Exhibit 99
Jefferies Announces Fourth Quarter Financial Results
NEW YORK--(BUSINESS WIRE)--January 20, 2009--Jefferies Group, Inc. (NYSE: JEF) today announced financial results for the fourth quarter and year ended December 31, 2008.
These results are consistent with the Firm’s preannouncement on December 3, 2008:
Reflecting the previously announced exceptional items, primarily the non-cash impact of expensing prior years’ employee stock awards, the net loss for the fourth quarter of 2008 was $443 million, or $2.41 per share (diluted), and the net loss for the year was $538.8 million.
The fourth quarter net loss includes approximately $328 million (post tax) of exceptional items, $303 million of which represents non-cash, post tax charges.
"With unprecedented volatility and the worst year for the financial markets in our lifetime, Jefferies is fortunate to have emerged intact and healthy," commented Richard B. Handler, Chairman and Chief Executive Officer of Jefferies. "Our Company starts 2009 with its strongest opening balance sheet ever, and we now have a lower, more flexible and transparent cost structure as we work to serve our clients in 2009."
Conference Call
A conference call with management discussion of financial results for the fourth quarter ended December 31, 2008 will be held today, January 20, 2009, at 9:00 AM Eastern and can be accessed at 877-246-1929 or 706-634-9290. A one-week replay of the call will be available two hours post-call at 800-633-8284 or 402-977-9140 (reservation code # 21411093). A live audio webcast and delayed replay will also be available under “Investor Relations” at www.jefferies.com.
About Jefferies
Jefferies, a global investment bank and institutional securities firm, has served growing and mid-sized companies and their investors for 45 years. Headquartered in New York, with offices in more than 25 cities around the world, Jefferies provides clients with capital markets and financial advisory services, institutional brokerage, securities research and asset management. The firm is a leading provider of trade execution in equity, high yield, convertible and international securities for institutional investors and high net worth individuals. Jefferies & Company, Inc. is the principal operating subsidiary of Jefferies Group, Inc. (NYSE: JEF; www.jefferies.com).
JEFFERIES GROUP, INC. AND SUBSIDIARIES | ||||||||||||
CONSOLIDATED STATEMENTS OF EARNINGS | ||||||||||||
(Amounts in Thousands, Except Per Share Amounts) | ||||||||||||
(Unaudited) | ||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||
Dec 31, 2008 | Dec 31, 2007 | Dec 31, 2008 | Dec 31, 2007 | |||||||||
Revenues: | ||||||||||||
Commissions | 114,727 | 99,823 | 444,315 | 355,601 | ||||||||
Principal Transactions | (56,522) | 69,570 | 81,781 | 390,374 | ||||||||
Investment Banking | 87,183 | 167,204 | 425,887 | 750,192 | ||||||||
Asset Management fees and investment income (loss) from managed funds | (35,181) | (6,052) | (52,929) | 23,534 | ||||||||
Interest | 124,963 | 328,926 | 749,577 | 1,174,883 | ||||||||
Other | 8,271 | 2,831 | 28,573 | 24,311 | ||||||||
Total Revenues | 243,441 | 662,302 | 1,677,204 | 2,718,895 | ||||||||
Interest Expense | 95,125 | 312,905 | 660,964 | 1,150,805 | ||||||||
Revenues, net of interest expense | 148,316 | 349,397 | 1,016,240 | 1,568,090 | ||||||||
Non-Interest Expenses: | ||||||||||||
Compensation And benefits | 738,506 | 283,538 | 1,522,157 | 946,309 | ||||||||
Floor brokerage and clearing fees | 18,962 | 21,587 | 69,444 | 71,851 | ||||||||
Technology and communications | 35,463 | 31,783 | 127,357 | 103,763 | ||||||||
Occupancy and equipment rental | 19,357 | 20,450 | 76,255 | 76,765 | ||||||||
Business development | 14,270 | 17,614 | 49,376 | 56,594 | ||||||||
Other | 59,086 | 15,896 | 125,526 | 67,074 | ||||||||
Total non-interest expenses | 885,644 | 390,868 | 1,970,115 | 1,322,356 | ||||||||
(Loss) / earnings before income taxes and minority interest | (737,328) | (41,471) | (953,875) | 245,734 | ||||||||
Income tax (benefit) / expense | (232,173) | (14,134) | (292,139) | 93,178 | ||||||||
(Loss) / earnings before minority interest | (505,155) | (27,337) | (661,736) | 152,556 | ||||||||
Minority interest in (loss) earnings of consolidated subsidiaries, net | (62,606) | (3,135) | (122,961) | 7,891 | ||||||||
Net (loss) / earnings | (442,549) | (24,202) | (538,775) | 144,665 | ||||||||
(Loss) / earnings per share: | ||||||||||||
Basic | $ | (2.41) | $ | (0.17) | $ | (3.24) | $ | 1.02 | ||||
Diluted | $ | (2.41) | $ | (0.17) | $ | (3.24) | $ | 0.97 | ||||
Weighted Average Shares: | ||||||||||||
Basic | 183,691 | 140,726 | 166,163 | 141,515 | ||||||||
Diluted | 183,691 | 140,726 | 166,163 | 153,807 | ||||||||
Effective tax rate | 31.5% | 34.1% | 30.6% | 37.9% |
JEFFERIES GROUP, INC. AND SUBSIDIARIES | ||||||||||||
SELECTED STATISTICAL INFORMATION | ||||||||||||
(Amounts in Thousands, Except Per Share Amounts) | ||||||||||||
(Unaudited) | ||||||||||||
Quarters Ended | ||||||||||||
12/31/2008 | 9/30/2008 | 6/30/2008 | 3/31/2008 | 12/31/2007 | 9/30/2007 | |||||||
Statement of Earnings | ||||||||||||
Revenues, net of interest expense | 148,316 | 274,646 | 392,082 | 201,196 | 349,397 | 334,424 | ||||||
Non Interest Expenses: | ||||||||||||
Compensation And Benefits | 738,506 | 246,186 | 277,514 | 259,951 | 283,538 | 183,503 | ||||||
Non-personel expenses | 147,138 | 106,221 | 100,097 | 94,502 | 107,330 | 95,600 | ||||||
(Loss) / earnings before income taxes and minority interest | (737,328) | (77,761) | 14,471 | (153,257) | (41,471) | 55,321 | ||||||
Income tax (benefit) / expense | (232,173) | (6,090) | 4,016 | (57,892) | (14,134) | 21,608 | ||||||
(Loss)/earnings before minority interest | (505,155) | (71,671) | 10,455 | (95,365) | (27,337) | 33,713 | ||||||
Minority interest in (loss) earnings of consolidated subsidiaries, net | (62,606) | (40,367) | 14,840 | (34,828) | (3,135) | (5,060) | ||||||
Net (loss) / earnings | ($442,549) | ($31,304) | ($4,385) | ($60,537) | ($24,202) | $38,773 | ||||||
Diluted (loss) / earnings per share | (2.41) | (0.18) | (0.03) | (0.43) | (0.17) | 0.26 | ||||||
Financial Ratios | ||||||||||||
Pretax Operating Margin | -497.1% | -28.3% | 3.7% | -76.2% | -11.9% | 16.5% | ||||||
Compensation and Benefits / Net Revenues | 497.9% | 89.6% | 70.8% | 129.2% | 81.2% | 54.9% | ||||||
Effective Tax Rate | 31.5% | 7.8% | 27.8% | 37.8% | 34.1% | 39.1% |
JEFFERIES GROUP, INC. AND SUBSIDIARIES | |||||||||||||
SELECTED STATISTICAL INFORMATION | |||||||||||||
(Amounts in Thousands, Except Per Share Amounts) | |||||||||||||
(Unaudited) | |||||||||||||
Quarters Ended | |||||||||||||
12/31/2008 | 9/30/2008 | 6/30/2008 | 3/31/2008 | 12/31/2007 | 9/30/2007 | ||||||||
Revenues by Source | |||||||||||||
Equities | 79,094 | 122,465 | 149,142 | 138,193 | 139,248 | 140,296 | |||||||
Fixed Income & Commodities | |||||||||||||
Fixed Income (excluding high yield) | |||||||||||||
and Commodities | 79,792 | 56,213 | 69,499 | 33,668 | 36,201 | 16,502 | |||||||
High Yield | (92,410) | (61,304) | 31,993 | (51,676) | (3,225) | (7,387) | |||||||
Fixed Income & Commodities Total | (12,618) | (5,091) | 101,492 | (18,008) | 32,976 | 9,115 | |||||||
Total | 66,476 | 117,374 | 250,634 | 120,185 | 172,224 | 149,411 | |||||||
Investment banking | 87,183 | 130,125 | 109,372 | 99,207 | 167,204 | 189,780 | |||||||
Asset management fees and investment income (loss) from managed funds: | |||||||||||||
Asset management fees | 4,765 | 3,804 | 4,758 | 6,285 | 6,419 | 5,369 | |||||||
Investment income (loss) from managed funds | (39,946) | (7,235) | 8,721 | (34,081) | (12,471) | (11,652) | |||||||
Total | (35,181) | (3,431) | 13,479 | (27,796) | (6,052) | (6,283) | |||||||
Interest | 124,963 | 209,183 | 210,540 | 204,891 | 328,926 | 334,056 | |||||||
Total Revenues | 243,441 | 453,251 | 584,025 | 396,487 | 662,302 | 666,964 | |||||||
Other Data | |||||||||||||
Number of Trading Days | 64 | 64 | 64 | 61 | 64 | 63 | |||||||
Average Employees | 2,356 | 2,403 | 2,327 | 2,486 | 2,521 | 2,472 | |||||||
Common Shares Outstanding | 163,216 | 163,429 | 162,121 | 132,762 | 124,453 | 125,657 | |||||||
Weighted Average Shares: | |||||||||||||
Basic | 183,691 | 173,757 | 165,694 | 141,784 | 140,726 | 142,822 | |||||||
Diluted | 183,691 | 173,757 | 165,694 | 141,784 | 140,726 | 155,480 | |||||||
As of December 31, 2008, stockholder's equity amounted to $2.1 billion, resulting in book value of $13.05 per share |
JEFFERIES GROUP, INC. AND SUBSIDIARIES | |||||
SELECTED STATISTICAL INFORMATION | |||||
Shares Outstanding and Shares for Basic and Diluted EPS Calculations | |||||
December 31, 2008 | |||||
December 31, 2008 | |||||
Shares outstanding | 163,216,038 | ||||
Note - All share information below for EPS purposes is based upon weighted-average balances for the applicable period. | |||||
Three months ended | Year ended | ||||
December 31, 2008 | December 31, 2008 | ||||
Shares Outstanding (weighted average) | (1) | 163,267,240 | 152,549,234 | ||
Unvested restricted stock | (2) | (9,210,668) | (11,427,946) | ||
Vested restricted stock units | (3) | 23,942,122 | 19,576,113 | ||
Other issuable shares | (4) | 5,691,822 | 5,465,785 | ||
Basic EPS Shares | 183,690,516 | 166,163,186 | |||
Stock Options | (5) | 26,527 | 41,583 | ||
Mandatorily redeemable convertible preferred stock | (6) | 4,105,138 | 4,099,497 | ||
Unvested restricted stock/ restricted stock units | (5) | 5,657,968 | 7,581,613 | ||
Diluted EPS Shares * | 193,480,149 | 177,885,878 | |||
* | For purposes of diluted EPS in the event of a net loss, only basic shares will be used due to anti-dilution factors | ||||
(1) | Shares outstanding represents shares issued less shares repurchased in treasury stock. Shares issued includes public and private offerings, vested and unvested restricted stock, distributions related to restricted stock units, deferred compensation plans, employee stock purchase plan and stock option exercises. Shares issued does not include undistributed vested and unvested restricted stock units. | ||||
(2) | As restricted stock is contingent upon a future service condition, unvested shares are removed from shares outstanding in the calculation of basic EPS as Jefferies obligation to issue these shares remains contingent. | ||||
(3) | As vested restricted stock units are no longer contingent upon a future service condition or any other contingency and are issuable upon a certain date in the future, vested restricted stock units are added to shares outstanding in the calculation of basic EPS. | ||||
(4) | Other shares issuable not pursuant to any contingency include shares issuable under certain deferred compensation plans and shares issuable in connection with earnout agreements. | ||||
(5) | Calculated under the treasury stock method in accordance with FASB 128, Earnings per Share. The treasury stock method assumes the issuance of only a net incremental number of shares as proceeds from issuance are assumed to be used to repurchase shares at the average stock price for the period. | ||||
(6) | Calculated under the if-converted method in accordance with FASB 128, Earnings per Share. The if-converted method assumes the conversion of convertible securities at the beginning of the period. |
CONTACT:
Jefferies Group, Inc.
Peregrine C. Broadbent, 212-284-2338
Chief Financial Officer