $ | 0.41 | $ | 0.37 | ||||||
Number of shares used in calculation | 372,367 | 372,556 | 374,567 | 374,693 | |||||||||||
2015 | |||||||||||||||
Net revenues | $ | 3,184,683 | $ | 2,839,463 | $ | 2,366,096 | $ | 2,496,216 | |||||||
Income (loss) from continuing operations | $ | 374,429 | $ | 15,034 | $ | (181,912 | ) | $ | 39,038 | ||||||
Income from discontinued operations, net of taxes | $ | — | $ | — | $ | 429 | $ | — | |||||||
Gain on disposal of discontinued operations, net of taxes | $ | — | $ | — | $ | 1,300 | $ | 3,793 | |||||||
Net loss attributable to the noncontrolling interest | $ | 234 | $ | 356 | $ | 1,238 | $ | 3,168 | |||||||
Net loss attributable to the redeemable noncontrolling interests | $ | 7,112 | $ | 2,031 | $ | 6,788 | $ | 10,612 | |||||||
Preferred stock dividends | $ | (1,016 | ) | $ | (1,015 | ) | $ | (1,016 | ) | $ | (1,016 | ) | |||
Net income (loss) attributable to Leucadia National Corporation common shareholders | $ | 380,759 | $ | 16,406 | $ | (173,173 | ) | $ | 55,595 | ||||||
Basic earnings (loss) per common share attributable to | |||||||||||||||
Leucadia National Corporation common shareholders: | |||||||||||||||
Income (loss) from continuing operations | $ | 1.00 | $ | 0.04 | $ | (0.47 | ) | $ | 0.14 | ||||||
Income from discontinued operations | — | — | — | — | |||||||||||
Gain on disposal of discontinued operations | — | — | — | 0.01 | |||||||||||
Net income (loss) | $ | 1.00 | $ | 0.04 | $ | (0.47 | ) | $ | 0.15 | ||||||
Number of shares used in calculation | 373,541 | 373,654 | 372,547 | 369,840 | |||||||||||
Diluted earnings (loss) per common share attributable to | |||||||||||||||
Leucadia National Corporation common shareholders: | |||||||||||||||
Income (loss) from continuing operations | $ | 0.99 | $ | 0.04 | $ | (0.47 | ) | $ | 0.14 | ||||||
Income from discontinued operations | — | — | — | — | |||||||||||
Gain on disposal of discontinued operations | — | — | — | 0.01 | |||||||||||
Net income (loss) | $ | 0.99 | $ | 0.04 | $ | (0.47 | ) | $ | 0.15 | ||||||
Number of shares used in calculation | 377,713 | 373,662 | 372,547 | 369,840 |
2016 | 2015 | ||||||
Severance costs | $ | 279 | $ | 30,327 | |||
Accelerated amortization of restricted stock and restricted cash awards | 41 | 7,922 | |||||
Accelerated amortization of capitalized software | — | 19,745 | |||||
Contract termination costs | 1,234 | 11,247 | |||||
Selling, general and other expenses | 300 | 3,853 | |||||
Total | $ | 1,854 | $ | 73,094 |
Severance costs | Other costs | Contract termination costs | Total restructuring costs | Accelerated amortization of restricted stock and restricted cash awards | Accelerated amortization of capitalized software | Impairments | Total | ||||||||||||||||||||||||
Balance at March 31, 2015 | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||
Expenses | 30,327 | 2,774 | 11,247 | 44,348 | $ | 7,922 | $ | 19,745 | $ | 1,079 | $ | 73,094 | |||||||||||||||||||
Payments | (25,522 | ) | (2,774 | ) | (11,247 | ) | (39,543 | ) | |||||||||||||||||||||||
Liability at December 31, 2015 | 4,805 | — | — | 4,805 | |||||||||||||||||||||||||||
Expenses | 279 | 300 | 1,234 | 1,813 | $ | 41 | $ | — | $ | — | $ | 1,854 | |||||||||||||||||||
Payments | (5,084 | ) | (300 | ) | (1,234 | ) | (6,618 | ) | |||||||||||||||||||||||
Liability at December 31, 2016 | $ | — | $ | — | $ | — | $ | — |
2016 | 2015 | 2014 | |||||||||
(In thousands) | |||||||||||
Net Revenues: | |||||||||||
Reportable Segments: | |||||||||||
Jefferies | $ | 2,421,055 | $ | 2,476,133 | $ | 2,986,325 | |||||
National Beef | 7,027,243 | 7,402,419 | 7,832,424 | ||||||||
Corporate and other | 88,590 | 78,122 | 60,720 | ||||||||
Total net revenues related to reportable segments | 9,536,888 | 9,956,674 | 10,879,469 | ||||||||
All other (1) | 525,729 | 950,784 | 607,016 | ||||||||
Intercompany eliminations (2) | — | (21,000 | ) | — | |||||||
Total consolidated net revenues | $ | 10,062,617 | $ | 10,886,458 | $ | 11,486,485 | |||||
Pre-tax income (loss) from continuing operations: | |||||||||||
Reportable Segments: | |||||||||||
Jefferies | $ | 43,508 | $ | 119,165 | $ | 358,396 | |||||
National Beef | 329,022 | (123,915 | ) | (40,303 | ) | ||||||
Corporate and other | 18,386 | (44,295 | ) | (142,728 | ) | ||||||
Pre-tax income (loss) from continuing operations related to reportable segments | 390,916 | (49,045 | ) | 175,365 | |||||||
All other (1) | (15,605 | ) | 492,762 | 305,752 | |||||||
Parent Company interest | (58,881 | ) | (87,181 | ) | (99,895 | ) | |||||
Total consolidated pre-tax income from continuing operations | $ | 316,430 | $ | 356,536 | $ | 381,222 | |||||
Depreciation and amortization expenses: | |||||||||||
Reportable Segments: | |||||||||||
Jefferies | $ | 60,206 | $ | 92,165 | $ | 78,566 | |||||
National Beef | 94,482 | 89,317 | 85,305 | ||||||||
Corporate and other | 3,619 | 3,744 | 5,627 | ||||||||
Total depreciation and amortization expenses related to reportable segments | 158,307 | 185,226 | 169,498 | ||||||||
All other | 53,286 | 38,907 | 16,495 | ||||||||
Total consolidated depreciation and amortization expenses | $ | 211,593 | $ | 224,133 | $ | 185,993 | |||||
Identifiable assets employed: | |||||||||||
Reportable Segments: | |||||||||||
Jefferies (3) | $ | 36,992,096 | $ | 38,607,786 | $ | 44,562,155 | |||||
National Beef | 1,498,317 | 1,514,249 | 1,716,069 | ||||||||
Corporate and other | 1,935,118 | 1,777,199 | 3,237,476 | ||||||||
Identifiable assets employed related to reportable segments | 40,425,531 | 41,899,234 | 49,515,700 | ||||||||
All other | 4,728,457 | 4,581,673 | 3,152,029 | ||||||||
Intercompany eliminations | (82,681 | ) | (149,723 | ) | (53,405 | ) | |||||
Total consolidated assets | $ | 45,071,307 | $ | 46,331,184 | $ | 52,614,324 |
(1) | All other revenue and pre-tax income from continuing operations include $(54.6) million and $491.3 million of realized and unrealized gains (losses) relating to our investment in FXCM for the years ended December 31, 2016 and 2015, respectively. |
(2) | Revenue intercompany elimination for 2015 relates to an investment banking and advisory fee paid to Jefferies in connection with our entering into the agreement with FXCM. |
(3) | At December 31, 2016, 2015 and 2014, includes $337.6 million, $320.2 million and $399.6 million, respectively, of Jefferies deferred tax asset, net. |
Common Shares Subject to Option | Weighted- Average Exercise Prices | Weighted- Average Remaining Contractual Term | Aggregate Intrinsic Value | |||||||||
Balance at December 31, 2013 | 2,417,248 | $ | 25.64 | |||||||||
Granted | — | $ | — | |||||||||
Exercised | (35,536 | ) | $ | 22.87 | $ | 58,000 | ||||||
Cancelled | (741,678 | ) | $ | 27.39 | ||||||||
Balance at December 31, 2014 | 1,640,034 | $ | 24.91 | |||||||||
Granted | — | $ | — | |||||||||
Exercised | (2,030 | ) | $ | 21.66 | $ | 6,000 | ||||||
Cancelled | (976,732 | ) | $ | 24.88 | ||||||||
Balance at December 31, 2015 | 661,272 | $ | 24.97 | |||||||||
Granted | — | $ | — | |||||||||
Exercised | — | $ | — | $ | — | |||||||
Cancelled | (19,794 | ) | $ | 30.49 | ||||||||
Balance at December 31, 2016 | 641,478 | $ | 24.80 | 1.1 years | $ | 144,000 | ||||||
Exercisable at December 31, 2016 | 503,430 | $ | 25.31 | 0.8 years | $ | 93,000 |
2016 | 2015 | ||||||
Bank loans (1) | $ | 372,301 | $ | 262,000 | |||
Secured revolving loan facilities | 57,086 | 48,659 | |||||
Floating rate puttable notes | 96,455 | — | |||||
Total short-term borrowings | $ | 525,842 | $ | 310,659 |
2016 | 2015 | 2014 | |||||||||
(In thousands) | |||||||||||
Net Revenues: | |||||||||||
Reportable Segments: | |||||||||||
Jefferies | $ | 2,421,055 | $ | 2,476,133 | $ | 2,986,325 | |||||
National Beef | 7,027,243 | 7,402,419 | 7,832,424 | ||||||||
Corporate and other | 88,590 | 78,122 | 60,720 | ||||||||
Total net revenues related to reportable segments | 9,536,888 | 9,956,674 | 10,879,469 | ||||||||
All other (1) | 525,729 | 950,784 | 607,016 | ||||||||
Intercompany eliminations (2) | — | (21,000 | ) | — | |||||||
Total consolidated net revenues | $ | 10,062,617 | $ | 10,886,458 | $ | 11,486,485 | |||||
Pre-tax income (loss) from continuing operations: | |||||||||||
Reportable Segments: | |||||||||||
Jefferies | $ | 43,508 | $ | 119,165 | $ | 358,396 | |||||
National Beef | 329,022 | (123,915 | ) | (40,303 | ) | ||||||
Corporate and other | 18,386 | (44,295 | ) | (142,728 | ) | ||||||
Pre-tax income (loss) from continuing operations related to reportable segments | 390,916 | (49,045 | ) | 175,365 | |||||||
All other (1) | (15,605 | ) | 492,762 | 305,752 | |||||||
Parent Company interest | (58,881 | ) | (87,181 | ) | (99,895 | ) | |||||
Total consolidated pre-tax income from continuing operations | $ | 316,430 | $ | 356,536 | $ | 381,222 | |||||
Depreciation and amortization expenses: | |||||||||||
Reportable Segments: | |||||||||||
Jefferies | $ | 60,206 | $ | 92,165 | $ | 78,566 | |||||
National Beef | 94,482 | 89,317 | 85,305 | ||||||||
Corporate and other | 3,619 | 3,744 | 5,627 | ||||||||
Total depreciation and amortization expenses related to reportable segments | 158,307 | 185,226 | 169,498 | ||||||||
All other | 53,286 | 38,907 | 16,495 | ||||||||
Total consolidated depreciation and amortization expenses | $ | 211,593 | $ | 224,133 | $ | 185,993 | |||||
Identifiable assets employed: | |||||||||||
Reportable Segments: | |||||||||||
Jefferies (3) | $ | 36,992,096 | $ | 38,607,786 | $ | 44,562,155 | |||||
National Beef | 1,498,317 | 1,514,249 | 1,716,069 | ||||||||
Corporate and other | 1,935,118 | 1,777,199 | 3,237,476 | ||||||||
Identifiable assets employed related to reportable segments | 40,425,531 | 41,899,234 | 49,515,700 | ||||||||
All other | 4,728,457 | 4,581,673 | 3,152,029 | ||||||||
Intercompany eliminations | (82,681 | ) | (149,723 | ) | (53,405 | ) | |||||
Total consolidated assets | $ | 45,071,307 | $ | 46,331,184 | $ | 52,614,324 |
(1) | All other revenue and pre-tax income from continuing operations include $(54.6) million and $491.3 million of realized and unrealized gains (losses) relating to our investment in FXCM for the years ended December 31, 2016 and 2015, respectively. |
(2) | Revenue intercompany elimination for 2015 relates to an investment banking and advisory fee paid to Jefferies in connection with our entering into the agreement with FXCM. |
(3) | At December 31, 2016, 2015 and 2014, includes $337.6 million, $320.2 million and $399.6 million, respectively, of Jefferies deferred tax asset, net. |
2016 | 2015 | 2014 | |||||||||
Americas (1) | $ | 1,876,796 | $ | 1,887,899 | $ | 2,257,870 | |||||
Europe (2) | 458,046 | 510,044 | 634,358 | ||||||||
Asia | 86,213 | 78,190 | 94,097 | ||||||||
$ | 2,421,055 | $ | 2,476,133 | $ | 2,986,325 |
(1) | Substantially all relates to U.S. results. |
(2) | Substantially all relates to U.K. results. |
2016 | 2015 | ||||||
Bank loans (1) | $ | 372,301 | $ | 262,000 | |||
Secured revolving loan facilities | 57,086 | 48,659 | |||||
Floating rate puttable notes | 96,455 | — | |||||
Total short-term borrowings | $ | 525,842 | $ | 310,659 |
Level 1: | Quoted prices are available in active markets for identical assets or liabilities as of the reported date. |
Level 2: | Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these financial instruments include cash instruments for which quoted prices are available but traded less frequently, derivative instruments fair values for which have been derived using model inputs that are directly observable in the market, or can be derived principally from or corroborated by observable market data, and instruments that are fair valued using other financial instruments, the parameters of which can be directly observed. |
Level 3: | Instruments that have little to no pricing observability as of the reported date. These financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation. |
2016 | 2015 | 2014 | |||||||||
Balance at beginning of period | $ | 150,867 | $ | 148,590 | $ | 145,520 | |||||
Increases based on tax positions related to the current period | 5,045 | 3,475 | 5,630 | ||||||||
Increases based on tax positions related to prior periods | 3,697 | 22,030 | 4,340 | ||||||||
Decreases based on tax positions related to prior periods | (9,414 | ) | (15,349 | ) | (3,940 | ) | |||||
Decreases related to settlements with taxing authorities | (1,347 | ) | (7,879 | ) | (2,960 | ) | |||||
Balance at end of period | $ | 148,848 | $ | 150,867 | $ | 148,590 |