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Section 1: 8-K (JEFFERIES FINANCIAL GROUP 3RD QTR. 2018 FORM 8-K)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): October 25, 2018

JEFFERIES FINANCIAL GROUP INC.
(Exact Name of Registrant as Specified in Its Charter)

NEW YORK
(State or Other Jurisdiction of Incorporation)

1-5721
(Commission File Number)
13-2615557
(I.R.S. Employer Identification No.)
 
 
520 Madison Avenue
New York, New York
(Address of Principal Executive Offices)

10022
(Zip Code)

212-460-1900
(Registrant's Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

|_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company: o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o







Item 2.02. Results of Operations and Financial Condition

The information set forth in the press release issued by Jefferies Financial Group Inc. on October 25, 2018, attached hereto as Exhibit 99.1, is incorporated herein by reference.

Item 9.01(d). Exhibits

Exhibit No.    Description

99.1        Press Release issued by Jefferies Financial Group Inc. on October 25, 2018










































SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.




Date: October 25, 2018




JEFFERIES FINANCIAL GROUP INC.
 
 
 
 
By:
/s/ Teresa S. Gendron
Name:
Teresa S. Gendron
Title:
Vice President and Chief Financial Officer





































EXHIBIT INDEX


Exhibit No.        Exhibit

99.1            Press Release dated October 25, 2018




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Section 2: EX-99.1 (JEFFERIES FINANCIAL GROUP INC. 3RD QTR. 2018 PRESS RELEASE)

Exhibit


FOR IMMEDIATE RELEASE                                 October 25, 2018
Contact: Laura Ulbrandt (212) 460-1900



JEFFERIES FINANCIAL GROUP INC.
ANNOUNCES THIRD QUARTER 2018 RESULTS


New York, New York, October 25, 2018--Jefferies Financial Group Inc. (NYSE: JEF) today announced its financial results for the three and nine month periods ended September 30, 2018. Consistent with the estimates in our press release of October 4, 2018, Net income attributable to Jefferies common shareholders was $193 million, or $0.55 per diluted share, for the third quarter, and $1.04 billion, or $2.91 per diluted share, for the nine month period. Pre-tax income, from continuing and discontinued operations, was $273 million for the three month period and $1.4 billion for the nine month period. The results for the third quarter include a pre-tax gain of $222 million recorded as a result of the August closing of the previously reported sale of our interests in Garcadia and its associated real estate, partially offset by a $49 million mark-to-market decrease in the value of our Spectrum Brands investment and a $48 million pre-tax impairment charge related to our investment in Golden Queen, of which $12 million is attributable to the noncontrolling interest.
  
Rich Handler, our CEO, and Brian Friedman, our President, said, "As we discussed during our recent Investor Day, we are pleased and confident in our momentum and future prospects."

Our Board of Directors has declared a quarterly cash dividend equal to $0.125 per Jefferies common share, payable on November 30, 2018 to record holders of Jefferies common shares on November 19, 2018. Our Board also has approved changing our fiscal year-end to November 30. Effective with the fourth quarter of 2018, our reporting will be harmonized with our wholly-owned subsidiary, Jefferies Group LLC.


* * * *

More information on the Company’s results of operations for the three and nine months ended September 30, 2018 will be provided upon filing of the Company’s Form 10-Q with the Securities and Exchange Commission.

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).





SUMMARY FOR JEFFERIES FINANCIAL GROUP AND SUBSIDIARIES
(In thousands, except per share amounts)
(Unaudited)

 
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
 
 
 
 
 
2018
 
2017
 
2018
 
2017
 
 
 
 
 
 
 
 
 
Net revenues
 
$
1,150,846

 
$
857,223

 
$
2,957,440

 
$
3,020,610

 
 
 
 
 
 
 
 
 
Income (loss) from continuing operations before income taxes and income (loss) related to associated companies
 
$
253,825

 
$
(4,509
)
 
$
263,650

 
$
497,212

 
 
 
 
 
 
 
 
 
Income (loss) related to associated companies
 
18,867

 
30,057

 
84,320

 
(84,413
)
 
 
 
 
 
 
 
 
 
Income from continuing operations before income taxes
 
272,692

 
25,548

 
347,970

 
412,799

 
 
 
 
 
 
 
 
 
Income tax provision
 
90,391

 
9,770

 
51,560

 
127,198

 
 
 
 
 
 
 
 
 
Income from continuing operations
 
182,301

 
15,778

 
296,410

 
285,601

 
 
 
 
 
 
 
 
 
Income from discontinued operations, net of income tax provision of $0, $53,490, $47,045 and $90,856
 

 
120,989

 
130,063

 
219,151

 
 
 
 
 
 
 
 
 
Gain on disposal of discontinued operations, net of income tax provision $0, $0, $229,553 and $0
 

 

 
643,921

 

 
 
 
 
 
 
 
 
 
Net income
 
182,301

 
136,767

 
1,070,394

 
504,752

 
 
 
 
 
 
 
 
 
Net (income) loss attributable to the noncontrolling interests
 
12,000

 
(28
)
 
13,208

 
1,941

 
 
 
 
 
 
 
 
 
Net income attributable to the redeemable noncontrolling interests
 
(390
)
 
(36,216
)
 
(37,294
)
 
(64,538
)
 
 
 
 
 
 
 
 
 
Preferred stock dividends
 
(1,276
)
 
(1,172
)
 
(3,619
)
 
(3,203
)
 
 
 
 
 
 
 
 
 
Net income attributable to Jefferies Financial Group Inc. common shareholders
 
$
192,635

 
$
99,351

 
$
1,042,689

 
$
438,952

 
 
 
 
 
 
 
 
 
Basic earnings per common share attributable to Jefferies Financial Group Inc. common shareholders:
 
 
 
 
 
 
 
 
Income from continuing operations
 
$
0.56

 
$
0.04

 
$
0.86

 
$
0.77

Income from discontinued operations
 

 
0.23

 
0.26

 
0.42

Gain on disposal of discontinued operations
 

 

 
1.82

 

Net income
 
$
0.56

 
$
0.27

 
$
2.94

 
$
1.19

 
 
 
 
 
 
 
 
 
Number of shares in calculation
 
341,434

 
367,828

 
353,300

 
368,736

 
 
 
 
 
 
 
 
 
Diluted earnings per common share attributable to Jefferies Financial Group Inc. common shareholders:
 
 
 
 
 
 
 
 
Income from continuing operations
 
$
0.55

 
$
0.04

 
$
0.85

 
$
0.76

Income from discontinued operations
 

 
0.23

 
0.26

 
0.41

Gain on disposal of discontinued operations
 

 

 
1.80

 

Net income
 
$
0.55

 
$
0.27

 
$
2.91

 
$
1.17

 
 
 
 
 
 
 
 
 
Number of shares in calculation
 
350,307

 
370,198

 
357,169

 
375,233






A summary of results for the three months ended September 30, 2018 is as follows (in thousands):
 
Financial Services
 
 
 
 
 
 
 
 
2018
Jefferies Group
 
Other Financial Services
 
Merchant Banking
 
Corporate
 
Parent Company Interest
 
Total
Net revenues
$
774,749

 
$
45,457

 
$
321,948

 
$
8,692

 
$

 
$
1,150,846

 
 
 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
Compensation and benefits
428,033

 
9,973

 
9,493

 
13,766

 

 
461,265

Cost of sales

 

 
84,876

 

 

 
84,876

Floor brokerage and clearing fees
44,570

 

 

 

 

 
44,570

Interest expense

 
12,723

 
1,359

 

 
14,755

 
28,837

Depreciation and amortization
17,175

 
1,379

 
12,889

 
852

 

 
32,295

Selling, general and other expenses
198,817

 
16,008

 
21,716

 
8,637

 

 
245,178

Total expenses
688,595

 
40,083

 
130,333

 
23,255

 
14,755

 
897,021

Income (loss) from continuing operations before income taxes and income related to associated companies
86,154

 
5,374

 
191,615

 
(14,563
)
 
(14,755
)
 
253,825

Income related to associated companies

 
16,502

 
2,365

 

 

 
18,867

Income (loss) from continuing operations before income taxes
$
86,154

 
$
21,876

 
$
193,980

 
$
(14,563
)
 
$
(14,755
)
 
272,692

Income tax provision from continuing operations
 
 
 
 
 
 
 
 
 
 
90,391

Net income
 
 
 
 
 
 
 
 
 
 
$
182,301








A summary of results for the three months ended September 30, 2017 is as follows (in thousands):
 
Financial Services
 
 
 
 
 
 
 
 
2017
Jefferies Group
 
Other Financial Services
 
Merchant Banking
 
Corporate
 
Parent Company Interest
 
Total
Net revenues
$
802,909

 
$
22,742

 
$
29,657

 
$
1,915

 
$

 
$
857,223

 
 
 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
Compensation and benefits
462,933

 
9,072

 
10,656

 
10,810

 

 
493,471

Cost of sales

 

 
71,596

 

 

 
71,596

Floor brokerage and clearing fees
42,852

 

 

 

 

 
42,852

Interest expense

 
4,966

 
5,909

 

 
14,737

 
25,612

Depreciation and amortization
15,928

 
2,244

 
9,723

 
865

 

 
28,760

Selling, general and other expenses
153,084

 
15,941

 
23,865

 
6,551

 

 
199,441

Total expenses
674,797

 
32,223

 
121,749

 
18,226

 
14,737

 
861,732

Income (loss) from continuing operations before income taxes and income (loss) related to associated companies
128,112

 
(9,481
)
 
(92,092
)
 
(16,311
)
 
(14,737
)
 
(4,509
)
Income (loss) related to associated companies

 
31,119

 
(1,062
)
 

 

 
30,057

Income (loss) from continuing operations before income taxes
$
128,112

 
$
21,638

 
$
(93,154
)
 
$
(16,311
)
 
$
(14,737
)
 
25,548

Income tax provision from continuing operations
 
 
 
 
 
 
 
 
 
 
9,770

Income from discontinued operations, net of income tax provision
 
 
 
 
 
 
 
 
 
 
120,989

Net income
 
 
 
 
 
 
 
 
 
 
$
136,767







A summary of results for the nine months ended September 30, 2018 is as follows (in thousands):
 
Financial Services
 
 
 
 
 
 
 
 
2018
Jefferies Group
 
Other Financial Services
 
Merchant Banking
 
Corporate
 
Parent Company Interest
 
Total
Net revenues
$
2,419,410

 
$
53,297

 
$
469,980

 
$
14,753

 
$

 
$
2,957,440

 
 
 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
Compensation and benefits
1,326,887

 
29,935

 
29,577

 
43,040

 

 
1,429,439

Cost of sales

 

 
257,501

 

 

 
257,501

Floor brokerage and clearing fees
131,792

 

 

 

 

 
131,792

Interest expense

 
26,367

 
3,996

 

 
44,251

 
74,614

Depreciation and amortization
50,829

 
4,837

 
34,095

 
2,599

 

 
92,360

Selling, general and other expenses
572,980

 
54,081

 
56,201

 
24,822

 

 
708,084

Total expenses
2,082,488

 
115,220

 
381,370

 
70,461

 
44,251

 
2,693,790

Income (loss) from continuing operations before income taxes and income related to associated companies
336,922

 
(61,923
)
 
88,610

 
(55,708
)
 
(44,251
)
 
263,650

Income related to associated companies

 
58,204

 
26,116

 

 

 
84,320

Income (loss) from continuing operations before income taxes
$
336,922

 
$
(3,719
)
 
$
114,726

 
$
(55,708
)
 
$
(44,251
)
 
347,970

Income tax provision from continuing operations
 
 
 
 
 
 
 
 
 
 
51,560

Income from discontinued operations, net of income tax provision
 
 
 
 
 
 
 
 
 
 
130,063

Gain on disposal of discontinued operations, net of income tax provision
 
 
 
 
 
 
 
 
 
 
643,921

Net income
 
 
 
 
 
 
 
 
 
 
$
1,070,394







A summary of results for the nine months ended September 30, 2017 is as follows (in thousands):
 
Financial Services
 
 
 
 
 
 
 
 
2017
Jefferies Group
 
Other Financial Services
 
Merchant Banking
 
Corporate
 
Parent Company Interest
 
Total
Net revenues
$
2,381,967

 
$
109,284

 
$
525,102

 
$
4,257

 
$

 
$
3,020,610

 
 
 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 

 
 
 
 
 
 
Compensation and benefits
1,374,127

 
26,248

 
32,981

 
35,017

 

 
1,468,373

Cost of sales

 

 
210,834

 

 

 
210,834

Floor brokerage and clearing fees
133,145

 

 

 

 

 
133,145

Interest expense

 
13,830

 
18,731

 

 
44,201

 
76,762

Depreciation and amortization
46,877

 
7,435

 
25,218

 
2,599

 

 
82,129

Selling, general and other expenses
444,724

 
36,641

 
47,333

 
23,457

 

 
552,155

Total expenses
1,998,873

 
84,154

 
335,097

 
61,073

 
44,201

 
2,523,398

Income (loss) from continuing operations before income taxes and income (loss) related to associated companies
383,094

 
25,130

 
190,005

 
(56,816
)
 
(44,201
)
 
497,212

Income (loss) related to associated companies

 
(87,838
)
 
3,425

 

 

 
(84,413
)
Income (loss) from continuing operations before income taxes
$
383,094

 
$
(62,708
)
 
$
193,430

 
$
(56,816
)
 
$
(44,201
)
 
412,799

Income tax provision from continuing operations
 
 
 
 
 
 
 
 
 
 
127,198

Income from discontinued operations, net of income tax provision
 
 
 
 
 
 
 
 
 
 
219,151

Net income
 
 
 
 
 
 
 
 
 
 
$
504,752








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