Jefferies Financial Group Inc. · NYSE:JEF
Jefferies Financial — Leucadia National — Shareholder Meeting (July 2013)
34 slides from Jefferies Financial's shareholder meeting presentation, Jul 25, 2013
Slide 1: Leucadia National Corporation 2013 Annual Meeting
Exhibit 99.1 Leucadia National Corporation 2013 Annual Meeting July 25, 2013
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: Book Value per Share Growth Since 1990
Book Value per Share Growth Since 1990 Leucadia – Book Value per Share Growth Since 1990 $32.00 $28.53 $27.67 $24.00 $16.95 $16.00 $6.16 $7.26 $8.00 $1.97 $0.00 (1) Jefferies – Book Value per Share Growth Since 1990 $20.00 $16.90 $14.43 $15.00 $11.07 $10.00 $4.64 $5.00 $0.91 $2.07 $0.00 Note: Book v
Slide 4: Overview
Overview Our Businesses: Jefferies National Beef Berkadia (Investment Banking) (Beef Processing) (Mortgage Servicing) 2013 2012 2009 Premier Garcadia Conwed Entertainment (Auto Retail) (Plastics) (Gaming) 2006 1985 2006 Idaho Timber Linkem Real Estate / (Wood Products) (Telecommunications) HomeFed 2
Slide 5: Liquidity Events – Last Twelve Months
Liquidity Events – Last Twelve Months Leucadia has generated over $2 billion of proceeds in the last twelve months Fortescue Metals note redemption and stock sale (July and October 2012): $868 million Inmet Mining merger consideration (March 2013): $732 million, including $340 million of First Quant
Slide 6: Long-Term Strategy – Compelling Value in Sectors We Understand
Long-Term Strategy – Compelling Value in Sectors We Understand Financial Services Jefferies Berkadia Asset Management Auto Retail – Garcadia Agribusiness – National Beef Project Development Gasification Oregon Liquefied Natural Gas Energy, Metals and Mining, Consumer, Industrial, Media, Telecom 4
Slide 7: National Beef
ey National Beef.
Slide 8: Overview
Overview National Beef harvests ~3.7M fed cattle per year representing ~14.5% market share 3 processing plants strategically located in Liberal and Dodge City, KS and Brawley, CA Compete with Tyson, Cargill, JBS and numerous small beef packers Export beef and beef by-products to more than 20 countri
Slide 9: Industry Trends
Industry Trends U.S. beef cowherd has been in downward trend for a generation, however due to improvements in genetics and production practices, overall beef supply has actually increased The U.S. has historically been a net importer of beef. Due to increasing international demand for U.S. beef and
Slide 10: Industry Trends (Cont’d)
Industry Trends (Cont’d) The cutout ratio is a good proxy for industry profitability…and demonstrates the variability of beef processing margins KS Steer Comprehensive Beef Cutout Ratio August 2002 – June 2013 (1) 2.00 1.95 1.90 1.85 1.80 1.75 1.70 1.65 1.60 Avg. 1.55 1.60 1.50 1.45 1.40 1.35 1.30 1
Slide 11: Financial Performance
Financial Performance The beef processing industry is cyclical and working capital intensive. However, it has significant barriers to entry and offers attractive prospects for free cash flow generation over the cycle Given cattle supply constraints, strategies designed to drive margin expansion are
Slide 12: Recent Developments
Recent Developments Global protein demand is expected to continue current growth trend; growth of middle class in developing countries points to increasing demand for beef Recent regulatory change in cattle age requirement by Japan has resulted in industry-wide increase in export volume to Japan Acq
Slide 13: Berkadia
BERKADIA THE INDUSTRY OF ONE*
Slide 14: Overview
Overview Acquired by Leucadia in a 50/50 joint venture with Berkshire Hathaway from the Capmark bankruptcy estate 3rd largest servicer of commercial real estate loans in the U.S. Berkadia collects payments, manages tax, insurance and maintenance escrow reserves on behalf of, and reports and remits f
Slide 15: Overview (Cont’d)
Overview (Cont’d) Despite the ongoing run-off of the historical servicing base, Berkadia has been able to grow in originations, revenues, margins, servicing portfolio and, most importantly, cash flow Low-cost high quality master and primary servicer, driven in part by company- owned operations in In
Slide 16: Financial Performance
Financial Performance Loan Originations ($ Billions) Pre-Tax Margin (% of Revenue) Pre-Tax Income ($ Millions) Cash Earnings ($ Millions) (1) (1) Cash Earnings is a non-GAAP measure. Cash Earnings equals pre-tax income plus depreciation and amortization of mortgage servicing rights (MSR’s), intangib
Slide 17: Portfolio Growth
Portfolio Growth More than 50% of the servicing portfolio has been added since acquisition As of July 2013, the U.S. servicing portfolio is the largest it has been in its history Servicing Portfolio – Unpaid Principal Balance ($ Billions) (1) $300 $257.6 $250 21.7 $220.3 $197.2 $197.1 $200 4.8 $180.
Slide 18: Opportunities & Risks
Opportunities & Risks Opportunities Benefit from a rise in interest rates, especially short term interest rates Fill-in national footprint by hiring experienced mortgage bankers and investment sales advisors in new markets and diversify across all product types Better capitalize on our combined mort
Slide 19: Garcadia
Garcadia 17
Slide 20: Garcadia Overview
Garcadia Overview 15th Largest U.S. Dealership Group 21 dealerships 1,800 employees Current group will sell 50,000 units annually Units Sold by Current Platform Number of Dealerships by Manufacturer (52% Domestic, 48% Foreign) 18
Slide 21: Auto Market Overview
Auto Market Overview Key Market Trends Pent up demand Average age of vehicle on road – 10.8 years Consumer financing available at pre-recession levels Aggressive loan to value Prime and near prime approval levels on the rise Number of licensed drivers on the rise Used vehicle valuations remain stron
Slide 22: Auto Retail Industry
Auto Retail Industry Large and Fragmented Market $700 billion in annual sales 17,900 dealerships nationwide Top 10 groups represent only 8% of market Many Acquisition Opportunities Aging dealer body without succession plans Technology Changing Business Many “old school” processes exist in auto deale
Slide 23: Garcadia Model
Garcadia Model Acquisition Strategy Build geographic clusters in medium to large markets Target medium to high volume stores Focus on profitable, but underperforming dealerships Solve succession issues Operations Hire the best people Maintain flat organization Execute on key operational initiatives
Slide 24: Garcadia Joint Venture
Garcadia Joint Venture JV Partner: Ken Garff Automotive Group 85 years in the industry Acts as the dealer principal Provides operating management Company Performance ($ Millions) FYE December 31, 2010 2011 2012 Total Units Sold 20,832 25,483 35,394 # of Dealerships 14 17 18 (1) Garcadia Revenue $ 63
Slide 25: Jefferies
Jefferies
Slide 26: Jefferies Group
Jefferies Group Full-Service Capital Markets Platform: expertise and depth across equities, fixed income, commodities and investment banking Client-Focused: providing investor and issuer clients with the highest quality advice and execution Global Footprint: sales & trading and investment banking pr
Slide 27: Jefferies Revenues & Net Income – Since 1990
Jefferies Revenues & Net Income – Since 1990 ($ Millions) Net Revenues (1) (2) Net Income (3) (1) (2) (1) The selected financial information for the year ended November 30, 2011 are non-GAAP financial measures. See page 31 in the appendix for a reconciliation to GAAP amounts. (2) The selected financ
Slide 28: A Full Service Investment Bank
A Full Service Investment Bank Equities Fixed Income Jefferies Bache Investment Banking Equity Cash Electronic Investment Leveraged Listed Base Metals Consumer Energy Capital Equities Trading Grade Credit Futures Markets Prime Brokerage / Emerging Precious Foreign Leveraged Derivatives MBS / ABS Fin
Slide 29: Recent Developments
Recent Developments Jefferies continues to win market share and deliver consistent profitability Investment Banking revenues underline the quality and durability of Jefferies’ platform Solid growth in Equities revenues Durable Fixed Income, Commodities and Currencies platforms Continued emphasis on
Slide 30: Appendix
Appendix 28
Slide 31: National Beef – GAAP Reconciliation
National Beef – GAAP Reconciliation ($ Millions) FYE August, FYE Dec., 2008 2009 2010 2011 2012 Pre-Tax Income (GAAP) $ 127.0 $ 145.1 $ 249.0 $ 261.6 $ 59.0 Interest Expense / (Income), net 33.5 23.2 14.7 11.7 12.4 Depreciation & Amortization 36.4 44.4 49.6 51.2 83.1 Profit from Operations (Non-GAAP
Slide 32: Berkadia – GAAP Reconciliation
Berkadia – GAAP Reconciliation ($ Millions) FYE December 31, Three Months Ended, 2010 2011 2012 03/31/12 03/31/13 Pre-Tax Income (GAAP) $ 31.0 $ 34.6 $ 103.8 $ 26.0 $ 37.8 Amortization, Impairment and Depreciation 88.1 107.5 112.7 23.7 25.7 Gains Attributable to Origination of MSR's (42.4) (45.2) (9
Slide 33: Jefferies – GAAP Reconciliation
Jefferies – GAAP Reconciliation ($ Millions) FYE November 30, 2011 2012 GAAP Adjustments Adjusted GAAP Adjustments Adjusted (1) (5) Net Revenues $ 2,548.8 $ 72.7 $ 2,476.1 $ 2,998.8 $ 8.4 $ 2,990.4 (2) (6) Compensation and Benefits 1,482.6 11.8 1,470.8 1,770.8 24.7 1,746.1 (3) (7) Noncompensation Ex
Slide 34: Leucadia National Corporation 2013 Annual Meeting
Leucadia National Corporation 2013 Annual Meeting July 25, 2013