Leucadia National: Jefferies Financial Group Announces Third Quarter 2020 Financial Results

The following excerpt is from the company's SEC filing.

All-Time Record Quarterly Results at Jefferies Group

Quarterly Cash Dividend of $0.15 per Jefferies Common Share Declared

Share Repurchase Authorization Increased to $250 million

New York, New York — September 23, 2020 — Jefferies Financial Group Inc. (NYSE: JEF) today announced its financial results for the three and nine month periods ended August 31, 2020. In addition, the Jefferies Board of Directors declared a quarterly cash dividend equal to $0.15 per Jefferies common share payable on November 25, 2020 to record holders of Jefferies common shares on November 13, 2020. The Jefferies Board o f Directors also increased the Company's stock buyback authorization by $128 million to a total of $250 million. We expect to file our Form 10-Q on or about October 9, 2020.

Highlights for the three months ended August 31, 2020:

Jefferies Group LLC recorded record quarterly net revenues of $1,383 million, record pre-tax income of $363 million, record net earnings of $268 million and return on tangible equity of 23.2%

Record Investment Banking net revenues of $589 million, including record Equity Underwriting net revenues of $305 million, Advisory net revenues of $171 million, and Debt Underwriting net revenues of $139 million

Combined Capital Markets net revenues of $655 million; record Equities net revenues of $319 million and Fixed Income net revenues of $336 million

Record Asset Management revenues (before allocated net interest

) of $122 million

Merchant Banking recorded pre-tax income of $71 million, reflecting record quarterly results from Idaho Timber and mark-to-market increases in the value of several of our investments in public companies, partially offset by a decrease in the fair value of Vitesse's hedges, as oil prices appreciated during the quarter

Net income attributable to Jefferies Financial Group common shareholders was $304 million, or $1.07 per diluted share

We repurchased 7.9 million shares for $128 million, or an average price of $16.26 per share; 259.2 million shares were outstanding and 283.0 million shares were outstanding on a fully diluted basis

at August 31, 2020; Jefferies book value per share was $36.30 and tangible book value per fully diluted share

was $26.49 at the end of the third quarter

Jefferies Financial Group had parent company liquidity of $1.6 billion at August 31, 2020. Jefferies Group had a record liquidity buffer of $8.1 billion of cash and unencumbered liquid collateral at August 31, 2020, which represented 17% of its total balance sheet.

Highlights for the nine months ended August 31, 2020:

Jefferies Group LLC recorded record nine months net revenues of $3,589 million, record pre-tax income of $772 million, record net earnings of $568 million and return on tangible equity of 17.7%

Record nine months Investment Banking net revenues of $1,483 million, including record nine months Advisory net revenues of $697 million, record Equity Underwriting net revenues of $561 million and Debt Underwriting net revenues of $337 million

Record combined nine months Capital Markets net revenues of $1,879 million, including Equities net revenues of $802 million and Fixed Income net revenues of $1,078 million

) of $173 million

Merchant Banking pre-tax loss of $58 million, reflecting positive contributions from Idaho Timber, Vitesse and FXCM, and a gain of about $60 million from effective short-term hedges against mark-to-

market and fair value decreases, more than offset by $145 million in previously reported non-cash charges in the first two quarters of 2020 to write-down our investments in The We Company, JETX and some of the real estate assets of HomeFed

Net income attributable to Jefferies Financial Group common shareholders of $462 million, or $1.57 per diluted share

Repurchases of 32.7 million shares for $620 million, or an average price of $18.98 per share

Rich Handler, our CEO, and Brian Friedman, our President, said:

"We are very pleased to report Jefferies Financial Group quarterly net income of $304 million, driven by Jefferies Group record quarterly net revenues and record quarterly net earnings for the second time this year. Jefferies Group's return on tangible equity of 23.2%

demonstrates the operating leverage inherent in our business model. Our strong results reflect Jefferies Group becoming an ever increasing portion of our overall business, greater productivity through growing market share with a limited increase in headcount and constant focus on control of operating costs. Our depth of capital markets knowledge and capabilities, combined with the breadth of our investment banking relationships, have positioned Jefferies as a leading firm serving an ever expanding client base across the world.

"Since the beginning of fiscal 2018, our tangible book value per fully diluted share

has increased 29% to $26.49, while Jefferies issued dividends during this period of $2.90 per share. The tangible book value per fully diluted share increase, combined with the dividends per share during this period, represent a 14% compounded return per share. During this same period, we repurchased an aggregate of 108.6 million shares for an aggregate of $2.3 billion, or $20.90 per share. We remain relentlessly focused on maximizing the value of Jefferies Financial Group by continuing to build Jefferies Group, while managing our legacy Merchant Banking portfolio to a sensible set of final realizations. We will continue to re-purchase shares when prudent from a balance sheet and capital allocation perspective, as we believe there continues to be a significant gap between our intrinsic value and our stock price.

"We continue to make important investments in our people and technology needed to deliver the highest quality of service. With Jefferies Group's broad product offering, scalable platform, strong capital and liquidity position and the amazing talent of our approximately 3,900 employees, we believe there is tremendous potential to continue to increase our market share across all our businesses.

"Investment Banking's record net revenues of $589 million were driven by record performance in Equity Underwritings. The unknown future path of the COVID-19 pandemic and uncertainty in timing of a remedy, encouraged companies across the world to raise long-term and permanent capital. Although M&A and advisory activities were a bit muted in the third quarter, our fourth quarter backlog of Investment Banking activity remains robust across all products.

"Capital Markets quarterly net revenues of $655 million was led by record Equity revenues and strong Fixed Income results across virtually every business line, which included material contributions from Europe and Asia. The strong equity markets and more clarity from the Federal Reserve on future rate policy provided a supportive trading environment for investors.

"Jefferies Group experienced record net revenues across Leucadia Asset Management, which were $122 million for the third quarter and $173 million for the first nine months of the year, 44% higher than the first nine months of 2019 (before allocated net interest

) on allocated capital of approximately $1 billion. This included continued positive performance from our investments in multi-manager platforms (Dymon, Schonfeld, Topwater and Weiss) and certain single manager boutiques, particularly ESG, Energy, Event-Driven and Capital Markets-focused. We’ve further enhanced our marketing efforts with the addition of a Head of Asia and a Head of Investor Relations. Despite the slow-down in travel due to the pandemic, fund-raising efforts continue, with strong momentum in several of our strategies.

"Jefferies Group's balance sheet was $46.7 billion at quarter-end, which was 3% higher than at the end of the second quarter, almost entirely due to an increase in Cash and cash equivalents. Jefferies Group's balance sheet

remains very liquid and our level 3 inventory remains low at $433 million, or approximately 2%, of total inventory. Our liquidity buffer totaled $8.1 billion, which represents an all-time record in liquidity that we believe is prudent considering the volatile environment."

Amounts herein pertaining to August 31, 2020 represent a preliminary estimate as of the date of this earnings release and may be revised upon filing our Quarterly Report on Form 10-Q with the Securities and Exchange Commission ("SEC"). More information on our results of operations for the three and nine month periods ended August 31, 2020 will be provided upon filing our Quarterly Report on Form 10-Q with the SEC.

This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include statements about our future and statements that are not historical facts. These forward-looking statements are usually preceded by the words "should," "expect," "intend," "may," "will," or similar expressions. Forward-looking statements may contain expectations regarding revenues, earnings, operations, and other results, and may include statements of future performance, plans, and objectives. Forward-looking statements also include statements pertaining to our strategies for future development of our businesses and products. Forward-looking statements represent only our belief regarding future events, many of which by their nature are inherently uncertain. It is possible that the actual results may differ, possibly materially, from the anticipated results indicated in these forward-looking statements. Information regarding important factors, including Risk Factors that could cause actual results to differ, perhaps materially, from those in our forward-looking statements is contained in reports we file with the SEC. You should read and interpret any forward-looking statement together with reports we file with the SEC.

Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy will be profitable or equal the corresponding indicated performance level(s).

For further information, please contact:

Teresa S. Gendron

Chief Financial Officer

Tel. (212) 460-1932

Matt Larson

Tel. (212) 284-2338

Return on tangible equity (a non-GAAP financial measure) equals our three months ended August 31, 2020 annualized net earnings attributable to Jefferies Group LLC divided by our tangible Jefferies Group LLC member's equity (a non-GAAP financial measure) of $4,612 million at May 31, 2020. Tangible Jefferies Group LLC member's equity at May 31, 2020 equals Jefferies Group LLC member's equity of $6,412 million less goodwill and identifiable intangibles assets of $1,800 million.

Allocated net interest represents the allocation of a ratable portion of Jefferies Group LLC's long-term debt interest expense to Jefferies Group LLC's Asset Management reportable segment, net of interest income on Jefferies Group LLC's Cash and cash equivalents and other sources of liquidity, which allocation is consistent with Jefferies Group LLC's policy of allocating such items to all its business lines. Refer to Jefferies Group LLC's summary of Net Revenues by Source on page 10 and 11.

Shares outstanding on a fully diluted basis, a non-GAAP measure, is defined as Jefferies Financial Group's common shares outstanding plus restricted stock units and other shares. Refer to schedule on page 14 for reconciliation to U.S. GAAP amounts.

Tangible book value per fully diluted share, a non-GAAP measure, is defined as Tangible book value divided by shares outstanding on a fully diluted basis. Tangible book value, a non-GAAP measure, is defined as Jefferies Financial Group shareholders' equity (book value) less Intangible assets, net and goodwill. Shares outstanding on a fully diluted basis, a non-GAAP measure, is defined as Jefferies Financial Group's common shares outstanding plus restricted stock units and other shares. Refer to schedule on page 14 for reconciliation to U.S. GAAP amounts.

Return on tangible equity (a non-GAAP financial measure) equals our first nine months of 2020 annualized net earnings attributable to Jefferies Group LLC divided by our tangible Jefferies Group LLC member's equity (a non-GAAP financial measure) of $4,311 million at November 30, 2019. Tangible Jefferies Group LLC member's equity at November 30, 2019 equals Jefferies Group LLC member's equity of $6,125 million less goodwill and identifiable intangibles assets of $1,814 million.

Summary for Jefferies Financial Group Inc. and Subsidiaries

(In thousands, except per share amounts)

(Unaudited)

Three Months Ended

August 31, 2019

Nine Months Ended

Net revenues

1,616,170

856,778

4,150,087

2,786,878

Income (loss) before income taxes and income (loss) related to associated companies

407,189

(59,020)

715,066

124,293

Income (loss) related to associated companies

72,283

(69,523)

121,766

Income before income taxes

412,242

13,263

645,543

246,059

Income tax provision (benefit)

107,403

(36,131)

185,138

(522,626)

304,839

49,394

460,405

768,685

Net (income) loss attributable to the noncontrolling interests

Net (income) loss attributable to the redeemable noncontrolling interests

Preferred stock dividends

(1,404)

(1,275)

(4,230)

(3,827)

Net income attributable to Jefferies Financial Group Inc. common shareholders

304,409

48,477

462,338

764,052

Basic earnings per common share attributable to Jefferies Financial Group Inc. common shareholders:

Number of shares in calculation

280,695

310,288

289,959

310,838

Diluted earnings per common share attributable to Jefferies Financial Group Inc. common shareholders:

285,136

311,897

294,875

317,181

A summary of results for the three months ended August 31, 2020 is as follows (in thousands):

Investment Banking and Capital Markets (1)

Asset Management (1)

Merchant Banking (1)

Corporate

Parent Company Interest

Consolidation Adjustments

1,274,115

118,558

220,887

Expenses:

Compensation and benefits

719,822

10,652

20,573

760,837

Cost of sales (2)

60,640

82,657

149,400

Interest expense

14,114

21,512

Depreciation and amortization

22,225

14,408

39,520

Selling, general and other expenses

190,105

12,181

30,157

237,712

Total expenses

992,792

30,954

155,193

16,209

1,208,981

Income (loss) before income taxes and income related to associated companies

281,323

87,604

65,694

(15,618)

(14,114)

Income related to associated companies

70,747

A summary of results for the three months ended August 31, 2019 is as follows (in thousands):

757,363

20,340

73,754

(3,646)

400,071

18,557

16,804

11,450

446,882

51,358

85,773

136,631

14,770

23,663

20,754

17,784

39,880

198,986

51,897

268,742

671,169

28,010

181,151

20,746

915,798

86,194

(7,670)

(107,397)

(11,779)

(14,770)

(3,598)

72,016

(7,403)

(35,381)

Income tax benefit

(1)    We now present Asset Management as a separate reporting segment. Prior year amounts have been reclassified to conform to current segment disclosure.

(2)    Includes Floor brokerage and clearing fees.

A summary of results for the nine months ended August 31, 2020 is as follows (in thousands):

3,451,776

146,278

532,608

11,908

1,892,567

59,375

51,736

25,819

2,029,497

181,115

20,288

235,871

437,274

24,453

39,773

64,226

61,322

50,627

119,356

570,958

36,717

157,990

19,684

784,668

2,705,962

121,156

520,677

48,134

3,435,021

Income (loss) before income taxes and loss related to associated companies

745,814

25,122

11,931

(36,226)

(39,773)

Loss related to associated companies

(57,592)

A summary of results for the nine months ended August 31, 2019 is as follows (in thousands):

2,274,885

95,447

391,825

22,134

1,231,915

48,749

44,638

41,732

1,367,034

148,712

14,401

233,109

396,222

25,521

44,298

69,819

56,672

49,904

110,600

553,694

29,421

111,275

24,857

718,910

1,990,993

94,043

464,447

69,141

2,662,585

283,892

(72,622)

(47,007)

(44,298)

121,159

48,537

The following financial tables provide information for the results of Jefferies Group LLC and should be read in conjunction with Jefferies Group LLC's Annual Report on Form 10-K for the year ended November 30, 2019. Amounts herein pertaining to August 31, 2020 represent a preliminary estimate as of the date of this earnings release and may be revised in Jefferies Group LLC's Quarterly Report on Form 10-Q for the quarter ended August 31, 2020.

Jefferies Group LLC and Subsidiaries

Consolidated Statements of Earnings

(Amounts in Thousands)

Quarter Ended

Revenues:

Commissions and other fees

204,313

243,267

171,003

Principal transactions

560,665

467,283

148,873

Investment banking

615,837

387,491

412,533

Asset management fees and revenues (1)

195,960

211,941

383,596

Other (1)

11,526

(47,275)

21,406

Total revenues

1,595,073

1,267,283

1,141,631

211,629

232,916

364,472

1,383,444

1,034,367

777,159

Non-interest expenses:

725,555

571,547

411,936

Non-compensation expenses:

66,744

77,619

54,247

Technology and communications

102,635

95,594

86,649

Occupancy and equipment rental

27,053

24,395

29,300

Business development

36,526

Professional services

41,173

41,994

42,379

Underwriting costs

29,071

12,485

14,647

20,175

29,506

18,400

Total non-compensation expenses

294,488

289,952

282,148

Total non-interest expenses

1,020,043

861,499

694,084

Earnings before income taxes

363,401

172,868

83,075

Income tax expense

95,870

43,972

18,250

Net earnings

267,531

128,896

64,825

Net loss attributable to noncontrolling interests

(1,842)

Net earnings attributable to Jefferies Group LLC

268,062

130,738

64,968

Pre-tax operating margin

Effective tax rate

In the fourth quarter of 2019, Jefferies Group LLC reorganized the presentation of revenues from arrangements which entitle us to certain portions of revenues and/or profits of strategic asset management partners. Jefferies Group LLC's Consolidated Statement of Earnings reflects the reclassification of revenues of $0.9 million from Other revenues to Asset management fees and revenues for the three months ended August 31, 2019. There is no impact on Total revenues as a result of this change in presentation.

627,115

493,843

1,399,850

632,002

1,595,330

1,128,216

23,068

16,350

702,569

1,163,022

(6,020)

77,563

4,341,912

3,510,996

753,405

1,146,268

3,588,507

2,364,728

1,932,332

1,261,506

204,943

168,698

287,413

247,464

78,951

87,587

45,953

103,430

127,832

117,372

59,085

36,045

80,351

41,828

884,528

802,424

2,816,860

2,063,930

771,647

300,798

203,855

79,789

567,792

221,009

Net earnings (loss) attributable to noncontrolling interests

(4,397)

572,189

220,869

In the fourth quarter of 2019, Jefferies Group LLC reorganized the presentation of revenues from arrangements which entitle us to certain portions of revenues and/or profits of strategic asset management partners. Jefferies Group LLC's Consolidated Statement of Earnings reflects the reclassification of revenues of $1.8 million from Other revenues to Asset management fees and revenues for the nine months ended August 31, 2019. There is no impact on Total revenues as a result of this change in presentation.

Selected Statistical Information

(Amounts in Thousands, Except Other Data)

Net Revenues by Source:

171,438

182,081

213,350

Equity underwriting

305,380

124,383

97,494

Debt underwriting

139,019

81,027

101,689

Total underwriting

444,399

205,410

199,183

Other investment banking

(27,013)

(71,234)

(9,108)

Total investment banking

588,824

316,257

403,425

318,824

237,131

193,229

Fixed income

336,347

493,144

148,334

Total capital markets

655,171

730,275

341,563

30,120

(17,700)

12,374

Total Investment Banking and Capital Markets (1) (2)

1,028,832

757,362

Asset management fees and revenues (3)

Investment return (3) (4) (5)

115,556

13,944

24,866

Allocated net interest (4) (6)

(12,999)

(12,985)

(9,289)

Total Asset Management

109,329

19,797

Other Data:

Number of trading days

Number of trading loss days

Average firmwide VaR (in millions) (7)

Includes net interest revenue (expense) of $3.3 million, $(0.8) million and $30.4 million for the quarters ended August 31, 2020, May 31, 2020, and August 31, 2019, respectively.

Allocated net interest is not separately disaggregated in presenting our Investment Banking and Capital Markets reportable segment within Jefferies Group LLC's Net Revenues by Source. This presentation is aligned to our Investment Banking and Capital Markets internal performance measurement.

In the fourth quarter of 2019, Jefferies Group LLC reorganized the presentation of revenues from arrangements which entitle us to certain portions of revenues and/or profits of strategic asset management partners. Jefferies Group LLC's Net Revenues by Source reflects the reclassification of revenues of $0.9 million from Investment return revenues to Asset management fees and revenues for the three months ended August 31, 2019. There is no impact on Total Asset Management revenues as a result of this change in presentation.

Net revenues attributed to the Investment return in Jefferies Group LLC's Asset Management reportable segment have been disaggregated to separately present Investment return and Allocated net interest (see footnotes 5 and 6). This disaggregation is intended to increase transparency and to make clearer actual Investment return. We believe that aggregating Investment return and Allocated net interest would obscure the Investment return by including an amount that is unique to Jefferies Group LLC's credit spreads, debt maturity profile, capital structure, liquidity risks and allocation methods, none of which are pertinent to the Investment returns generated by the performance of the portfolio.

Includes net interest expense of $6.0 million, $7.2 million and $2.0 million for the quarters ended May 31, 2020, February 29, 2020, and May 31, 2019, respectively.

Allocated net interest represents the allocation of Jefferies Group LLC's long-term debt interest expense to Jefferies Group LLC's Asset Management reportable segment, net of interest income on Jefferies Group LLC's Cash and cash equivalents and other sources of liquidity (refer to page 12).

VaR estimates the potential loss in value of Jefferies Group LLC's trading positions due to adverse market movements over a one-day time horizon with a 95% confidence level. For a further discussion of the calculation of VaR, see "Value-at-Risk" in Part II, Item 7 "Management's Discussion and Analysis" in Jefferies Group LLC's Annual Report on Form 10-K for the year ended November 30, 2019.

696,677

572,386

561,455

256,853

337,198

306,977

898,653

563,830

(112,776)

(7,116)

1,482,554

1,129,100

801,596

573,851

1,077,673

518,346

1,879,269

1,092,197

89,953

53,587

2,274,884

150,339

104,442

(36,676)

(30,948)

136,731

89,844

Includes net interest revenue of $5.4 million and $51.4 million for the nine months ended August 31, 2020 and 2019, respectively.

In the fourth quarter of 2019, Jefferies Group LLC reorganized the presentation of revenues from arrangements which entitle us to certain portions of revenues and/or profits of strategic asset management partners. Jefferies Group LLC's Net Revenues by Source reflects the reclassification of revenues of $1.8 million from Investment return revenues to Asset management fees and revenues for the nine months ended August 31, 2019. There is no impact on Total Asset Management revenues as a result of this change in presentation.

Includes net interest expense of $19.6 million and $3.7 million for the nine months ended August 31, 2020 and 2019, respectively.

Financial Highlights

(Amounts in Millions, Except Where Noted)

Financial position:

Total assets (1)

46,660

45,084

43,094

Average total assets for the period (1)

54,654

56,480

53,097

Average total assets less goodwill and intangible assets for the period (1)

52,965

54,673

51,281

Cash and cash equivalents (1)

Cash and cash equivalents and other sources of liquidity (1) (2)

Cash and cash equivalents and other sources of liquidity - % total assets (1) (2)

Cash and cash equivalents and other sources of liquidity - % total assets less goodwill and intangible assets (1) (2)

Financial instruments owned (1)

17,556

18,125

16,371

Goodwill and intangible assets (1)

Right-of-use assets (1) (3)

Total equity (including noncontrolling interests) (1)

Total Jefferies Group LLC member's equity (1)

Tangible Jefferies Group LLC member's equity (1) (4)

Level 3 financial instruments:

Level 3 financial instruments owned (1) (5)

Level 3 financial instruments owned - % total assets (1) (5)

Level 3 financial instruments owned - % total financial instruments (1) (5)

Level 3 financial instruments owned - % tangible Jefferies Group LLC member's equity (1) (5)

Other data and financial ratios:

Total long-term capital (1) (6)

12,492

12,102

12,219

Leverage ratio (1) (7)

Tangible gross leverage ratio (1) (8)

Adjusted tangible gross leverage ratio (1) (3) (9)

Number of trading loss days

Average firmwide VaR (10)

Number of employees, at period end

N/A — Not Applicable

Financial Highlights - Footnotes

Amounts pertaining to August 31, 2020 represent a preliminary estimate as of the date of this earnings release and may be revised in Jefferies Group LLC's Quarterly Report on Form 10-Q for the quarter ended August 31, 2020.

At August 31, 2020, other sources of liquidity include high quality sovereign government securities and reverse repurchase agreements collateralized by U.S. government securities and other high quality sovereign government securities of $1,123 million, in aggregate, and $216 million, being the estimated amount of additional secured financing that could be reasonably expected to be obtained from Jefferies Group LLC's financial instruments that are currently not pledged after considering reasonable financing haircuts. The corresponding amounts included in other sources of liquidity at May 31, 2020 were $998 million and $292 million, respectively, and at August 31, 2019, were $1,063 million and $345 million, respectively.

Jefferies Group LLC adopted the new lease standard on December 1, 2019 using a modified retrospective transition approach. Accordingly, reported financial information for historical comparable periods is not revised and continues to be reported under the accounting standards in effect during those historical periods. We elected not to reassess whether existing contracts are or contain leases, or the lease classification and initial direct costs of existing leases upon transition. At transition on December 1, 2019, the adoption of this standard resulted in the recognition of right-of-use assets of $520 million, reflected in Premises and equipment in Jefferies Group LLC's Consolidated Statement of Financial Condition.

Tangible Jefferies Group LLC member's equity (a non-GAAP financial measure) represents total Jefferies Group LLC member's equity less goodwill and identifiable intangible assets. We believe that tangible Jefferies Group LLC member's equity is meaningful for valuation purposes, as financial companies are often measured as a multiple of tangible equity, making these ratios meaningful for investors.

Level 3 financial instruments represent those financial instruments classified as such under Accounting Standards Codification 820, accounted for at fair value and included within Financial instruments owned.

At August 31, 2020, May 31, 2020, and August 31, 2019, total long-term capital includes Jefferies Group LLC's long-term debt of $5,987 million, $5,672 million and $6,030 million, respectively, and total equity. Long-term debt included in total long-term capital is reduced by amounts outstanding under the revolving credit facility, amounts from secured term loans and the amount of debt maturing in less than one year, as applicable.

Leverage ratio equals total assets divided by total equity.

Tangible gross leverage ratio (a non-GAAP financial measure) equals total assets less goodwill and identifiable intangible assets divided by tangible Jefferies Group LLC member's equity. The tangible gross leverage ratio is used by rating agencies in assessing Jefferies Group LLC's leverage ratio.

Adjusted tangible gross leverage ratio (a non-GAAP financial measure) equals total assets less goodwill and identifiable intangible assets and right-of-use assets divided by tangible Jefferies Group LLC member's equity less right-of-use assets.

Non-GAAP Reconciliation

The following table reconciles Jefferies Financial Group non-GAAP measures to their respective U.S. GAAP measures. Management believes such non-GAAP measures are useful to investors as they allow them to view our results through the eyes of management, while facilitating a comparison across historical periods. These measures should not be considered a substitute for, or superior to, measures prepared in accordance with U.S. GAAP.

Jefferies Financial Group Book Value and Shares Outstanding GAAP Reconciliation

The table below reconciles our book value to tangible book value and our common shares outstanding to fully diluted shares outstanding (in thousands, except per share amounts):

As Reported, August 31, 2020

Book value (GAAP)

9,410,665

Less: Intangibles assets, net and goodwill

(1,914,542)

Tangible book value (non-GAAP)

7,496,123

Common shares outstanding (GAAP)

259,246

Restricted stock units ("RSUs")

22,632

Fully diluted shares outstanding (non-GAAP) (1)

282,983

Book value per share outstanding

Tangible book value per fully diluted share outstanding

(1) Fully diluted shares outstanding exclude preferred shares as they are antidilutive. Fully diluted shares outstanding include vested RSUs as well as the target number of RSUs issuable under the senior executive compensation plans.

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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Other recent filings from the company include the following:

Quarterly report filed by institutional managers, Holdings - Nov. 13, 2020

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