Jefferies Financial Group Inc. · NYSE:JEF
Jefferies Financial — Leucadia National — Investor Presentation (June 2016)
40 slides from Jefferies Financial's investor presentation, Jun 29, 2016
Slide 1: Leucadia National Corporation June 2016
Leucadia National Corporation June 2016
Slide 2: Note on Forward Looking Statements
Note on Forward Looking Statements This document 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
Slide 3: Table of Contents
Table of Contents Page Leucadia Overview 1 Jefferies Overview 9 Leucadia Investments Overview 16 Appendix 32 June 2016 ii
Slide 4: Leucadia Overview
Leucadia Overview June 2016 1
Slide 5: Unique merchant and investment banking platform
Unique merchant and investment banking platform that builds shareholder value by creating, acquiring and operating a diversified group of businesses Leading diversified financial services and merchant banking platform Jefferies Other Financial Services, including Leucadia Asset Management Leucadia M
Slide 6: Leucadia Overview – as of 3/31/16
Leucadia Overview – as of 3/31/16 Leucadia National Corporation Parent Capital – $11.2 Billion Common Equity – $10.1 Billion (1) Preferred Equity – $0.125 Billion Parent Debt – $1.0 Billion Jefferies (100%) $5.3 Billion (2) Jefferies Finance (50%) $486 Million Jefferies LoanCore (49%) $261 Million K
Slide 7: Leucadia's Opportunity (As of 3/31/16)
Leucadia’s Opportunity (As of 3/31/16) Free-Cash Generating Opportunity Leucadia Tangible Capital ($ Millions)(1) % Jefferies Grow Investment Banking and Equities; Fixed Income Refocused and Performing $3,385 39.45% Berkadia Leveraging Our Momentum and the Growing Market Opportunity $199 2.32% Natio
Slide 8: Leucadia Strategy and Overview: Business Update
Leucadia Strategy and Overview Leucadia Business Update Jefferies recorded solid Equities and Fixed Income results in Q2 2016; Investment Banking backlog showing encouraging improvement National Beef is benefiting from cyclical uplift – Q1 2016 pre-tax income of $21.4 million and EBITDA of $44.9 mil
Slide 9: A Unique and Diversified Financial Services and Merchant Banking Platform
A Unique and Diversified Financial Services and Merchant Banking Platform Financial Services - Our historic sector; post-crisis opportunity - Jefferies Drive market share, margin expansion and earnings growth by growing Investment Banking, Equities and Fixed Income; Jefferies is delivering better re
Slide 10: A Unique and Diversified Financial Services and Merchant Banking Platform (Continued)
A Unique and Diversified Financial Services and Merchant Banking Platform (Continued) - HomeFed Otay Ranch’s 13,050 entitled units expected to be the market leader in San Diego county (which had 2,000+ home sales in 2015) for years to come Beginning to harvest ripening projects and assets - Foursigh
Slide 11: A Unique and Diversified Financial Services and Merchant Banking Platform (Continued)
A Unique and Diversified Financial Services and Merchant Banking Platform (Continued) - Linkem Increase coverage through LTE network deployment Prepare for launch in major Italian cities - Conwed Drive organic growth with new applications and market expansion - Idaho Timber Drive volume and producti
Slide 12: Jefferies Overview
Jefferies Overview June 2016 9
Slide 13: Jefferies Strategic Update
Jefferies Strategic Update We are building a leading, client-focused global investment banking firm, with our focus to provide clients with the best ideas, expertise and execution in global capital markets Investment Banking and Equities have continued momentum and meaningful upside Fixed Income has
Slide 14: Global Full-Service Capabilities
Global Full-Service Capabilities Investment Banking Consumer Energy Equity Capital Markets Financials Healthcare Debt Capital Markets Industrials TMT M&A REGAL Financial Sponsors Restructuring Public Finance Equities Cash Equities Electronic Trading Listed Derivatives Prime Services ETFs Convertible
Slide 15: Business Strategic Priorities
Business Strategic Priorities Investment Banking Continue to increase managing director productivity Capitalize on revenue opportunities in recently entered sectors Capitalize on revenue opportunities in recently entered countries/regions Fixed Income Deliver improved margins and returns, capitalizi
Slide 16: Jefferies Earnings Overview (GAAP)
Jefferies Earnings Overview (GAAP) ($ Millions) Predecessor Successor FYE Nov. 30, FYE Nov. 30, Quarter Ended ($ Millions) 11M 2010 2011 2012 LTM 2/28/2014 2014 2015 2/29/2016 5/31/2016 Equities 557 594 642 771 696 757 2 224 Fixed Income 728 743 1,253 790 748 271 57 238 Other - 74 13 5 - - - - Tradi
Slide 17: Jefferies Adjusted Earnings Overview (excluding Bache)
Jefferies Adjusted Earnings Overview (excluding Bache) ($ Millions) Predecessor Successor FYE Nov. 30, FYE Nov. 30, Quarter Ended 11M LTM ($ Millions) 2010 2011 2012 2/28/2014 2014 2015 2/29/2016 5/31/2016 Equities 557 594 642 771 696 757 2 224 Fixed Income (Adjusted) 728 625 1,004 583 545 191 57 23
Slide 18: Balance Sheet and Funding Overview
Balance Sheet and Funding Overview Jefferies continues to manage the size of its balance sheet in response to market conditions - Tangible assets / tangible common equity at 5/31/16: 10.2x(1) Jefferies’ long-standing liquidity and funding principles have maintained the strength and soundness of our
Slide 19: Leucadia Investments Overview
Leucadia Investments Overview June 2016 16
Slide 20: Berkadia - Overview
Berkadia - Overview BERKADIA THE INDUSTRY OF ONE Overview Berkadia is a full-service mortgage banking firm focused on providing clients best of class middle market mortgage finance and advisory services Business Lines: - Permanent and construction loans - Investment sales - Bridge loans - Full spect
Slide 21: FXCM - Overview
FXCM - Overview FXCM Overview FXCM Inc. (NYSE: FXCM) is a leading online provider of foreign exchange trading services to over 175,000 retail customers globally Multi-asset class product offering - ~70% of volumes in OTC Spot FX - ~30% in contracts for difference (“CFDs”) on OTC precious metals, oil
Slide 22: Leucadia Asset Management Overview
Leucadia Asset Management Overview Diversified alternative asset management platform - supporting and developing focused funds managed by distinct management teams Fee-generating assets, long-term stable cash flows, able to recycle capital Goal of growing third party AUM, while earning a reasonable
Slide 23: Leucadia Asset Management (Continued)
Leucadia Asset Management (Continued) Platforms and Strategies Folger Hill Asset Management (Multi-Manager) - Multi-manager discretionary long/short equity hedge fund platform; $873 million AUM Topwater Capital (Multi-Manager / First-loss) - First-loss, scalable multi-manager and multi-strategy liqu
Slide 24: HomeFed - Overview
HomeFed - Overview HOMEFED CORPORATION Company Overview Developer/owner of residential and mixed-use real estate projects in California, New York, Florida, South Carolina, Virginia and Maine After many years in the entitlement process, the vast majority of HomeFed’s assets are now either operating r
Slide 25: Specialty Finance Overview
Specialty Finance Overview Foursight Auto loan originator and servicer Surpassed $330 million in assets and currently pacing $20+ million of originations per month Medium term goal is to grow annual originations to $500 million (supported by an estimated $90 million in capital), with a pre-tax retur
Slide 26: National Beef – Overview
National Beef – Overview National Beef Overview National Beef processes ~3 million fed cattle per year — 2 processing plants strategically located in Liberal and Dodge City, KS — Primary competitors: Tyson, Cargill, JBS — Export beef and beef by-products to more than 20 countries Beef processing is
Slide 27: HRG Group – Overview
HRG Group – Overview HRG GROUP Overview NYSE-listed diversified holding company (NYSE: HRG) that operates in four business segments: — Consumer Products – Spectrum Brands (NYSE: SPB, ~58% ownership(1)) — Insurance – Fidelity & Guaranty Life (NYSE: FGL, ~81% ownership(1)); FrontStreet Re (100% owners
Slide 28: Garcadia – Overview
Garcadia – Overview GARCADIA Overview A top 12 U.S. dealership group — 4 clusters, 27 dealerships as of 3/31/16 - 14 domestic brands, 13 foreign — ~2,900 employees Emphasis on customer experience as our differentiator — Employee culture focused on customer experience — Focus on leveraging digital ch
Slide 29: Vitesse Energy – Overview
Vitesse Energy – Overview Company Overview Denver-based oil and gas company led by Bob Gerrity, CEO, and Brian Cree, CFO Formed in May 2014 – Leucadia has funded $258 million through March 31, 2016 for acquisitions and property development Non-operating owner of oil and gas properties in the core of
Slide 30: Juneau Energy – Overview
Juneau Energy – Overview JUNEAU ENERGY Company Overview Formed in February 2014 – Leucadia and management has funded $250 million to date for acquisitions and property development Focus areas are: 20,000+ net acre position in East Texas Eagle Ford Shale (EEF) in Brazos, Burleson, and Grimes Counties
Slide 31: Linkem – Overview
Linkem – Overview linkem Overview Fast-growing fixed wireless broadband provider in Italy — 78% annualized subscriber growth rate since Leucadia’s initial investment in July 2011 — 339,645 subscribers as of 3/31/16 — EBITDA positive since Q4 2014 Commercially launched LTE in Q4 2014, increasing cust
Slide 32: Conwed – Overview
Conwed – Overview CONWED GLOBAL NETTING SOLUTIONS Overview Leading manufacturer of extruded, oriented and knitted plastic netting used in a variety of applications, including agriculture, automotive, building & construction, filtration, hygiene, medical, packaging, etc. — 90% share in core markets s
Slide 33: Idaho Timber - Overview
Idaho Timber - Overview IDAHO TIMBER Overview Manufacturer and distributor of wood products - Remanufacturing, Home Center Board and Sawmill segments 7 plants and 3 sawmills located in 7 states - 922,000 square feet of manufacturing and office space across 214 acres Remanufacturing segment - Purchas
Slide 34: Golden Queen - Overview
Golden Queen - Overview Overview Golden Queen Mining Company LLC (“Golden Queen”) owns 100% of the Soledad Mountain gold and silver project in Kern County, California, ~90 miles northeast of Los Angeles (the “Project”) Project employs open-pit mining and the cyanide heap leach and Merrill-Crowe proc
Slide 35: Appendix
Appendix June 2016 32
Slide 36: Leucadia - Tangible Book Value GAAP Reconciliation
Leucadia - Tangible Book Value GAAP Reconciliation Reconciliation of Book Value to Tangible Book Value ($ Millions) Book Value (GAAP) (1) Goodwill and Intangibles, Net Tangible Book Value (Non-GAAP) Jefferies $5,310 $1,925 $3,385 Berkadia 199 199 National Beef 694 634 60 Garcadia 190 190 Conwed 108
Slide 37: Tangible Book Value and Fully-Diluted Shares Outstanding GAAP Reconciliations
Leucadia - Tangible Book Value and Fully-Diluted Shares Outstanding GAAP Reconciliations Reconciliation of Leucadia Book Value (Leucadia’s Shareholders’ Equity) to Tangible Book Value ($ millions) 3/31/2016 Leucadia Book Value (GAAP) $10,091 Less: Goodwill and Intangible Assets 2,622 Leucadia Tangib
Slide 38: Jefferies - Bache Adjusted Earnings GAAP Reconciliation
Jefferies - Bache Adjusted Earnings GAAP Reconciliation Reconciliation of Consolidated Adjusted Financial Information ($ millions) Successor Twelve Months Ended 11/30/2015 Full Year Ended 11/30/2014 LTM Ended 2/28/2014 GAAP Adjustments Adjusted GAAP Adjustments Adjusted GAAP Adjustments Adjusted Rev
Slide 39: Jefferies - Bache Adjusted Earnings GAAP Reconciliation (continued)
Jefferies - Bache Adjusted Earnings GAAP Reconciliation (continued) (1) Revenues generated by the Bache business, including commissions, principal transaction revenues and estimated net interest revenue, for the presented period have been classified as a reduction of revenue in the presentation of A
Slide 40: National Beef - Pre-tax Income to EBITDA GAAP Reconciliation
National Beef - Pre-tax Income to EBITDA GAAP Reconciliation ($ in Millions) Reconciliation of Pre-Tax Income to EBITDA 3 months ending March 2016 Pre-Tax Income (GAAP) $21.4 Interest Expense 4.0 Non-Operating Income (3.1) Depreciation and Amortization 22.6 EBITDA (Non-GAAP) $44.9 Note: EBITDA (Non-
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