Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended |
Aug. 31, 2013 | |
Document And Entity Information [Abstract] | |
Document Type | 10-Q |
Amendment Flag | FALSE |
Document Period End Date | 31-Aug-13 |
Document Fiscal Year Focus | 2013 |
Document Fiscal Period Focus | Q3 |
Entity Registrant Name | JEFFERIES GROUP LLC |
Entity Central Index Key | 1084580 |
Current Fiscal Year End Date | -19 |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 0 |
Consolidated_Statements_of_Fin
Consolidated Statements of Financial Condition (USD $) | Aug. 31, 2013 | Nov. 30, 2012 | Aug. 31, 2013 | Nov. 30, 2012 |
In Thousands, unless otherwise specified | Successor [Member] | Predecessor [Member] | Variable Interest Entity, Primary Beneficiary [Member] | Variable Interest Entity, Primary Beneficiary [Member] |
Successor [Member] | Predecessor [Member] | |||
Assets | ||||
Cash and cash equivalents | $4,119,096 | $2,692,595 | $43,938 | $388,279 |
Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations | 3,457,926 | 4,082,595 | ||
Financial instruments owned, at fair value | ||||
Corporate equity securities | 1,933,302 | 1,762,775 | 105,271 | |
Corporate debt securities | 2,354,748 | 3,038,146 | 394,043 | |
Government, federal agency and other sovereign obligations | 4,027,870 | 5,153,750 | ||
Mortgage- and asset-backed securities | 4,126,691 | 5,468,284 | 15,589 | |
Loans and other receivables | 942,969 | 678,311 | 108,700 | 383,667 |
Derivatives | 121,869 | 298,086 | ||
Investments, at fair value | 79,917 | 127,023 | 462 | 5,836 |
Physical commodities | 110,915 | 144,016 | ||
Total financial instruments owned, at fair value | 13,698,281 | 16,670,391 | 109,162 | 904,406 |
Investments in managed funds | 55,897 | 57,763 | ||
Loans to and investments in related parties | 563,828 | 586,420 | ||
Securities borrowed | 5,316,449 | 5,094,679 | ||
Securities purchased under agreements to resell | 4,420,886 | 3,357,602 | ||
Securities received as collateral | 45,133 | |||
Receivables: | ||||
Brokers, dealers and clearing organizations | 2,738,047 | 1,424,027 | 236,594 | |
Customers | 1,095,422 | 916,284 | ||
Fees, interest and other | 241,909 | 196,811 | 10,931 | |
Premises and equipment | 191,018 | 185,991 | ||
Goodwill | 1,718,115 | 365,670 | ||
Other assets | 1,168,206 | 662,713 | 22 | 348 |
Total assets | 38,830,213 | 36,293,541 | 153,122 | 1,540,558 |
LIABILITIES AND EQUITY | ||||
Short-term borrowing | 50,000 | 150,000 | ||
Financial instruments sold, not yet purchased, at fair value: | ||||
Corporate equity securities | 1,739,491 | 1,539,332 | ||
Corporate debt securities | 1,320,896 | 1,389,312 | 325,979 | |
Government, federal agency and other sovereign obligations | 2,987,515 | 3,666,112 | ||
Mortgage- and asset-backed securities | 37,968 | 241,211 | ||
Loans | 360,537 | 207,227 | 199,610 | |
Derivatives | 133,827 | 229,127 | 505 | |
Physical commodities | 44,796 | 183,142 | ||
Total financial instruments sold, not yet purchased, at fair value | 6,625,030 | 7,455,463 | 526,094 | |
Collateralized financings: | ||||
Securities loaned | 2,578,401 | 1,934,355 | ||
Securities sold under agreements to repurchase | 10,863,548 | 8,181,250 | ||
Other secured financings | 228,025 | 62,300 | 228,025 | 62,300 |
Obligation to return securities received as collateral | 45,133 | |||
Payables: | ||||
Brokers, dealers and clearing organizations | 1,058,396 | 2,819,677 | 201,237 | |
Customers | 4,837,843 | 5,568,017 | ||
Accrued expenses and other liabilities | 956,403 | 1,062,068 | 40,959 | 10,656 |
Long-term debt | 6,346,439 | 4,804,607 | ||
Mandatorily redeemable convertible preferred stock | 125,000 | |||
Mandatorily redeemable preferred interests of consolidated subsidiaries | 348,051 | 348,051 | ||
Total liabilities | 33,589,218 | 32,510,788 | 268,984 | 1,148,338 |
EQUITY | ||||
Common stock, $0.0001 par value. Authorized 500,000,000 shares; issued 204,147,007 shares at November 30, 2012 | 20 | |||
Member's paid-in capital/ Additional paid-in capital | 5,169,864 | 2,219,959 | ||
Retained earnings | 1,281,855 | |||
Treasury stock, at cost, 835,033 shares at November 30, 2012 | -12,682 | |||
Accumulated other comprehensive loss: | ||||
Currency translation adjustments | -5,917 | -38,009 | ||
Additional minimum pension liability | -15,128 | |||
Total accumulated other comprehensive loss | -5,917 | -53,137 | ||
Total member's / common stockholders' equity | 5,163,947 | 3,436,015 | ||
Noncontrolling interests | 77,048 | 346,738 | ||
Total equity | 5,240,995 | 3,782,753 | ||
Total liabilities and equity | $38,830,213 | $36,293,541 |
Consolidated_Statements_of_Fin1
Consolidated Statements of Financial Condition (Parenthetical) (USD $) | Aug. 31, 2013 | Nov. 30, 2012 |
In Thousands, except Share data, unless otherwise specified | Successor [Member] | Predecessor [Member] |
Securities pledged to creditors | $12,693,618 | $12,334,745 |
Common stock, par value | $0.00 | |
Common stock, shares authorized | 500,000,000 | |
Common stock, shares issued | 204,147,007 | |
Treasury stock, at cost | 835,033 |
Consolidated_Statements_of_Ear
Consolidated Statements of Earnings (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 9 Months Ended | |
Share data in Thousands, except Per Share data, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2012 |
Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | |
Revenues: | |||||
Commissions | $138,736,000 | $285,584,000 | $131,083,000 | $119,200,000 | $358,495,000 |
Principal transactions | -24,910,000 | 109,661,000 | 300,278,000 | 297,037,000 | 793,834,000 |
Investment banking | 309,339,000 | 586,473,000 | 288,278,000 | 260,163,000 | 842,921,000 |
Asset management fees and investment income from managed funds | 13,549,000 | 24,076,000 | 10,883,000 | 3,116,000 | 10,648,000 |
Interest | 230,672,000 | 489,337,000 | 249,277,000 | 242,625,000 | 788,935,000 |
Other | 28,630,000 | 54,875,000 | 27,004,000 | 22,911,000 | 103,102,000 |
Total revenues | 696,016,000 | 1,550,006,000 | 1,006,803,000 | 945,052,000 | 2,897,935,000 |
Interest expense | 178,987,000 | 390,450,000 | 203,416,000 | 206,114,000 | 668,000,000 |
Net revenues | 517,029,000 | 1,159,556,000 | 803,387,000 | 738,938,000 | 2,229,935,000 |
Interest on mandatorily redeemable preferred interests of consolidated subsidiaries | 3,368,000 | 10,961,000 | 8,304,000 | 34,604,000 | |
Net revenues, less interest on mandatorily redeemable preferred interests of consolidated subsidiaries | 517,029,000 | 1,156,188,000 | 792,426,000 | 730,634,000 | 2,195,331,000 |
Non-interest expenses: | |||||
Compensation and benefits | 293,771,000 | 667,651,000 | 474,217,000 | 440,391,000 | 1,310,394,000 |
Non-compensation expenses: | |||||
Floor brokerage and clearing fees | 34,500,000 | 67,491,000 | 30,998,000 | 30,280,000 | 91,039,000 |
Technology and communications | 62,266,000 | 126,105,000 | 59,878,000 | 58,681,000 | 180,460,000 |
Occupancy and equipment rental | 26,205,000 | 58,430,000 | 24,309,000 | 24,077,000 | 71,582,000 |
Business development | 17,624,000 | 40,356,000 | 24,927,000 | 27,736,000 | 72,362,000 |
Professional services | 25,269,000 | 54,788,000 | 24,135,000 | 14,667,000 | 45,656,000 |
Other | 34,012,000 | 52,732,000 | 14,475,000 | 12,433,000 | 46,018,000 |
Total non-compensation expenses | 199,876,000 | 399,902,000 | 178,722,000 | 167,874,000 | 507,117,000 |
Total non-interest expenses | 493,647,000 | 1,067,553,000 | 652,939,000 | 608,265,000 | 1,817,511,000 |
Earnings before income taxes | 23,382,000 | 88,635,000 | 139,487,000 | 122,369,000 | 377,820,000 |
Income tax expense | 8,493,000 | 33,500,000 | 48,645,000 | 44,048,000 | 134,403,000 |
Net earnings | 14,889,000 | 55,135,000 | 90,842,000 | 78,321,000 | 243,417,000 |
Net earnings attributable to noncontrolling interests | 3,149,000 | 3,887,000 | 10,704,000 | 8,150,000 | 32,612,000 |
Net earnings attributable to Jefferies Group LLC | $11,740,000 | $51,248,000 | $80,138,000 | $70,171,000 | $210,805,000 |
Earnings per common share: | |||||
Basic | $0.35 | $0.31 | $0.92 | ||
Diluted | $0.35 | $0.31 | $0.91 | ||
Dividends declared per common share | $0.08 | $0.08 | $0.23 | ||
Weighted average common shares: | |||||
Basic | 213,732 | 214,756 | 216,509 | ||
Diluted | 217,844 | 218,867 | 220,621 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2012 | |||||
Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | ||||||
Net earnings | $14,889 | $55,135 | $90,842 | $78,321 | $243,417 | |||||
Other comprehensive income net of tax: | ||||||||||
Currency translation adjustments | 5,549 | -5,917 | -10,018 | 6,519 | -207 | |||||
Total other comprehensive income, net of tax | 5,549 | [1] | -5,917 | [1] | -10,018 | [1] | 6,519 | [1] | -207 | [1] |
Comprehensive income | 20,438 | 49,218 | 80,824 | 84,840 | 243,210 | |||||
Net earnings attributable to noncontrolling interests | 3,149 | 3,887 | 10,704 | 8,150 | 32,612 | |||||
Comprehensive income attributable to Jefferies Group LLC | $17,289 | $45,331 | $70,120 | $76,690 | $210,598 | |||||
[1] | Total other comprehensive income (loss), net of tax, is attributable to Jefferies Group LLC. No other comprehensive income (loss) is attributable to noncontrolling interests. |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Equity (USD $) | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | |||
In Thousands | Common stock, par value $0.0001 per share [Member] | Member's paid-in capital [Member] | Additional paid-in capital [Member] | Retained earnings [Member] | Accumulated other comprehensive loss [Member] | Treasury stock, at cost [Member] | Noncontrolling interests [Member] | Common stock, par value $0.0001 per share [Member] | Member's paid-in capital [Member] | Additional paid-in capital [Member] | Retained earnings [Member] | Accumulated other comprehensive loss [Member] | Treasury stock, at cost [Member] | Noncontrolling interests [Member] | |||||
Balance at Nov. 30, 2011 | $312,663 | ||||||||||||||||||
Balance at Nov. 30, 2011 | 20 | 2,207,410 | 1,067,858 | -50,490 | [1],[2] | -486 | |||||||||||||
Benefit plan share activity | [3] | 12,076 | |||||||||||||||||
Purchases | -113,562 | ||||||||||||||||||
Issued | 1 | ||||||||||||||||||
Currency adjustment | [1],[2] | 1,511 | |||||||||||||||||
Share-based expense, net of forfeitures and clawbacks | 83,769 | ||||||||||||||||||
Net earnings attributable to Jefferies Group LLC | 282,409 | 40,740 | |||||||||||||||||
Returns / forfeitures | -7,928 | ||||||||||||||||||
Retired | -1 | ||||||||||||||||||
Pension adjustment, net of tax | [1],[2] | -4,158 | |||||||||||||||||
Proceeds from exercise of stock options | 104 | ||||||||||||||||||
Dividends | -68,412 | ||||||||||||||||||
Distributions | -13,570 | ||||||||||||||||||
Consolidation of asset management entity | 6,905 | ||||||||||||||||||
Tax (deficiency) benefit for issuance of share-based awards | 19,789 | ||||||||||||||||||
Equity component of convertible debt, net of tax | -427 | ||||||||||||||||||
Dividend equivalents on share-based plans | 6,531 | ||||||||||||||||||
Retirement of treasury stock | -109,293 | 109,294 | |||||||||||||||||
Total equity | 3,782,753 | ||||||||||||||||||
Balance at Nov. 30, 2012 | 3,436,015 | 20 | 2,219,959 | 1,281,855 | -53,137 | [1],[2] | -12,682 | ||||||||||||
Balance at Nov. 30, 2012 | 346,738 | 346,738 | |||||||||||||||||
Benefit plan share activity | [3] | 3,138 | |||||||||||||||||
Contributions | |||||||||||||||||||
Purchases | -166,541 | ||||||||||||||||||
Issued | 1 | ||||||||||||||||||
Currency adjustment | -10,018 | -10,018 | [1],[2] | ||||||||||||||||
Share-based expense, net of forfeitures and clawbacks | 22,288 | ||||||||||||||||||
Net earnings attributable to Jefferies Group LLC | 90,842 | 80,138 | 10,704 | ||||||||||||||||
Net earnings | 80,138 | ||||||||||||||||||
Returns / forfeitures | -1,922 | ||||||||||||||||||
Retired | |||||||||||||||||||
Pension adjustment, net of tax | [1],[2] | ||||||||||||||||||
Proceeds from exercise of stock options | 57 | ||||||||||||||||||
Contributions | |||||||||||||||||||
Dividends | -17,217 | ||||||||||||||||||
Acquisitions and contingent consideration | 2,535 | ||||||||||||||||||
Distributions | 1,262 | -1,262 | |||||||||||||||||
Redemptions | |||||||||||||||||||
Consolidation of asset management entity | |||||||||||||||||||
Tax (deficiency) benefit for issuance of share-based awards | -17,965 | ||||||||||||||||||
Equity component of convertible debt, net of tax | |||||||||||||||||||
Dividend equivalents on share-based plans | 1,418 | ||||||||||||||||||
Retirement of treasury stock | |||||||||||||||||||
Total equity | 3,688,107 | ||||||||||||||||||
Balance at Feb. 28, 2013 | 4,754,101 | [1],[2] | 3,331,927 | 21 | 2,231,430 | 1,344,776 | -63,155 | [1],[2] | -181,145 | ||||||||||
Balance at Feb. 28, 2013 | 356,180 | 356,180 | |||||||||||||||||
Benefit plan share activity | [3] | ||||||||||||||||||
Contributions | 362,255 | ||||||||||||||||||
Purchases | |||||||||||||||||||
Issued | |||||||||||||||||||
Currency adjustment | -5,917 | -5,917 | [1],[2] | ||||||||||||||||
Share-based expense, net of forfeitures and clawbacks | |||||||||||||||||||
Net earnings attributable to Jefferies Group LLC | 55,135 | 3,887 | |||||||||||||||||
Net earnings | 51,248 | 51,248 | |||||||||||||||||
Returns / forfeitures | |||||||||||||||||||
Retired | |||||||||||||||||||
Pension adjustment, net of tax | [1],[2] | ||||||||||||||||||
Proceeds from exercise of stock options | |||||||||||||||||||
Contributions | 64,610 | ||||||||||||||||||
Dividends | |||||||||||||||||||
Acquisitions and contingent consideration | |||||||||||||||||||
Distributions | 306,830 | ||||||||||||||||||
Redemptions | -347,629 | ||||||||||||||||||
Consolidation of asset management entity | |||||||||||||||||||
Tax (deficiency) benefit for issuance of share-based awards | 2,260 | ||||||||||||||||||
Equity component of convertible debt, net of tax | |||||||||||||||||||
Dividend equivalents on share-based plans | |||||||||||||||||||
Retirement of treasury stock | |||||||||||||||||||
Total equity | 5,240,995 | ||||||||||||||||||
Balance at Aug. 31, 2013 | 5,163,947 | 5,169,864 | -5,917 | [1],[2] | |||||||||||||||
Balance at Aug. 31, 2013 | 77,048 | 77,048 | |||||||||||||||||
Balance at May. 31, 2013 | |||||||||||||||||||
Currency adjustment | 5,549 | ||||||||||||||||||
Net earnings attributable to Jefferies Group LLC | 14,889 | ||||||||||||||||||
Net earnings | 11,740 | ||||||||||||||||||
Total equity | 5,240,995 | ||||||||||||||||||
Balance at Aug. 31, 2013 | 5,163,947 | ||||||||||||||||||
Balance at Aug. 31, 2013 | $77,048 | ||||||||||||||||||
[1] | The components of other comprehensive loss are attributable to Jefferies Group LLC (formerly Jefferies Group, Inc.). None of the components of other comprehensive loss are attributable to noncontrolling interests. | ||||||||||||||||||
[2] | There were no reclassifications out of Accumulated other comprehensive loss during the six months ended August 31, 2013. | ||||||||||||||||||
[3] | Includes grants related to the Incentive Plan, Deferred Compensation Plan, and Directors' Plan. |
Consolidated_Statements_of_Cha1
Consolidated Statements of Changes in Equity (Parenthetical) (USD $) | Aug. 31, 2013 | Feb. 28, 2013 | Nov. 30, 2012 |
Successor [Member] | Predecessor [Member] | Predecessor [Member] | |
Common stock, par value | $0.00 | $0.00 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 6 Months Ended | 3 Months Ended | 9 Months Ended |
In Thousands, unless otherwise specified | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 |
Successor [Member] | Predecessor [Member] | Predecessor [Member] | |
Cash flows from operating activities: | |||
Net earnings | $55,135 | $90,842 | $243,417 |
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | -1,369 | 17,393 | 54,836 |
Gain on conversion option | -9,151 | ||
Bargain purchase gain | -3,368 | ||
Gain on repurchase of long-term debt | -9,898 | ||
Interest on mandatorily redeemable preferred interests of consolidated subsidiaries | 3,368 | 10,961 | 34,604 |
Accruals related to various benefit plans and stock issuances, net of forfeitures | 23,505 | 65,457 | |
Income on loans to and investments in related parties | -55,194 | ||
Distributions received on investments in related parties | 28,335 | ||
Other adjustments | -1,815 | -1,154 | -2,780 |
Net change in assets and liabilities: | |||
Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations | 269,786 | 352,891 | -408,445 |
Receivables: | |||
Brokers, dealers and clearing organizations | -300,959 | -1,027,671 | -401,758 |
Customers | -51,942 | -130,543 | 224,761 |
Fees, interest and other | -16,821 | -29,149 | -28,921 |
Securities borrowed | -5,251 | -224,557 | -48,893 |
Financial instruments owned | 2,691,267 | 229,394 | 2,758,173 |
Loans to and investments in related parties | -197,166 | -109,997 | |
Investments in managed funds | 4,079 | -2,213 | 10,619 |
Securities purchased under agreements to resell | -846,206 | -224,418 | -1,050,263 |
Other assets | 38,339 | 25,489 | 26,957 |
Payables: | |||
Brokers, dealers and clearing organizations | -727,408 | -1,031,335 | -2,204,936 |
Customers | -607,034 | -111,139 | 241,725 |
Securities loaned | 679,305 | -28,138 | 355,679 |
Financial instruments sold, not yet purchased | -3,127,918 | 2,327,667 | 1,750,709 |
Securities sold under agreements to repurchase | 2,894,054 | -197,493 | -1,402,558 |
Accrued expenses and other liabilities | 134,369 | -267,336 | 74,927 |
Net cash provided by (used in) operating activities | 1,046,969 | -394,170 | 170,047 |
Cash flows from investing activities: | |||
Net payments on premises and equipment | -24,787 | -10,706 | -39,848 |
Contributions to loans to and investments in related parties | -1,133,831 | ||
Distributions from loans to and investments in related parties | 1,363,755 | ||
Cash received in connection with acquisition during the period | 2,257 | ||
Cash received from contingent consideration | 2,579 | 1,203 | 2,774 |
Cash paid from contingent consideration | -1,172 | ||
Net cash provided by (used in) investing activities | 207,716 | -9,503 | -35,989 |
Cash flows from financing activities: | |||
Excess tax benefits from the issuance of share-based awards | 2,419 | 5,682 | 30,576 |
Proceeds from short-term borrowings | 8,053,000 | 6,744,000 | 9,563,063 |
Payments on short-term borrowings | -8,103,000 | -6,794,000 | -9,370,557 |
Proceeds from secured credit facility | 720,000 | 900,000 | 680,000 |
Payments on secured credit facility | -685,000 | -990,007 | -370,000 |
Repayment of long-term debt | -253,232 | ||
Proceeds from other secured financings | 105,000 | 60,000 | |
Payments on repurchase of long-term debt | -1,435 | ||
Payments on mandatorily redeemable preferred interest of consolidated subsidiaries | -64 | -61 | -5,313 |
Payments on repurchase of common stock | -166,541 | -104,202 | |
Payments on dividends | -15,799 | -46,298 | |
Proceeds from exercise of stock options, not including tax benefits | 57 | 104 | |
Net proceeds from issuance of senior notes, net of issuance costs | 991,469 | 201,010 | |
Proceeds from contributions of noncontrolling interests | 64,610 | ||
Payments on distributions to noncontrolling interests | -306,830 | -1,262 | -7,709 |
Net cash (used in) provided by financing activities | -149,865 | 733,538 | 316,007 |
Effect of exchange rate changes on cash and cash equivalents | -3,682 | -4,502 | 651 |
Net increase in cash and cash equivalents | 1,101,138 | 325,363 | 450,716 |
Cash and cash equivalents at beginning of period | 3,017,958 | 2,692,595 | 2,393,797 |
Cash and cash equivalents at end of period | 4,119,096 | 3,017,958 | 2,844,513 |
Cash paid (received) during the period for: | |||
Interest | 441,652 | 178,836 | 648,394 |
Income taxes, net of refunds | $26,037 | ($34,054) | $12,816 |
Consolidated_Statements_of_Cas1
Consolidated Statements of Cash Flows (Parenthetical) (Member's paid-in capital [Member], Successor [Member], USD $) | Mar. 31, 2013 |
In Thousands, unless otherwise specified | |
Member's paid-in capital [Member] | Successor [Member] | |
Contributions | $362,255 |
Organization_and_Basis_of_Pres
Organization and Basis of Presentation | 9 Months Ended | |
Aug. 31, 2013 | ||
Accounting Policies [Abstract] | ||
Organization and Basis of Presentation | Note 1. | Organization and Basis of Presentation |
Organization | ||
On March 1, 2013, Jefferies Group, Inc. converted into a limited liability company and was renamed Jefferies Group LLC. In addition, certain subsidiaries of Jefferies Group, Inc. also converted into limited liability companies. The accompanying Consolidated Financial Statements therefore refer to Jefferies Group LLC and represent the accounts of Jefferies Group, Inc., as it was formerly known, and all our subsidiaries (together “we” or “us”). The subsidiaries of Jefferies Group LLC include Jefferies LLC (“Jefferies”), Jefferies Execution Services, Inc., (“Jefferies Execution”), Jefferies Bache, LLC, Jefferies International Limited, Jefferies Bache, Limited, Jefferies Hong Kong Limited, Jefferies Bache Financial Services, Inc., Jefferies Mortgage Funding, LLC and Jefferies Leveraged Credit Products, LLC and all other entities in which we have a controlling financial interest or are the primary beneficiary. | ||
We operate in two business segments, Capital Markets and Asset Management. Capital Markets includes our securities, commodities, futures and foreign exchange trading and investment banking activities, which provides the research, sales, trading, origination and advisory effort for various equity, fixed income and advisory products and services. Asset Management provides investment management services to various private investment funds, separate accounts and mutual funds. | ||
On February 1, 2012, we acquired the corporate broking business of Hoare Govett from The Royal Bank of Scotland Group plc (“RBS”). The acquired business represented the corporate broking business carried on under the name RBS Hoare Govett in the United Kingdom and comprised corporate broking advice and services. The acquisition of Hoare Govett provided us with the opportunity to continue our growth in corporate broking in the U.K. and significantly expand the capabilities and reach of our established European Investment Banking and Equities business units. See Note 5, Hoare Govett Acquisition for further details. | ||
On March 1, 2013, Jefferies Group LLC through a series of merger transactions, became a wholly owned subsidiary of Leucadia National Corporation (“Leucadia”) (referred to herein as the “Merger Transaction”). Each outstanding share of Jefferies Group LLC was converted into 0.81 of a share of Leucadia common stock (the “Exchange Ratio”). Leucadia did not assume nor guarantee any of our outstanding debt securities. Our 3.875% Convertible Senior Debentures due 2029 are now convertible into Leucadia common shares at a price that reflects the Exchange Ratio and the 3.25% Series A Convertible Cumulative Preferred Stock of Jefferies Group, Inc. was exchanged for a comparable series of convertible preferred shares of Leucadia. Jefferies Group LLC continues to operate as the holding company of its various regulated and unregulated operating subsidiaries. Richard Handler, our Chief Executive Officer and Chairman, was also appointed the Chief Executive Officer of Leucadia, as well as a Director of Leucadia. Brian Friedman, our Chairman of the Executive Committee, was also appointed Leucadia’s President and a Director of Leucadia. Following the merger, we continue to operate as a full-service global investment banking firm, retain a credit rating separate from Leucadia and remain an SEC reporting company, filing annual, quarterly and periodic financial reports. | ||
In addition, on April 1, 2013, we merged Jefferies High Yield Trading, LLC (our high yield trading broker-dealer) with Jefferies (a U.S. broker-dealer) and our high yield activities are now all conducted by Jefferies. In addition, during the three months ended May 31, 2013, we redeemed the third party interests in our high yield joint venture. | ||
Basis of Presentation | ||
The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements and should be read in conjunction with our Annual Report on Form 10-K for the year ended November 30, 2012. | ||
As more fully described in Note 4, Leucadia Merger and Related Transactions, the Merger Transaction is accounted for using the acquisition method of accounting, which requires that the assets, including identifiable intangible assets, and liabilities of Jefferies Group LLC be recorded at their fair values at the date of the Merger Transaction. The application of the acquisition method of accounting has been pushed down and reflected in the financial statements of Jefferies Group LLC as a wholly-owned subsidiary of Leucadia. The application of push down accounting represents the termination of the prior reporting entity and the creation of a new reporting entity, which do not have the same bases of accounting. As a result, our consolidated financial statements for 2013 are presented for the period from March 1, 2013 through August 31, 2013 for the new reporting entity (the “Successor”), and before March 1, 2013 for the prior reporting entity (the “Predecessor.”) The Predecessor and Successor periods are separated by a vertical line to highlight the fact that the financial information for such periods have been prepared under two different cost bases of accounting. | ||
We have made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with U.S. GAAP. The most important of these estimates and assumptions relate to fair value measurements, compensation and benefits, goodwill, the ability to realize deferred tax assets and the recognition and measurement of uncertain tax positions. Although these and other estimates and assumptions are based on the best available information, actual results could be materially different from these estimates. | ||
Cash Flow Statement Presentation | ||
For the six months ended August 31, 2013, certain amounts relating to loans and investments in related parties are classified as components of investing activities on the Consolidated Statements of Cash Flows to conform to the presentation of our Parent company in connection with the establishment of a new accounting entity through the application of push down accounting. These amounts were classified by the Predecessor entity as operating activities for reporting periods prior to the merger. | ||
Consolidation | ||
Our policy is to consolidate all entities in which we control by ownership a majority of the outstanding voting stock. In addition, we consolidate entities which meet the definition of a variable interest entity for which we are the primary beneficiary. The primary beneficiary is the party who has the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance and who has an obligation to absorb losses of the entity or a right to receive benefits from the entity that could potentially be significant to the entity. For consolidated entities that are less than wholly owned, the third-party’s holding of equity interest is presented as Noncontrolling interests in the Consolidated Statements of Financial Condition and Consolidated Statements of Changes in Equity. The portion of net earnings attributable to the noncontrolling interests are presented as Net earnings to noncontrolling interests in the Consolidated Statements of Earnings. | ||
In situations where we have significant influence, but not control, of an entity that does not qualify as a variable interest entity, we apply either the equity method of accounting or fair value accounting pursuant to the fair value option election under U.S. GAAP, with our portion of net earnings or gains and losses recorded within Other revenues or Principal transaction revenues, respectively. We also have formed nonconsolidated investment vehicles with third-party investors that are typically organized as partnerships or limited liability companies and are carried at fair value. We act as general partner or managing member for these investment vehicles and have generally provided the third-party investors with termination or “kick-out” rights. | ||
Intercompany accounts and transactions are eliminated in consolidation. | ||
Immaterial Revision | ||
We have made correcting adjustments (referred to as “adjustments”) to our historical financial statements for the three months ended February 28, 2013 and for the three months ended May 31, 2013, the results of which are included within our financial statements for the six months ended August 31, 2013. We do not believe these adjustments are material to our financial statements for any previously reported period. | ||
Pre-tax non-compensation expenses for the quarter ended February 28, 2013, were overstated by $8.5 million. Professional services expense should have been $24.1 million rather than $32.6 million, as previously reported. Professional service fees related to the Merger Transaction were incorrectly accrued in the quarter ended February 28, 2013, rather than at 12:01AM on March 1, 2013 when the transaction was completed. This had the effect of understating net earnings by approximately $5.3 million for the three month period ended February 28, 2013 and, accordingly, we have increased first quarter net earnings to $80.1 million. We evaluated the effects of this correction and concluded that it is not material to the previously issued Quarterly Report on Form 10-Q for the three month period ended February 28, 2013. Nevertheless, we revised our consolidated net earnings for the three month period ended February 28, 2013 as presented in this Form 10-Q to correct for the effect of this error and appropriately reflected the $8.5 million of professional service fees as an expense in the second quarter of fiscal 2013. The adjustment had an inconsequential impact on the Statement of Financial Condition as of February 28, 2013. | ||
Principal transaction revenues for the three months ended May 31, 2013 was reduced by $3.9 million to correct the valuation of the conversion option to shares of Leucadia embedded in our 3.875% Senior Convertible Debentures. On an after tax basis, the correction results in a reduction of Net earnings for the three months ended May 31, 2013 of $2.5 million. It was determined that the conversion option liability at March 1, 2013, which was recognized at fair value as part of acquisition accounting should have been $16.5 million rather than $7.7 million. This had the effect of understating goodwill in the purchase price allocation by $5.3 million, after considering the tax effects of increasing the fair value of the conversion option. We evaluated the effects of this correction and concluded that it is not material to the previously issued Quarterly Report on Form 10-Q for the three month period ended May 31, 2013. Nevertheless, we revised our consolidated net earnings for the three month period ended May 31, 2013 as reflected in this this Form 10-Q for the six months ended August 31, 2013 to correct for the effect of these items and appropriately reflected the increase in goodwill of $5.3 million within our Consolidated Statement of Financial Condition. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | ||
Aug. 31, 2013 | |||
Accounting Policies [Abstract] | |||
Summary of Significant Accounting Policies | Note 2. | Summary of Significant Accounting Policies | |
Revenue Recognition Policies | |||
Commissions. All customer securities transactions are reported on the Consolidated Statements of Financial Condition on a settlement date basis with related income reported on a trade-date basis. We permit institutional customers to allocate a portion of their gross commissions to pay for research products and other services provided by third parties. The amounts allocated for those purposes are commonly referred to as soft dollar arrangements. These arrangements are accounted for on an accrual basis and, as we are not the primary obligor for these arrangements, netted against commission revenues in the Consolidated Statements of Earnings. The commissions and related expenses on client transactions executed by Jefferies Bache, LLC, a futures commission merchant, are recorded on a half-turn basis. | |||
Principal Transactions. Financial instruments owned and Financial instruments sold, but not yet purchased (all of which are recorded on a trade-date basis) are carried at fair value with gains and losses reflected in Principal transactions in the Consolidated Statements of Earnings on a trade date basis. Fees received on loans carried at fair value are also recorded within Principal transactions. | |||
Investment Banking. Underwriting revenues and fees from mergers and acquisitions, restructuring and other investment banking advisory assignments or engagements are recorded when the services related to the underlying transactions are completed under the terms of the assignment or engagement. Expenses associated with such assignments are deferred until reimbursed by the client, the related revenue is recognized or the engagement is otherwise concluded. Expenses are recorded net of client reimbursements and netted against revenues. Unreimbursed expenses with no related revenues are included in Business development and Professional services expenses in the Consolidated Statements of Earnings. | |||
Asset Management Fees and Investment Income From Managed Funds. Asset management fees and investment income from managed funds include revenues we earn from management, administrative and performance fees from funds and accounts managed by us, revenues from management and performance fees we earn from related-party managed funds and investment income from our investments in these funds. We earn fees in connection with management and investment advisory services performed for various funds and managed accounts. These fees are based on assets under management or an agreed upon notional amount and may include performance fees based upon the performance of the funds. Management and administrative fees are generally recognized over the period that the related service is provided. Generally, performance fees are earned when the return on assets under management exceeds certain benchmark returns, “high-water marks” or other performance targets. Performance fees are accrued (or reversed) on a monthly basis based on measuring performance to date versus any relevant benchmark return hurdles stated in the investment management agreement. Performance fees are not subject to adjustment once the measurement period ends (generally annual periods) and the performance fees have been realized. | |||
Interest Revenue and Expense. We recognize contractual interest on Financial instruments owned and Financial instruments sold, but not yet purchased, on an accrual basis as a component of interest revenue and expense. Interest flows on derivative trading transactions and dividends are included as part of the fair valuation of these contracts and recognized in Principal transactions in the Consolidated Statements of Earnings rather than as a component of interest revenue or expense. We account for our short-term borrowings, long-term borrowings and our mandatorily redeemable convertible preferred stock on an accrual basis with related interest recorded as Interest expense. Discounts/premiums arising on our long-term debt are accreted / amortized to Interest expense using the effective yield method over the remaining lives of the underlying debt obligations. In addition, we recognize interest revenue related to our securities borrowed and securities purchased under agreements to resell activities and interest expense related to our securities loaned and securities sold under agreements to repurchase activities on an accrual basis. | |||
Cash Equivalents | |||
Cash equivalents include highly liquid investments, including money market funds, not held for resale with original maturities of three months or less. | |||
Cash and Securities Segregated and on Deposit for Regulatory Purposes or Deposited With Clearing and Depository Organizations | |||
In accordance with Rule 15c3-3 of the Securities Exchange Act of 1934, Jefferies as a broker-dealer carrying client accounts, is subject to requirements related to maintaining cash or qualified securities in a segregated reserve account for the exclusive benefit of its clients. In addition, certain financial instruments used for initial and variation margin purposes with clearing and depository organizations are recorded in this caption. Jefferies Bache, LLC, as a futures commission merchant, is obligated by rules mandated by the Commodities Futures Trading Commission under the Commodities Exchange Act, to segregate or set aside cash or qualified securities to satisfy such regulations, which regulations have been promulgated to protect customer assets. Certain other entities are also obligated by rules mandated by their primary regulators to segregate or set aside cash or equivalent securities to satisfy regulations, promulgated to protect customer assets. | |||
Financial Instruments | |||
Financial instruments owned and Financial instruments sold, not yet purchased are recorded at fair value, either as required by accounting pronouncements or through the fair value option election. These instruments primarily represent our trading activities and include both cash and derivative products. Gains and losses are recognized in Principal transactions in our Consolidated Statements of Earnings. The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). | |||
Fair Value Hierarchy | |||
In determining fair value, we maximize the use of observable inputs and minimize the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. Unobservable inputs reflect our assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. We apply a hierarchy to categorize our fair value measurements broken down into three levels based on the transparency of inputs as follows: | |||
Level 1: | Quoted prices are available in active markets for identical assets or liabilities as of the reported date. | ||
Level 2: | Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these financial instruments include cash instruments for which quoted prices are available but traded less frequently, derivative instruments whose fair value have been derived using a model where inputs to the model are directly observable in the market, or can be derived principally from or corroborated by observable market data, and instruments that are fair valued using other financial instruments, the parameters of which can be directly observed. | ||
Level 3: | Instruments that have little to no pricing observability as of the reported date. These financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation. | ||
Financial instruments are valued at quoted market prices, if available. Certain financial instruments have bid and ask prices that can be observed in the marketplace. For financial instruments whose inputs are based on bid-ask prices, the financial instrument is valued at the point within the bid-ask range that meets our best estimate of fair value. We use prices and inputs that are current as of the measurement date. For financial instruments that do not have readily determinable fair values using quoted market prices, the determination of fair value is based upon consideration of available information, including types of financial instruments, current financial information, restrictions on dispositions, fair values of underlying financial instruments and quotations for similar instruments. | |||
The valuation of financial instruments may include the use of valuation models and other techniques. Adjustments to valuations derived from valuation models may be made when, in management’s judgment, features of the financial instrument such as its complexity, the market in which the financial instrument is traded and risk uncertainties about market conditions require that an adjustment be made to the value derived from the models. Adjustments from the price derived from a valuation model reflect management’s judgment that other participants in the market for the financial instrument being measured at fair value would also consider in valuing that same financial instrument. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. | |||
The availability of observable inputs can vary and is affected by a wide variety of factors, including, for example, the type of financial instrument and market conditions. As the observability of prices and inputs may change for a financial instrument from period to period, this condition may cause a transfer of an instrument among the fair value hierarchy levels. Transfers among the levels are recognized at the beginning of each period. The degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. | |||
Valuation Process for Financial Instruments | |||
Our Independent Price Verification (“IPV”) Group, which is part of our Finance department, in partnership with Risk Management, is responsible for establishing our valuation policies and procedures. The IPV Group and Risk Management, which are independent of our business functions, play an important role and serve as a control function in determining that our financial instruments are appropriately valued and that fair value measurements are reliable. This is particularly important where prices or valuations that require inputs are less observable. In the event that observable inputs are not available, the control processes are designed to assure that the valuation approach utilized is appropriate and consistently applied and that the assumptions are reasonable. The IPV Group reports to the Global Controller and is subject to the oversight of the IPV Committee, which is comprised of our Chief Financial Officer, Global Controller, Global Head of Product Control, Chief Risk Officer and Principal Accounting Officer, among other personnel. Our independent price verification policies and procedures are reviewed, at a minimum, annually and changes to the policies require the approval of the IPV Committee. | |||
Price Testing Process. The business units are responsible for determining the fair value of our financial instruments using approved valuation models and methodologies. In order to ensure that the business unit valuations represent a fair value exit price, the IPV Group tests and validates the fair value of our financial instruments inventory. In the testing process, the IPV Group obtains prices and valuation inputs from sources independent of Jefferies, consistently adheres to established procedures set forth in our valuation policies for sourcing prices and valuation inputs and utilizing valuation methodologies. Sources used to validate fair value prices and inputs include, but are not limited to, exchange data, recently executed transactions, pricing data obtained from third party vendors, pricing and valuation services, broker quotes and observed comparable transactions. | |||
To the extent discrepancies between the business unit valuations and the pricing or valuations resulting from the price testing process are identified, such discrepancies are investigated by the IPV Group and fair values are adjusted, as appropriate. The IPV Group maintains documentation of its testing, results, rationale and recommendations and prepares a monthly summary of its valuation results. This process also forms the basis for our classification of fair values within the fair value hierarchy (i.e., Level 1, Level 2 or Level 3). The IPV Group utilizes the additional expertise of Risk Management personnel in valuing more complex financial instruments and financial instruments with less or limited pricing observability. The results of the valuation testing are reported to the IPV Committee on a monthly basis, which discusses the results and is charged with the final conclusions as to the financial instrument fair values in the consolidated financial statements. This process specifically assists the Chief Financial Officer in asserting as to the fair presentation of our financial condition and results of operations as included within our Quarterly Reports on Form 10-Q and Annual Report on Form 10-K. At each quarter end, the overall valuation results, as concluded upon by the IPV Committee, are presented to the Audit Committee. | |||
Judgment exercised in determining Level 3 fair value measurements is supplemented by daily analysis of profit and loss performed by the Product Control functions. Gains and losses, which result from changes in fair value, are evaluated and corroborated daily based on an understanding of each of the trading desks’ overall risk positions and developments in a particular market on the given day. Valuation techniques generally rely on recent transactions of suitably comparable financial instruments and use the observable inputs from those comparable transactions as a validation basis for Level 3 inputs. Level 3 fair value measurements are further validated through subsequent sales testing and market comparable sales, if such information is available. Level 3 fair value measurements require documentation of the valuation rationale applied, which is reviewed for consistency in application from period to period; and the documentation includes benchmarking the assumptions underlying the valuation rationale against relevant analytic data. | |||
Third Party Pricing Information. Pricing information obtained from external data providers (including independent pricing services and brokers) may incorporate a range of market quotes from dealers, recent market transactions and benchmarking model derived prices to quoted market prices and trade data for comparable securities. External pricing data is subject to evaluation for reasonableness by the IPV Group using a variety of means including comparisons of prices to those of similar product types, quality and maturities, consideration of the narrowness or wideness of the range of prices obtained, knowledge of recent market transactions and an assessment of the similarity in prices to comparable dealer offerings in a recent time period. We have a process whereby we challenge the appropriateness of pricing information obtained from external data providers (including independent pricing services and brokers) in order to validate the data for consistency with the definition of a fair value exit price. Our process includes understanding and evaluating the external data providers’ valuation methodologies. For corporate, U.S. government and agency, and municipal debt securities, and loans, to the extent independent pricing services or broker quotes are utilized in our valuation process, the vendor service providers are collecting and aggregating observable market information as to recent trade activity and active bid-ask submissions. The composite pricing information received from the independent pricing service is not based on unobservable inputs or proprietary models. For mortgage- and other asset-backed securities and collateralized debt obligations, our independent pricing service uses a matrix evaluation approach incorporating both observable yield curves and market yields on comparable securities as well as implied inputs from observed trades for comparable securities in order to determine prepayment speeds, cumulative default rates and loss severity. Further, we consider pricing data from multiple service providers as available as well as compare pricing data to prices we have observed for recent transactions, if any, in order to corroborate our valuation inputs. | |||
Model Review Process. Where a pricing model is to be used to determine fair value, the pricing model is reviewed for theoretical soundness and appropriateness by Risk Management, independent from the trading desks, and then approved by Risk Management to be used in the valuation process. Review and approval of a model for use includes benchmarking the model against relevant third party valuations, testing sample trades in the model, backtesting the results of the model against actual trades and stress-testing the sensitivity of the pricing model using varying inputs and assumptions. In addition, recently executed comparable transactions and other observable market data are considered for purposes of validating assumptions underlying the model. Models are independently reviewed and validated by Risk Management annually or more frequently if market conditions or use of the valuation model changes. | |||
Investments in Managed Funds | |||
Investments in managed funds include our investments in funds managed by us and our investments in related-party managed funds in which we are entitled to a portion of the management and/or performance fees. Investments in nonconsolidated managed funds are accounted for at fair value with gains or losses included in Asset management fees and investment income from managed funds in the Consolidated Statements of Earnings. | |||
Loans to and Investments in Related Parties | |||
Loans to and investments in related parties include investments in private equity and other operating entities made in connection with our capital markets activities in which we exercise significant influence over operating and capital decisions and loans issued in connection with such activities. Loans to and investments in related parties are accounted for using the equity method or at cost, as appropriate. Revenues on Loans to and investments in related parties are included in Other revenues in the Consolidated Statements of Earnings. See Note 12, Investments, and Note 25, Related Party Transactions, for additional information regarding certain of these investments. | |||
Receivable from and Payable to Customers | |||
Receivable from and payable to customers includes amounts receivable and payable on cash and margin transactions. Securities owned by customers and held as collateral for these receivables are not reflected in the accompanying consolidated financial statements. Receivable from officers and directors included within this financial statement line item represents balances arising from their individual security transactions. These transactions are subject to the same regulations as customer transactions and are provided on substantially the same terms. | |||
Securities Borrowed and Securities Loaned | |||
Securities borrowed and securities loaned are carried at the amounts of cash collateral advanced and received in connection with the transactions and accounted for as collateralized financing transactions. In connection with both trading and brokerage activities, we borrow securities to cover short sales and to complete transactions in which customers have failed to deliver securities by the required settlement date, and lend securities to other brokers and dealers for similar purposes. We have an active securities borrowed and lending matched book business in which we borrow securities from one party and lend them to another party. When we borrow securities, we generally provide cash to the lender as collateral, which is reflected in our Consolidated Statements of Financial Condition as Securities borrowed. We earn interest revenues on this cash collateral. Similarly, when we lend securities to another party, that party provides cash to us as collateral, which is reflected in our Consolidated Statements of Financial Condition as Securities loaned. We pay interest expense on the cash collateral received from the party borrowing the securities. The initial collateral advanced or received approximates or is greater than the fair value of the securities borrowed or loaned. We monitor the fair value of the securities borrowed and loaned on a daily basis and request additional collateral or return excess collateral, as appropriate. | |||
Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase | |||
Securities purchased under agreements to resell and Securities sold under agreements to repurchase (collectively “repos”) are accounted for as collateralized financing transactions and are recorded at their contracted resale or repurchase amount plus accrued interest. We earn and incur interest over the term of the repo, which is reflected in Interest income and Interest expense on our Consolidated Statements of Earnings on an accrual basis. Repos are presented in the Consolidated Statements of Financial Condition on a net-basis-by counterparty, where permitted by generally accepted accounting principles. We monitor the fair value of the underlying securities daily versus the related receivable or payable balances. Should the fair value of the underlying securities decline or increase, additional collateral is requested or excess collateral is returned, as appropriate. | |||
Premises and Equipment | |||
Premises and equipment are depreciated using the straight-line method over the estimated useful lives of the related assets (generally three to ten years). Leasehold improvements are amortized using the straight-line method over the term of the related leases or the estimated useful lives of the assets, whichever is shorter. Premises and equipment includes internally developed software, which was increased to its fair market value in the allocation of the purchase price on March 1, 2013. The revised carrying values of internally developed software ready for its intended use are depreciated over the remaining useful life. See Note 4, Leucadia Merger and Related Transactions for more information regarding the allocation of the purchase price. | |||
Goodwill and Intangible Assets | |||
Goodwill. Goodwill represents the excess acquisition cost over the fair value of net tangible and intangible assets acquired. Goodwill is not amortized and is subject to annual impairment testing on August 1 or between annual tests if an event or change in circumstance occurs that would more likely than not reduce the fair value of a reporting unit below its carrying value. In testing for goodwill impairment, we have the option to first assess qualitative factors to determine whether the existence of events or circumstances lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events and circumstances, we conclude that it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then performing the two-step impairment test is not required. If we conclude otherwise, we are required to perform the two-step impairment test. The goodwill impairment test is performed at the reporting unit level by comparing the estimated fair value of a reporting unit with its respective carrying value. If the estimated fair value exceeds the carrying value, goodwill at the reporting unit level is not impaired. If the estimated fair value is less than carrying value, further analysis is necessary to determine the amount of impairment, if any. | |||
The fair value of reporting units are based on widely accepted valuation techniques that we believe market participants would use, although the valuation process requires significant judgment and often involves the use of significant estimates and assumptions. The methodologies we utilize in estimating the fair value of reporting units include market capitalization, price-to-book multiples of comparable exchange traded companies and multiples of merger and acquisitions of similar businesses. The estimates and assumptions used in determining fair value could have a significant effect on whether or not an impairment charge is recorded and the magnitude of such a charge. Adverse market or economic events could result in impairment charges in future periods. Refer to Note 13, Goodwill and Other Intangible Assets, for further information on our assessment of goodwill. | |||
Intangible Assets. Intangible assets deemed to have finite lives are amortized on a straight line basis over their estimated useful lives, where the useful life is the period over which the asset is expected to contribute directly, or indirectly, to our future cash flows. Intangible assets are reviewed for impairment on an interim basis when certain events or circumstances exist. For amortizable intangible assets, impairment exists when the carrying amount of the intangible asset exceeds its fair value. At least annually, the remaining useful life is evaluated. | |||
An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value. In testing for impairment, we have the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If we conclude otherwise, we are required to perform a quantitative impairment test. Subsequent reversal of impairment losses is not permitted. Our annual indefinite-lived intangible asset impairment testing date is August 1. | |||
To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset that is amortized over the remaining useful life of that asset, if any. Subsequent reversal of impairment losses is not permitted. | |||
Income Taxes | |||
We are a single-member limited liability company treated as a disregarded entity for federal and state income tax purposes and our results of operations are included in the consolidated federal and applicable state income tax returns filed by Leucadia. Prior to the Merger Transaction we filed a consolidated U.S. federal income tax return, which included all of our qualifying subsidiaries. We also are subject to income tax in various states and municipalities and those foreign jurisdictions in which we operate. Amounts provided for income taxes are based on income reported for financial statement purposes and do not necessarily represent amounts currently payable. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and for tax loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. Under acquisition accounting for the Merger Transaction the recognition of certain assets and liabilities at fair value created a change in the financial reporting basis for our assets and liabilities, while the tax basis of our assets and liabilities remained the same. As a result, deferred tax assets and liabilities were recognized for the change in the basis differences. The realization of deferred tax assets is assessed and a valuation allowance is recorded to the extent that it is more likely than not that any portion of the deferred tax asset will not be realized. | |||
The tax benefit related to dividends and dividend equivalents paid on nonvested share-based payment awards are recognized as an increase to Additional paid-in capital. These amounts are included in tax benefits for issuance of share-based awards on the Consolidated Statements of Changes in Equity. | |||
Legal Reserves | |||
In the normal course of business, we have been named, from time to time, as a defendant in legal and regulatory proceedings. We are also involved, from time to time, in other exams, investigations and similar reviews (both formal and informal) by governmental and self-regulatory agencies regarding our businesses, certain of which may result in judgments, settlements, fines, penalties or other injunctions. | |||
We recognize a liability for a contingency in Accrued expenses and other liabilities when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. If the reasonable estimate of a probable loss is a range, we accrue the most likely amount of such loss, and if such amount is not determinable, then we accrue the minimum in the range as the loss accrual. The determination of the outcome and loss estimates requires significant judgment on the part of management. | |||
In many instances, it is not possible to determine whether any loss is probable or even possible or to estimate the amount of any loss or the size of any range of loss. We believe that, in the aggregate, the pending legal actions or regulatory proceedings and any other exams, investigations or similar reviews (both formal and informal) should not have a material adverse effect on our consolidated results of operations, cash flows or financial condition. In addition, we believe that any amount that could be reasonably estimated of potential loss or range of potential loss in excess of what has been provided in the consolidated financial statements is not material. | |||
Share-based Compensation | |||
Share-based awards are measured based on the grant-date fair value of the award and recognized over the period from the service inception date through the date the employee is no longer required to provide service to earn the award. Expected forfeitures are included in determining share-based compensation expense. | |||
Foreign Currency Translation | |||
Assets and liabilities of foreign subsidiaries having non-U.S. dollar functional currencies are translated at exchange rates at the end of a period. Revenues and expenses are translated at average exchange rates during the period. The gains or losses resulting from translating foreign currency financial statements into U.S. dollars, net of hedging gains or losses and taxes, if any, are included in Other comprehensive income. Gains or losses resulting from foreign currency transactions are included in Principal transactions in the Consolidated Statements of Earnings. | |||
Earnings per Common Share | |||
As a single member limited liability company, earnings per share is not calculated for Jefferies Group LLC (the Successor company). | |||
Prior to the Merger Transaction, Jefferies Group, Inc. (the Predecessor company) had common shares and other common share equivalents outstanding. For the Predecessor periods, basic earnings per share (“EPS”) is computed by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding and certain other shares committed to be, but not yet issued. Net earnings available to common shareholders represent net earnings to common shareholders reduced by the allocation of earnings to participating securities. Losses are not allocated to participating securities. Common shares outstanding and certain other shares committed to be, but not yet issued, include restricted stock and restricted stock units (“RSUs”) for which no future service is required. For Predecessor periods, diluted EPS is computed by dividing net earnings available to common shareholders plus dividends on dilutive mandatorily redeemable convertible preferred stock by the weighted average number of common shares outstanding and certain other shares committed to be, but not yet issued, plus all dilutive common stock equivalents outstanding during the period. Unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and, therefore, are included in the earnings allocation in computing earnings per share under the two-class method of earning per share. Restricted stock and RSUs granted as part of our share-based compensation contain nonforfeitable rights to dividends and dividend equivalents, respectively, and therefore, prior to the requisite service being rendered for the right to retain the award, restricted stock and RSUs meet the definition of a participating security. As such, we calculate Basic and Diluted earnings per share under the two-class method. | |||
Securitization Activities | |||
We engage in securitization activities related to corporate loans, commercial mortgage loans and mortgage-backed and other asset-backed securities. Such transfers of financial assets are accounted for as sales when we have relinquished control over the transferred assets. The gain or loss on sale of such financial assets depends, in part, on the previous carrying amount of the assets involved in the transfer allocated between the assets sold and the retained interests, if any, based upon their respective fair values at the date of sale. We may retain interests in the securitized financial assets as one or more tranches of the securitization. These retained interests are included within Financial instruments owned in the Consolidated Statements of Financial Condition at fair value. Any changes in the fair value of such retained interests are recognized within Principal transactions revenues in the Consolidated Statements of Earnings. | |||
When a transfer of assets does not meet the criteria of a sale, we account for the transfer as a secured borrowing and continue to recognize the assets of a secured borrowing in Financial instruments owned and recognize the associated financing in Other secured financings in the Consolidated Statements of Financial Condition. |
Accounting_Developments
Accounting Developments | 9 Months Ended | |
Aug. 31, 2013 | ||
Accounting Changes And Error Corrections [Abstract] | ||
Accounting Developments | Note 3. | Accounting Developments |
Accounting Standards to be Adopted in Future Periods | ||
Income Taxes. In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The guidance requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss or tax credit carryforward, unless such tax loss or credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes resulting from the disallowance of a tax position. In the event that the tax position is disallowed or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit shall be presented in the financial statements as a liability and shall not be combined with deferred tax assets. The guidance is effective for annual reporting periods beginning after December 15, 2013, and interim periods within those annual periods (fiscal quarter ended February 28, 2014), and is to be applied prospectively. We are currently evaluating the impact of our pending adoption of ASU No. 2013-11 on our consolidated financial statements. | ||
Balance Sheet Offsetting Disclosures. In December 2011, the FASB issued ASU No. 2011-11, Disclosures about Offsetting Assets and Liabilities and in January 2013 the FASB issued ASU 2013-01, Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities. The updates require new disclosures regarding balance sheet offsetting and related arrangements. For derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions, the updates require disclosure of gross asset and liability amounts, amounts offset on the balance sheet, and amounts subject to the offsetting requirements but not offset on the balance sheet. The guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods (fiscal quarter ended February 28, 2014), and is to be applied retrospectively. This guidance does not amend the existing guidance on when it is appropriate to offset; as a result, this guidance will not affect our financial condition, results of operations or cash flows. | ||
Adopted Accounting Standards | ||
Accumulated Other Comprehensive Income. In February 2013, the FASB issued ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. The guidance requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under U.S. GAAP to be reclassified in its entirety to net income. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety from accumulated other comprehensive income to net income in the same reporting period, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. The guidance is effective prospectively for reporting periods beginning after December 15, 2012. We adopted the guidance effective March 1, 2013, presenting the additional disclosures within our Consolidated Statements of Changes in Equity. Adoption did not affect our results of operation, financial condition or cash flows. | ||
Indefinite-Lived Intangible Asset Impairment. In July 2012, the FASB issued ASU No. 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment. The guidance permits an entity to first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset, other than goodwill, is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test. The update does not revise the requirement to test indefinite-lived intangible assets annually for impairment, or more frequently if deemed appropriate. The new guidance is effective for annual and interim tests performed for fiscal years beginning after September 15, 2012. The adoption of this guidance on December 1, 2012 did not affect our financial condition, results of operations or cash flows as it did not affect how impairment is calculated. | ||
Goodwill Testing. In September 2011, the FASB issued ASU No. 2011-08, Testing Goodwill for Impairment. The update outlines amendments to the two step goodwill impairment test permitting an entity to first assess qualitative factors in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step quantitative goodwill impairment test. The update is effective for annual and interim goodwill tests performed for fiscal years beginning after December 15, 2011. We adopted this guidance on December 1, 2012, which did not change how goodwill impairment is calculated nor assigned to reporting units and therefore had no effect on our financial condition, results of operations or cash flows. | ||
Comprehensive Income. In June 2011, the FASB issued ASU No. 2011-05, Presentation of Comprehensive Income. The update requires entities to report comprehensive income either (1) in a single continuous statement of comprehensive income or (2) in two separate but consecutive statements. We adopted the guidance on March 1, 2012, and elected the two separate but consecutive statements approach. Accordingly, we now present our Consolidated Statements of Comprehensive Income immediately following our Consolidated Statements of Earnings within our consolidated financial statements. | ||
Fair Value Measurements and Disclosures. In May 2011, the FASB issued ASU No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS. The amendments prohibit the use of blockage factors at all levels of the fair value hierarchy and provide guidance on measuring financial instruments that are managed on a net portfolio basis. Additional disclosure requirements include transfers between Levels 1 and 2; and for Level 3 fair value measurements, a description of our valuation processes and additional information about unobservable inputs impacting Level 3 measurements. We adopted this guidance on March 1, 2012 and have reflected the new disclosures in our consolidated financial statements. The adoption of this guidance did not have an impact on our financial condition, results of operations or cash flows. | ||
Reconsideration of Effective Control for Repurchase Agreements. In April 2011, the FASB issued ASU No. 2011-03, Reconsideration of Effective Control for Repurchase Agreements. In assessing whether to account for repurchase and other agreements that both entitle and obligate the transferor to repurchase or redeem financial assets before their maturity as sales or as secured financing, this guidance removes from the assessment of effective control 1) the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms and 2) the collateral maintenance implementation guidance related to that criterion. The adoption of this guidance for transactions beginning on or after January 1, 2012 did not have an impact on our financial condition, results of operations or cash flows. |
Leucadia_Merger_and_Related_Tr
Leucadia Merger and Related Transactions | 9 Months Ended | ||||
Aug. 31, 2013 | |||||
Business Combinations [Abstract] | |||||
Leucadia Merger and Related Transactions | Note 4. | Leucadia Merger and Related Transactions | |||
Merger Transaction | |||||
On March 1, 2013, Jefferies Group LLC completed a merger transaction with Leucadia and became a wholly-owned subsidiary of Leucadia as described in Note 1 Organization and Basis of Presentation. Each share of Jefferies Group Inc.‘s common stock outstanding was converted into common shares of Leucadia at an Exchange Ratio of 0.81 of a Leucadia common share for each share of Jefferies Group, Inc. (the “Exchange Ratio”). Leucadia exchanged Jefferies Group, Inc.’s $125.0 million 3.25% Series A-1 Convertible Cumulative Preferred Stock for a new series of Leucadia $125.0 million 3.25% Cumulative Convertible Preferred Shares. In addition, each restricted share and restricted stock unit of Jefferies Group, Inc. common stock was converted at the Exchange Ratio, into an equivalent award of shares of Leucadia, with all such awards for Leucadia shares subject to the same terms and conditions, including, without limitation, vesting and, in the case of performance-based restricted stock units, performance being measured at existing targets. | |||||
Leucadia did not assume or guarantee any of our outstanding debt securities, but our 3.875% Convertible senior Debentures due 2029 with an aggregate principal amount of $345.0 million are now convertible into common shares of Leucadia. Other than the conversion into Leucadia common shares, the terms of the debenture remain the same. | |||||
The merger resulted in a change in our ownership and was recorded under the acquisition method of accounting by Leucadia and pushed-down to us by allocating the total purchase consideration of $4.8 billion to the cost of the assets acquired, including intangible assets, and liabilities assumed based on their estimated fair values at the date of the merger. The excess of the total purchase price over the fair value of assets acquired and the liabilities assumed is recorded as goodwill. The goodwill arising from the merger consists largely of our commercial potential and the value of our assembled workforce. | |||||
In connection with the merger, we recognized $2.5 million, $11.5 million and $2.1 million in transaction costs during the three and six months ended August 31, 2013 and three months ended February 28, 2013, respectively. | |||||
The summary computation of the purchase price and the fair values assigned to the assets and liabilities are presented as follows (in thousands except share amounts): | |||||
Purchase Price | |||||
Jefferies common stock outstanding | 205,368,031 | ||||
Less: Jefferies common stock owned by Leucadia | (58,006,024 | ) | |||
Jefferies common stock acquired by Leucadia | 147,362,007 | ||||
Exchange ratio | 0.81 | ||||
Leucadia’s shares issued (excluding for Jefferies shares held by Leucadia) | 119,363,226 | ||||
Less: restricted shares issued for share-base payment awards (1) | (6,894,856 | ) | |||
Leucadia’s shares issued, excluding share-based payment awards | 112,468,370 | ||||
Closing price of Leucadia’s common stock (2) | $ | 26.9 | |||
Fair value of common shares acquired by Leucadia | 3,025,399 | ||||
Fair value of 3.25% cumulative convertible preferred shares (3) | 125,000 | ||||
Fair value of shares-based payment awards (4) | 343,811 | ||||
Fair value of Jefferies shares owned by Leucadia (5) | 1,259,891 | ||||
Total purchase price | $ | 4,754,101 | |||
-1 | Represents shares of restricted stock included in Jefferies common stock outstanding that contained a future service requirement as of March 1, 2013. | ||||
-2 | The value of the shares of common stock exchanged with Jefferies shareholders was based upon the closing price of Leucadia’s common stock at February 28, 2013, the last trading day prior to the date of acquisition. | ||||
-3 | Represents Leucadia’s 3.25% Cumulative Convertible Preferred Shares issued in exchange for Jefferies Group, Inc.’s 3.25% Series A-1 Convertible Cumulative Preferred Stock. | ||||
-4 | The fair value of share-based payment awards is calculated in accordance with ASC 718, Compensation – Stock Compensation. Share-based payment awards attributable to pre-combination service are included as part of the total purchase price. Share-based payment awards attributable to pre-combination service is estimated based on the ratio of the pre-combination service performed to the original service period of the award. | ||||
-5 | The fair value of Jefferies shares owned by Leucadia was based upon a price of $21.72, the closing price of Jefferies common stock at February 28, 2013. | ||||
Assets acquired (1): | |||||
Cash and cash equivalents | $ | 3,017,958 | |||
Cash and securities segregated | 3,728,742 | ||||
Financial instruments owned, at fair value | 16,413,535 | ||||
Investments in managed funds | 59,976 | ||||
Loans to and investments in related parties | 766,893 | ||||
Securities borrowed | 5,315,488 | ||||
Securities purchased under agreements to resell | 3,578,366 | ||||
Securities received as collateral | 25,338 | ||||
Receivables: | |||||
Brokers, dealers and clearing organizations | 2,444,085 | ||||
Customers | 1,045,251 | ||||
Fees, interest and other | 225,555 | ||||
Premises and equipment | 192,603 | ||||
Indefinite-lived intangible exchange memberships and licenses (2) | 15,551 | ||||
Finite-lived intangible customer relationships (2)(3) | 136,002 | ||||
Finite-lived trade name (2)(4) | 131,299 | ||||
Other assets | 939,600 | ||||
Total assets | $ | 38,036,242 | |||
Liabilities assumed (1): | |||||
Short-term borrowings | $ | 100,000 | |||
Financial instruments sold, not yet purchased, at fair value | 9,766,876 | ||||
Securities loaned | 1,902,687 | ||||
Securities sold under agreements to repurchase | 7,976,492 | ||||
Other secured financings | 122,294 | ||||
Obligation to return securities received as collateral | 25,338 | ||||
Payables: | |||||
Brokers, dealers and clearing organizations | 1,787,055 | ||||
Customers | 5,450,781 | ||||
Accrued expenses and other liabilities | 789,449 | ||||
Long-term debt | 6,362,024 | ||||
Mandatorily redeemable preferred interests | 358,951 | ||||
Total liabilities | $ | 34,641,947 | |||
Noncontrolling interests | 356,180 | ||||
Fair value of net assets acquired, excluding goodwill (1) | $ | 3,038,115 | |||
Goodwill (1) | $ | 1,715,986 | |||
-1 | Modifications to the purchase price allocation have been made since the initial presentation included in our Quarterly Report on Form 10-Q for the three months ended May 31, 2013, which reflect additional information obtained about the fair value of the assets acquired and liabilities assumed. These modifications include adjustments of $4.8 million to reduce the fair value of the total assets acquired and $9.6 million to increase the total liabilities assumed at March 1, 2013. The impact of the adjustments resulted in an increase of goodwill of $14.4 million from the previously presented balance of $1,701.6 million to $1,716.0 million as reflected in this table. | ||||
-2 | Intangible assets are recorded within Other assets on the Consolidated Statements of Financial Condition. | ||||
-3 | The fair value of the finite-lived customer relationships will be amortized on a straight line basis over a weighted average useful life of approximately 14.4 years. | ||||
-4 | The fair value of the finite-lived trade name will be amortized on a straight line basis over a useful life of 35 years. | ||||
Intangible assets, not including goodwill, totaling approximately $282.9 million were identified and recognized as part of the acquisition accounting. The goodwill of $1.7 billion resulting from the Merger Transaction is not deductible for tax purposes. | |||||
Reorganization of Jefferies High Yield Holdings, LLC | |||||
On March 1, 2013, we commenced a reorganization of our high yield joint venture with Leucadia, conducted through Jefferies High Yield Holdings, LLC (“JHYH”) (the parent of Jefferies High Yield Trading, LLC (our high yield trading broker-dealer)). On March 1, 2013, we redeemed the outstanding third party noncontrolling interests in JHYH of $347.6 million. On March 31, 2013, Leucadia contributed its mandatorily redeemable preferred interests in JHYH of $362.3 million to Jefferies Group LLC as member’s equity. We subsequently redeemed the mandatorily redeemable preferred interests in JHYH on April 1, 2013. In addition, on April 1, 2013, our high yield trading broker-dealer was merged into Jefferies LLC (our U.S. securities broker-dealer). |
Hoare_Govett_Acquisition
Hoare Govett Acquisition | 9 Months Ended |
Aug. 31, 2013 | |
Business Combinations [Abstract] | |
Hoare Govett Acquisition | Note 5. Hoare Govett Acquisition |
On February 1, 2012, we acquired the corporate broking business of Hoare Govett from RBS. Total cash consideration paid by us to RBS for the acquisition was £1. In addition, under the terms of the purchase agreement RBS agreed to pay us approximately £1.9 million towards retention payments made to certain employees, which constituted a reduction of the final purchase price. The business acquired represents the corporate broking business carried on under the name RBS Hoare Govett in the United Kingdom and comprised corporate broking advice and services, as well as certain equity sales and trading activities. The acquisition included the Hoare Govett trade name, domain name, client agreements and the exclusive right to carry on the business in succession to RBS. | |
We accounted for the acquisition under the acquisition method of accounting. Accordingly, the assets acquired, including identifiable intangible assets, and liabilities assumed were recorded at their respective fair values as of the date of acquisition. The fair values of the net assets acquired, including identifiable intangible assets, specifically the Hoare Govett trademark/trade name, was approximately $0.3 million, which exceeded the negative purchase price of $3.1 million (cash consideration paid of £1 less remittance from RBS of £1.9 million), resulting in a bargain purchase gain of approximately $3.4 million. The bargain purchase gain is included within Other revenues in the Consolidated Statement of Earnings for the nine months ended August 31, 2012 and is reported within the Capital Markets business segment. | |
Our results of operations for the nine months ended August 31, 2012 include the results of operations of Hoare Govett for seven months for the period from February 1, 2012 to August 31, 2012. The acquisition closed on February 29, 2012. |
Cash_Cash_Equivalents_and_Shor
Cash, Cash Equivalents and Short-Term Investments | 9 Months Ended | ||||||||||
Aug. 31, 2013 | |||||||||||
Cash And Cash Equivalents [Abstract] | |||||||||||
Cash, Cash Equivalents and Short-Term Investments | Note 6. | Cash, Cash Equivalents and Short-Term Investments | |||||||||
We generally invest our excess cash in money market funds and other short-term instruments. Cash equivalents include highly liquid investments not held for resale and with original maturities of three months or less. The following are financial instruments classified as cash and cash equivalents that are deemed by us to be generally readily convertible into cash as of August 31, 2013 and November 30, 2012 (in thousands): | |||||||||||
Successor | Predecessor | ||||||||||
August 31, | November 30, | ||||||||||
2013 | 2012 | ||||||||||
Cash and cash equivalents: | |||||||||||
Cash in banks | $ | 938,881 | $ | 1,038,664 | |||||||
Money market investments | 3,180,215 | 1,653,931 | |||||||||
Total cash and cash equivalents | $ | 4,119,096 | $ | 2,692,595 | |||||||
Cash and securities segregated (1) | $ | 3,457,926 | $ | 4,082,595 | |||||||
-1 | Consists of deposits at exchanges and clearing organizations, as well as deposits in accordance with Rule 15c3-3 of the Securities Exchange Act of 1934, which subjects Jefferies as a broker-dealer carrying client accounts to requirements related to maintaining cash or qualified securities in a segregated reserve account for the exclusive benefit of its clients, and Jefferies Bache, LLC which, as a futures commission merchant, is subject to the segregation requirements pursuant to the Commodity Exchange Act. |
Fair_Value_Disclosures
Fair Value Disclosures | 9 Months Ended | ||||||||||||||||||||||||||||||||
Aug. 31, 2013 | |||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||
Fair Value Disclosures | Note 7. | Fair Value Disclosures | |||||||||||||||||||||||||||||||
The following is a summary of our financial assets and liabilities that are accounted for at fair value on a recurring basis as of August 31, 2013 and November 30, 2012 by level within the fair value hierarchy (in thousands): | |||||||||||||||||||||||||||||||||
Successor | |||||||||||||||||||||||||||||||||
31-Aug-13 | |||||||||||||||||||||||||||||||||
Level 1 (1) | Level 2 (1) | Level 3 | Counterparty and | Total | |||||||||||||||||||||||||||||
Cash Collateral | |||||||||||||||||||||||||||||||||
Netting (2) | |||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Financial instruments owned: | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 1,753,178 | $ | 164,045 | $ | 16,079 | $ | — | $ | 1,933,302 | |||||||||||||||||||||||
Corporate debt securities | — | 2,334,115 | 20,633 | — | 2,354,748 | ||||||||||||||||||||||||||||
Collateralized debt obligations | — | 196,639 | 45,872 | — | 242,511 | ||||||||||||||||||||||||||||
U.S. government and federal agency securities | 1,559,899 | 45,993 | — | — | 1,605,892 | ||||||||||||||||||||||||||||
Municipal securities | — | 504,981 | — | — | 504,981 | ||||||||||||||||||||||||||||
Sovereign obligations | 1,225,076 | 691,921 | — | — | 1,916,997 | ||||||||||||||||||||||||||||
Residential mortgage-backed securities | — | 2,951,619 | 132,183 | — | 3,083,802 | ||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 728,365 | 14,423 | — | 742,788 | ||||||||||||||||||||||||||||
Other asset-backed securities | — | 49,020 | 8,570 | — | 57,590 | ||||||||||||||||||||||||||||
Loans and other receivables | — | 812,517 | 130,452 | — | 942,969 | ||||||||||||||||||||||||||||
Derivatives | 38,410 | 1,937,799 | 2,567 | (1,856,907 | ) | 121,869 | |||||||||||||||||||||||||||
Investments at fair value | — | 6,465 | 73,452 | — | 79,917 | ||||||||||||||||||||||||||||
Physical commodities | — | 110,915 | — | — | 110,915 | ||||||||||||||||||||||||||||
Total financial instruments owned | $ | 4,576,563 | $ | 10,534,394 | $ | 444,231 | $ | (1,856,907 | ) | $ | 13,698,281 | ||||||||||||||||||||||
Cash and cash equivalents | $ | 4,119,096 | $ | — | $ | — | $ | — | $ | 4,119,096 | |||||||||||||||||||||||
Investments in managed funds | $ | — | $ | — | $ | 55,897 | $ | — | $ | 55,897 | |||||||||||||||||||||||
Cash and securities segregated and on deposit for regulatory purposes (3) | $ | 3,457,926 | $ | — | $ | — | $ | — | $ | 3,457,926 | |||||||||||||||||||||||
Securities received as collateral | $ | 45,133 | $ | — | $ | — | $ | — | $ | 45,133 | |||||||||||||||||||||||
Total Level 3 assets | $ | 500,128 | |||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Financial instruments sold, not yet purchased: | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 1,675,406 | $ | 64,047 | $ | 38 | $ | — | $ | 1,739,491 | |||||||||||||||||||||||
Corporate debt securities | — | 1,320,896 | — | — | 1,320,896 | ||||||||||||||||||||||||||||
U.S. government and federal agency securities | 1,299,404 | — | — | — | 1,299,404 | ||||||||||||||||||||||||||||
Sovereign obligations | 1,043,906 | 644,205 | — | — | 1,688,111 | ||||||||||||||||||||||||||||
Residential mortgage-backed securities | — | 24,569 | — | — | 24,569 | ||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 13,399 | — | — | 13,399 | ||||||||||||||||||||||||||||
Loans | — | 359,561 | 976 | — | 360,537 | ||||||||||||||||||||||||||||
Derivatives | 39,794 | 1,991,520 | 17,205 | (1,914,692 | ) | 133,827 | |||||||||||||||||||||||||||
Physical commodities | — | 44,796 | — | — | 44,796 | ||||||||||||||||||||||||||||
Total financial instruments sold, not yet purchased | $ | 4,058,510 | $ | 4,462,993 | $ | 18,219 | $ | (1,914,692 | ) | $ | 6,625,030 | ||||||||||||||||||||||
Obligation to return securities received as collateral | $ | 45,133 | $ | — | $ | — | $ | — | $ | 45,133 | |||||||||||||||||||||||
Other secured financings | $ | — | $ | 30,000 | $ | 3,025 | $ | — | $ | 33,025 | |||||||||||||||||||||||
Embedded conversion option | $ | — | $ | 7,336 | $ | — | $ | — | $ | 7,336 | |||||||||||||||||||||||
-1 | During the three months ended August 31, 2013, we transferred from Level 1 to Level 2 listed equity options with a fair value of $403.0 million within Financial instruments owned and $423.0 million within Financial instruments sold, not yet purchased as adjustments to the exchange closing price are necessary to best reflect the fair value of the population at its exit price. | ||||||||||||||||||||||||||||||||
-2 | Represents counterparty and cash collateral netting across the levels of the fair value hierarchy for positions with the same counterparty. | ||||||||||||||||||||||||||||||||
-3 | Securities comprise U.S. government securities segregated for regulatory purposes with a fair value of $279.3 million. | ||||||||||||||||||||||||||||||||
Predecessor | |||||||||||||||||||||||||||||||||
30-Nov-12 | |||||||||||||||||||||||||||||||||
Level 1 (1) | Level 2 (1) | Level 3 | Counterparty and | Total | |||||||||||||||||||||||||||||
Cash Collateral | |||||||||||||||||||||||||||||||||
Netting (2) | |||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Financial instruments owned: | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 1,608,715 | $ | 137,245 | $ | 16,815 | $ | — | $ | 1,762,775 | |||||||||||||||||||||||
Corporate debt securities | — | 3,034,515 | 3,631 | — | 3,038,146 | ||||||||||||||||||||||||||||
Collateralized debt obligations | — | 87,239 | 31,255 | — | 118,494 | ||||||||||||||||||||||||||||
U.S. government and federal agency securities | 1,720,617 | 115,310 | — | — | 1,835,927 | ||||||||||||||||||||||||||||
Municipal securities | — | 619,969 | — | — | 619,969 | ||||||||||||||||||||||||||||
Sovereign obligations | 1,722,044 | 975,810 | — | — | 2,697,854 | ||||||||||||||||||||||||||||
Residential mortgage-backed securities | — | 4,008,844 | 156,069 | — | 4,164,913 | ||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 1,060,333 | 30,202 | — | 1,090,535 | ||||||||||||||||||||||||||||
Other asset-backed securities | — | 93,228 | 1,114 | — | 94,342 | ||||||||||||||||||||||||||||
Loans and other receivables | — | 497,918 | 180,393 | — | 678,311 | ||||||||||||||||||||||||||||
Derivatives | 615,024 | 1,547,984 | 328 | (1,865,250 | ) | 298,086 | |||||||||||||||||||||||||||
Investments at fair value | — | 43,126 | 83,897 | — | 127,023 | ||||||||||||||||||||||||||||
Physical commodities | — | 144,016 | — | — | 144,016 | ||||||||||||||||||||||||||||
Total financial instruments owned | $ | 5,666,400 | $ | 12,365,537 | $ | 503,704 | $ | (1,865,250 | ) | $ | 16,670,391 | ||||||||||||||||||||||
Level 3 financial instruments for which the firm does not bear economic exposure (3) | (53,289 | ) | |||||||||||||||||||||||||||||||
Level 3 financial instruments for which the firm bears economic exposure | $ | 450,415 | |||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 2,692,595 | $ | — | $ | — | $ | — | $ | 2,692,595 | |||||||||||||||||||||||
Investments in managed funds | $ | — | $ | — | $ | 57,763 | $ | — | $ | 57,763 | |||||||||||||||||||||||
Cash and securities segregated and on deposit for regulatory purposes (4) | $ | 4,082,595 | $ | — | $ | — | $ | — | $ | 4,082,595 | |||||||||||||||||||||||
Total Level 3 assets for which the firm bears economic exposure | $ | 508,178 | |||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Financial instruments sold, not yet purchased: | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 1,442,347 | $ | 96,947 | $ | 38 | $ | — | $ | 1,539,332 | |||||||||||||||||||||||
Corporate debt securities | — | 1,389,312 | — | — | 1,389,312 | ||||||||||||||||||||||||||||
U.S. government and federal agency securities | 1,428,746 | 250,387 | — | — | 1,679,133 | ||||||||||||||||||||||||||||
Sovereign obligations | 1,395,355 | 591,624 | — | — | 1,986,979 | ||||||||||||||||||||||||||||
Residential mortgage-backed securities | — | 239,063 | — | — | 239,063 | ||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 2,148 | — | — | 2,148 | ||||||||||||||||||||||||||||
Loans | — | 205,516 | 1,711 | — | 207,227 | ||||||||||||||||||||||||||||
Derivatives | 547,605 | 1,684,884 | 9,516 | (2,012,878 | ) | 229,127 | |||||||||||||||||||||||||||
Physical commodities | — | 183,142 | — | — | 183,142 | ||||||||||||||||||||||||||||
Total financial instruments sold, not yet purchased | $ | 4,814,053 | $ | 4,643,023 | $ | 11,265 | $ | (2,012,878 | ) | $ | 7,455,463 | ||||||||||||||||||||||
-1 | There were no transfers between Level 1 and Level 2 for the year ended November 30, 2012. | ||||||||||||||||||||||||||||||||
-2 | Represents counterparty and cash collateral netting across the levels of the fair value hierarchy for positions with the same counterparty. | ||||||||||||||||||||||||||||||||
-3 | Consists of Level 3 assets attributable to third party or employee noncontrolling interests in certain consolidated entities. | ||||||||||||||||||||||||||||||||
-4 | Securities comprise U.S. government securities segregated for regulatory purposes with a fair value of $404.3 million. | ||||||||||||||||||||||||||||||||
The following is a description of the valuation basis, including valuation techniques and inputs, used in measuring our financial assets and liabilities that are accounted for at fair value on a recurring basis: | |||||||||||||||||||||||||||||||||
Corporate Equity Securities | |||||||||||||||||||||||||||||||||
• | Exchange Traded Equity Securities: Exchange-traded equity securities are measured based on quoted closing exchange prices, which are generally obtained from external pricing services, and are categorized within Level 1 of the fair value hierarchy, otherwise they are categorized within Level 2 or Level 3 of the fair value hierachy. | ||||||||||||||||||||||||||||||||
• | Non-exchange Traded Equity Securities: Non-exchange traded equity securities are measured primarily using broker quotations, pricing data from external pricing services and prices observed for recently executed market transactions and are categorized within Level 2 of the fair value hierarchy. Where such information is not available, non-exchange traded equity securities are categorized within Level 3 of the fair value hierarchy and measured using valuation techniques involving quoted prices of or market data for comparable companies, similar company ratios and multiples (e.g., price/EBITDA, price/book value), discounted cash flow analyses and transaction prices observed for subsequent financing or capital issuance by the company. When using pricing data of comparable companies, judgment must be applied to adjust the pricing data to account for differences between the measured security and the comparable security (e.g., issuer market capitalization, yield, dividend rate, geographical concentration). | ||||||||||||||||||||||||||||||||
• | Equity warrants: Non-exchange traded equity warrants are generally categorized within Level 3 of the fair value hierarchy and are measured using the Black-Scholes model with key inputs impacting the valuation including the underlying security price, implied volatility, dividend yield, interest rate curve, strike price and maturity date. | ||||||||||||||||||||||||||||||||
Corporate Debt Securities | |||||||||||||||||||||||||||||||||
• | Corporate Bonds: Corporate bonds are measured primarily using pricing data from external pricing services and broker quotations, where available, prices observed for recently executed market transactions of comparable size, and bond spreads or credit default swap spreads of the issuer adjusted for basis differences between the swap curve and the bond curve. Corporate bonds measured using these valuation methods are categorized within Level 2 of the fair value hierarchy. If broker quotes, pricing data or spread data is not available, alternative valuation techniques are used including cash flow models incorporating interest rate curves, single name or index credit default swap curves for comparable issuers and recovery rate assumptions. Corporate bonds measured using alternative valuation techniques are categorized within Level 3 of the fair value hierarchy and comprise a limited portion of our corporate bonds. | ||||||||||||||||||||||||||||||||
• | High Yield Corporate and Convertible Bonds: A significant portion of our high yield corporate and convertible bonds are categorized within Level 2 of the fair value hierarchy and are measured primarily using broker quotations and pricing data from external pricing services, where available, and prices observed for recently executed market transactions of comparable size. Where pricing data is less observable, valuations are categorized within Level 3 and are based on pending transactions involving the issuer or comparable issuers, prices implied from an issuer’s subsequent financings or recapitalizations, models incorporating financial ratios and projected cash flows of the issuer and market prices for comparable issuers. | ||||||||||||||||||||||||||||||||
Collateralized Debt Obligations | |||||||||||||||||||||||||||||||||
Collateralized debt obligations are measured based on prices observed for recently executed market transactions or based on valuations received from third party brokers and are categorized within Level 2 or Level 3 of the fair value hierarchy depending on the observability and significance of the pricing inputs. | |||||||||||||||||||||||||||||||||
U.S. Government and Federal Agency Securities | |||||||||||||||||||||||||||||||||
• | U.S. Treasury Securities: U.S. Treasury securities are measured based on quoted market prices and categorized within Level 1 of the fair value hierarchy. | ||||||||||||||||||||||||||||||||
• | U.S. Agency Issued Debt Securities: Callable and non-callable U.S. agency issued debt securities are measured primarily based on quoted market prices obtained from external pricing services. Non-callable U.S. agency securities are generally categorized within Level 1 and callable U.S. agency securities are categorized within Level 2 of the fair value hierarchy. | ||||||||||||||||||||||||||||||||
Municipal Securities | |||||||||||||||||||||||||||||||||
Municipal securities are measured based on quoted prices obtained from external pricing services and are generally categorized within Level 2 of the fair value hierarchy. | |||||||||||||||||||||||||||||||||
Sovereign Obligations | |||||||||||||||||||||||||||||||||
Foreign sovereign government obligations are measured based on quoted market prices obtained from external pricing services, where available, or recently executed independent transactions of comparable size. To the extent external price quotations are not available or recent transactions have not been observed, valuation techniques incorporating interest rate yield curves and country spreads for bonds of similar issuers, seniority and maturity are used to determine fair value of sovereign bonds or obligations. Foreign sovereign government obligations are classified in Level 1, 2 or Level 3 of the fair value hierarchy, primarily based on the country of issuance. | |||||||||||||||||||||||||||||||||
Residential Mortgage-Backed Securities | |||||||||||||||||||||||||||||||||
• | Agency Residential Mortgage-Backed Securities: Agency residential mortgage-backed securities include mortgage pass-through securities (fixed and adjustable rate), collateralized mortgage obligations, interest-only and principal-only securities and to-be-announced securities and are generally measured using market price quotations from external pricing services and categorized within Level 2 of the fair value hierarchy. | ||||||||||||||||||||||||||||||||
• | Agency Residential Inverse Interest-Only Securities (“Agency Inverse IOs”): The fair value of agency inverse IOs is estimated using expected future cash flow techniques that incorporate prepayment models and other prepayment assumptions to amortize the underlying mortgage loan collateral. We use prices observed for recently executed transactions to develop market-clearing spread and yield curve assumptions. Valuation inputs with regard to the underlying collateral incorporate weighted average coupon, loan-to-value, credit scores, geographic location, maximum and average loan size, originator, servicer, and weighted average loan age. Agency inverse IOs are categorized within Level 2 or Level 3 of the fair value hierarchy. We also use vendor data in developing our assumptions, as appropriate. | ||||||||||||||||||||||||||||||||
• | Non-Agency Residential Mortgage-Backed Securities: Fair values are determined primarily using discounted cash flow methodologies and securities are categorized within Level 2 or Level 3 of the fair value hierarchy based on the observability and significance of the pricing inputs used. Performance attributes of the underlying mortgage loans are evaluated to estimate pricing inputs, such as prepayment rates, default rates and the severity of credit losses. Attributes of the underlying mortgage loans that affect the pricing inputs include, but are not limited to, weighted average coupon; average and maximum loan size; loan-to-value; credit scores; documentation type; geographic location; weighted average loan age; originator; servicer; historical prepayment, default and loss severity experience of the mortgage loan pool; and delinquency rate. Yield curves used in the discounted cash flow models are based on observed market prices for comparable securities and published interest rate data to estimate market yields. | ||||||||||||||||||||||||||||||||
Commercial Mortgage-Backed Securities | |||||||||||||||||||||||||||||||||
• | Agency Commercial Mortgage-Backed Securities: GNMA project loan bonds and FNMA Delegated Underwriting and Servicing (“DUS”) mortgage-backed securities are generally measured by using prices observed for recently executed market transactions to estimate market-clearing spread levels for purposes of estimating fair value. GNMA project loan bonds and FNMA DUS mortgage-backed securities are categorized within Level 2 of the fair value hierarchy. | ||||||||||||||||||||||||||||||||
• | Non-Agency Commercial Mortgage-Backed Securities: Non-agency commercial mortgage-backed securities are measured using pricing data obtained from external pricing services and prices observed for recently executed market transactions and are categorized within Level 2 and Level 3 of the fair value hierarchy. | ||||||||||||||||||||||||||||||||
Other Asset-Backed Securities | |||||||||||||||||||||||||||||||||
Other asset-backed securities include, but are not limited to, securities backed by auto loans, credit card receivables and student loans and are categorized within Level 2 and Level 3 of the fair value hierarchy. Valuations are determined using pricing data obtained from external pricing services and prices observed for recently executed market transactions. | |||||||||||||||||||||||||||||||||
Loans and Other Receivables | |||||||||||||||||||||||||||||||||
• | Corporate Loans: Corporate loans categorized within Level 2 of the fair value hierarchy are measured based on market price quotations where market price quotations from external pricing services are supported by market transaction data. Corporate loans categorized within Level 3 of the fair value hierarchy are measured based on market price quotations that are considered to be less transparent, market prices for debt securities of the same creditor, and estimates of future cash flow incorporating assumptions regarding creditor default and recovery rates and consideration of the issuer’s capital structure. | ||||||||||||||||||||||||||||||||
• | Participation Certificates in GNMA Project and Construction Loans: Valuations of participation certificates in GNMA project and construction loans are based on observed market prices of recently executed purchases of similar loans which are then used to derive a market implied spread, which in turn is used as the primary input in estimating the fair value of loans at the measurement date. The loan participation certificates are categorized within Level 2 of the fair value hierarchy given the observability and volume of recently executed transactions. | ||||||||||||||||||||||||||||||||
• | Project Loans: Valuation of project loans are based on benchmarks of prices for recently executed transactions of related realized collateralized securities and are categorized within Level 2 of the fair value hierarchy. | ||||||||||||||||||||||||||||||||
• | Escrow and Trade Claim Receivables: Escrow and trade claim receivables are categorized within Level 3 of the fair value hierarchy where fair value is estimated based on reference to market prices and implied yields of debt securities of the same or similar issuers. Escrow and trade claim receivables are categorized within Level 2 of the fair value hierarchy where fair value is based on recent trade activity in the same security. | ||||||||||||||||||||||||||||||||
Derivatives | |||||||||||||||||||||||||||||||||
• | Listed Derivative Contracts: Listed derivative contracts are measured based on quoted exchange prices, which are generally obtained from external pricing services, and are categorized within Level 1 or Level 2 of the fair value hierarchy. Listed derivatives for which there is limited trading activity are measured based on incorporating the closing auction price of the underlying equity security and are categorized within Level 2 of the fair value hierarchy. | ||||||||||||||||||||||||||||||||
• | OTC Derivative Contracts: Over-the-counter (“OTC”) derivative contracts are generally valued using models, whose inputs reflect assumptions that we believe market participants would use in valuing the derivative in a current period transaction. Inputs to valuation models are appropriately calibrated to market data. For many OTC derivative contracts, the valuation models do not involve material subjectivity as the methodologies do not entail significant judgment and the inputs to valuation models do not involve a high degree of subjectivity as the valuation model inputs are readily observable or can be derived from actively quoted markets. OTC derivative contracts are primarily categorized within Level 2 of the fair value hierarchy given the observability and significance of the inputs to the valuation models. Where significant inputs to the valuation are unobservable, derivative instruments are categorized within Level 3 of the fair value hierarchy. | ||||||||||||||||||||||||||||||||
OTC options include OTC equity, foreign exchange and commodity options measured using various valuation models, such as the Black-Scholes, with key inputs impacting the valuation including the underlying security, foreign exchange spot rate or commodity price, implied volatility, dividend yield, interest rate curve, strike price and maturity date. Discounted cash flow models are utilized to measure certain OTC derivative contracts including the valuations of our interest rate swaps, which incorporate observable inputs related to interest rate curves, valuations of our foreign exchange forwards and swaps, which incorporate observable inputs related to foreign currency spot rates and forward curves and valuations of our commodity swaps, which incorporate observable inputs related to commodity spot prices and forward curves. Credit default swaps include both index and single-name credit default swaps. External prices are available as inputs in measuring index credit default swaps and single-name credit default swaps. For commodity and equity total return swaps, market prices are observable for the underlying asset and used as the basis for measuring the fair value of the derivative contracts. Total return swaps executed on other underlyings are measured based on valuations received from external pricing services. | |||||||||||||||||||||||||||||||||
Physical Commodities | |||||||||||||||||||||||||||||||||
Physical commodities include base and precious metals and are measured using observable inputs including spot prices and published indices. Physical commodities are categorized within Level 2 of the fair value hierarchy. To facilitate the trading in precious metals we undertake leasing of such precious metals. The fees earned or paid for such leases are recorded as Principal transaction revenues on the Consolidated Statements of Earnings. | |||||||||||||||||||||||||||||||||
Investments at Fair Value and Investments in Managed Funds | |||||||||||||||||||||||||||||||||
Investments at fair value and Investments in managed funds include investments in hedge funds, fund of funds, private equity funds, convertible bond funds and commodity funds, which are measured at fair value based on the net asset value of the funds provided by the fund managers and are categorized within Level 2 or Level 3 of the fair value hierarchy. Investments at fair value also include direct equity investments in private companies, which are measured at fair value using valuation techniques involving quoted prices of or market data for comparable companies, similar company ratios and multiples (e.g., price/EBITDA, price/book value), discounted cash flow analyses and transaction prices observed for subsequent financing or capital issuance by the company. Direct equity investments in private companies are categorized within Level 2 or Level 3 of the fair value hierarchy. Additionally, investments at fair value include investments in insurance contracts relating to our defined benefit plan in Germany and at November 30, 2012, shares in non-U.S. exchanges and clearing house. Fair value for the insurance contracts is determined using a third party and is categorized within Level 3 of the fair value hierarchy. Fair value for the shares in non-U.S. exchanges and clearing houses is determined based on recent transactions or third party model valuations and is categorized within Level 2 or Level 3 of the fair value hierarchy. The following tables present information about our investments in entities that have the characteristics of an investment company at August 31, 2013 and November 30, 2012 (in thousands): | |||||||||||||||||||||||||||||||||
Successor | |||||||||||||||||||||||||||||||||
31-Aug-13 | |||||||||||||||||||||||||||||||||
Fair Value (7) | Unfunded | Redemption Frequency | |||||||||||||||||||||||||||||||
Commitments | (if currently eligible) | ||||||||||||||||||||||||||||||||
Equity Long/Short Hedge Funds (1) | $ | 20,360 | $ | — | Monthly, Quarterly | ||||||||||||||||||||||||||||
High Yield Hedge Funds(2) | 341 | — | — | ||||||||||||||||||||||||||||||
Fund of Funds(3) | 474 | 106 | — | ||||||||||||||||||||||||||||||
Equity Funds(4) | 66,526 | 49,019 | — | ||||||||||||||||||||||||||||||
Convertible Bond Funds(5) | 3,081 | — | At Will | ||||||||||||||||||||||||||||||
Other Investments(6) | 17 | — | Bi-Monthly | ||||||||||||||||||||||||||||||
Total(8) | $ | 90,799 | $ | 49,125 | |||||||||||||||||||||||||||||
Predecessor | |||||||||||||||||||||||||||||||||
30-Nov-12 | |||||||||||||||||||||||||||||||||
Fair Value (7) | Unfunded | Redemption Frequency | |||||||||||||||||||||||||||||||
Commitments | (if currently eligible) | ||||||||||||||||||||||||||||||||
Equity Long/Short Hedge Funds (1) | $ | 19,554 | $ | — | Monthly, Quarterly | ||||||||||||||||||||||||||||
High Yield Hedge Funds(2) | 612 | — | — | ||||||||||||||||||||||||||||||
Fund of Funds(3) | 604 | 106 | — | ||||||||||||||||||||||||||||||
Equity Funds(4) | 69,223 | 59,272 | — | ||||||||||||||||||||||||||||||
Convertible Bond Funds(5) | 3,002 | — | At Will | ||||||||||||||||||||||||||||||
Other Investments(6) | 19 | — | Bi-Monthly | ||||||||||||||||||||||||||||||
Total(8) | $ | 93,014 | $ | 59,378 | |||||||||||||||||||||||||||||
-1 | This category includes investments in hedge funds that invest, long and short, in equity securities in domestic and international markets in both the public and private sectors. At August 31, 2013 and November 30, 2012, investments representing approximately 98% and 96%, respectively, of the fair value of investments in this category are redeemable with 30 – 65 days prior written notice. The remaining investments in this category cannot be redeemed as they are in liquidation and distributions will be received through the liquidation of the underlying assets of the funds. We are unable to estimate when the underlying assets will be liquidated. | ||||||||||||||||||||||||||||||||
-2 | Includes investments in funds that invest in domestic and international public high yield debt, private high yield investments, senior bank loans, public leveraged equities, distressed debt, and private equity investments. There are no redemption provisions. The underlying assets of the funds are being liquidated and we are unable to estimate when the underlying assets will be fully liquidated. | ||||||||||||||||||||||||||||||||
-3 | Includes investments in fund of funds that invest in various private equity funds. At August 31, 2013 and November 30, 2012, approximately 98% and 94%, respectively, of the fair value of investments in this category are managed by us and have no redemption provisions, instead distributions are received through the liquidation of the underlying assets of the fund of funds, which are estimated to be liquidated in one to two years. For the remaining investments we have requested redemption; however, we are unable to estimate when these funds will be received. | ||||||||||||||||||||||||||||||||
-4 | At August 31, 2013 and November 30, 2012, investments representing approximately 99% and 98%, respectively of the fair value of investments in this category include investments in equity funds that invest in the equity of various U.S. and foreign private companies in the energy, technology, internet service and telecommunication service industries. These investments cannot be redeemed, instead distributions are received through the liquidation of the underlying assets of the funds which are expected to liquidate in one to eight years. The remaining investments are in liquidation and we are unable to estimate when the underlying assets will be fully liquidated. At August 31, 2013 and November 30, 2012, this category includes investments in equity funds managed by us with a fair value of $53.7 million and $55.6 million and unfunded commitments of $47.5 million and $56.9 million, respectively. | ||||||||||||||||||||||||||||||||
-5 | Investment in the Jefferies Umbrella Fund, an open-ended investment company managed by us that invests primarily in convertible bonds. The investment is redeemable with 5 days prior written notice. | ||||||||||||||||||||||||||||||||
-6 | Other investments at August 31, 2013 and November 30, 2012 included investments in funds that invest in commodity futures and options contracts. | ||||||||||||||||||||||||||||||||
-7 | Fair value has been estimated using the net asset value derived from each of the funds’ capital statements. | ||||||||||||||||||||||||||||||||
-8 | Investments at fair value in the Consolidated Statements of Financial Condition at August 31, 2013 and November 30, 2012 include $45.0 million and $91.8 million, respectively, of direct investments which do not have the characteristics of investment companies and therefore not included within this table. | ||||||||||||||||||||||||||||||||
Other Secured Financings | |||||||||||||||||||||||||||||||||
Other secured financings includes the notes issued by VIEs related to transfers of financial assets and accounted for as financings, which are classified as Level 2 within the fair value hierarchy. Fair value is based on recent transaction prices. Other secured financings also includes mortgage-backed securities issued by a VIE for which we are deemed the primary beneficiary, categorized within Level 3 of the fair value hierarchy and measured using a discounted cashflow model with discount yield being a significant input. | |||||||||||||||||||||||||||||||||
Embedded Conversion Option | |||||||||||||||||||||||||||||||||
The embedded conversion option presented within long-term debt represents the fair value of the conversion option on Leucadia shares within our 3.875% Convertible Senior Debentures, due November 1, 2029 and categorized as Level 2 within the fair value hierarchy. The conversion option was valued using Black-Scholes methodology using as inputs the price of Leucadia’s common stock, the conversion strike price, 252-day historical volatility, a maturity date of November 1, 2017 (the first put date), dividend yield and the risk-free interest rate curve. | |||||||||||||||||||||||||||||||||
Pricing Information | |||||||||||||||||||||||||||||||||
At August 31, 2013 and November 30, 2012, our Financial instruments owned and Financial instruments sold, not yet purchased are measured using different valuation bases as follows: | |||||||||||||||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||||||||||||||
August 31, 2013 | November 30, 2012 | ||||||||||||||||||||||||||||||||
Financial | Financial | Financial | Financial | ||||||||||||||||||||||||||||||
Instruments | Instruments Sold, | Instruments | Instruments Sold, | ||||||||||||||||||||||||||||||
Owned | Not Yet | Owned | Not Yet | ||||||||||||||||||||||||||||||
Purchased | Purchased | ||||||||||||||||||||||||||||||||
Exchange closing prices | 13 | % | 26 | % | 11 | % | 19 | % | |||||||||||||||||||||||||
Recently observed transaction prices | 7 | % | 4 | % | 5 | % | 6 | % | |||||||||||||||||||||||||
External pricing services | 56 | % | 65 | % | 70 | % | 71 | % | |||||||||||||||||||||||||
Broker quotes | 3 | % | 3 | % | 1 | % | 0 | % | |||||||||||||||||||||||||
Valuation techniques | 21 | % | 2 | % | 13 | % | 4 | % | |||||||||||||||||||||||||
100 | % | 100 | % | 100 | % | 100 | % | ||||||||||||||||||||||||||
The following is a summary of changes in fair value of our financial assets and liabilities that have been categorized within Level 3 of the fair value hierarchy for the three months ended August 31, 2013 (in thousands): | |||||||||||||||||||||||||||||||||
Successor | |||||||||||||||||||||||||||||||||
Three Months Ended August 31, 2013 (3) | |||||||||||||||||||||||||||||||||
Balance, | Total gains/ | Purchases | Sales | Settlements | Net | Balance, | Change in | ||||||||||||||||||||||||||
May 31, | losses | transfers | August 31, | unrealized gains/ | |||||||||||||||||||||||||||||
2013 | (realized and | into/ (out | 2013 | (losses) relating | |||||||||||||||||||||||||||||
unrealized) | of) | to instruments | |||||||||||||||||||||||||||||||
-1 | Level 3 | still held at | |||||||||||||||||||||||||||||||
August 31, | |||||||||||||||||||||||||||||||||
2013 (1) | |||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Financial instruments owned: | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 19,577 | $ | (788 | ) | $ | — | $ | (930 | ) | $ | — | $ | (1,780 | ) | $ | 16,079 | $ | (786 | ) | |||||||||||||
Corporate debt securities | 18,615 | (4,285 | ) | 68 | (571 | ) | — | 6,806 | 20,633 | (4,342 | ) | ||||||||||||||||||||||
Collateralized debt obligations | 45,124 | (1,903 | ) | 8,222 | (4,236 | ) | — | (1,335 | ) | 45,872 | (2,388 | ) | |||||||||||||||||||||
Residential mortgage-backed securities | 143,766 | (1,876 | ) | 33,831 | (50,938 | ) | (2,306 | ) | 9,706 | 132,183 | (3,898 | ) | |||||||||||||||||||||
Commercial mortgage-backed securities | 16,068 | 2,033 | 130 | (310 | ) | (3,703 | ) | 205 | 14,423 | (1,106 | ) | ||||||||||||||||||||||
Other asset-backed securities | 1,444 | 2,170 | 7,576 | (3,279 | ) | — | 659 | 8,570 | 2,142 | ||||||||||||||||||||||||
Loans and other receivables | 117,496 | (198 | ) | 52,246 | (12,139 | ) | (25,395 | ) | (1,558 | ) | 130,452 | 609 | |||||||||||||||||||||
Investments, at fair value | 76,364 | 1,848 | — | (101 | ) | (710 | ) | (3,949 | ) | 73,452 | 2,002 | ||||||||||||||||||||||
Investments in managed funds | 55,141 | 4,034 | 6,598 | — | (9,876 | ) | — | 55,897 | 4,034 | ||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Financial instruments sold, not yet purchased: | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 38 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 38 | $ | — | |||||||||||||||||
Net derivatives (2) | 10,799 | 3,899 | — | — | (60 | ) | — | 14,638 | (3,899 | ) | |||||||||||||||||||||||
Loans | 15,212 | — | (14,952 | ) | 716 | — | — | 976 | — | ||||||||||||||||||||||||
Other secured financing | 2,294 | 731 | — | — | — | — | 3,025 | (731 | ) | ||||||||||||||||||||||||
-1 | Realized and unrealized gains/losses are reported in Principal transactions in the Consolidated Statements of Earnings. | ||||||||||||||||||||||||||||||||
-2 | Net derivatives represent Financial instruments owned – Derivatives and Financial instruments sold, not yet purchased – Derivatives. | ||||||||||||||||||||||||||||||||
-3 | There were no issuances during the three months ended August 31, 2013. | ||||||||||||||||||||||||||||||||
Analysis of Level 3 Assets and Liabilities for the Three Months Ended August 31, 2013 | |||||||||||||||||||||||||||||||||
During the three months ended August 31, 2013, transfers of assets of $91.4 million from Level 2 to Level 3 of the fair value hierarchy are attributed to: | |||||||||||||||||||||||||||||||||
• | Non-agency residential mortgage-backed securities of $50.3 million and commercial mortgage-backed securities of $2.4 million for which no recent trade activity was observed for purposes of determining observable inputs; | ||||||||||||||||||||||||||||||||
• | Corporate equity securities of $5.6 million and corporate debt securities of $8.3 million due to lack of observable market transactions; | ||||||||||||||||||||||||||||||||
• | Collateralized debt obligations of $22.3 million which have little to no transparency in trade activity; | ||||||||||||||||||||||||||||||||
During the three months ended August 31, 2013, transfers of assets of $82.7 million from Level 3 to Level 2 are attributed to: | |||||||||||||||||||||||||||||||||
• | Non-agency residential mortgage-backed securities of $40.6 million and commercial mortgage-backed securities of $2.2 million for which market trades were observed in the period for either identical or similar securities; | ||||||||||||||||||||||||||||||||
• | Collateralized debt obligations of $23.6 million and loans and other receivables of $1.6 million due to a greater number of contributors for certain vendor quotes supporting classification into Level 2; | ||||||||||||||||||||||||||||||||
• | Corporate equity securities of $7.4 million and corporate debt securities of $1.5 million due to an increase in observable market transactions. | ||||||||||||||||||||||||||||||||
During the three months ended August 31, 2013, there no transfers of liabilities from Level 2 to Level 3 and from Level 3 to Level 2. | |||||||||||||||||||||||||||||||||
Net gains on Level 3 assets were $1.0 million and net losses on Level 3 liabilities were $4.6 million for the three months ended August 31, 2013. Net gains on Level 3 assets were primarily due to increased valuations of certain commercial mortgage-backed securities, other asset-backed securities, investments at fair value and investments in managed funds, partially offset by a decrease in valuation of certain corporate equity securities, corporate debt securities, collateralized debt obligations, residential mortgage-backed securities and loans and other receivables. Net losses on Level 3 liabilities were primarily due to increased valuations of certain derivative instruments. | |||||||||||||||||||||||||||||||||
The following is a summary of changes in fair value of our financial assets and liabilities that have been categorized within Level 3 of the fair value hierarchy for the six months ended August 31, 2013 (in thousands): | |||||||||||||||||||||||||||||||||
Successor | |||||||||||||||||||||||||||||||||
Six Months Ended August 31, 2013 (3) | |||||||||||||||||||||||||||||||||
Balance, | Total gains/ | Purchases | Sales | Settlements | Net | Balance, | Change in | ||||||||||||||||||||||||||
February 28, | losses | transfers | August 31, | unrealized gains/ | |||||||||||||||||||||||||||||
2013 | (realized and | into/ (out | 2013 | (losses) relating | |||||||||||||||||||||||||||||
unrealized) | of) | to instruments | |||||||||||||||||||||||||||||||
-1 | Level 3 | still held at | |||||||||||||||||||||||||||||||
August 31, | |||||||||||||||||||||||||||||||||
2013 (1) | |||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Financial instruments owned: | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 13,234 | $ | 1,053 | $ | 213 | $ | (753 | ) | $ | 266 | $ | 2,066 | $ | 16,079 | $ | 1,243 | ||||||||||||||||
Corporate debt securities | 31,820 | (17,415 | ) | 708 | (2,556 | ) | — | 8,076 | 20,633 | (6,933 | ) | ||||||||||||||||||||||
Collateralized debt obligations | 29,776 | (2,008 | ) | 43,152 | (27,676 | ) | — | 2,628 | 45,872 | (3,830 | ) | ||||||||||||||||||||||
Residential mortgage-backed securities | 169,426 | 5,594 | 79,531 | (105,671 | ) | (4,851 | ) | (11,846 | ) | 132,183 | 586 | ||||||||||||||||||||||
Commercial mortgage-backed securities | 17,794 | (735 | ) | 1,533 | (3,054 | ) | (5,281 | ) | 4,166 | 14,423 | (5,007 | ) | |||||||||||||||||||||
Other asset-backed securities | 1,252 | 2,168 | 7,618 | (3,127 | ) | — | 659 | 8,570 | 2,077 | ||||||||||||||||||||||||
Loans and other receivables | 170,986 | (5,103 | ) | 206,672 | (26,630 | ) | (213,662 | ) | (1,811 | ) | 130,452 | (8,063 | ) | ||||||||||||||||||||
Investments, at fair value | 70,067 | 653 | 5,000 | (102 | ) | (3,204 | ) | 1,038 | 73,452 | 668 | |||||||||||||||||||||||
Investments in managed funds | 59,976 | 3,108 | 9,130 | — | (16,439 | ) | 122 | 55,897 | 3,108 | ||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Financial instruments sold, not yet purchased: | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 38 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 38 | $ | — | |||||||||||||||||
Residential mortgage-backed securities | 1,542 | (1,542 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||
Net derivatives (2) | 11,185 | 3,453 | — | — | — | — | 14,638 | (3,453 | ) | ||||||||||||||||||||||||
Loans | 7,398 | — | (20,221 | ) | 13,799 | — | — | 976 | — | ||||||||||||||||||||||||
Other secured financing | — | 731 | — | — | — | 2,294 | 3,025 | (731 | ) | ||||||||||||||||||||||||
-1 | Realized and unrealized gains/losses are reported in Principal transactions in the Consolidated Statements of Earnings. | ||||||||||||||||||||||||||||||||
-2 | Net derivatives represent Financial instruments owned – Derivatives and Financial instruments sold, not yet purchased – Derivatives. | ||||||||||||||||||||||||||||||||
-3 | There were no issuances during the six months ended August 31, 2013. | ||||||||||||||||||||||||||||||||
Analysis of Level 3 Assets and Liabilities for the Six Months Ended August 31, 2013 | |||||||||||||||||||||||||||||||||
During the six months ended August 31, 2013, transfers of assets of $53.6 million from Level 2 to Level 3 of the fair value hierarchy are attributed to: | |||||||||||||||||||||||||||||||||
• | Non-agency residential mortgage-backed securities of $17.9 million and commercial mortgage-backed securities of $5.3 million for which no recent trade activity was observed for purposes of determining observable inputs; | ||||||||||||||||||||||||||||||||
• | Loans and other receivables of $0.4 million due to a lower number of contributors comprising vendor quotes to support classification within Level 2. | ||||||||||||||||||||||||||||||||
• | Corporate equity securities of $7.0 million and corporate debt securities of $8.5 million due to lack of observable market transactions; | ||||||||||||||||||||||||||||||||
• | Collateralized debt obligations of $12.1 million which have little to no transparency in trade activity; | ||||||||||||||||||||||||||||||||
During the six months ended August 31, 2013, transfers of assets of $48.5 million from Level 3 to Level 2 are attributed to: | |||||||||||||||||||||||||||||||||
• | Non-agency residential mortgage-backed securities of $29.7 million and commercial mortgage-backed securities of $1.2 million for which market trades were observed in the period for either identical or similar securities; | ||||||||||||||||||||||||||||||||
• | Collateralized debt obligations of $9.5 million and loans and other receivables of $2.2 million due to a greater number of contributors for certain vendor quotes supporting classification into Level 2; | ||||||||||||||||||||||||||||||||
• | Corporate equity securities of $4.9 million and corporate debt securities of $0.4 million due to an increase in observable market transactions. | ||||||||||||||||||||||||||||||||
During the six months ended August 31, 2013, there were no transfers of liabilities from Level 2 to Level 3 and no transfers of liabilities from Level 3 to Level 2. | |||||||||||||||||||||||||||||||||
Net losses on Level 3 assets and Level 3 liabilities were $12.7 million and $2.6 million for the six months ended August 31, 2013, respectively. Net losses on Level 3 assets were primarily due to decreased valuations of certain corporate debt securities, collateralized debt obligations, commercial mortgage-backed securities and loans and other receivables, partially offset by an increase in valuation of certain corporate equity securities, residential mortgage-backed securities, other asset-backed securities, investments at fair value and investments in managed funds. Net losses on Level 3 liabilities were primarily due to increased valuations of certain derivative instruments. | |||||||||||||||||||||||||||||||||
The following is a summary of changes in fair value of our financial assets and liabilities that have been categorized within Level 3 of the fair value hierarchy for the three months ended February 28, 2013 (in thousands): | |||||||||||||||||||||||||||||||||
Predecessor | |||||||||||||||||||||||||||||||||
Three Months Ended February 28, 2013 (3) | |||||||||||||||||||||||||||||||||
Balance, | Total gains/ | Purchases | Sales | Settlements | Net | Balance, | Change in | ||||||||||||||||||||||||||
November 30, | losses | transfers | February 28, | unrealized gains/ | |||||||||||||||||||||||||||||
2012 | (realized and | into/ (out | 2013 | (losses) relating | |||||||||||||||||||||||||||||
unrealized) | of) | to instruments | |||||||||||||||||||||||||||||||
-1 | Level 3 | still held at | |||||||||||||||||||||||||||||||
February 28, | |||||||||||||||||||||||||||||||||
2013 (1) | |||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Financial instruments owned: | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 16,815 | $ | 200 | $ | 707 | $ | 109 | $ | — | $ | (4,597 | ) | $ | 13,234 | $ | 172 | ||||||||||||||||
Corporate debt securities | 3,631 | 7,836 | 11,510 | (1,918 | ) | — | 10,761 | 31,820 | 7,833 | ||||||||||||||||||||||||
Collateralized debt obligations | 31,255 | 3,624 | 9,406 | (17,374 | ) | — | 2,865 | 29,776 | (1,125 | ) | |||||||||||||||||||||||
Residential mortgage-backed securities | 156,069 | 11,906 | 132,773 | (130,143 | ) | (6,057 | ) | 4,878 | 169,426 | 4,511 | |||||||||||||||||||||||
Commercial mortgage-backed securities | 30,202 | (995 | ) | 2,280 | (2,866 | ) | (1,188 | ) | (9,639 | ) | 17,794 | (2,059 | ) | ||||||||||||||||||||
Other asset-backed securities | 1,114 | 50 | 1,627 | (1,342 | ) | (19 | ) | (178 | ) | 1,252 | (1 | ) | |||||||||||||||||||||
Loans and other receivables | 180,393 | (8,682 | ) | 105,650 | (29,828 | ) | (61,407 | ) | (15,140 | ) | 170,986 | (12,374 | ) | ||||||||||||||||||||
Investments, at fair value | 83,897 | 961 | 952 | (4,923 | ) | (9,721 | ) | (1,099 | ) | 70,067 | 1,171 | ||||||||||||||||||||||
Investments in managed funds | 57,763 | (363 | ) | 11,068 | — | (8,492 | ) | — | 59,976 | (363 | ) | ||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Financial instruments sold, not yet purchased: | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 38 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 38 | $ | — | |||||||||||||||||
Residential mortgage-backed securities | — | 25 | (73,846 | ) | 75,363 | — | — | 1,542 | (19 | ) | |||||||||||||||||||||||
Net derivatives (2) | 9,188 | 2,648 | — | — | — | (651 | ) | 11,185 | 2,648 | ||||||||||||||||||||||||
Loans | 1,711 | — | (1,711 | ) | 7,398 | — | — | 7,398 | — | ||||||||||||||||||||||||
-1 | Realized and unrealized gains/losses are reported in Principal transactions in the Consolidated Statements of Earnings. | ||||||||||||||||||||||||||||||||
-2 | Net derivatives represent Financial instruments owned – Derivatives and Financial instruments sold, not yet purchased – Derivatives. | ||||||||||||||||||||||||||||||||
-3 | There were no issuances during the three months ended February 28, 2013. | ||||||||||||||||||||||||||||||||
Analysis of Level 3 Assets and Liabilities for the Three Months Ended February 28, 2013 | |||||||||||||||||||||||||||||||||
During the three months ended February 28, 2013, transfers of assets of $100.5 million from Level 2 to Level 3 of the fair value hierarchy are attributed to: | |||||||||||||||||||||||||||||||||
• | Non-agency residential mortgage-backed securities of $78.4 million and commercial mortgage-backed securities of $1.3 million for which no recent trade activity was observed for purposes of determining observable inputs; | ||||||||||||||||||||||||||||||||
• | Corporate debt securities of $10.8 million and corporate equity securities of $0.1 million due to lack of observable market transactions; | ||||||||||||||||||||||||||||||||
• | Collateralized debt obligations of $5.3 million which have little to no transparency in trade activity; | ||||||||||||||||||||||||||||||||
• | Loans and other receivables of $4.8 million due to a lower number of contributors comprising vendor quotes to support classification within Level 2. | ||||||||||||||||||||||||||||||||
During the three months ended February 28, 2013, transfers of assets of $112.7 million from Level 3 to Level 2 are attributed to: | |||||||||||||||||||||||||||||||||
• | Non-agency residential mortgage-backed securities of $73.5 million, commercial mortgage-backed securities of $10.9 million and $0.2 million of other asset-backed securities for which market trades were observed in the period for either identical or similar securities; | ||||||||||||||||||||||||||||||||
• | Loans and other receivables of $19.9 million and collateralized debt obligations of $2.4 million due to a greater number of contributors for certain vendor quotes supporting classification into Level 2; | ||||||||||||||||||||||||||||||||
• | Corporate equity securities of $4.7 million due to an increase in observable market transactions. | ||||||||||||||||||||||||||||||||
During the three months ended February 28, 2013, there were no transfers of liabilities from Level 2 to Level 3 and there were $0.7 million transfers of net derivative liabilities from Level 3 to Level 2 due to an increase in observable significant inputs used in valuing the derivative contracts. | |||||||||||||||||||||||||||||||||
Net gains on Level 3 assets were $14.5 million and net losses on Level 3 liabilities were $2.7 million for the three months ended February 28, 2013. Net gains on Level 3 assets were primarily due to increased valuations of certain residential mortgage-backed securities, corporate debt securities, collateralized debt obligations and investments at fair value partially offset by a decrease in valuation of certain loans and other receivables, commercial mortgage backed securities and investments in managed funds. Net losses on Level 3 liabilities were primarily due to increased valuations of certain derivative instruments. | |||||||||||||||||||||||||||||||||
The following is a summary of changes in fair value of our financial assets and liabilities that have been categorized within Level 3 of the fair value hierarchy for the three months ended August 31, 2012 (in thousands): | |||||||||||||||||||||||||||||||||
Predecessor | |||||||||||||||||||||||||||||||||
Three Months Ended August 31, 2012 (3) | |||||||||||||||||||||||||||||||||
Balance, | Total gains/ | Purchases | Sales | Settlements | Net | Balance, | Change in | ||||||||||||||||||||||||||
May 31, | losses | transfers | August 31, | unrealized gains/ | |||||||||||||||||||||||||||||
2012 | (realized and | into/ (out | 2012 | (losses) relating | |||||||||||||||||||||||||||||
unrealized) | of) | to instruments | |||||||||||||||||||||||||||||||
-1 | Level 3 | still held at | |||||||||||||||||||||||||||||||
August 31, | |||||||||||||||||||||||||||||||||
2012 (1) | |||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Financial instruments owned: | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 25,789 | $ | 260 | $ | 2,991 | $ | (15,418 | ) | $ | — | $ | 6,161 | $ | 19,783 | $ | (907 | ) | |||||||||||||||
Corporate debt securities | 7,972 | (101 | ) | 521 | (1,118 | ) | — | 284 | 7,558 | (136 | ) | ||||||||||||||||||||||
Collateralized debt obligations | 84,006 | 6,710 | — | (11,008 | ) | — | 1,890 | 81,598 | 5,836 | ||||||||||||||||||||||||
Municipal securities | 465 | 5 | — | (387 | ) | — | — | 83 | 5 | ||||||||||||||||||||||||
Residential mortgage-backed securities | 123,555 | 2,542 | 27,401 | (65,422 | ) | (5,216 | ) | 62,128 | 144,988 | 359 | |||||||||||||||||||||||
Commercial mortgage-backed securities | 40,594 | (1,327 | ) | 2,092 | (1,307 | ) | (450 | ) | (8,089 | ) | 31,513 | (1,310 | ) | ||||||||||||||||||||
Other asset-backed securities | 1,273 | — | — | — | (291 | ) | (774 | ) | 208 | — | |||||||||||||||||||||||
Loans and other receivables | 108,674 | (528 | ) | 57,790 | (30,632 | ) | (56,404 | ) | 29,889 | 108,789 | (237 | ) | |||||||||||||||||||||
Investments, at fair value | 91,836 | (202 | ) | 1,120 | — | (775 | ) | — | 91,979 | (466 | ) | ||||||||||||||||||||||
Investments in managed funds | 68,314 | (5,389 | ) | 2,173 | — | (4,987 | ) | 10 | 60,121 | (5,382 | ) | ||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Financial instruments sold, not yet purchased: | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 12,039 | $ | (410 | ) | $ | (11,782 | ) | $ | 191 | $ | — | $ | — | $ | 38 | $ | — | |||||||||||||||
Corporate debt securities | 74 | (15 | ) | (59 | ) | — | — | — | — | — | |||||||||||||||||||||||
Net derivatives (2) | 4,395 | 7,342 | — | — | — | 10 | 11,747 | 6,209 | |||||||||||||||||||||||||
Loans | — | — | — | 4,285 | — | — | 4,285 | — | |||||||||||||||||||||||||
-1 | Realized and unrealized gains/losses are reported in Principal transactions in the Consolidated Statements of Earnings. | ||||||||||||||||||||||||||||||||
-2 | Net derivatives represent Financial instruments owned – Derivatives and Financial instruments sold, not yet purchased – Derivatives. | ||||||||||||||||||||||||||||||||
-3 | There were no issuances during the three months ended August 31, 2012. | ||||||||||||||||||||||||||||||||
Analysis of Level 3 Assets and Liabilities for the Three Months Ended August 31, 2012 | |||||||||||||||||||||||||||||||||
During the three months ended August 31, 2012, transfers of assets of $156.5 million from Level 2 to Level 3 are primarily attributed to: | |||||||||||||||||||||||||||||||||
• | Non-agency residential mortgage-backed securities of $74.5 million and Commercial mortgage-backed securities of $9.0 million for which no recent trade activity was observed for purposes of determining observable inputs; | ||||||||||||||||||||||||||||||||
• | Loans and other receivables of $53.0 million due to a lack of observable market transactions or vendor quotes during the period to support classification within Level 2 as less market interest likely existed for the specific loans during the period; | ||||||||||||||||||||||||||||||||
• | Collateralized debt obligations of $9.3 million which have no recent trade activity; and | ||||||||||||||||||||||||||||||||
• | Corporate equity securities of $6.3 million and Corporate debt securities of $4.4 million due to lack of observable market transactions. | ||||||||||||||||||||||||||||||||
During the three months ended August 31, 2012, transfers of assets of $65.0 million from Level 3 to Level 2 are primarily attributed to: | |||||||||||||||||||||||||||||||||
• | Loans and other receivables of $23.1 million due to a greater number of contributors for certain vendor quotes supporting classification into Level 2 as greater market interest likely existed for the specific loans during the quarter; | ||||||||||||||||||||||||||||||||
• | Commercial mortgage-backed securities of $17.1 million, Non-agency residential mortgage-backed securities of $12.4 million and Other asset-backed securities of $0.8 million for which market trades were observed in the period for either identical or similar securities or for which vendor prices were corroborated to actual market transactions; | ||||||||||||||||||||||||||||||||
• | Collateralized debt obligations of $7.4 million due to a greater number of contributors for certain vendor quotes supporting classification into Level 2 during the period; and | ||||||||||||||||||||||||||||||||
• | Corporate equity securities of $0.1 million and Corporate debt securities of $4.1 million due to an increase in observable broker levels and recent trade activity in certain bonds and private equity positions. | ||||||||||||||||||||||||||||||||
During the three months ended August 31, 2012 there no transfers of liabilities from Level 2 to Level 3 and transfers of $0.01 million from Level 3 to Level 2. | |||||||||||||||||||||||||||||||||
Net gains on Level 3 assets were $2.0 million and net losses on Level 3 liabilities were $6.9 million for the three months ended August 31, 2012. Net gains on Level 3 assets were primarily due to increased valuations of certain collateralized debt obligations and residential mortgage backed securities. These gains were partially offset by decreased valuations of investments in managed funds, commercial mortgage backed securities and loans and other receivables. Net losses on Level 3 liabilities were primarily due to increased valuations of certain derivative instruments. | |||||||||||||||||||||||||||||||||
The following is a summary of changes in fair value of our financial assets and liabilities that have been categorized within Level 3 of the fair value hierarchy for the nine months ended August 31, 2012 (in thousands): | |||||||||||||||||||||||||||||||||
Predecessor | |||||||||||||||||||||||||||||||||
Nine Months Ended August 31, 2012 (3) | |||||||||||||||||||||||||||||||||
Balance, | Total gains/ | Purchases | Sales | Settlements | Net | Balance, | Change in | ||||||||||||||||||||||||||
November 30, | losses | transfers | August 31, | unrealized gains/ | |||||||||||||||||||||||||||||
2011 | (realized and | into/ (out | 2012 | (losses) relating | |||||||||||||||||||||||||||||
unrealized) | of) | to instruments | |||||||||||||||||||||||||||||||
-1 | Level 3 | still held at | |||||||||||||||||||||||||||||||
August 31, | |||||||||||||||||||||||||||||||||
2012 (1) | |||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Financial instruments owned: | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 13,489 | $ | (2,580 | ) | $ | 20,676 | $ | (13,437 | ) | $ | — | $ | 1,635 | $ | 19,783 | $ | (4,636 | ) | ||||||||||||||
Corporate debt securities | 48,140 | 85 | 7,228 | (39,367 | ) | (1,276 | ) | (7,252 | ) | 7,558 | (656 | ) | |||||||||||||||||||||
Collateralized debt obligations | 47,988 | 4,278 | 8,479 | (18,699 | ) | (3,892 | ) | 43,444 | 81,598 | 3,515 | |||||||||||||||||||||||
Municipal securities | 6,904 | (74 | ) | — | (1,366 | ) | — | (5,381 | ) | 83 | 5 | ||||||||||||||||||||||
Sovereign obligations | 140 | — | — | — | — | (140 | ) | — | — | ||||||||||||||||||||||||
Residential mortgage-backed securities | 149,965 | (17,833 | ) | 59,477 | (101,039 | ) | (8,489 | ) | 62,907 | 144,988 | (8,884 | ) | |||||||||||||||||||||
Commercial mortgage-backed securities | 52,407 | (2,221 | ) | 5,090 | (5,441 | ) | (115 | ) | (18,207 | ) | 31,513 | (2,769 | ) | ||||||||||||||||||||
Other asset-backed securities | 3,284 | 141 | 19,397 | (20,351 | ) | (51 | ) | (2,212 | ) | 208 | 3 | ||||||||||||||||||||||
Loans and other receivables | 97,291 | (2,674 | ) | 158,305 | (60,111 | ) | (104,476 | ) | 20,454 | 108,789 | (4,109 | ) | |||||||||||||||||||||
Investments, at fair value | 78,326 | 15,076 | 1,909 | (6 | ) | (3,326 | ) | — | 91,979 | 14,412 | |||||||||||||||||||||||
Investments in managed funds | 70,740 | (17,765 | ) | 12,683 | — | (5,537 | ) | — | 60,121 | (17,765 | ) | ||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Financial instruments sold, not yet purchased: | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | — | $ | 38 | $ | — | $ | — | $ | — | $ | — | $ | 38 | $ | 38 | |||||||||||||||||
Corporate debt securities | 74 | (15 | ) | (59 | ) | — | — | — | — | — | |||||||||||||||||||||||
Net derivatives (2) | 9,285 | 5,064 | (389 | ) | — | — | (2,213 | ) | 11,747 | 6,087 | |||||||||||||||||||||||
Loans | 10,157 | — | (10,157 | ) | 4,285 | — | — | 4,285 | — | ||||||||||||||||||||||||
-1 | Realized and unrealized gains/losses are reported in Principal transactions in the Consolidated Statements of Earnings. | ||||||||||||||||||||||||||||||||
-2 | Net derivatives represent Financial instruments owned – Derivatives and Financial instruments sold, not yet purchased – Derivatives. | ||||||||||||||||||||||||||||||||
-3 | There were no issuances during the nine months ended August 31, 2012. | ||||||||||||||||||||||||||||||||
Analysis of Level 3 Assets and Liabilities for the Nine Months Ended August 31, 2012 | |||||||||||||||||||||||||||||||||
During the nine months ended August 31, 2012, transfers of assets of $184.2 million from Level 2 to Level 3 are attributed to: | |||||||||||||||||||||||||||||||||
• | Non-agency residential mortgage-backed securities of $67.5 million, Commercial mortgage-backed securities of $11.7 million for which no recent trade activity was observed for purposes of determining observable inputs; | ||||||||||||||||||||||||||||||||
• | Loans and other receivables of $55.2 million due to a lower number of contributors comprising vendor quotes to support classification within Level 2 as less market interest likely existed for the specific loans during the period; | ||||||||||||||||||||||||||||||||
• | Collateralized debt obligations of $47.3 million which have little to no transparency in trade activity; and | ||||||||||||||||||||||||||||||||
• | Corporate equity securities of $1.7 million and Corporate debt securities of $0.6 million due to lack of observable market transactions. | ||||||||||||||||||||||||||||||||
During the nine months ended August 31, 2012, transfers of assets of $88.9 million from Level 3 to Level 2 are attributed to: | |||||||||||||||||||||||||||||||||
• | Loans and other receivables of $34.8 million and Collateralized debt obligations of $3.9 million due to a greater number of contributors for certain vendor quotes supporting classification into Level 2; | ||||||||||||||||||||||||||||||||
• | Commercial mortgage-backed securities of $29.9 million, Non-agency residential mortgage-backed securities of $4.5 million and $2.4 million of Other asset-backed securities for which market trades were observed in the period for either identical or similar securities or for which vendor prices were corroborated to actual market transactions; and | ||||||||||||||||||||||||||||||||
• | Corporate debt securities of $7.9 million and Municipal securities of $5.4 million due to increased observability of trades in certain debt and municipal securities. | ||||||||||||||||||||||||||||||||
During the nine months ended August 31, 2012 there were no transfers of liabilities from Level 2 to Level 3 and there were $2.2 million transfers of net derivative liabilities from Level 3 to Level 2 due to an increase in observable significant inputs used in valuing the derivative contracts. | |||||||||||||||||||||||||||||||||
Net losses on Level 3 assets were $23.6 million and net losses on Level 3 liabilities were $5.1 million for the nine months ended August 31, 2012. Net losses on Level 3 assets were primarily due to decreased valuations of certain residential mortgage-backed securities, investments in managed funds, loans and other receivables, commercial mortgage backed securities and corporate equity securities, offset by an increase in valuation of certain investments at fair value and collateralized debt obligations. Net losses on Level 3 liabilities were primarily due to increased valuations of certain derivative instruments. | |||||||||||||||||||||||||||||||||
Components or portions of interest rate and credit risk related to mortgage-backed securities categorized within Level 3 of the fair value hierarchy are frequently economically hedged with U.S. Treasury and Eurodollar futures and short U.S. Treasury securities, which are categorized within Level 1 liabilities, and with interest rate swaps and, to a lesser extent, index credit default swaps categorized within Level 2 assets or liabilities. Accordingly, a portion of the gains and losses on mortgage-backed securities reported in Level 3 are offset by gains and losses from the economic hedges attributed to instruments categorized within Level 1 and Level 2. Economic hedging is often executed on a macro-basis for a given asset class rather than an instrument-specific basis. Valuation inputs and prices for hedging instruments categorized within Level 1 and Level 2 provide a level of observability used in valuing Level 3 mortgage-backed securities; however, other inputs, such as prepayment, default rates and other credit specific factors are significant to the valuation and are not derived from the prices of the hedging instruments. Basis risk differences may also arise between the Level 3 mortgage-backed securities and the Level 1 and Level 2 hedging instruments due to the underlying interest rates and the underlying credits comprising the referenced credit index. Hedge effectiveness is limited by factors that include idiosyncratic collateral performance and basis risk as well as the sizing of the macro-hedge. | |||||||||||||||||||||||||||||||||
Quantitative Information about Significant Unobservable Inputs used in Level 3 Fair Value Measurements at August 31, 2013 and November 30, 2012 | |||||||||||||||||||||||||||||||||
The tables below present information on the valuation techniques, significant unobservable inputs and their ranges for our financial assets and liabilities, subject to threshold levels related to the market value of the positions held, measured at fair value on a recurring basis with a significant Level 3 balance. The range of unobservable inputs could differ significantly across different firms given the range of products across different firms in the financial services sector. The inputs are not representative of the inputs that could have been used in the valuation of any one financial instrument; i.e., the input used for valuing one financial instrument within a particular class of financial instruments may not be appropriate for valuing other financial instruments within that given class. Additionally, the ranges of inputs presented below should not be construed to represent uncertainty regarding the fair values of our financial instruments; rather the range of inputs is reflective of the differences in the underlying characteristics of the financial instruments in each category. | |||||||||||||||||||||||||||||||||
For certain categories, we have provided a weighted average of the inputs allocated based on the fair values of the financial instruments comprising the category. We do not believe that the range or weighted average of the inputs is indicative of the reasonableness of uncertainty of our Level 3 fair values. The range and weighted average are driven by the individual financial instruments within each category and their relative distribution in the population. The disclosed inputs when compared with the inputs as disclosed in other quarters should not be expected to necessarily be indicative of changes in our estimates of unobservable inputs for a particular financial instrument as the population of financial instruments comprising the category will vary from period to period based on purchases and sales of financial instruments during the period as well as transfers into and out of Level 3 each period. | |||||||||||||||||||||||||||||||||
Successor | |||||||||||||||||||||||||||||||||
August 31, 2013 | |||||||||||||||||||||||||||||||||
Financial Instruments Owned | Fair Value (in | Valuation Technique | Significant Unobservable Input(s) | Input / Range | Weighted | ||||||||||||||||||||||||||||
thousands) | Average | ||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 11,665 | |||||||||||||||||||||||||||||||
Non-exchange traded securities | Market approach | EBITDA (a) multiple | 16 | ||||||||||||||||||||||||||||||
Comparable pricing | Comparable share price | $76.75 | |||||||||||||||||||||||||||||||
Warrants | Option model | Volatility | 37% | ||||||||||||||||||||||||||||||
Corporate debt securities | $ | 18,313 | |||||||||||||||||||||||||||||||
Scenario analysis | Estimated recovery percentage | 21% | |||||||||||||||||||||||||||||||
Comparable pricing | Comparable bond or loan price | $63.70 to $126 | $ | 78.28 | |||||||||||||||||||||||||||||
Market approach | Yield | 12.60% | |||||||||||||||||||||||||||||||
Collateralized debt obligations | $ | 35,512 | |||||||||||||||||||||||||||||||
Discounted cash flows | Constant prepayment rate | 0% to 20% | 14 | % | |||||||||||||||||||||||||||||
Constant default rate | 0% to 10% | 2 | % | ||||||||||||||||||||||||||||||
Loss severity | 13% to 75% | 49 | % | ||||||||||||||||||||||||||||||
Yield | 5% to 75% | 24 | % | ||||||||||||||||||||||||||||||
Residential mortgage-backed | $ | 114,278 | |||||||||||||||||||||||||||||||
Discounted cash flows | Constant prepayment rate | 0% to 22% | 5 | % | |||||||||||||||||||||||||||||
Constant default rate | 1% to 50% | 6 | % | ||||||||||||||||||||||||||||||
Loss severity | 25% to 75% | 50 | % | ||||||||||||||||||||||||||||||
Yield | 0% to 28% | 7 | % | ||||||||||||||||||||||||||||||
Commercial mortgage-backed | $ | 5,847 | |||||||||||||||||||||||||||||||
Comparable pricing | Comparable bond or loan price | $12.50 | |||||||||||||||||||||||||||||||
Discounted cash flows | Yield | 15% to 26% | 21 | % | |||||||||||||||||||||||||||||
Cumulative loss rate | 0% to 22% | 12 | % | ||||||||||||||||||||||||||||||
Other asset-backed securities | $ | 7,711 | |||||||||||||||||||||||||||||||
Discounted cash flows | Constant prepayment rate | 0% to 30% | 22 | % | |||||||||||||||||||||||||||||
Constant default rate | 0% to 11% | 8 | % | ||||||||||||||||||||||||||||||
Loss severity | 75% to 92% | 89 | % | ||||||||||||||||||||||||||||||
Yield | 9% to 25% | 20 | % | ||||||||||||||||||||||||||||||
Loans and other receivables | $ | 81,282 | |||||||||||||||||||||||||||||||
Comparable pricing | Comparable bond or loan price | $90.50 to $100 | $ | 98.9 | |||||||||||||||||||||||||||||
Market approach | Yield | 12% | |||||||||||||||||||||||||||||||
EBITDA (a) multiple | 6.5 | ||||||||||||||||||||||||||||||||
Scenario analysis | Estimated recovery percentage | 17% to 86% | 52 | % | |||||||||||||||||||||||||||||
Derivatives | $ | 1,600 | |||||||||||||||||||||||||||||||
Loan Commitments | Comparable pricing | Comparable bond or loan price | $101.38 | ||||||||||||||||||||||||||||||
Investments at fair value | $ | 5,975 | |||||||||||||||||||||||||||||||
Private equity securities | Comparable pricing | Comparable share price | $ | 414 | |||||||||||||||||||||||||||||
Financial Instruments Sold, Not Yet | Fair Value (in | Valuation Technique | Significant Unobservable Input(s) | Input / Range | Weighted | ||||||||||||||||||||||||||||
Purchased | thousands) | Average | |||||||||||||||||||||||||||||||
Derivatives | $ | (12,879 | ) | ||||||||||||||||||||||||||||||
Equity options | Option model | Volatility | 36% to 41% | 39 | % | ||||||||||||||||||||||||||||
Loan commitments | Comparable pricing | Comparable bond or loan price | $101.38 | ||||||||||||||||||||||||||||||
(a) | Earnings before interest, taxes, depreciation and amortization (“EBITDA”). | ||||||||||||||||||||||||||||||||
Predecessor | |||||||||||||||||||||||||||||||||
30-Nov-12 | |||||||||||||||||||||||||||||||||
Financial Instruments Owned | Fair Value (in | Valuation Technique | Significant Unobservable Input(s) | Range | |||||||||||||||||||||||||||||
thousands) | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 16,815 | |||||||||||||||||||||||||||||||
Non-exchange traded securities | Market approach | EBITDA (a) multiple | 4.0 to 16.3 | ||||||||||||||||||||||||||||||
Scenario analysis | Estimated recovery percentage | 35% | |||||||||||||||||||||||||||||||
Warrants | Option model | Volatility | 39% | ||||||||||||||||||||||||||||||
Collateralized debt obligations | $ | 26,705 | |||||||||||||||||||||||||||||||
Discounted cash flows | Constant prepayment rate | 0% to 5% | |||||||||||||||||||||||||||||||
Constant default rate | 0% to 10% | ||||||||||||||||||||||||||||||||
Loss severity | 13% to 75% | ||||||||||||||||||||||||||||||||
Yield | 10% to 35% | ||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | $ | 156,069 | |||||||||||||||||||||||||||||||
Discounted cash flows | Constant prepayment rate | 0% to 25% | |||||||||||||||||||||||||||||||
Constant default rate | 0% to 50% | ||||||||||||||||||||||||||||||||
Loss severity | 0% to 80% | ||||||||||||||||||||||||||||||||
Yield | 1% to 50% | ||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | $ | 30,202 | |||||||||||||||||||||||||||||||
Discounted cash flows | Yield | 22% to 57% | |||||||||||||||||||||||||||||||
Cumulative loss rate | 2% to 20% | ||||||||||||||||||||||||||||||||
Loans and other receivables | $ | 153,365 | |||||||||||||||||||||||||||||||
Comparable pricing | Comparable bond or loan price | $81.88 to $101.25 | |||||||||||||||||||||||||||||||
Discounted cash flows | Yield | 19% | |||||||||||||||||||||||||||||||
Cumulative loss rate | 0% | ||||||||||||||||||||||||||||||||
Market approach | Yield | 5% to 54% | |||||||||||||||||||||||||||||||
EBITDA (a) multiple | 8.3 | ||||||||||||||||||||||||||||||||
Scenario analysis | Estimated recovery percentage | 15% | |||||||||||||||||||||||||||||||
Investments at fair value | $ | 32,751 | |||||||||||||||||||||||||||||||
Private equity securities | Market approach | EBITDA (a) multiple | 6.6 | ||||||||||||||||||||||||||||||
Comparable pricing | Comparable share price | $400.00 | |||||||||||||||||||||||||||||||
Scenario analysis | Estimated recovery percentage | 50% | |||||||||||||||||||||||||||||||
Financial Instruments Sold, Not Yet Purchased | Fair Value (in | Valuation Technique | Significant Unobservable Input(s) | Range | |||||||||||||||||||||||||||||
thousands) | |||||||||||||||||||||||||||||||||
Derivatives | $ | (9,516 | ) | ||||||||||||||||||||||||||||||
Equity options | Option model | Volatility | 39% | ||||||||||||||||||||||||||||||
Loan commitments | Comparable pricing | Comparable bond or loan price | $ | 101.13 | |||||||||||||||||||||||||||||
(a) | Earnings before interest, taxes, depreciation and amortization (“EBITDA”). | ||||||||||||||||||||||||||||||||
The fair values of certain Level 3 assets that were determined based on third-party pricing information, unadjusted past transaction prices, reported net asset value or a percentage of the reported enterprise fair value are excluded from the above table. At August 31, 2013 and November 30, 2012, the exclusions consisted of $106.1 million and $82.7 million, respectively, primarily comprised of investments in private equity and hedge funds, investments in reinsurance contracts, certain collateralized debt obligations and corporate loans. | |||||||||||||||||||||||||||||||||
Sensitivity of Fair Values to Changes in Significant Unobservable Inputs | |||||||||||||||||||||||||||||||||
For recurring fair value measurements categorized within Level 3 of the fair value hierarchy, the sensitivity of the fair value measurement to changes in significant unobservable inputs and interrelationships between those unobservable inputs (if any) are described below: | |||||||||||||||||||||||||||||||||
• | Private equity securities, corporate debt securities, commercial mortgage-backed securities, loans and other receivables and loan commitments using comparable pricing valuation techniques. A significant increase (decrease) in the comparable share, bond or loan price in isolation would result in a significant higher (lower) fair value measurement. | ||||||||||||||||||||||||||||||||
• | Non-exchange traded securities, corporate debt securities and loans and other receivables using a market approach valuation technique. A significant increase (decrease) in the EBITDA or other multiples in isolation would result in a significantly higher (lower) fair value measurement. A significant increase (decrease) in the yield of a corporate debt security, loan and other receivable would result in a significantly lower (higher) fair value measurement. | ||||||||||||||||||||||||||||||||
• | Corporate debt securities, and loans and other receivables using scenario analysis. A significant increase (decrease) in the possible recovery rates of the cash flow outcomes underlying the investment would result in a significantly higher (lower) fair value measurement for the financial instrument. | ||||||||||||||||||||||||||||||||
• | Collateralized debt obligations, residential and commercial mortgage-backed securities and other asset-backed securities using a discounted cash flow valuation technique. A significant increase (decrease) in isolation in the constant default rate, loss severities or cumulative loss rate and discount rate would result in a significantly lower (higher) fair value measurement. The impact of changes in the constant prepayment rate would have differing impacts depending on the capital structure of the security. A significant increase (decrease) in the loan or bond yield would result in a significant lower (higher) fair value measurement. | ||||||||||||||||||||||||||||||||
• | Derivative equity options and equity warrants using an option model. A significant increase (decrease) in volatility would result in a significant higher (lower) fair value measurement. | ||||||||||||||||||||||||||||||||
Fair Value Option Election | |||||||||||||||||||||||||||||||||
We have elected the fair value option for all loans and loan commitments made by our capital markets businesses. These loans and loan commitments include loans entered into by our investment banking division in connection with client bridge financing and loan syndications, loans purchased by our leveraged credit trading desk as part of its bank loan trading activities and mortgage loan commitments and fundings in connection with mortgage-backed securitization activities. Loans and loan commitments originated or purchased by our leveraged credit and mortgage-backed businesses are managed on a fair value basis. Loans are included in Financial instruments owned and loan commitments are included in Financial instruments owned-derivatives and Financial instruments sold, not yet purchased – derivatives on the Consolidated Statements of Financial Condition. The fair value option election is not applied to loans made to affiliate entities as such loans are entered into as part of ongoing, strategic business ventures. Loans to affiliate entities are included within Loans to and investments in related parties on the Consolidated Statements of Financial Condition and are accounted for on an amortized cost basis. We have elected the fair value option for our investment in Knight Capital Group, Inc., which is included in Financial Instruments owned – Corporate equity securities on the Consolidated Statement of Financial Condition. See Note 12, Investments for further details regarding our investment in Knight Capital Group, Inc. We have also elected the fair value option for certain financial instruments held by subsidiaries as the investments are risk managed by us on a fair value basis. The fair value option has also been elected for secured financings that arise in connection with our securitization activities and other structural financings. Other secured financings, Receivables – Brokers, dealers and clearing organizations, Receivables – Customers, Receivables – Fees, interest and other, Payables – Brokers, dealers and clearing organizations and Payables – Customers, are not accounted for at fair value; however, the recorded amounts approximate fair value due to their liquid or short-term nature. | |||||||||||||||||||||||||||||||||
The following is a summary of gains (losses) due to changes in instrument specific credit risk on loans and other receivables and loan commitments measured at fair value under the fair value option (in thousands): | |||||||||||||||||||||||||||||||||
Successor | Successor | Predecessor | |||||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | Three Months Ended | Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||
August 31, 2013 | August 31, 2013 | February 28, 2013 | August 31, 2012 | August 31, 2012 | |||||||||||||||||||||||||||||
Financial Instruments Owned: | |||||||||||||||||||||||||||||||||
Loans and other receivables | $ | 1,097 | $ | 2,284 | $ | 3,924 | $ | 5,012 | $ | 9,664 | |||||||||||||||||||||||
Financial Instruments Sold: | |||||||||||||||||||||||||||||||||
Loans | $ | — | $ | — | $ | — | $ | (320 | ) | $ | (466 | ) | |||||||||||||||||||||
Loan commitments | 4,440 | (2,059 | ) | (2,746 | ) | (5,213 | ) | (7,088 | ) | ||||||||||||||||||||||||
The following is a summary of the amount by which contractual principal exceeds fair value for loans and other receivables measured at fair value under the fair value option (in thousands): | |||||||||||||||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||||||||||||||
August 31, | November 30, | ||||||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||||||
Financial Instruments Owned: | |||||||||||||||||||||||||||||||||
Loans and other receivables (2) | $ | 226,332 | $ | 256,271 | |||||||||||||||||||||||||||||
Loans greater than 90 days past due (1) (2) | 7,809 | 10,433 | |||||||||||||||||||||||||||||||
-1 | The aggregate fair value of loans that were 90 or more days past due was $5.2 million and $34.7 million at August 31, 2013 and November 30, 2012. | ||||||||||||||||||||||||||||||||
-2 | Interest income is recognized separately from other changes in fair value and is included within Interest revenues on the Consolidated Statements of Earnings. | ||||||||||||||||||||||||||||||||
There was one loan on nonaccrual status at August 31, 2013 and no loan receivables on non-accrual status at November 30, 2012. |
Derivative_Financial_Instrumen
Derivative Financial Instruments | 9 Months Ended | ||||||||||||||||||||||
Aug. 31, 2013 | |||||||||||||||||||||||
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||
Derivative Financial Instruments | Note 8. | Derivative Financial Instruments | |||||||||||||||||||||
Off-Balance Sheet Risk | |||||||||||||||||||||||
We have contractual commitments arising in the ordinary course of business for securities loaned or purchased under agreements to resell, repurchase agreements, future purchases and sales of foreign currencies, securities transactions on a when-issued basis and underwriting. Each of these financial instruments and activities contains varying degrees of off-balance sheet risk whereby the fair values of the securities underlying the financial instruments may be in excess of, or less than, the contract amount. The settlement of these transactions is not expected to have a material effect upon our consolidated financial statements. | |||||||||||||||||||||||
Derivative Financial Instruments | |||||||||||||||||||||||
Our derivative activities are recorded at fair value in the Consolidated Statements of Financial Condition in Financial instruments owned – derivatives and Financial instruments sold, not yet purchased – derivatives net of cash paid or received under credit support agreements and on a net counterparty basis when a legal right to offset exists under a master netting agreement. Net realized and unrealized gains and losses are recognized in Principal transactions in the Consolidated Statements of Earnings on a trade date basis and as a component of cash flows from operating activities in the Consolidated Statements of Cash Flows. Acting in a trading capacity, we may enter into derivative transactions to satisfy the needs of our clients and to manage our own exposure to market and credit risks resulting from our trading activities. (See Note 7, Fair Value Disclosures and Note 22, Commitments, Contingencies and Guarantees for additional disclosures about derivative instruments.) | |||||||||||||||||||||||
Derivatives are subject to various risks similar to other financial instruments, including market, credit and operational risk. The risks of derivatives should not be viewed in isolation, but rather should be considered on an aggregate basis along with our other trading-related activities. We manage the risks associated with derivatives on an aggregate basis along with the risks associated with proprietary trading as part of our firm wide risk management policies. In connection with our derivative activities, we may enter into master netting agreements and collateral arrangements with counterparties. These agreements provide us with the ability to offset a counterparty’s rights and obligations, request additional collateral when necessary or liquidate the collateral in the event of counterparty default. | |||||||||||||||||||||||
The following tables present the fair value and related number of derivative contracts at August 31, 2013 and November 30, 2012 categorized by type of derivative contract. The fair value of assets/liabilities related to derivative contracts represents our receivable/payable for derivative financial instruments, gross of counterparty netting and cash collateral received and pledged (in thousands, except contract amounts): | |||||||||||||||||||||||
Successor | |||||||||||||||||||||||
31-Aug-13 | |||||||||||||||||||||||
Assets | Liabilities | ||||||||||||||||||||||
Fair Value | Number of | Fair Value | Number of | ||||||||||||||||||||
Contracts | Contracts | ||||||||||||||||||||||
Interest rate contracts | $ | 846,497 | 32,663 | $ | 881,518 | 57,449 | |||||||||||||||||
Foreign exchange contracts | 534,443 | 120,650 | 548,061 | 114,965 | |||||||||||||||||||
Equity contracts | 447,376 | 1,853,291 | 468,562 | 1,875,348 | |||||||||||||||||||
Commodity contracts | 135,866 | 464,064 | 130,612 | 464,679 | |||||||||||||||||||
Credit contracts: centrally cleared swaps | 10,015 | 19 | 10,855 | 17 | |||||||||||||||||||
Credit contracts: other credit derivatives | 4,580 | 24 | 8,910 | 19 | |||||||||||||||||||
Total | 1,978,777 | 2,048,518 | |||||||||||||||||||||
Counterparty/cash-collateral netting | (1,856,908 | ) | (1,914,691 | ) | |||||||||||||||||||
Total per Consolidated Statement of Financial Condition | $ | 121,869 | $ | 133,827 | |||||||||||||||||||
Predecessor | |||||||||||||||||||||||
30-Nov-12 | |||||||||||||||||||||||
Assets | Liabilities | ||||||||||||||||||||||
Fair Value | Number of | Fair Value | Number of | ||||||||||||||||||||
Contracts | Contracts | ||||||||||||||||||||||
Interest rate contracts | $ | 927,896 | 67,410 | $ | 1,065,788 | 90,831 | |||||||||||||||||
Foreign exchange contracts | 387,325 | 118,958 | 357,277 | 116,758 | |||||||||||||||||||
Equity contracts | 577,964 | 1,526,127 | 528,979 | 1,396,213 | |||||||||||||||||||
Commodity contracts | 265,703 | 754,987 | 278,660 | 728,696 | |||||||||||||||||||
Credit contracts | 4,448 | 13 | 11,301 | 40 | |||||||||||||||||||
Total | 2,163,336 | 2,242,005 | |||||||||||||||||||||
Counterparty/cash-collateral netting | (1,865,250 | ) | (2,012,878 | ) | |||||||||||||||||||
Total per Consolidated Statement of Financial Condition | $ | 298,086 | $ | 229,127 | |||||||||||||||||||
The following table presents unrealized and realized gains (losses) on derivative contracts for the three and six months ended August 31, 2013, three months ended February 28, 2013 and for the three and nine months ended August 31, 2012 (in thousands): | |||||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||||
Gains (Losses) | Three Months Ended | Six Months Ended | Three Months Ended | Three Months Ended | Nine Months Ended | ||||||||||||||||||
31-Aug-13 | 31-Aug-13 | 28-Feb-13 | 31-Aug-12 | 31-Aug-12 | |||||||||||||||||||
Interest rate contracts | $ | 65,628 | $ | 95,009 | $ | 25,713 | $ | 38,067 | $ | (39,667 | ) | ||||||||||||
Foreign exchange contracts | (4,149 | ) | (13 | ) | 11,895 | (4,616 | ) | 4,193 | |||||||||||||||
Equity contracts | 32,918 | 66,811 | (5,436 | ) | (46,930 | ) | (72,691 | ) | |||||||||||||||
Commodity contracts | 15,080 | 36,593 | 19,585 | 11,074 | 57,586 | ||||||||||||||||||
Credit contracts | (904 | ) | (11,914 | ) | (3,742 | ) | (5,887 | ) | (15,274 | ) | |||||||||||||
Total | $ | 108,573 | $ | 186,486 | $ | 48,015 | $ | (8,292 | ) | $ | (65,853 | ) | |||||||||||
OTC Derivatives. The following tables set forth by remaining contract maturity the fair value of OTC derivative assets and liabilities as of August 31, 2013 (in thousands): | |||||||||||||||||||||||
Successor | |||||||||||||||||||||||
OTC Derivative Assets (1) (2) (4) | |||||||||||||||||||||||
0 – 12 | 1 – 5 Years | Greater Than | Cross- | Total | |||||||||||||||||||
Months | 5 Years | Maturity | |||||||||||||||||||||
Netting (3) | |||||||||||||||||||||||
Commodity swaps, options and forwards | $ | 36,869 | $ | 783 | $ | — | $ | (47 | ) | $ | 37,605 | ||||||||||||
Credit default swaps | 73 | 607 | — | 680 | |||||||||||||||||||
Equity swaps and options | 3,650 | — | — | — | 3,650 | ||||||||||||||||||
Total return swaps | 817 | — | — | (114 | ) | 703 | |||||||||||||||||
Foreign currency forwards, swaps and options | 70,110 | 32,782 | — | (16,218 | ) | 86,674 | |||||||||||||||||
Interest rate swaps and options | 7,340 | 64,407 | 147,654 | (82,057 | ) | 137,344 | |||||||||||||||||
Total | $ | 118,859 | $ | 98,579 | $ | 147,654 | $ | (98,436 | ) | 266,656 | |||||||||||||
Cross product counterparty netting | (579 | ) | |||||||||||||||||||||
Total OTC derivative assets included in Financial instruments owned | $ | 266,077 | |||||||||||||||||||||
-1 | At August 31, 2013, we held exchange traded derivative assets and other credit agreements with a fair value of $10.9 million, which are not included in this table. | ||||||||||||||||||||||
-2 | OTC derivative assets in the table above are gross of collateral received. OTC derivative assets are recorded net of collateral received on the Consolidated Statements of Financial Condition. At August 31, 2013, cash collateral received was $155.1 million. | ||||||||||||||||||||||
-3 | Amounts represent the netting of receivable balances with payable balances for the same counterparty within product category across maturity categories. | ||||||||||||||||||||||
-4 | Derivative fair values include counterparty netting within product category. | ||||||||||||||||||||||
Successor | |||||||||||||||||||||||
OTC Derivative Liabilities (1) (2) (4) | |||||||||||||||||||||||
0 – 12 | 1 – 5 Years | Greater Than | Cross- | Total | |||||||||||||||||||
Months | 5 Years | Maturity | |||||||||||||||||||||
Netting (3) | |||||||||||||||||||||||
Commodity swaps, options and forwards | $ | 28,734 | $ | 47 | $ | — | $ | (47 | ) | $ | 28,734 | ||||||||||||
Credit default swaps | — | 2,062 | 380 | — | 2,442 | ||||||||||||||||||
Equity swaps and options | 8,455 | — | 2,852 | — | 11,307 | ||||||||||||||||||
Total return swaps | 650 | — | 549 | (114 | ) | 1,085 | |||||||||||||||||
Foreign currency forwards, swaps and options | 81,858 | 34,725 | — | (16,218 | ) | 100,365 | |||||||||||||||||
Interest rate swaps and options | 16,291 | 89,710 | 151,371 | (82,057 | ) | 175,315 | |||||||||||||||||
Total | $ | 135,988 | $ | 126,544 | $ | 155,152 | $ | (98,436 | ) | 319,248 | |||||||||||||
Cross product counterparty netting | (579 | ) | |||||||||||||||||||||
Total OTC derivative liabilities included in Financial instruments sold, not yet purchased | $ | 318,669 | |||||||||||||||||||||
-1 | At August 31, 2013, we held exchange traded derivative liabilities and other credit agreements with a fair value of $28.0 million, which are not included in this table. | ||||||||||||||||||||||
-2 | OTC derivative liabilities in the table above are gross of collateral pledged. OTC derivative liabilities are recorded net of collateral pledged on the Consolidated Statements of Financial Condition. At August 31, 2013, cash collateral pledged was $212.9 million. | ||||||||||||||||||||||
-3 | Amounts represent the netting of receivable balances with payable balances for the same counterparty within product category across maturity categories. | ||||||||||||||||||||||
-4 | Derivative fair values include counterparty netting within product category. | ||||||||||||||||||||||
At August 31, 2013, the counterparty credit quality with respect to the fair value of our OTC derivatives assets was as follows (in thousands): | |||||||||||||||||||||||
Counterparty credit quality (1): | |||||||||||||||||||||||
A- or higher | $ | 199,298 | |||||||||||||||||||||
BBB- to BBB+ | 9,447 | ||||||||||||||||||||||
BB+ or lower | 51,448 | ||||||||||||||||||||||
Unrated | 5,884 | ||||||||||||||||||||||
Total | $ | 266,077 | |||||||||||||||||||||
-1 | We utilize internal credit ratings determined by our Risk Management. Credit ratings determined by Risk Management use methodologies that produce ratings generally consistent with those produced by external rating agencies. | ||||||||||||||||||||||
Contingent Features | |||||||||||||||||||||||
Certain of our derivative instruments contain provisions that require our debt to maintain an investment grade credit rating from each of the major credit rating agencies. If our debt were to fall below investment grade, it would be in violation of these provisions and the counterparties to the derivative instruments could request immediate payment or demand immediate and ongoing full overnight collateralization on our derivative instruments in liability positions. The aggregate fair value of all derivative instruments with such credit-risk-related contingent features that are in a liability position at August 31, 2013 and November 30, 2012 is $67.2 million and $164.8 million, respectively, for which we have posted collateral of $61.3 million and $129.2 million, respectively, in the normal course of business. If the credit-risk-related contingent features underlying these agreements were triggered on August 31, 2013 and November 30, 2012, we would have been required to post an additional $10.6 million and $38.1 million, respectively, of collateral to our counterparties. |
Collateralized_Transactions
Collateralized Transactions | 9 Months Ended | ||||||||||
Aug. 31, 2013 | |||||||||||
Text Block [Abstract] | |||||||||||
Collateralized Transactions | Note 9. | Collateralized Transactions | |||||||||
We enter into secured borrowing and lending arrangements to obtain collateral necessary to effect settlement, finance inventory positions, meet customer needs or re-lend as part of our dealer operations. We manage our exposure to credit risk associated with these transactions by entering into master netting agreements. We also monitor the fair value of the securities loaned and borrowed on a daily basis as compared with the related payable or receivable, and request additional collateral or return excess collateral, as appropriate. We pledge financial instruments as collateral under repurchase agreements, securities lending agreements and other secured arrangements, including clearing arrangements. Our agreements with counterparties generally contain contractual provisions allowing the counterparty the right to sell or repledge the collateral. Pledged securities owned that can be sold or repledged by the counterparty are included within Financial instruments owned and noted parenthetically as Securities pledged on our Consolidated Statements of Financial Condition. | |||||||||||
We receive securities as collateral under resale agreements, securities borrowing transactions and customer margin loans. We also receive securities as collateral in connection with securities-for-securities transactions in which we are the lender of securities. In many instances, we are permitted by contract or custom to rehypothecate the securities received as collateral. These securities may be used to secure repurchase agreements, enter into securities lending transactions, satisfy margin requirements on derivative transactions or cover short positions. At August 31, 2013 and November 30, 2012, the approximate fair value of securities received as collateral by us that may be sold or repledged was $21.4 billion and $21.1 billion, respectively. The fair value of securities received as collateral at August 31, 2013 and November 30, 2012 that pertains to our securities financing activities at August 31, 2013 and November 30, 2012 are as follows (in thousands): | |||||||||||
Successor | Predecessor | ||||||||||
August 31, | November 30, | ||||||||||
2013 | 2012 | ||||||||||
Carrying amount: | |||||||||||
Securities purchased under agreements to resell | $ | 4,420,886 | $ | 3,357,602 | |||||||
Securities borrowed | 5,316,449 | 5,094,679 | |||||||||
Securities received as collateral | 45,133 | — | |||||||||
Total assets on Consolidated Statement of Financial Condition | 9,782,468 | 8,452,281 | |||||||||
Netting of securities purchased under agreements to resell (1) | 8,481,994 | 9,982,752 | |||||||||
18,264,462 | 18,435,033 | ||||||||||
Fair value of additional collateral received (2) | 3,098,873 | 2,683,767 | |||||||||
Fair value of securities received as collateral | $ | 21,363,335 | $ | 21,118,800 | |||||||
-1 | Represents the netting of securities purchased under agreements to resell with securities sold under agreements to repurchase balances for the same counterparty under legally enforceable netting agreements. | ||||||||||
-2 | Includes 1) collateral received from customers for margin balances unrelated to arrangements for securities purchased under agreements to resell or securities borrowed with a fair value of $1,092.2 million and $1,252.6 million at August 31, 2013 and November 30, 2012, respectively, of which $634.5 million and $727.7 million had been rehypothecated, 2) collateral received on securities for securities transactions of $1,669.8 million and $1,378.8 million at August 31, 2013 and November 30, 2012, respectively and 3) collateral received in excess of the reverse repurchase and securities borrowed contract amounts. | ||||||||||
At August 31, 2013 and November 30, 2012, a substantial portion of the securities received by us had been sold or repledged. | |||||||||||
In instances where we receive securities as collateral in connection with securities-for-securities transactions in which we are the lender of securities and are permitted to sell or repledge the securities received as collateral, we report the fair value of the collateral received and the related obligation to return the collateral in the Consolidated Statements of Financial Condition. At August 31, 2013 and November 30, 2012, $45.1 million and $-0- million, respectively, were reported as Securities received as collateral and as Obligation to return securities received as collateral. |
Securitization_Activities
Securitization Activities | 9 Months Ended | ||||||||||||||||||||||
Aug. 31, 2013 | |||||||||||||||||||||||
Text Block [Abstract] | |||||||||||||||||||||||
Securitization Activities | Note 10. | Securitization Activities | |||||||||||||||||||||
We engage in securitization activities related to corporate loans, commercial mortgage loans and mortgage-backed and other asset-backed securities. In our securitization transactions, we transfer these assets to special purpose entities (“SPEs”) and act as the placement or structuring agent for the beneficial interests sold to investors by the SPE. A significant portion of our securitization transactions are securitization of assets issued or guaranteed by U.S. government agencies. These SPEs generally meet the criteria of variable interest entities; however we generally do not consolidate the SPEs as we are not considered the primary beneficiary for these SPEs. See Note 11, Variable Interest Entities for further discussion on variable interest entities and our determination of the primary beneficiary. | |||||||||||||||||||||||
We account for our securitization transactions as sales provided we have relinquished control over the transferred assets. Transferred assets are carried at fair value with unrealized gains and losses reflected in Principal transactions revenues in the Consolidated Statement of Earnings prior to the identification and isolation for securitization. Revenues subsequent to such identification and isolation, including revenues recognized from the sales of the beneficial interests to investors, are reflected as net underwriting revenues. If we have not relinquished control over the transferred assets, the assets continue to be recognized in Financial instruments owned and a corresponding secured borrowing is recognized in Other secured financings. | |||||||||||||||||||||||
We generally receive cash proceeds in connection with the transfer of assets to an SPE. We may, however, have continuing involvement with the transferred assets, which is limited to retaining one or more tranches of the securitization (primarily senior and subordinated debt securities), which are included within Financial instruments owned. We apply fair value accounting to the securities. | |||||||||||||||||||||||
The following table presents activity related to our securitizations that were accounted for as sales in which we had continuing involvement (in millions): | |||||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||||
Three Months Ended | Six Months Ended | Three Months Ended | Three Months Ended | Nine Months Ended | |||||||||||||||||||
31-Aug-13 | 31-Aug-13 | 28-Feb-13 | 31-Aug-12 | 31-Aug-12 | |||||||||||||||||||
Transferred assets | $ | 918.4 | $ | 3,102.40 | $ | 2,735.20 | $ | 2,132.30 | $ | 7,070.90 | |||||||||||||
Proceeds on new securitizations | 921.5 | 3,112.50 | 2,751.30 | 2,375.00 | 7,654.10 | ||||||||||||||||||
Net revenues | 1.7 | 6.5 | 12.9 | 2.4 | 16.5 | ||||||||||||||||||
Cash flows received on retained interests | $ | 13 | $ | 24.2 | $ | 32.3 | $ | 19.7 | $ | 44.6 | |||||||||||||
Assets received as proceeds in the form of mortgage-backed-securities or collateralized loan obligations issued by the SPEs have been initially categorized as Level 2 within the fair value hierarchy. For further information on fair value measurements and the fair value hierarchy, refer to Note 2, Summary of Significant Accounting Policies and Note 7, Fair Value Disclosures. We have no explicit or implicit arrangements to provide additional financial support to these SPEs and have no liabilities related to these SPEs at August 31, 2013 and November 30, 2012. Although not obligated, in connection with secondary market-making activities we may make a market in the securities issued by these SPEs. In these market-making transactions, we buy these securities from and sell these securities to investors. Securities purchased through these market-making activities are not considered to be continuing involvement in these SPEs, although the securities are included in Financial instruments owned – Mortgage- and asset-backed securities. To the extent the securities purchased through these market-marking activities meet specific thresholds and we are not deemed to be the primary beneficiary of the variable interest entity, these securities are included in agency and non-agency mortgage- and asset-backed securitizations in the nonconsolidated variable interest entities table presented in Note 11, Variable Interest Entities. | |||||||||||||||||||||||
The following tables summarize our retained interests in SPEs where we transferred assets and have continuing involvement and received sale accounting treatment (in millions): | |||||||||||||||||||||||
Successor | |||||||||||||||||||||||
As of August 31, 2013 | |||||||||||||||||||||||
Securitization Type | Total Assets | Retained | |||||||||||||||||||||
Interests | |||||||||||||||||||||||
U.S. government agency residential mortgage-backed securities | $ | 7,056.50 | $ | 362.8 | (1) | ||||||||||||||||||
U.S. government agency commercial mortgage-backed securities | 2,263.30 | 102.3 | (1) | ||||||||||||||||||||
Collateralized loan obligations | 1,191.50 | (2) | 13.8 | (2) | |||||||||||||||||||
-1 | A portion of these securities have been subsequently sold in secondary-market transactions to third parties. As of September 23, 2013, we continue to hold approximately $285.0 million and $91.0 million of these Residential mortgage-backed securities and Commercial mortgage-backed securities, respectively, in inventory. | ||||||||||||||||||||||
-2 | Total assets include assets transferred by unrelated transferors. Retained interests at September 23, 2013 was $9.3 million. | ||||||||||||||||||||||
Predecessor | |||||||||||||||||||||||
As of November 30, 2012 | |||||||||||||||||||||||
Securitization Type | Total Assets | Retained | |||||||||||||||||||||
Interests | |||||||||||||||||||||||
U.S. government agency residential mortgage-backed securities | $ | 3,791.50 | $ | 335.2 | (1) | ||||||||||||||||||
U.S. government agency commercial mortgage-backed securities | 2,193.40 | 28.9 | (1) | ||||||||||||||||||||
-1 | A significant portion of these securities have been subsequently sold in secondary-market transactions to third parties. As of September 23, 2013, we continue to hold approximately $57.9 million and $13.0 million of these Residential mortgage-backed securities and Commercial mortgage-backed securities, respectively, in inventory. | ||||||||||||||||||||||
We do not have any derivative contracts executed in connection with these securitization activities. Total assets represent the unpaid principal amount of assets in the SPEs in which we have continuing involvement and are presented solely to provide information regarding the size of the transaction and the size of the underlying assets supporting our retained interests, and are not considered representative of the risk of potential loss. Assets retained in connection with a securitization transaction represent the fair value of the securities of one or more tranches issued by an SPE, including senior and subordinated tranches. Our risk of loss is limited to this fair value amount which is included within total Financial instruments owned – Mortgage- and asset-backed securities on our Consolidated Statements of Financial Condition. |
Variable_Interest_Entities
Variable Interest Entities | 9 Months Ended | ||||||||||||||||||||||||||
Aug. 31, 2013 | |||||||||||||||||||||||||||
Text Block [Abstract] | |||||||||||||||||||||||||||
Variable Interest Entities | Note 11. | Variable Interest Entities | |||||||||||||||||||||||||
Variable interest entities (“VIEs”) are entities in which equity investors lack the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. VIEs are consolidated by the primary beneficiary. The primary beneficiary is the party who has the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance and who has an obligation to absorb losses of the entity or a right to receive benefits from the entity that could potentially be significant to the entity. | |||||||||||||||||||||||||||
We determine whether we are the primary beneficiary of a VIE upon our initial involvement with the VIE and we reassess whether we are the primary beneficiary of a VIE on an ongoing basis. Our determination of whether we are the primary beneficiary of a VIE is based upon the facts and circumstances for each VIE and requires significant judgment. In determining whether we are the party with the power to direct the VIE’s most significant activities, we first identify the activities of the VIE that most significantly impact its economic performance. Our considerations in determining the VIE’s most significant activities primarily include, but are not limited to, the VIE’s purpose and design and the risks passed through to investors. We then assess whether we have the power to direct those significant activities. Our considerations in determining whether we have the power to direct the VIE’s most significant activities include, but are not limited to, voting interests of the VIE, management, service and/or other agreements of the VIE, involvement in the VIE’s initial design and the existence of explicit or implicit financial guarantees. In situations where we have determined that the power over the VIE’s most significant activities is shared, we assess whether we are the party with the power over the majority of the significant activities. If we are the party with the power over the majority of the significant activities, we meet the “power” criteria of the primary beneficiary. If we do not have the power over a majority of the significant activities or we determine that decisions require consent of each sharing party, we do not meet the “power” criteria of the primary beneficiary. | |||||||||||||||||||||||||||
We assess our variable interests in a VIE both individually and in aggregate to determine whether we have an obligation to absorb losses of or a right to receive benefits from the VIE that could potentially be significant to the VIE. The determination of whether our variable interest is significant to the VIE requires significant judgment. In determining the significance of our variable interest, we consider the terms, characteristics and size of the variable interests, the design and characteristics of the VIE, our involvement in the VIE and our market-making activities related to the variable interests. Our variable interests in VIEs include debt and equity interests, commitments and certain fees. Our involvement with VIEs arises primarily from: | |||||||||||||||||||||||||||
• | Purchases of mortgage-backed securities and collateralized debt and loan obligations in connection with our trading and secondary market making activities, | ||||||||||||||||||||||||||
• | Retained interests held as a result of securitization activities as part of primary market making activities, including the resecuritizations of mortgage-backed securities and the securitization of corporate loans, | ||||||||||||||||||||||||||
• | Financing of agency and non-agency mortgage-securities through financing vehicles utilizing master repurchase agreements, | ||||||||||||||||||||||||||
• | Prior to the merger of Jefferies High Yield Holdings, LLC with Jefferies on April 1, 2013, ownership of debt, equity and partnership interests in Jefferies High Yield Holdings, LLC and related entities, | ||||||||||||||||||||||||||
• | Management and performance fees in the Jefferies Umbrella Fund, and | ||||||||||||||||||||||||||
• | Loans to and investments in investment fund vehicles. | ||||||||||||||||||||||||||
Consolidated VIEs | |||||||||||||||||||||||||||
The following table presents information about the assets and liabilities of our consolidated VIEs, which are presented within our Consolidated Statements of Financial Condition in the respective asset and liability categories, as of August 31, 2013 and November 30, 2012. The assets and liabilities in the tables below are presented prior to consolidation and thus a portion of these assets and liabilities are eliminated in consolidation. We have aggregated our consolidated VIEs based upon principal business activity. | |||||||||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||||||||
(in millions) | 31-Aug-13 | 30-Nov-12 | |||||||||||||||||||||||||
High Yield | Securitization | Other | High Yield | Securitization | Other | ||||||||||||||||||||||
Vehicles | Vehicles | ||||||||||||||||||||||||||
Cash | $ | 43.8 | $ | — | $ | 0.2 | $ | 388.1 | $ | — | $ | 0.2 | |||||||||||||||
Financial instruments owned | — | 108.7 | 0.5 | 894.2 | 10 | 0.5 | |||||||||||||||||||||
Securities borrowed | — | — | — | 372.1 | — | — | |||||||||||||||||||||
Securities purchased under agreement to resell (3) | — | 195.1 | — | — | 60 | — | |||||||||||||||||||||
Receivable from brokers and dealers | — | — | — | 264.5 | — | — | |||||||||||||||||||||
Other | — | — | — | 11.4 | — | — | |||||||||||||||||||||
$ | 43.8 | $ | 303.8 | $ | 0.7 | $ | 1,930.30 | $ | 70 | $ | 0.7 | ||||||||||||||||
Financial instruments sold, not yet purchased | $ | — | $ | — | $ | — | $ | 526.1 | $ | — | $ | — | |||||||||||||||
Securities loaned | — | — | — | 112 | — | — | |||||||||||||||||||||
Payable to brokers and dealers | — | — | — | 201.2 | — | — | |||||||||||||||||||||
Mandatorily redeemable interests (1) | — | — | — | 1,076.00 | — | — | |||||||||||||||||||||
Redemption payable | 40.8 | — | — | — | — | — | |||||||||||||||||||||
Other secured financings (2) | — | 303.7 | — | — | 70 | — | |||||||||||||||||||||
Other | 2.9 | — | 0.2 | 15 | — | 0.2 | |||||||||||||||||||||
$ | 43.7 | $ | 303.7 | $ | 0.2 | $ | 1,930.30 | $ | 70 | $ | 0.2 | ||||||||||||||||
-1 | After consolidation, which eliminates our interests and the interests of our consolidated subsidiaries, JSOP and JESOP, the carrying amount of the mandatorily redeemable financial interests pertaining to the above VIEs included within Mandatorily redeemable preferred interests of consolidated subsidiaries was approximately $348.1 million at November 30, 2012. These amounts represent the portion of the mandatorily redeemable preferred interests held by our joint venture partner. | ||||||||||||||||||||||||||
-2 | Approximately $75.7 million and $7.7 million of the secured financing represents an amount held by us in inventory and eliminated in consolidation at August 31, 2013 and November 30, 2012, respectively. | ||||||||||||||||||||||||||
-3 | Securities purchased under agreement to resell represent an amount due under a collateralized transaction on a related consolidated entity, which is eliminated in consolidation. | ||||||||||||||||||||||||||
High Yield. We have historically conducted our high yield secondary market trading activities through Jefferies High Yield Trading, LLC (“JHYT”) and Jefferies Leveraged Credit Products, LLC (“JLCP”). JHYT was a registered broker-dealer engaged in the secondary sales and trading of high yield and special situation securities, including bank debt, post-reorganization equity, public and private equity, equity derivatives and other financial instruments. JHYT made markets in high yield and distressed securities and provided research coverage on these types of securities. JLCP was engaged in the trading of bank debt, credit default swaps and trade claims. JHYT and JLCP were wholly owned subsidiaries of JHYH. As of November 30, 2012, we owned voting and non-voting interests in JHYH and had entered into management, clearing, and other services agreements with JHYH. We and Leucadia each had the right to nominate two of a total of four directors to JHYH’s board of directors. Further, two funds managed by us, JSOP and JESOP, were also investors in JHYH. We determined that JHYH, JSOP and JESOP met the definition of a variable interest entity and, as the primary beneficiary of JHYH, JSOP and JESOP, consolidated JHYH (and the assets, liabilities and results of operations of its wholly owned subsidiaries JHYT and JLCP), JSOP and JESOP. At November 30, 2012, the carrying amount of our variable interest was $389.4 million, which consists of our debt, equity and partnership interests in JHYH, JSOP and JESOP, which were eliminated in consolidation. | |||||||||||||||||||||||||||
On April 1, 2013, we merged JHYH and JHYT into Jefferies with Jefferies as the surviving entity. In addition, JLCP became a wholly-owned subsidiary of Jefferies Group LLC. Accordingly, the high yield entities that were consolidated VIEs no longer exist at August 31, 2013. See Note 17, Noncontrolling Interests and Mandatorily Redeemable Preferred Interests of Consolidated Subsidiaries for further discussion of JSOP, JESOP and the mandatorily redeemable interests in JHYH. | |||||||||||||||||||||||||||
Effective March 1, 2013, we deconsolidated JSOP and JESOP following their liquidation and dissolution and we redeemed third party interest in JSOP and JESOP for cash of $347.6 million (after giving effect to redemption of their respective interests in JHYH for cash, equal to the valuation of JHYH as of February 28, 2013). A portion of the redemption is still to be remitted to third party interests and are held in liquidating trusts, which we consider to be VIEs, and are recognized as redemptions payable and included within Accrued expenses and other liabilities on our Consolidated Statement of Financial Condition. There was no gain or loss recognized on the deconsolidation of JSOP and JESOP. | |||||||||||||||||||||||||||
Securitization Vehicles. We are the primary beneficiary of securitization vehicles to which we transferred loans and may retain servicing rights over the loans as well as retain a portion of the securities issued by the securitization vehicles. Our variable interests in these vehicles consist of the securities and a contractual servicing fee. The asset of these VIEs consists of project and corporate loans, which is available for the benefit of the vehicles’ beneficial interest holders. The creditors of these VIEs do not have recourse to our general credit. | |||||||||||||||||||||||||||
We are also the primary beneficiary of mortgage-backed financing vehicles to which we sell agency and non-agency residential and commercial mortgage-backed securities pursuant to the terms of a master repurchase agreement. We manage the assets within these vehicles. Our variable interests in these vehicles consist of our collateral margin maintenance obligations under the master repurchase agreement. The assets of these VIEs consist of reverse repurchase agreements, which are available for the benefit of the vehicle’s debt holders. The creditors of these VIEs do not have recourse to our general credit. | |||||||||||||||||||||||||||
Other. We are the primary beneficiary of certain investment vehicles set up for the benefit of our employees. We manage and invest alongside our employees in these vehicles. The assets of these VIEs consist of private equity securities, and are available for the benefit of the entities’ equity holders. Our variable interests in these vehicles consist of equity securities. The creditors of these VIEs do not have recourse to our general credit. | |||||||||||||||||||||||||||
Nonconsolidated VIEs | |||||||||||||||||||||||||||
We also hold variable interests in VIEs in which we are not the primary beneficiary and do not have the power to direct the activities that most significantly impact their economic performance and, accordingly, do not consolidate. We have not provided financial or other support to these VIEs during the Successor period three and six months ended August 31, 2013, and Predecessor periods three months ended February 28, 2013 and year ended November 30, 2012. We have no explicit or implicit arrangements to provide additional financial support to these VIEs and have no liabilities related to these VIEs at August 31, 2013 and November 30, 2012. | |||||||||||||||||||||||||||
The following tables present information about nonconsolidated VIEs in which we had variable interests aggregated by principal business activity. The tables include VIEs where we have determined that the maximum exposure to loss is greater than specific thresholds or meets certain other criteria. | |||||||||||||||||||||||||||
Successor | |||||||||||||||||||||||||||
31-Aug-13 | |||||||||||||||||||||||||||
Variable Interests | |||||||||||||||||||||||||||
(in millions) | Financial Statement | Maximum | VIE Assets | ||||||||||||||||||||||||
Carrying Amount | exposure to loss | ||||||||||||||||||||||||||
Collateralized loan obligations | $ | 17.8 | (2) | $ | 17.8 | (4) | $ | 1,784.50 | |||||||||||||||||||
Agency mortgage- and asset-backed securitizations (1) | 1,122.40 | (2) | 1,122.40 | (4) | 5,397.10 | ||||||||||||||||||||||
Non-agency mortgage- and asset-backed securitizations (1) | 647 | (2) | 647 | (4) | 69,737.10 | ||||||||||||||||||||||
Asset management vehicle | 3.1 | (3) | 3.1 | (4) | 377.4 | ||||||||||||||||||||||
Private equity vehicles | 51.9 | (3) | 89.9 | 92.4 | |||||||||||||||||||||||
Total | $ | 1,842.20 | $ | 1,880.20 | $ | 77,388.50 | |||||||||||||||||||||
-1 | VIE assets represent the unpaid principal balance of the assets in these vehicles at August 31, 2013 and represent the underlying assets that provide the cash flows supporting our variable interests. | ||||||||||||||||||||||||||
-2 | Consists of debt securities accounted for at fair value, which are included within Financial instruments owned. | ||||||||||||||||||||||||||
-3 | Consists of equity interests and loans, which are included within Investments in managed funds and Loans to and investments in related parties. | ||||||||||||||||||||||||||
-4 | Our maximum exposure to loss in these non-consolidated VIEs is limited to our investment, which is represented by the financial statement carrying amount of our purchased or retained interests. | ||||||||||||||||||||||||||
Predecessor | |||||||||||||||||||||||||||
30-Nov-12 | |||||||||||||||||||||||||||
Variable Interests | |||||||||||||||||||||||||||
(in millions) | Financial Statement | Maximum | VIE Assets | ||||||||||||||||||||||||
Carrying Amount | exposure to loss | ||||||||||||||||||||||||||
Collateralized loan obligations | $ | 5.3 | (2) | $ | 5.3 | (4) | $ | 499.7 | |||||||||||||||||||
Agency mortgage- and asset-backed securitizations (1) | 1,579.10 | (2) | 1,579.10 | (4) | 6,396.60 | ||||||||||||||||||||||
Non-agency mortgage- and asset-backed securitizations (1) | 814.1 | (2) | 814.1 | (4) | 54,436.20 | ||||||||||||||||||||||
Asset management vehicle | 3 | (3) | 3 | (4) | 505.3 | ||||||||||||||||||||||
Private equity vehicles | 55 | (3) | 107.7 | 82.1 | |||||||||||||||||||||||
Total | $ | 2,456.50 | $ | 2,509.20 | $ | 61,919.90 | |||||||||||||||||||||
-1 | VIE assets represent the unpaid principal balance of the assets in these vehicles at November 30, 2012 and represent the underlying assets that provide the cash flows supporting our variable interests. | ||||||||||||||||||||||||||
-2 | Consists of debt securities accounted for at fair value, which are included within Financial instruments owned. | ||||||||||||||||||||||||||
-3 | Consists of equity interests and loans, which are included within Investments in managed funds and Loans to and investments in related parties. | ||||||||||||||||||||||||||
-4 | Our maximum exposure to loss in these non-consolidated VIEs is limited to our investment, which is represented by the financial statement carrying amount of our purchased or retained interests. | ||||||||||||||||||||||||||
Collateralized Loan Obligations. We acted as transferor and underwriter in several collateralized loan obligation (“CLOs”) transactions during the period and retained securities representing variable interests in the CLOs. Assets collateralizing the CLOs include bank loans, participation interests and sub-investment grade and senior secured U.S. loans. In addition, we own variable interests in CLOs previously managed by us. These CLOs represent interests in assets consisting primarily of senior secured loans, unsecured loans and high yield bonds. Our exposure to loss from these entities is limited to our investments in the debt securities held. Regarding the CLOs previously managed by us, our variable interests consists of debt securities (with a fair value of $3.9 million and $5.3 million at August 31, 2013 and November 30, 2012, respectively) and a right to a portion of the CLOs’ management and incentive fees. Management and incentives fees are accrued as the amounts become realizable. | |||||||||||||||||||||||||||
Mortgage- and Asset-Backed Vehicles. In connection with our trading and market making activities, we buy and sell mortgage- and asset-backed securities. Mortgage- and asset-backed securities issued by securitization entities are generally considered variable interests in VIEs. A substantial portion of our variable interests in mortgage- and asset-backed VIEs are sponsored by unrelated third parties. The variable interests consist entirely of mortgage- and asset-backed securities and are accounted for at fair value and included in Financial instruments owned on our Consolidated Statements of Financial Condition. In addition to the agency mortgage- and asset-backed securities of $1,122.4 million, non-agency mortgage- and asset-backed securities of $647.0 million and collateralized loan obligations of $17.8 million at August 31, 2013 presented in the above table, we owned additional securities issued by securitization SPEs for which the maximum exposure to loss is less than specific thresholds. These additional securities were acquired in connection with our secondary market making activities and our securitization activities. Total securities issued by securitization SPEs at August 31, 2013 consist of the following (in millions): | |||||||||||||||||||||||||||
Nonagency | Agency | Total | |||||||||||||||||||||||||
Variable interests in collateralized loan obligations | $ | 17.8 | $ | — | $ | 17.8 | |||||||||||||||||||||
Variable interests in agency mortgage- and asset-backed securitizations | — | 1,122.40 | 1,122.40 | ||||||||||||||||||||||||
Variable interests in nonagency mortgage- and asset-backed securitizations | 647 | — | 647 | ||||||||||||||||||||||||
Additional securities in connection with trading and market making activities: | |||||||||||||||||||||||||||
Residential mortgage-backed securities | 47.9 | 1,692.40 | 1,740.30 | ||||||||||||||||||||||||
Commercial mortgage-backed securities | 38.7 | 505.3 | 544 | ||||||||||||||||||||||||
Collateralized debt obligations | 25 | — | 25 | ||||||||||||||||||||||||
Other asset-backed securities | 30.2 | — | 30.2 | ||||||||||||||||||||||||
Total mortgage- and asset-backed securities on the Consolidated Statement of Financial Condition | $ | 806.6 | $ | 3,320.10 | $ | 4,126.70 | |||||||||||||||||||||
Asset Management Vehicle. We manage the Jefferies Umbrella Fund, an “umbrella structure” company that enables investors to choose between one or more investment objectives by investing in one or more sub-funds within the same structure. The assets of the Jefferies Umbrella Fund primarily consist of convertible bonds. Accounting changes to consolidation standards under generally accepted accounting principles have been deferred for entities that are considered to be investment companies; accordingly, consolidation continues to be determined under a risk and reward model. The Jefferies Umbrella Fund is subject to the deferral guidance and we are not the primary beneficiary as of August 31, 2013 and November 30, 2012 under the risk and reward model. Our variable interests in the Jefferies Umbrella Fund consist of equity interests, management fees and performance fees. | |||||||||||||||||||||||||||
Private Equity Vehicles. On July 26, 2010, we committed to invest equity of up to $75.0 million in Jefferies SBI USA Fund L.P. (the “SBI USA Fund”). As of August 31, 2013 and November 30, 2012, we funded approximately $41.2 million and $27.1 million, respectively, of our commitment. The carrying amount of our equity investment was $32.6 million and $20.8 million at August 31, 2013 and November 30, 2012, respectively. Our exposure to loss is limited to our equity commitment. The SBI USA Fund has assets consisting primarily of private equity and equity related investments. | |||||||||||||||||||||||||||
We have variable interests in Jefferies Employees Partners IV, LLC (“JEP IV”) consisting of an equity investment and a loan commitment up to an aggregate principal amount of $21.6 million. The carrying amount of our equity investment was $1.8 million and $1.5 million at August 31, 2013 and November 30, 2012, respectively. As of August 31, 2013 and November 30, 2012, we funded approximately $17.4 million and $32.7 million, respectively, of the aggregate principal balance, which is included in Loans to and investments in related parties. Our exposure to loss is limited to our equity investment and the aggregate amount of our loan commitment. JEP IV has assets consisting primarily of private equity and equity related investments. |
Investments
Investments | 9 Months Ended | ||||||||
Aug. 31, 2013 | |||||||||
Investments Schedule [Abstract] | |||||||||
Investments | Note 12. | Investments | |||||||
We have investments in Jefferies Finance, LLC (“Jefferies Finance”), Jefferies LoanCore LLC (“Jefferies LoanCore”) and Knight Capital Group, Inc. (“Knight Capital”). Our investment in Knight Capital is accounted for at fair value by electing the fair value option available under U.S. GAAP and is included in Financial instruments owned, at fair value – Corporate equity securities on the Consolidated Statement of Financial Condition with changes in fair value recognized in Principal transaction revenues on the Consolidated Statement of Earnings. Our investments in Jefferies Finance and Jefferies LoanCore are accounted for under the equity method and are included in Loans to and investments in related parties on the Consolidated Statements of Financial Condition with our share of the investees’ earnings recognized in Other revenues in the Consolidated Statements of Earnings. | |||||||||
Jefferies Finance | |||||||||
On October 7, 2004, we entered into an agreement with Babson Capital Management LLC (“Babson Capital”) and Massachusetts Mutual Life Insurance Company (“MassMutual”) to form Jefferies Finance, a joint venture entity. Jefferies Finance is a commercial finance company whose primary focus is the origination and syndication of senior secured debt to middle market and growth companies in the form of term and revolving loans. Loans are originated primarily through the investment banking efforts of Jefferies, with Babson Capital providing primary credit analytics and portfolio management services. Jefferies Finance can also originate other debt products such as second lien term, bridge and mezzanine loans, as well as related equity co-investments. Jefferies Finance also purchases syndicated loans in the secondary market, including loans that are performing, stressed and distressed loan obligations. | |||||||||
As of August 31, 2013, we and MassMutual each have equity commitments to Jefferies Finance of $600.0 million for total committed equity capital to Jefferies Finance of $1.2 billion. As of August 31, 2013, we have funded $314.6 million of our aggregate $600.0 million commitment, leaving $285.4 million unfunded. The investment commitment is scheduled to mature on March 1, 2016 with automatic one year extensions subject to a 60 day termination notice by either party. | |||||||||
Jefferies Finance has executed a Secured Revolving Credit Facility with us and MassMutual, to be funded equally, to support loan underwritings by Jefferies Finance. The Secured Revolving Credit Facility bears interest based on the interest rates of the related Jefferies Finance underwritten loans and is secured by the underlying loans funded by the proceeds of the facility. The total committed Secured Revolving Credit Facility is $700.0 million. The facility is scheduled to mature on March 1, 2016 with automatic one year extensions subject to a 60 day termination notice by either party. At August 31, 2013, we have not funded any of our $350.0 million commitment. During the three and six months ended August 31, 2013 and three months ended February 28, 2013, $0.4 million, $0.8 million and $4.1 million of interest income and $0.4 million, $0.8 million and $0.3 million of unfunded commitment fees, respectively, are included in the Consolidated Statement of Earnings related to the Secured Revolving Credit Facility. During the three and nine months ended August 31, 2012, we earned interest income of $2.3 million and $5.7 million and unfunded commitment fees of $0.5 million and $1.4 million, respectively. | |||||||||
The following is a summary of selected financial information for Jefferies Finance as of August 31, 2013 and November 30, 2012 (in millions): | |||||||||
August 31, | November 30, | ||||||||
2013 | 2012 | ||||||||
Total assets | $ | 2,643.00 | $ | 1,730.40 | |||||
Total liabilities | 2,013.40 | 1,188.20 | |||||||
Total equity | 629.6 | 542.2 | |||||||
Our total equity balance | 314.8 | 271.1 | |||||||
The net earnings of Jefferies Finance were $30.4 million and $87.4 million for the three and nine months ended August 31, 2013, respectively and $34.2 million and $91.8 million for the three and nine months ended August 31, 2012, respectively. | |||||||||
We engage in debt capital markets transactions with Jefferies Finance related to the originations of loans by Jefferies Finance. In connection with such transactions, we earned net underwriting fees of $35.2 million and $70.4 million during the three and six months ended August 31, 2013, $31.0 million during the three months ended February 28, 2013 and $29.3 million and $85.2 million during the three and nine months ended August 31, 2012, respectively. In addition, in relation to these transactions, we paid fees to Jefferies Finance of $1.6 million and $7.9 million during the three and six months ended August 31, 2013, $0.8 million during the three months ended February 28, 2013, and $1.0 million and $7.2 million during the three and nine months ended August 31, 2012, respectively, recognized within Business development expenses on the Consolidated Statements of Earnings. | |||||||||
Under a service agreement, we charged Jefferies Finance $4.1 million and $9.5 million for certain administrative services for the three and six months ended August 31, 2013, $15.7 million during the three months ended February 28, 2013, and $3.6 million and $21.4 million for the three and nine months ended August 31, 2012, respectively. Receivables from Jefferies Finance, included within Other assets on the Consolidated Statements of Financial Condition, were $17.9 million and $32.1 million at August 31, 2013 and November 30, 2012, respectively. | |||||||||
Jefferies LoanCore | |||||||||
On February 23, 2011, we entered into a joint venture agreement with the Government of Singapore Investment Corporation and LoanCore, LLC and formed Jefferies LoanCore, a commercial real estate finance company. Jefferies LoanCore originates and purchases commercial real estate loans throughout the United States with the support of the investment banking and securitization capabilities of Jefferies and the real estate and mortgage investment expertise of the Government of Singapore Investment Corporation and LoanCore, LLC. Jefferies LoanCore has aggregate equity commitments of $600.0 million. As of August 31, 2013 and November 30, 2012, we have funded $174.8 million and $110.0 million, respectively, of our $291.0 million equity commitment and have a 48.5% voting interest in Jefferies LoanCore. | |||||||||
The following is a summary of selected financial information for Jefferies LoanCore as of August 31, 2013 and November 30, 2012 (in millions): | |||||||||
August 31, | November 30, | ||||||||
2013 | 2012 | ||||||||
Total assets | $ | 1,048.20 | $ | 372 | |||||
Total liabilities | 594.1 | 98.4 | |||||||
Total equity | 454.1 | 273.6 | |||||||
Our total equity balance | 220.2 | 132.7 | |||||||
The net earnings of Jefferies LoanCore were $16.7 million and $65.8 million for the three and nine months ended August 31, 2013, respectively, and $5.5 million and $50.1 million for the three and nine months ended August 31, 2012, respectively. | |||||||||
Under a service agreement, we charged Jefferies LoanCore $0.1 million and $0.2 million for administrative services for the three and six months ended August 31, 2013, $0.6 million for the three months ended February 28, 2013 and $0.1 million and $0.4 million for the three and nine months ended August 31, 2012, respectively. Receivables from Jefferies LoanCore, included within Other assets on the Consolidated Statements of Financial Condition, were $31,000 and $37,000, at August 31, 2013 and November 30, 2012, respectively. | |||||||||
Jefferies LoanCore enters into derivative transactions with us to hedge its loan portfolio. As of August 31, 2013, the aggregate net fair value of derivative transactions outstanding with Jefferies LoanCore was $0.6 million and is included within Financial instruments owned on the Consolidated Statement of Financial Condition. On derivative transactions with Jefferies LoanCore, we recognized a net loss of $3.8 million and a net gain of $3.2 million during the Successor period three and six months ended August 31, 2013, respectively, and during the Predecessor periods a net gain of $0.2 million during the three months ended February 28, 2013, and a net gain of $1.1 million and $20.9 million during the three and nine months ended August 31, 2012, respectively, which are included in Principal transactions revenue on the Consolidated Statements of Earnings. | |||||||||
Knight Capital | |||||||||
On August 6, 2012, we entered into a Securities Purchase Agreement with Knight Capital, a publicly-traded global financial services firm, (“the Agreement”). Under the Agreement, we purchased preferred stock in exchange for cash consideration of $125.0 million. The preferred stock consisted of 24,876 shares of Series A-1 Cumulative Perpetual Convertible Preferred Stock (“Series A-1 Shares”) and 100,124 shares of Series A-2 Non-voting Cumulative Perpetual Convertible Preferred Stock (“Series A-2 Shares”) (collectively the “Series A Securities”). Each Series A-1 Share is convertible into shares of common stock at the conversion rate of 666.667 shares of common stock. Each Series A-2 Share is convertible into one Series A-1 Share. On August 29, 2012, we exercised our conversion options and converted our holding of Series A Securities to common stock of Knight Capital. On July 1, 2013, Knight Capital Group, Inc. merged with GETCO Holding Company, LLC (the merged company referred to as “KCG Holdings, Inc.”). In connection with the consummation of the merger, we received cash consideration of $3.75 per share, or approximately $192.0 million, with respect to approximately 63% of our holdings in Knight Capital Group, Inc. and stock consideration of one third of a share of KCG Holdings, Inc. common stock for each share of Knight Capital common stock for the remainder of our holdings. As of August 31, 2013, we owned approximately 9.1% of the outstanding common stock of KCG Holdings, Inc. | |||||||||
We elected to record our investment in KCG Holdings, Inc. at fair value under the fair value option as the investment was acquired as part of our capital markets activities. The valuation of our investment at August 31, 2013 is based on the closing exchange price of KCG Holdings, Inc.’s common stock and included within Level 1 of the fair value hierarchy. Changes in the fair value of our investment of $(16.0) million and $(21.7) million for the three and six months ended August 31, 2013, $26.5 million for three months ended February 28, 2013, and $103.3 million for the three and nine months ended August 31, 2012, are recognized in Revenues – Principal transactions on the Consolidated Statement of Earnings. | |||||||||
The following is a summary of selected financial information for Knight Capital as of June 30, 2013 and December 31, 2012, the most recently available public financial information for the company (in millions): | |||||||||
June 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Total assets | $ | 11,433.00 | $ | 9,778.40 | |||||
Total liabilities | 9,951.30 | 8,295.90 | |||||||
Total equity and convertible preferred stock | 1,481.70 | 1,482.50 | |||||||
For the three and six months ended June 30, 2013, Knight Capital reported a net loss of $30.8 million and $40.2 million, respectively. | |||||||||
We have separately entered into securities lending transactions with KCG Holdings, Inc. in the normal course of our capital markets activities. At August 31, 2013, the balances of securities borrowed and securities loaned were $6.2 million and $30.6 million, respectively. During the current quarter we earned a fee of $10.0 million in connection with a $535.0 million senior secured credit agreement provided by Jefferies Finance in connection with financing the merger of Knight Capital Group, Inc. and GETCO Holding Company, LLC announced on July 1, 2013. |
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets | 9 Months Ended | ||||||||||||||||||||
Aug. 31, 2013 | |||||||||||||||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||
Goodwill and Other Intangible Assets | Note 13. | Goodwill and Other Intangible Assets | |||||||||||||||||||
In connection with the Merger Transaction, goodwill of $1.7 billion was recorded on March 1, 2013. In addition, as of March 1, 2013, certain existing intangible assets and new intangible assets were identified and recorded at their fair values. See Note 4, Leucadia Merger and Related Transactions for further information. | |||||||||||||||||||||
Goodwill | |||||||||||||||||||||
The following table presents goodwill resulting from the Merger Transaction attributed to our reportable segments: | |||||||||||||||||||||
August 31, 2013 | |||||||||||||||||||||
Capital Markets | $ | 1,707,315 | |||||||||||||||||||
Asset Management | 10,800 | ||||||||||||||||||||
Total goodwill | $ | 1,718,115 | |||||||||||||||||||
The following table is a summary of the changes to goodwill for the three and six months ended August 31, 2013, three months ended February 28, 2013 and twelve months ended November 30, 2012 (in thousands): | |||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||
Three Months Ended | Six Months Ended | Three Months Ended | Twelve Months Ended | ||||||||||||||||||
31-Aug-13 | 31-Aug-13 | 28-Feb-13 | 30-Nov-12 | ||||||||||||||||||
Balance, at beginning of period | $ | 1,713,776 | $ | 1,715,986 | (2) | $ | 365,670 | $ | 365,574 | ||||||||||||
Add: Contingent consideration | — | — | 2,394 | — | |||||||||||||||||
Add: Translation adjustments | 4,339 | 2,129 | -1,287 | 96 | |||||||||||||||||
Balance, at end of period | $ | 1,718,115 | $ | 1,718,115 | $ | 366,777 | (1) | $ | 365,670 | ||||||||||||
-1 | Predecessor Company goodwill as of February 28, 2013 was reduced to $-0- as of March 1, 2013, as a result of purchase accounting adjustments. | ||||||||||||||||||||
-2 | The balance of goodwill as March 1, 2013 has been adjusted from the prior presentation in our Quarterly Report on Form 10-Q for the three months ended May 31, 2013 based on refinements to the purchase price allocation for additional information obtained regarding the fair values of the assets acquired and liabilities assumed. See Note 4, Leucadia Merger and Related Transactions for further information. | ||||||||||||||||||||
Contingent consideration recorded during the three months ended February 28, 2013 relates to the lapse of certain conditions as specified in the purchase agreements associated with an acquisition in 2007. | |||||||||||||||||||||
Goodwill Impairment Testing | |||||||||||||||||||||
Goodwill associated with the merger is allocated to related reporting units, which are determined based on financial information provided to management in connection with its management of the businesses. A reporting unit is an operating segment or one level below an operating segment. As part of the push down of the acquisition method of accounting for the Merger Transaction and the resulting creation of a new Successor reporting entity, our annual goodwill impairment testing date is designated as August 1. Prior to the merger, our annual goodwill impairment test date was June 1. | |||||||||||||||||||||
The quantitative goodwill impairment test is performed at the level of the reporting unit and consists of two steps. In the first step, the fair value of each reporting unit is compared with its carrying value, including goodwill and allocated intangible assets. If the fair value is in excess of the carrying value, the goodwill for the reporting unit is considered not to be impaired. If the fair value is less than the carrying value, then a second step is performed in order to measure the amount of the impairment loss, if any, which is based on comparing the implied fair value of the reporting unit’s goodwill to the fair value of the net assets of the reporting unit. | |||||||||||||||||||||
Allocated equity plus goodwill and allocated intangible assets are used as a proxy for the carrying amount of each reporting unit. The amount of equity allocated to a reporting unit is based on our cash capital model deployed in managing our businesses, which seeks to approximate the capital a business would require if it were operating independently. Intangible assets are allocated to a reporting unit based on either specifically identifying a particular intangible asset as pertaining to a reporting unit or, if shared among reporting units, based on an assessment of the reporting unit’s benefit from the intangible asset in order to generate results. | |||||||||||||||||||||
Estimating the fair value of a reporting unit requires management judgment. Estimated fair values for our reporting units were determined using a market valuation method that incorporate price-to-earnings and price-to-book multiples of comparable public companies and, for certain reporting units, a net asset value method. In addition, as the fair values determined under the market approach represent a noncontrolling interest, we applied a control premium to arrive at the estimated fair value of each reporting unit on a controlling basis. We engaged an independent valuation specialist to assist us in our valuation process as of August 1, 2013. | |||||||||||||||||||||
Our annual goodwill impairment testing as of August 1, 2013 did not indicate any goodwill impairment in any of our reporting units. Substantially all of our goodwill is allocated to our Investment Banking, Equities and Fixed Income reporting units for which the results of our assessment indicated that these reporting units had a fair value substantially in excess of their carrying amounts based on current projections. Goodwill allocated to these reporting units is $1,655.4 million of total goodwill of $1,718.1 million at August 31, 2013. For the remaining less significant reporting units, which contain approximately 3.6% of our total goodwill, we have used a net asset approach for valuation and the fair value of each of the reporting units is equal to its book value. | |||||||||||||||||||||
Intangible Assets | |||||||||||||||||||||
The following tables present the gross carrying amount, accumulated amortization, net carrying amount and weighted average amortization period of identifiable intangible assets as of August 31, 2013 and November 30, 2012 (in thousands): | |||||||||||||||||||||
Successor | |||||||||||||||||||||
31-Aug-13 | |||||||||||||||||||||
Gross cost | Impairment | Accumulated | Net carrying | Weighted | |||||||||||||||||
losses | amortization | amount | average | ||||||||||||||||||
remaining | |||||||||||||||||||||
lives (years) | |||||||||||||||||||||
Customer relationships | $ | 136,311 | $ | — | $ | (11,711 | ) | $ | 124,600 | 14.6 | |||||||||||
Trade name | 131,609 | — | (1,876 | ) | 129,733 | 34.5 | |||||||||||||||
Exchange and clearing organization membership interests and registrations | 15,492 | (378 | ) | — | 15,114 | N/A | |||||||||||||||
$ | 283,412 | $ | (378 | ) | $ | (13,587 | ) | $ | 269,447 | ||||||||||||
Predecessor | |||||||||||||||||||||
30-Nov-12 | |||||||||||||||||||||
Gross cost | Impairment | Accumulated | Net carrying | Weighted | |||||||||||||||||
losses | amortization | amount | average | ||||||||||||||||||
remaining | |||||||||||||||||||||
lives (years) | |||||||||||||||||||||
Customer relationships | $ | 10,542 | $ | — | $ | (4,107 | ) | 6,435 | 7.9 | ||||||||||||
Trade name | 1,680 | — | (1,287 | ) | 393 | 3.5 | |||||||||||||||
Other | 100 | — | (15 | ) | 85 | 12.8 | |||||||||||||||
Exchange and clearing organization membership interests and registrations | 11,219 | (2,873 | ) | — | $ | 8,346 | N/A | ||||||||||||||
$ | 23,541 | $ | (2,873 | ) | $ | (5,409 | ) | $ | 15,259 | ||||||||||||
We performed our annual impairment testing of intangible assets with an indefinite useful, which consists of exchange and clearing organization membership interests and registrations, as of August 1. We elected to perform a quantitative assessment of membership interests and registrations that have available quoted sales prices, and a qualitative assessment of the remainder of our intangible assets. In applying our quantitative assessment, we recognized an impairment loss of $378,000 on certain exchange memberships based on a decline in fair value at August 1, 2013 as observed based on quoted sales prices. With regard to our qualitative assessment of the remaining indefinite-life intangible assets, based on our assessment of market conditions, the utilization of the assets and the replacement costs associated with the assets since the most recent valuation date of March 1, 2013 as part of acquisition accounting, we have concluded that it is not more likely than not that the intangible assets are impaired. Prior to our merger with Leucadia, our annual impairment testing date was June 1. | |||||||||||||||||||||
During the second fiscal quarter of 2012, as a result of a significant decline in the fair value of our exchange and clearing organization membership interests and registrations we recognized an impairment loss of $2.9 million. Fair values were based on prices of public sales which had declined over the past year. | |||||||||||||||||||||
For intangible assets with a finite life, aggregate amortization expense amounted to $7.2 million and $14.0 million for the three and six months ended August 31, 2013 (Successor period), and for the Predecessor periods $0.4 million for the three months ended February 28, 2013 and $0.6 million and $1.7 million for the three and nine months ended August 31, 2012, respectively, which is included in Other expenses on the Consolidated Statements of Earnings. | |||||||||||||||||||||
Estimated future amortization expense for the next five fiscal years are as follows (in thousands): | |||||||||||||||||||||
Fiscal year | Estimated future | ||||||||||||||||||||
amortization expense | |||||||||||||||||||||
Remainder of 2013 | $ | 6,767 | |||||||||||||||||||
2014 | 12,668 | ||||||||||||||||||||
2015 | 12,668 | ||||||||||||||||||||
2016 | 12,668 | ||||||||||||||||||||
2017 | 12,668 | ||||||||||||||||||||
Mortgage Servicing Rights | |||||||||||||||||||||
On November 30, 2012, (Predecessor period), we sold substantially all of our mortgage servicing rights for military housing for approximately $30.9 million; and on May 20, 2013 (Successor period), we sold the remaining servicing rights for $2.0 million. | |||||||||||||||||||||
Mortgage servicing rights for military housing mortgage loans were accounted for as an intangible asset and included within Other assets in the Consolidated Statements of Financial Condition. The mortgage servicing rights were amortized over the period of the estimated net servicing income, which is reported in Other revenues in the Consolidated Statements of Earnings. We provided no credit support in connection with the servicing of these loans and were not required to make servicing advances on the loans in the underlying portfolios. We determined that the servicing rights represented one class of servicing rights based on the availability of market inputs to measure the fair value of the asset and our treatment of the asset as one aggregate pool for risk management purposes. We earned no fees related to these servicing rights during the three months ended August 31, 2013, $104,000 during the six months ended August 31, 2013, $114,000 during the three months ended February 28, 2013 and $0.9 million and $2.8 million during the three and nine months ended August 31, 2012, respectively. | |||||||||||||||||||||
The following presents the activity in the balance of these servicing rights for the three and six months ended August 31, 2013, three months ended February 28, 2013 and year ended November 30, 2012 (in thousands): | |||||||||||||||||||||
Predecessor | |||||||||||||||||||||
Six Months Ended | Three Months Ended | Twelve Months Ended | |||||||||||||||||||
31-Aug-13 | 28-Feb-13 | 30-Nov-12 | |||||||||||||||||||
Balance, beginning of period | $ | 2,000 | $ | 805 | $ | 8,202 | |||||||||||||||
Add: Acquisition | — | — | 162 | ||||||||||||||||||
Less: Sales, net | (2,000 | ) | — | (6,959 | ) | ||||||||||||||||
Less: Pay down | — | — | (211 | ) | |||||||||||||||||
Less: Amortization | — | (10 | ) | (389 | ) | ||||||||||||||||
Balance, end of period | $ | — | $ | 795 | $ | 805 | |||||||||||||||
There was no activity during the three months ended August 31, 2013 as all servicing rights were sold as of May 20, 2013. |
ShortTerm_Borrowings
Short-Term Borrowings | 9 Months Ended | |
Aug. 31, 2013 | ||
Debt Disclosure [Abstract] | ||
Short-Term Borrowings | Note 14. | Short-Term Borrowings |
Bank loans represent short-term borrowings that are payable on demand and generally bear interest at a spread over the federal funds rate. Unsecured bank loans are typically overnight loans used to finance financial instruments owned or clearing related balances, but are not part of our systemic funding model. Bank loans at August 31, 2013 and November 30, 2012 totaled $50.0 million and $150.0 million, respectively, of which $100.0 million at November 30, 2012 is secured financing. At August 31, 2013, the interest rate on short-term borrowings outstanding is 1.07%. Average daily bank loans outstanding for the six months ended August 31, 2013, three months ended February 28, 2013 and year ended November 30, 2012 are $34.0 million, $110.0 million and $66.4 million, respectively. |
LongTerm_Debt
Long-Term Debt | 9 Months Ended | ||||||||
Aug. 31, 2013 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Long-Term Debt | Note 15. | Long-Term Debt | |||||||
In conjunction with pushdown accounting for the Merger Transaction with Leucadia on March 1, 2013, we recorded our long-term debt at its then current fair value of $6.1 billion, which included $536.5 million of excess of the fair value over the total principal amount of our debt at March 1, 2013, in aggregate. The premium is being amortized to interest expense using the effective yield method over the remaining lives of the underlying debt obligations. See Note 4, Leucadia Merger and Related Transactions for further information. | |||||||||
The following summarizes our long-term debt carrying values (including unamortized discounts and premiums and valuation adjustment, where applicable) at August 31, 2013 and November 30, 2012 (in thousands): | |||||||||
Successor | Predecessor | ||||||||
August 31, | November 30, | ||||||||
2013 | 2012 | ||||||||
Unsecured Long-Term Debt | |||||||||
$ | 258,377 | $ | 249,564 | ||||||
5.875% Senior Notes, due June 8, 2014 (effective interest rate of 1.51%) | |||||||||
3.875% Senior Notes, due November 9, 2015 (effective interest rate of 2.17%) | 518,241 | 499,382 | |||||||
5.5% Senior Notes, due March 15, 2016 (effective interest rate of 2.52%) | 375,626 | 349,248 | |||||||
5.125% Senior Notes, due April 13, 2018 (effective interest rate of 3.46%) | 856,862 | 771,450 | |||||||
8.5% Senior Notes, due July 15, 2019 (effective interest rate of 4.00%) | 864,673 | 706,990 | |||||||
6.875% Senior Notes, due April 15, 2021 (effective interest rate of 4.40%) | 870,136 | 743,945 | |||||||
2.25% Euro Medium Term Notes, due July 13, 2022 (effective rate of 3.82%) | 4,647 | 3,708 | |||||||
5.125% Senior Notes, due January 20, 2023 (effective interest rate of 4.55%) | 626,188 | — | |||||||
6.45% Senior Debentures, due June 8, 2027 (effective interest rate of 5.46%) | 383,637 | 346,792 | |||||||
3.875% Convertible Senior Debentures, due November 1, 2029 (effective interest rate of 3.50%) (1) | 357,323 | 290,617 | |||||||
6.25% Senior Debentures, due January 15, 2036 (effective interest rate of 6.03%) | 513,415 | 492,904 | |||||||
6.50% Senior Notes, due January 20, 2043 (effective interest rate of 6.09%) | 422,314 | — | |||||||
$ | 6,051,439 | $ | 4,454,600 | ||||||
Secured Long-Term Debt | |||||||||
Credit facility, due August 26, 2014 | 295,000 | 350,007 | |||||||
$ | 6,346,439 | $ | 4,804,607 | ||||||
-1 | As a result of the Merger Transaction with Leucadia on March 1, 2013, the value of the 3.875% Convertible Senior debentures at August 31, 2013 includes the fair value of the conversion feature of $7.3 million. The change in fair value is included within Revenues – Principal transactions in the Consolidated Statement of Earnings and amounted to a gain of $16.3 million and $9.2 million for the three and six months ended August 31, 2013, respectively. The fair value of the embedded option at August 31, 2013 and the unrealized gain for the second quarter has been adjusted to reflect the retrospective adjustment to the valuation of the embedded option at the date of the merger and for the three months ended May 31, 2013. See Note 1, Organization and Basis of Presentation for further information. | ||||||||
On January 15, 2013, we issued $1.0 billion in senior unsecured long-term debt, comprising 5.125% Senior Notes, due 2023 and 6.5% Senior Notes, due 2043. The 5.125% Senior Notes were issued with a principal amount of $600.0 million and we received proceeds of $595.6 million. The 6.5% Senior Notes were issued with a principal amount of $400.0 million and we received proceeds of $391.7 million. | |||||||||
On July 13, 2012, under our Euro Medium Term Note Program (“EMTN Program”) we issued senior unsecured notes with a principal amount of €4.0 million which bear interest at 2.25% per annum and mature on July 13, 2022. Proceeds net of original issue discount amounted to €2.8 million. | |||||||||
On April 19, 2012, we issued an additional $200.0 million aggregate principal amount of our 6.875% Senior Notes due April 15, 2021. Proceeds before underwriting discount and expenses amounted to $197.7 million. The total aggregate principal amount issued under this series of notes is $750.0 million. | |||||||||
Our U.S. broker-dealer, from time to time, makes a market in our long-term debt securities (i.e., purchases and sells our long-term debt securities). During November and December 2011, there was extreme volatility in the price of our debt and a significant amount of secondary trading volume through our market-making desk. Given the volume of activity and significant price volatility, purchases and sales of our Senior Notes due 2018 and Convertible Senior Debentures due 2029 were treated as debt extinguishments and reissuances of debt, respectively. We recognized a gain of $9.9 million on debt extinguishment which is reported in Other revenues for the three months ended February 29, 2012. Discounts arose as a result of the repurchase and subsequent reissuance of our debt below par during November and December 2011 which was being amortized over the remaining life of the debt using the effective yield method. The unamortized balance of $30.9 million at February 28, 2013, was reduced to $-0- on March 1, 2013 by application of the acquisition method of accounting. | |||||||||
In October 2009, we issued 3.875% convertible senior debentures due 2029 (the “debentures”) with an aggregate principal amount of $345.0 million. Upon completion of the Merger with Leucadia, the debentures remain issued and outstanding but are now convertible into common shares of Leucadia. Other than the conversion into Leucadia common shares, the terms of the debenture remain the same. Each $1,000 debenture is currently convertible into 21.922 shares of Leucadia’s common stock (equivalent to a conversion price of approximately $45.62 per share of Leucadia’s common stock). The debentures are convertible at the holders’ option any time beginning on August 1, 2029 and convertible at any time if: 1) Leucadia’s common stock price is greater than or equal to 130% of the conversion price for at least 20 trading days in a period of 30 consecutive trading days; 2) if the trading price per debenture is less than 95% of the price of the common stock times the conversion ratio for any 10 consecutive trading days; 3) if the debentures are called for redemption; or 4) upon the occurrence of specific corporate actions. The debentures may be redeemed for par, plus accrued interest, on or after November 1, 2012 if the price of Leucadia’s common stock is greater than 130% of the conversion price for at least 20 days in a period of 30 consecutive trading days and we may redeem the debentures for par, plus accrued interest, at our election any time on or after November 1, 2017. Holders may require us to repurchase the debentures for par, plus accrued interest, on November 1, 2017, 2019 and 2024. In addition to ordinary interest, commencing November 1, 2017, contingent interest will accrue at 0.375% if the average trading price of a debenture for 5 trading days ending on and including the third trading day immediately preceding a six-month interest period equals or exceed $1,200 per $1,000 debenture. As of the merger, the conversion option to Leucadia common shares embedded within the debentures meets the definition of a derivative contract, does not qualify to be accounted for within member’s equity and is not clearly and closely related to the economic interest rate or credit risk characteristics of our debt. Accordingly, as of March 1, 2013, the conversion option is accounted for on a standalone basis at fair value with changes in fair value recognized in Principal transaction revenues and is presented within Long-term debt on the Consolidated Statement of Financial Condition. | |||||||||
Secured Long-Term Debt – On August 26, 2011, we entered into a committed senior secured revolving credit facility (“Credit Facility”) with a group of commercial banks in U.S. dollars, Euros and Sterling, in an aggregate committed amount of $950.0 million with availability subject to one or more borrowing bases and of which $250.0 million can be borrowed by Jefferies Bache Limited without a borrowing base requirement. The borrowers under the Credit Facility are Jefferies Bache Financial Services, Inc., Jefferies Bache, LLC and Jefferies Bache Limited. The Credit Facility is guaranteed by Jefferies Group LLC and contains certain financial covenants, including, but not limited to, restrictions on future indebtedness of our subsidiaries, requires Jefferies Group LLC and certain of our subsidiaries to maintain specified level of tangible net worth and liquidity amounts and to maintain specified levels of regulated capital. The Credit Facility terminates on August 26, 2014. Interest is based on, in the case of U.S. dollar borrowings, the Federal funds rate or the London Interbank Offered Rate or, in the case of Euro and Sterling borrowings, the Euro Interbank Offered Rate and the London Interbank Offered Rate, respectively. At August 31, 2013 and November 30, 2012, borrowings under the Credit Facility were denominated in U.S. dollar and we were in compliance with debt covenants under the Credit Facility. |
Mandatorily_Redeemable_Convert
Mandatorily Redeemable Convertible Preferred Stock | 9 Months Ended | |
Aug. 31, 2013 | ||
Equity [Abstract] | ||
Mandatorily Redeemable Convertible Preferred Stock | Note 16. | Mandatorily Redeemable Convertible Preferred Stock |
As of February 28, 2013 (Predecessor period), we had issued and outstanding 125,000 shares of 3.25% Series A Convertible Cumulative Preferred Stock, all of which were held by controlled affiliates of MassMutual. Dividends paid on the Series A Convertible Cumulative Preferred Stock were recorded as a component of Interest expense as the preferred stock is treated as debt for accounting purposes. For tax purposes, the dividend is not tax-deductible because the Series A Convertible Cumulative Preferred Stock are considered “equity”. | ||
On March 1, 2013, pursuant to the merger with Leucadia, the Series A Convertible Cumulative Preferred Stock was exchanged for a comparable series of convertible preferred shares of Leucadia. The assumption by Leucadia of our convertible cumulative preferred stock is considered part of the purchase price and resulted in an increase in member’s equity. See Note 4. Leucadia Merger and Related Transactions for further details. |
Noncontrolling_Interests_and_M
Noncontrolling Interests and Mandatorily Redeemable Preferred Interests of Consolidated Subsidiaries | 9 Months Ended | ||||||||
Aug. 31, 2013 | |||||||||
Noncontrolling Interest [Abstract] | |||||||||
Noncontrolling Interests and Mandatorily Redeemable Preferred Interests of Consolidated Subsidiaries | Note 17. | Noncontrolling Interests and Mandatorily Redeemable Preferred Interests of Consolidated Subsidiaries | |||||||
Noncontrolling Interests | |||||||||
Noncontrolling interests represent equity interests in consolidated subsidiaries that are not attributable, either directly or indirectly, to us (i.e., minority interests). The following table presents noncontrolling interests at August 31, 2013 and November 30, 2012 (in thousands): | |||||||||
Successor | Predecessor | ||||||||
August 31, | November 30, | ||||||||
2013 | 2012 | ||||||||
JSOP | $ | — | $ | 303,178 | |||||
JESOP | — | 35,239 | |||||||
Other (1) | 77,048 | 8,321 | |||||||
Noncontrolling interests | $ | 77,048 | $ | 346,738 | |||||
-1 | Other includes asset management entities and investment vehicles set up for the benefit of our employees, and includes an investment by Leucadia in a consolidated asset management entity of $50.0 million at August 21, 2013. | ||||||||
Noncontrolling ownership interests in consolidated subsidiaries are presented in the accompanying Consolidated Statement of Financial Condition within Equity as a component separate from Member’s equity. Net Earnings in the accompanying Consolidated Statements of Earnings includes earnings attributable to both our equity investor and the noncontrolling interests. There has been no other comprehensive income or loss attributed to noncontrolling interests for the three and six months ended August 31, 2013, three months ended February 28, 2013 and three and nine months ended August 31, 2012 because all other comprehensive income or loss is attributed to us. On March 1, 2013, ownership interests in JSOP and JESOP were redeemed at the carrying value of the interests as of February 28, 2013 and the entities dissolved at no gain or loss to us. Residual cash redemption payments are expected to be made in the fourth quarter of 2013. | |||||||||
Mandatorily Redeemable Preferred Interests of Consolidated Subsidiaries | |||||||||
Interests in consolidated subsidiaries that meet the definition of mandatorily redeemable financial instruments require liability classification and remeasurement at the estimated amount of cash that would be due and payable to settle such interests under the applicable entity’s organization agreement. On April 1, 2013, mandatorily redeemable financial instruments, representing Leucadia’s member’s equity interests held in Jefferies High Yield Holdings, LLC (“JHYH”), were redeemed and subsequently contributed back to us by Leucadia as additional equity in Jefferies Group LLC. | |||||||||
Prior to redemption, the mandatorily redeemable financial instruments were entitled to a pro rata share of the profits and losses of JHYH and changes to these mandatorily redeemable financial instruments of JHYH reported in Net revenues and reflected as Interest on mandatorily redeemable preferred interests of consolidated subsidiaries on our Consolidated Statements of Earnings. The carrying amount of the Mandatorily redeemable preferred interests of consolidated subsidiaries was approximately $348.1 million at November 30, 2012. |
Benefit_Plans
Benefit Plans | 9 Months Ended | ||||||||||||||||||||||
Aug. 31, 2013 | |||||||||||||||||||||||
Compensation And Retirement Disclosure [Abstract] | |||||||||||||||||||||||
Benefit Plans | Note 18. | Benefit Plans | |||||||||||||||||||||
U.S. Pension Plan | |||||||||||||||||||||||
We sponsor a defined benefit pension plan, Jefferies Group LLC Employees’ Pension Plan (the “U.S. Pension Plan”), which is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended, and covers certain of our employees. Under the U.S. Pension Plan, benefits to participants are based on years of service and the employee’s career average pay. Effective December 31, 2005, benefits under the U.S. Pension Plan were frozen with no further benefit accruing to participants for future service after December 31, 2005. | |||||||||||||||||||||||
German Pension Plan | |||||||||||||||||||||||
In connection with the acquisition of Jefferies Bache from Prudential on July 1, 2011, we acquired a defined benefits pension plan located in Germany (the “German Pension Plan”) for the benefit of eligible employees of Jefferies Bache in that territory. As part of purchase accounting, a liability of $21.8 million was recognized on July 1, 2011 as a pension obligation within Accrued expenses and other liabilities. The German Pension Plan has no plan assets and is therefore unfunded. We have purchased insurance contracts from multi-national insurers held in the name of Jefferies Bache Limited to provide for the plan’s future obligations. The investments in these insurance contracts are included in Financial Instruments owned – Investments at fair value in the Consolidated Statements of Financial Condition and has a fair value of $19.2 million and $18.6 million at August 31, 2013 and November 30, 2012, respectively. We expect to pay the pension obligation from the cash flows available to us under the insurance contracts. All costs relating to the plan (including insurance premiums and other costs as computed by the insurers) are paid by us. In connection with the acquisition, it was agreed with Prudential that any insurance premiums and funding obligations related to pre-acquisition date service will be reimbursed to us by Prudential. | |||||||||||||||||||||||
The following tables summarize the components of our net periodic pension cost (in thousands): | |||||||||||||||||||||||
U.S. Pension Plan | |||||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||||
Three Months Ended | Six Months Ended | Three Months Ended | Three Months Ended | Nine Months Ended | |||||||||||||||||||
31-Aug-13 | 31-Aug-13 | 28-Feb-13 | 31-Aug-12 | 31-Aug-12 | |||||||||||||||||||
Components of net periodic pension cost | |||||||||||||||||||||||
Service cost | $ | 56 | $ | 112 | $ | 56 | $ | 44 | $ | 132 | |||||||||||||
Interest cost on projected benefit obligation | 557 | 1,114 | 529 | 584 | 1,752 | ||||||||||||||||||
Expected return on plan assets | (680 | ) | (1,360 | ) | (665 | ) | (616 | ) | (1,848 | ) | |||||||||||||
Net amortization | — | — | 300 | 317 | 951 | ||||||||||||||||||
Net periodic pension cost | $ | (67 | ) | $ | (134 | ) | $ | 220 | $ | 329 | $ | 987 | |||||||||||
German Pension Plan | |||||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||||
Three Months Ended | Six Months Ended | Three Months Ended | Three Months Ended | Nine Months Ended | |||||||||||||||||||
31-Aug-13 | 31-Aug-13 | 28-Feb-13 | 31-Aug-12 | 31-Aug-12 | |||||||||||||||||||
Components of net periodic pension cost | |||||||||||||||||||||||
Service cost | $ | 16 | $ | 32 | $ | 16 | $ | 9 | $ | 27 | |||||||||||||
Interest cost on projected benefit obligation | 220 | 433 | 220 | 252 | 767 | ||||||||||||||||||
Net amortization | 45 | 89 | 45 | — | — | ||||||||||||||||||
Net periodic pension cost | $ | 281 | $ | 554 | $ | 281 | $ | 261 | $ | 794 | |||||||||||||
We contributed $3.0 million to our U.S. Pension Plan during the three months ended August 31, 2013 for a total contribution of $3.0 million for the 2013 fiscal year. We do not anticipate contributing to the plans during the remainder of the fiscal year. |
Compensation_Plans
Compensation Plans | 9 Months Ended | |
Aug. 31, 2013 | ||
Compensation Related Costs [Abstract] | ||
Compensation Plans | Note 19. | Compensation Plans |
Prior to the merger with Leucadia, we sponsored the following share-based compensation plans: incentive compensation plan, employee stock purchase plan and the deferred compensation plan. Subsequent to the merger with Leucadia, sponsorship of share-based compensation plans was transferred to Leucadia, with outstanding share-based awards relating to Leucadia common shares and future awards to relate to Leucadia common shares. The fair value of share-based awards is estimated on the date of grant based on the market price of the underlying common stock less the impact of selling restrictions subsequent to vesting, if any, and is amortized as compensation expense over the related requisite service periods. We are allocated costs associated with awards granted to our employees under such plans. | ||
In addition, we sponsor non-share-based compensation plans. Non-share-based compensation plans sponsored by us include a profit sharing plan and other forms of restricted cash awards. | ||
The following are descriptions of the compensation plans and the activity of such plans for the three and six months ended August 31, 2013 (Successor Period), three months ended February 28, 2013 (Predecessor period) and three and nine months ended August 31, 2012 (Predecessor period): | ||
Incentive Compensation Plan. The Incentive Compensation Plan (“Incentive Plan”) allows awards in the form of incentive stock options (within the meaning of Section 422 of the Internal Revenue Code), nonqualified stock options, stock appreciation rights, restricted stock, unrestricted stock, performance awards, RSUs, dividend equivalents or other share-based awards. In connection with the merger with Leucadia, the Incentive Plan was amended to provide for awards to be issued relating to shares of Leucadia, our parent company as of March 1, 2013. Share-based awards outstanding at March 1, 2013 were converted into awards for shares of Leucadia at the Exchange Ratio, with all such awards subject to the same terms and conditions that existed prior to the merger (except for the elimination of fractional shares). | ||
The Incentive Plan allows for grants of restricted stock awards, whereby employees are granted restricted common shares subject to a risk of forfeiture. The Incentive Plan also allows for grants of restricted stock units. RSUs give a participant the right to receive fully vested common shares at the end of a specified deferral period allowing a participant to hold an interest tied to common stock on a tax deferred basis. Prior to settlement, RSUs carry no voting or dividend rights associated with the stock ownership, but dividend equivalents are accrued to the extent there are dividends declared on the underlying common shares as cash amounts or as deemed reinvestments in additional RSUs. | ||
Restricted stock and RSUs may be granted to new employees as “sign-on” awards, to existing employees as “retention” awards and to certain executive officers as awards for multiple years. Sign-on and retention awards are generally subject to annual ratable vesting over a four-year service period and are amortized as compensation expense on a straight line basis over the related four years. Restricted stock and RSUs are granted to certain senior executives with both performance and service conditions. These awards granted to senior executives are amortized over the service period as we have determined that it is probable that the performance condition will be achieved. | ||
The total compensation cost associated with restricted stock and RSUs amounted to $20.7 million and $44.1 million for the three and six months ended August 31, 2013 (Successor period), $22.3 million for the three months ended February 28, 2013 (Predecessor period) and $44.2 million and $136.6 million for the three and nine months ended August 31, 2012 (Predecessor period), respectively. Total compensation cost includes the amortization of sign-on, retention and senior executive awards, less forfeitures and clawbacks. | ||
The fair values of outstanding restricted stock and RSUs with future service requirements were remeasured as part of the acquisition accounting, resulting in an increase of approximately $45.1 million to the unrecognized compensation cost allocated to us at March 1, 2013. As of August 31, 2013, we had $221.1 million of total unrecognized compensation cost allocated to us related to nonvested share-based awards, which is expected to be recognized over a remaining weighted average vesting period of approximately 2.5 years. | ||
Employee Stock Purchase Plan. There is also an Employee Stock Purchase Plan (“ESPP”) which we consider noncompensatory effective January 1, 2007. The ESPP permits all regular full-time employees and employees who work part time over 20 hours per week to purchase, at a discount, Leucadia common shares (since the merger) and permitted purchase of Jefferies Group, Inc. common stock (prior to the merger). Annual employee contributions are limited to $21,250, are voluntary and made through payroll deduction. The stock purchase price is equal to 95% of the closing price of common stock on the last day of the applicable session (monthly). | ||
Deferred Compensation Plan. There is also a Deferred Compensation Plan, which was established in 2001. Eligible employees are able to defer compensation on a pre-tax basis, with deferred amounts deemed invested at a discount in Leucadia common shares (since the merger) and in Jefferies Group, Inc. common stock (prior to the merger) (“DCP shares”), or by allocating among any combination of other investment funds available under the Deferred Compensation Plan. In connection with the merger with Leucadia on March 1, 2013, the Deferred Compensation Plan was amended and deferrals denominated as DCP shares became settleable by delivery of Leucadia common shares. We often invest directly, as a principal, in investments corresponding to the other investment funds, relating to our obligations to perform under the Deferred Compensation Plan. The compensation deferred by our employees is expensed in the period earned. The change in fair value of our investments in assets corresponding to the specified other investment funds are recognized in Principal transactions and changes in the corresponding deferral compensation liability are reflected as Compensation and benefits expense in our Consolidated Statements of Earnings. | ||
Additionally, we recognize compensation cost related to the discount provided to employees in electing to defer compensation in DCP shares. This compensation cost was approximately $22,000 and $73,000 for the three and six months ended August 31, 2013 (Successor period), $72,000 for the three months ended February 28, 2013 (Predecessor period) and $41,000 and $164,000 for the three and nine months ended August 31, 2012 (Predecessor period), respectively. | ||
Profit Sharing Plan. We have a profit sharing plan, covering substantially all employees, which includes a salary reduction feature designed to qualify under Section 401(k) of the Internal Revenue Code. The compensation cost related to this plan was $1.3 million and $3.0 million for the three and six months ended August 31, 2013 (Successor period), $2.6 million for the three months ended February 28, 2013 (Predecessor period) and $1.1 million and $5.5 million for the three and nine months ended August 31, 2012 (Predecessor period), respectively. | ||
Restricted Cash Awards. We provide compensation to new and existing employees in the form of loans and/or other cash awards which are subject to ratable vesting terms with service requirements ranging from one to eight years, with an approximate average term of two years. We amortize these awards to compensation expense over the relevant service period. The compensation cost associated with these awards amounted to $43.7 million and $89.1 million for the three and six months ended August 31, 2013 (Successor period), $44.7 million for the three months ended February 28, 2013 (Predecessor period) and $56.0 million and $140.8 million for the three and nine months ended August 31, 2012 (Predecessor period), respectively. At August 31, 2013 (Successor period) and November 30, 2012 (Predecessor period), the remaining unamortized amount of these awards was $214.4 million and $198.9 million, respectively and is included within Other assets on the Consolidated Statements of Financial Condition. |
Earnings_per_Share
Earnings per Share | 9 Months Ended | ||||||||||||
Aug. 31, 2013 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
Earnings per Share | Note 20. | Earnings per Share | |||||||||||
Earnings per share data is not provided for the three and six months ended August 31, 2013 (Successor period) as we are now a limited liability company and wholly-owned subsidiary of Leucadia. The following is a reconciliation of the numerators and denominators of the Basic and Diluted earnings per common share computations for the three months ended February 28, 2013 and the three and nine months ended August 31, 2012 (in thousands, except per share amounts): | |||||||||||||
Predecessor | |||||||||||||
Three Months Ended | Three Months Ended | Nine Months Ended | |||||||||||
28-Feb-13 | 31-Aug-12 | 31-Aug-12 | |||||||||||
Earnings for basic earnings per common share: | |||||||||||||
Net earnings | $ | 90,842 | $ | 78,321 | $ | 243,417 | |||||||
Net earnings to noncontrolling interests | 10,704 | 8,150 | 32,612 | ||||||||||
Net earnings to common shareholders | 80,138 | 70,171 | 210,805 | ||||||||||
Less: Allocation of earnings to participating securities (1) | 5,890 | 3,913 | 12,243 | ||||||||||
Net earnings available to common shareholders | $ | 74,248 | $ | 66,258 | $ | 198,562 | |||||||
Earnings for diluted earnings per common share: | |||||||||||||
Net earnings | $ | 90,842 | $ | 78,321 | $ | 243,417 | |||||||
Net earnings to noncontrolling interests | 10,704 | 8,150 | 32,612 | ||||||||||
Net earnings to common shareholders | 80,138 | 70,171 | 210,805 | ||||||||||
Add: Mandatorily redeemable convertible preferred stock dividends | 1,016 | 1,016 | 3,047 | ||||||||||
Less: Allocation of earnings to participating securities (1) | 5,882 | 3,916 | 12,254 | ||||||||||
Net earnings available to common shareholders | $ | 75,272 | $ | 67,271 | $ | 201,598 | |||||||
Shares: | |||||||||||||
Average common shares used in basic computation | 213,732 | 214,756 | 216,509 | ||||||||||
Stock options | 2 | 1 | 2 | ||||||||||
Mandatorily redeemable convertible preferred stock | 4,110 | 4,110 | 4,110 | ||||||||||
Convertible debt | — | — | — | ||||||||||
Average common shares used in diluted computation | 217,844 | 218,867 | 220,621 | ||||||||||
Earnings per common share: | |||||||||||||
Basic | $ | 0.35 | $ | 0.31 | $ | 0.92 | |||||||
Diluted | $ | 0.35 | $ | 0.31 | $ | 0.91 | |||||||
-1 | Represents dividends declared during the period on participating securities plus an allocation of undistributed earnings to participating securities. Net losses are not allocated to participating securities. Participating securities represent restricted stock and restricted stock units for which requisite service has not yet been rendered and amounted to weighted average shares of 16,756,000, 12,732,000 and 13,337,000 for the three months ended February 28, 2013 and three and nine months ended August 31, 2012, respectively. Dividends declared on participating securities during the three months ended February 28, 2013 and three and nine months ended August 31, 2012 amounted to approximately $1,315,000, $924,000 and $2,988,000, respectively. Undistributed earnings are allocated to participating securities based upon their right to share in earnings if all earnings for the period had been distributed. | ||||||||||||
Our ability to pay distributions to Leucadia is subject to the restrictions set forth in certain financial covenants associated with the $950.0 million Credit Facility as described in Note 15, Long-Term Debt and the governing provisions of the Delaware Limited Liability Company Act. | |||||||||||||
Dividends per share of common stock declared during the quarter are reflected below: | |||||||||||||
1st Quarter | 2nd Quarter | 3rd Quarter | |||||||||||
2013 | $ | 0.075 | N/a | N/a | |||||||||
2012 | $ | 0.075 | $ | 0.075 | $ | 0.075 |
Income_Taxes
Income Taxes | 9 Months Ended | ||||
Aug. 31, 2013 | |||||
Income Tax Disclosure [Abstract] | |||||
Income Taxes | Note 21. | Income Taxes | |||
As of August 31, 2013 (Successor period) and November 30, 2012 (Predecessor period), we had approximately $132.7 million and $110.5 million respectively, of total gross unrecognized tax benefits. The total amount of unrecognized benefit that, if recognized, would favorably affect the effective tax rate was $87.4 million and $72.4 million (net of federal benefits of taxes) at August 31, 2013 and November 30, 2012, respectively. | |||||
We recognize interest accrued related to unrecognized tax benefits in Interest expense. Penalties, if any, are recognized in Other expenses in the Consolidated Statements of Earnings. As of August 31, 2013 (Successor period) and November 30, 2012 (Predecessor period), we had interest accrued of approximately $20.9 million and $15.3 million, respectively, included in Accrued expenses and other liabilities. No material penalties were accrued at August 31, 2013 and November 30, 2012. | |||||
We are currently under examination by the Internal Revenue Service and other major tax jurisdictions. We do not expect that resolution of these examinations will have a material effect on our consolidated financial position, but could have a material impact on the consolidated results of operations for the period in which resolution occurs. It is reasonably possible that, within the next twelve months, various tax examinations will be concluded and statutes of limitation will expire. However, it is not possible to reasonably estimate the expected change to the total amount of unrecognized tax benefits and impact on the effective tax rate over the next 12 months. | |||||
The table below summarizes the earliest tax years that remain subject to examination in the major tax jurisdictions in which we operate: | |||||
Jurisdiction | Tax Year | ||||
United States | 2006 | ||||
United Kingdom | 2011 | ||||
California | 2004 | ||||
Connecticut | 2006 | ||||
Massachusetts | 2006 | ||||
New Jersey | 2007 | ||||
New York State | 2001 | ||||
New York City | 2003 |
Commitments_Contingencies_and_
Commitments, Contingencies and Guarantees | 9 Months Ended | ||||||||||||||||||||||||||||
Aug. 31, 2013 | |||||||||||||||||||||||||||||
Commitments And Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||
Commitments, Contingencies and Guarantees | Note 22. | Commitments, Contingencies and Guarantees | |||||||||||||||||||||||||||
Commitments | |||||||||||||||||||||||||||||
The following table summarizes our commitments associated with our capital market and asset management business activities at August 31, 2013 (in millions): | |||||||||||||||||||||||||||||
Expected Maturity Date | |||||||||||||||||||||||||||||
2015 | 2017 | 2019 | |||||||||||||||||||||||||||
and | and | and | Maximum | ||||||||||||||||||||||||||
2013 | 2014 | 2016 | 2018 | Later | Payout | ||||||||||||||||||||||||
Equity commitments (1) | $ | 0.3 | $ | 1.7 | $ | 7.2 | $ | 0.8 | $ | 444.8 | $ | 454.8 | |||||||||||||||||
Loan commitments (1) | 4.2 | 7.6 | 354.7 | 114 | — | 480.5 | |||||||||||||||||||||||
Mortgage-related commitments | 507.1 | 213.2 | 796.2 | — | — | 1,516.50 | |||||||||||||||||||||||
Forward starting reverse repos and repos | 848.8 | — | — | — | — | 848.8 | |||||||||||||||||||||||
$ | 1,360.40 | $ | 222.5 | $ | 1,158.10 | $ | 114.8 | $ | 444.8 | $ | 3,300.60 | ||||||||||||||||||
-1 | Equity and loan commitments are presented by contractual maturity date. The amounts are however available on demand. | ||||||||||||||||||||||||||||
The table below presents our credit exposure from our loan commitments, including funded amounts, summarized by period of expiration as of August 31, 2013. Credit exposure is based on the external credit ratings of the underlyings or referenced assets of our loan commitments. Since commitments associated with these business activities may expire unused, they do not necessarily reflect the actual future cash funding requirements (in millions): | |||||||||||||||||||||||||||||
Total | Corporate | ||||||||||||||||||||||||||||
Corporate | Lending | ||||||||||||||||||||||||||||
0 – 12 | Greater Than | Lending | Exposure at | Corporate Lending | |||||||||||||||||||||||||
Credit Ratings | Months | 1 – 5 Years | 5 Years | Exposure (1) | Fair Value (2) | Commitments (3) | |||||||||||||||||||||||
Non-investment grade | $ | — | $ | 48.2 | $ | — | $ | 48.2 | $ | 8 | $ | 40.2 | |||||||||||||||||
Unrated | 26.8 | 613.8 | — | 640.6 | 200.3 | 440.3 | |||||||||||||||||||||||
Total | $ | 26.8 | $ | 662 | $ | — | $ | 688.8 | $ | 208.3 | $ | 480.5 | |||||||||||||||||
-1 | Total corporate lending exposure represents the potential loss assuming the fair value of funded loans and lending commitments were zero. | ||||||||||||||||||||||||||||
-2 | The corporate lending exposure includes $211.0 million of funded loans included in Financial instruments owned – Loans and Loans to and investments in related parties, and a $2.7 million net liability related to lending commitments recorded in Financial instruments sold – Derivatives and Financial instruments owned – Derivatives in the Consolidated Statement of Financial Condition as of August 31, 2013. | ||||||||||||||||||||||||||||
-3 | Amounts represent the notional amount of unfunded lending commitments. | ||||||||||||||||||||||||||||
Equity Commitments. We have commitments to invest $600.0 million and $291.0 million in Jefferies Finance and Jefferies LoanCore as of August 31, 2013, and have funded $314.6 million and $174.8 million, respectively. See Note 12, Investments for additional information regarding these investments. | |||||||||||||||||||||||||||||
As of August 31, 2013, we have committed to invest $5.9 million in Jefferies Capital Partners LLC, the manager of Jefferies Capital Partners IV L.P., Jefferies Capital Partners V L.P. and a related parallel fund, the SBI USA Fund (Jefferies Capital Partners V L.P. and the SBI USA Fund are collectively “Fund V”). As of August 31, 2013, we have funded approximately $1.0 million of our commitment to Jefferies Capital Partners LLC, leaving $4.9 million unfunded. | |||||||||||||||||||||||||||||
We have committed to invest in aggregate up to $85.0 million in Fund V, private equity funds managed by a team led by Brian P. Friedman, one of our directors and Chairman of the Executive Committee, comprised of up to $75.0 million in the SBI USA Fund and $10.0 million in Jefferies Capital Partners V L.P. As of August 31, 2013, we have funded approximately $41.2 million and $5.5 million of our commitments to the SBI USA Fund and Jefferies Capital Partners V L.P., respectively, leaving approximately $38.3 million unfunded in aggregate. | |||||||||||||||||||||||||||||
We have committed to invest up to $45.9 million in Jefferies Capital Partners IV L.P. and $3.1 million in JCP IV LLC, the General Partner of Jefferies Capital Partners IV L.P. As of August 31, 2013, we have funded approximately $38.7 million and $2.3 million of our commitments to Jefferies Capital Partners IV L.P. and JCP IV LLC, respectively, leaving approximately $8.0 million unfunded in aggregate. | |||||||||||||||||||||||||||||
As of August 31, 2013, we had other equity commitments to invest up to $23.8 million in various other investments of which $2.0 million remained unfunded. | |||||||||||||||||||||||||||||
Loan Commitments. From time to time we make commitments to extend credit to investment banking and other clients in loan syndication, acquisition finance and securities transactions. These commitments and any related drawdowns of these facilities typically have fixed maturity dates and are contingent on certain representations, warranties and contractual conditions applicable to the borrower. As of August 31, 2013, we had $126.3 million of outstanding loan commitments to clients. | |||||||||||||||||||||||||||||
On March 1, 2011, we and MassMutual entered into a secured revolving credit facility with Jefferies Finance, to be funded equally, to support loan underwritings by Jefferies Finance. At August 31, 2013, the facility of $700.0 million, is scheduled to mature on March 1, 2016 with automatic one year extensions subject to a 60 day termination notice by either party. As of August 31, 2013, we have not funded any of the aggregate principal balance and $350.0 million of our commitment remained unfunded. | |||||||||||||||||||||||||||||
We entered into a credit agreement with JEP IV, a related party, whereby we are committed to extend loans up to the maximum aggregate principal amount of $21.6 million. As of August 31, 2013, we funded approximately $17.4 million of the aggregate principal balance, which is included in Loans to and investments in related parties in our Consolidated Statements of Financial Condition, and $4.2 million of our commitment remained unfunded. | |||||||||||||||||||||||||||||
The unfunded loan commitments to Jefferies Finance and JEP IV of $354.2 million in aggregate are unrated and included in the total unrated lending commitments of $440.3 million presented in the table above. | |||||||||||||||||||||||||||||
Mortgage-Related Commitments. We enter into forward contracts to purchase mortgage participation certificates and mortgage-backed securities. The mortgage participation certificates evidence interests in mortgage loans insured by the Federal Housing Administration and the mortgage-backed securities are insured or guaranteed by the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) or the Government National Mortgage Association (Ginnie Mae). We frequently securitize the mortgage participation certificates and mortgage-backed securities. The fair value of mortgage-related commitments recorded in the Consolidated Statement of Financial Condition was $3.1 million at August 31, 2013. | |||||||||||||||||||||||||||||
Forward Starting Reverse Repos and Repos. We enter into commitments to take possession of securities with agreements to resell on a forward starting basis and to sell securities with agreements to repurchase on a forward starting basis that are primarily secured by U.S. government and agency securities. | |||||||||||||||||||||||||||||
Contingencies | |||||||||||||||||||||||||||||
Seven putative class action lawsuits have been filed in New York and Delaware concerning the merger transactions whereby Jefferies Group LLC became a wholly owned subsidiary of Leucadia. The class actions, filed on behalf of our shareholders prior to the merger transactions, name as defendants Jefferies Group, Inc., the members of the board of directors of Jefferies Group, Inc., Leucadia and, in certain of the actions, certain merger-related subsidiaries. The actions allege that the directors breached their fiduciary duties in connection with the merger transactions by engaging in a flawed process and agreeing to sell Jefferies Group, Inc. for inadequate consideration pursuant to an agreement that contains improper deal protection terms. The actions allege that Jefferies Group, Inc. and Leucadia aided and abetted the directors’ breach of fiduciary duties. The actions filed in New York have been stayed, and the actions filed in Delaware are proceeding. We are unable to predict the outcome of this litigation or to estimate the amount of or range of any reasonably possible loss. | |||||||||||||||||||||||||||||
Guarantees | |||||||||||||||||||||||||||||
Derivative Contracts. Our dealer activities cause us to make markets and trade in a variety of derivative instruments. Certain derivative contracts that we have entered into meet the accounting definition of a guarantee under U.S. GAAP, including credit default swaps, written foreign currency options and written equity put options. On certain of these contracts, such as written interest rate caps and foreign currency options, the maximum payout cannot be quantified since the increase in interest or foreign exchange rates are not contractually limited by the terms of the contract. As such, we have disclosed notional values as a measure of our maximum potential payout under these contracts. | |||||||||||||||||||||||||||||
The following table summarizes the notional amounts associated with our derivative contracts meeting the definition of a guarantee under U.S. GAAP at August 31, 2013 (in millions): | |||||||||||||||||||||||||||||
Expected Maturity Date | |||||||||||||||||||||||||||||
2015 | 2017 | 2019 | Notional/ | ||||||||||||||||||||||||||
and | and | and | Maximum | ||||||||||||||||||||||||||
Guarantee Type | 2013 | 2014 | 2016 | 2018 | Later | Payout | |||||||||||||||||||||||
Derivative contracts - non-credit related | $ | 831,159.50 | $ | 7,556.10 | $ | 2,974.80 | $ | 1.2 | $ | 523 | $ | 842,214.60 | |||||||||||||||||
Written derivative contracts - credit related | — | — | — | 1,184.00 | — | 1,184.00 | |||||||||||||||||||||||
Total derivative contracts | $ | 831,159.50 | $ | 7,556.10 | $ | 2,974.80 | $ | 1,185.20 | $ | 523 | $ | 843,398.60 | |||||||||||||||||
At August 31, 2013 the external credit ratings of the underlyings or referenced assets for our credit related derivatives contracts (in millions): | |||||||||||||||||||||||||||||
External Credit Rating | |||||||||||||||||||||||||||||
Below | Notional/ | ||||||||||||||||||||||||||||
AAA/ | Investment | Maximum | |||||||||||||||||||||||||||
Aaa | AA/Aa | A | BBB/Baa | Grade | Unrated | Payout | |||||||||||||||||||||||
Credit related derivative contracts: | |||||||||||||||||||||||||||||
Index credit default swaps | $ | 1,115.00 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1,115.00 | |||||||||||||||
Single name credit default swaps | 7 | — | — | 49.5 | 12.5 | — | 69 | ||||||||||||||||||||||
The derivative contracts deemed to meet the definition of a guarantee under U.S. GAAP are before consideration of hedging transactions and only reflect a partial or “one-sided” component of any risk exposure. Written equity options and written credit default swaps are often executed in a strategy that is in tandem with long cash instruments (e.g., equity and debt securities). We substantially mitigate our exposure to market risk on these contracts through hedges, such as other derivative contracts and/or cash instruments and we manage the risk associated with these contracts in the context of our overall risk management framework. We believe notional amounts overstate our expected payout and that fair value of these contracts is a more relevant measure of our obligations. At August 31, 2013, the fair value of derivative contracts meeting the definition of a guarantee is approximately $347.3 million. | |||||||||||||||||||||||||||||
Stand by Letters of Credit. At August 31, 2013, we provided guarantees to certain counterparties in the form of standby letters of credit in the amount of $28.3 million, which expire within one year. Stand by letters of credit commit us to make payment to the beneficiary if the guaranteed party fails to fulfill its obligation under a contractual arrangement with that beneficiary. Since commitments associated with these collateral instruments may expire unused, the amount shown does not necessarily reflect the actual future cash funding requirement. | |||||||||||||||||||||||||||||
Other Guarantees. We are members of various exchanges and clearing houses. In the normal course of business we provide guarantees to securities clearinghouses and exchanges. These guarantees generally are required under the standard membership agreements, such that members are required to guarantee the performance of other members. Additionally, if a member becomes unable to satisfy its obligations to the clearinghouse, other members would be required to meet these shortfalls. To mitigate these performance risks, the exchanges and clearinghouses often require members to post collateral. Our obligations under such guarantees could exceed the collateral amounts posted. Our maximum potential liability under these arrangements cannot be quantified; however, the potential for us to be required to make payments under such guarantees is deemed remote. Accordingly no liability has been recognized for these arrangements. |
Net_Capital_Requirements
Net Capital Requirements | 9 Months Ended | ||||||||
Aug. 31, 2013 | |||||||||
Text Block [Abstract] | |||||||||
Net Capital Requirements | Note 23. | Net Capital Requirements | |||||||
As broker-dealers registered with the SEC and member firms of the Financial Industry Regulatory Authority (“FINRA”), Jefferies and Jefferies Execution are subject to the Securities and Exchange Commission Uniform Net Capital Rule (“Rule 15c3-1”), which requires the maintenance of minimum net capital and which may limit distributions from the broker-dealers. Jefferies and Jefferies Execution have elected to calculate minimum capital requirements under the alternative method as permitted by Rule 15c3-1. Jefferies Bache, LLC is also registered as a Futures Commission Merchants and is subject to Rule 1.17 of the Commodities Futures Trading Commission (“CFTC”). Our designated self-regulatory organization is FINRA for our U.S. broker-dealers and the Chicago Mercantile Exchange for Jefferies Bache, LLC. Subsequent to the closing of the merger with Leucadia, Jefferies High Yield Trading merged with Jefferies and voluntarily withdrew its registration with the SEC as a broker-dealer on April 2, 2013 and resigned as a member of FINRA. | |||||||||
As of August 31, 2013, Jefferies and Jefferies Execution and Jefferies Bache, LLC’s net capital, adjusted net capital, and excess net capital were as follows (in thousands): | |||||||||
Net Capital | Excess Net Capital | ||||||||
Jefferies | $ | 1,303,564 | $ | 1,260,099 | |||||
Jefferies Execution | 3,751 | 3,501 | |||||||
Adjusted Net Capital | Excess Net Capital | ||||||||
Jefferies Bache, LLC | $ | 242,273 | $ | 113,424 | |||||
Certain other U.S. and non-U.S. subsidiaries are subject to capital adequacy requirements as prescribed by the regulatory authorities in their respective jurisdictions, including Jefferies International Limited and Jefferies Bache Limited which are subject to the regulatory supervision and requirements of the Financial Conduct Authority in the United Kingdom (“U.K.”). | |||||||||
The regulatory capital requirements referred to above may restrict our ability to withdraw capital from our subsidiaries. |
Segment_Reporting
Segment Reporting | 9 Months Ended | ||||||||||||||||||||
Aug. 31, 2013 | |||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||
Segment Reporting | Note 24. | Segment Reporting | |||||||||||||||||||
We operate in two principal segments – Capital Markets and Asset Management. The Capital Markets segment includes our securities, commodities, futures and foreign exchange brokerage trading activities and investment banking comprising of underwriting and financial advisory activities. The Capital Markets reportable segment provides the sales, trading, origination and advisory effort for various fixed income, equity and advisory products and services. The Asset Management segment provides investment management services to investors in the U.S. and overseas. | |||||||||||||||||||||
Our reportable business segment information is prepared using the following methodologies: | |||||||||||||||||||||
• | Net revenues and expenses directly associated with each reportable business segment are included in determining earnings before taxes. | ||||||||||||||||||||
• | Net revenues and expenses not directly associated with specific reportable business segments are allocated based on the most relevant measures applicable, including each reportable business segment’s net revenues, headcount and other factors. | ||||||||||||||||||||
• | Reportable business segment assets include an allocation of indirect corporate assets that have been fully allocated to our reportable business segments, generally based on each reportable business segment’s capital utilization. | ||||||||||||||||||||
Our net revenues and expenses by segment are summarized below for the Successor period three and six months ended August 31, 2013 and Predecessor periods three months ended February 28, 2013 and August 31, 2012 and nine months ended August 31, 2012 (in millions): | |||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||
Three Months Ended | Six Months Ended | Three Months Ended | Three Months Ended | Nine Months Ended | |||||||||||||||||
31-Aug-13 | 31-Aug-13 | February 28, 2013 (1) | 31-Aug-12 | 31-Aug-12 | |||||||||||||||||
Capital Markets: | |||||||||||||||||||||
Net revenues | $ | 500.6 | 1,119.40 | $ | 792.5 | $ | 735.8 | $ | 2,219.30 | ||||||||||||
Expenses | $ | 485.4 | 1,047.00 | $ | 645.4 | $ | 603.6 | $ | 1,794.10 | ||||||||||||
Asset Management: | |||||||||||||||||||||
Net revenues | $ | 16.4 | 40.2 | $ | 10.9 | $ | 3.1 | $ | 10.6 | ||||||||||||
Expenses | $ | 8.2 | 20.6 | $ | 7.5 | $ | 4.7 | $ | 23.4 | ||||||||||||
Total: | |||||||||||||||||||||
Net revenues | $ | 517 | 1,159.60 | $ | 803.4 | $ | 738.9 | $ | 2,229.90 | ||||||||||||
Expenses | $ | 493.6 | 1,067.60 | $ | 652.9 | $ | 608.3 | $ | 1,817.50 | ||||||||||||
-1 | Our consolidated net earnings for the three months ended February 28, 2013 reflects an adjustment of $5.3 million, after tax, to correct for the effect of an overstatement of professional service fees of $8.5 million relating to the Merger Transaction with Leucadia. We evaluated the effects of this error and concluded that it is not material to the previously issued Quarterly Report on Form 10-Q for the three month period ended February 28, 2013. Nevertheless, in the table above we have revised our consolidated expenses for the three month period ended February 28, 2013 to correct for the effect of this error and appropriately reflected the $8.5 million of professional service fees as an expense in the three months ended May 31, 2013. | ||||||||||||||||||||
The following table summarizes our total assets by segment as of August 31, 2013 and November 30, 2012 (in millions): | |||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||
August 31, 2013 | November 30, 2012 | ||||||||||||||||||||
Segment Assets: | |||||||||||||||||||||
Capital Markets | $ | 37,978.60 | $ | 35,588.60 | |||||||||||||||||
Asset Management | 851.6 | 704.9 | |||||||||||||||||||
Total assets | $ | 38,830.20 | $ | 36,293.50 | |||||||||||||||||
Net Revenues by Geographic Region | |||||||||||||||||||||
Net revenues for the Capital Market segment are recorded in the geographic region in which the position was risk-managed or, in the case of investment banking, in which the senior coverage banker is located. For Asset Management, net revenues are allocated according to the location of the investment advisor. Net revenues by geographic region for the Successor period three and six months ended August 31 , 2013 and the Predecessor periods three months ended February 28, 2013 and August 31, 2012 and nine months ended August 31, 2012, were as follows (in thousands): | |||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||
Three Months Ended | Six Months Ended | Three Months Ended | Three Months Ended | Nine Months Ended | |||||||||||||||||
31-Aug-13 | 31-Aug-13 | 28-Feb-13 | 31-Aug-12 | 31-Aug-12 | |||||||||||||||||
Americas (1) | $ | 353,173 | $ | 865,190 | $ | 653,608 | $ | 577,646 | $ | 1,832,523 | |||||||||||
Europe (2) | 154,491 | 265,901 | 127,970 | 127,237 | 330,092 | ||||||||||||||||
Asia | 9,365 | 28,465 | 21,809 | 34,055 | 67,320 | ||||||||||||||||
Net revenues | $ | 517,029 | $ | 1,159,556 | $ | 803,387 | $ | 738,938 | $ | 2,229,935 | |||||||||||
-1 | Substantially all relates to U.S. results. | ||||||||||||||||||||
-2 | Substantially all relates to U.K. results. |
Related_Party_Transactions
Related Party Transactions | 9 Months Ended | ||||||||||||||||||||
Aug. 31, 2013 | |||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||
Related Party Transactions | Note 25. | Related Party Transactions | |||||||||||||||||||
Jefferies Capital Partners and JEP IV Related Funds. We have loans to and/or equity investments in private equity funds and in Jefferies Capital Partners, LLC, the manager of the Jefferies Capital Partners funds, which are managed by a team led by Brian P. Friedman, one of our directors and our Chairman of the Executive Committee (“Private Equity Related Funds”). At August 31, 2013 (Successor period) and November 30, 2012 (Predecessor period), loans to and/or equity investments in Private Equity Related Funds were in aggregate $80.9 million and $104.2 million, respectively. The following table presents interest income earned on loans to Private Equity Related Funds and other revenues and investment income related to net gains and losses on our investment in Private Equity Related Funds (in thousands): | |||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||
Three Months Ended | Six Months Ended | Three Months Ended | Three Months Ended | Nine Months Ended | |||||||||||||||||
31-Aug-13 | 31-Aug-13 | 28-Feb-13 | 31-Aug-12 | 31-Aug-12 | |||||||||||||||||
Interest income | $ | 339 | $ | 837 | $ | 516 | $ | 767 | $ | 2,462 | |||||||||||
Other revenues and investment income (loss) | 4,005 | 3,031 | 947 | (6,354 | ) | (15,625 | ) | ||||||||||||||
For further information regarding our commitments and funded amounts to Private Equity Related Funds, see Note 22, Commitments, Contingencies and Guarantees. | |||||||||||||||||||||
Berkadia Commercial Mortgage, LLC. At August 31, 2013 (Successor period) and November 30, 2012 (Predecessor period), we have commitments to purchase $169.6 million and $411.6 million, respectively, in agency commercial mortgage-backed securities from Berkadia Commercial Mortgage, LLC, which is partially owned by Leucadia. | |||||||||||||||||||||
Officers, Directors and Employees. At August 31, 2013 (Successor period) and November 30, 2012 (Predecessor period), we had $14.0 million and $16.3 million, respectively, of loans outstanding to certain of our employees (none of whom are executive officers or directors) that are included in Other assets on the Consolidated Statements of Financial Condition. | |||||||||||||||||||||
Leucadia. During the Predecessor periods three months ended February 28, 2013, and three and nine months ended August 31, 2012, we received commissions and commission equivalents for providing brokerage services to Leucadia and its affiliates of $5,000, $1.5 million and $9.8 million, respectively which is recorded in Commission income on the Consolidated Statements of Earnings. During the six months ended August, 2013 (Successor period) and three months ended February 28, 2013 (Predecessor period), we distributed to Leucadia approximately $65,000 and $61,000, respectively, and $42,000 and $5.3 million for the three and nine months ended August 31, 2012. Leucadia invested $25.0 million on May 1, 2013 and a further $25.0 million on July 1, 2013 in an asset management entity that is consolidated by us. See Note 17, Noncontrolling Interests and Mandatorily Redeemable Preferred Interests of Consolidated Subsidiaries. In addition, see Note 4, Leucadia Merger and Related Transactions for information regarding the merger on March 1, 2013. | |||||||||||||||||||||
For information on transactions with our equity method investees, see Note 12, Investments. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | ||
Aug. 31, 2013 | |||
Accounting Policies [Abstract] | |||
Revenue Recognition Policies | Revenue Recognition Policies | ||
Commissions. All customer securities transactions are reported on the Consolidated Statements of Financial Condition on a settlement date basis with related income reported on a trade-date basis. We permit institutional customers to allocate a portion of their gross commissions to pay for research products and other services provided by third parties. The amounts allocated for those purposes are commonly referred to as soft dollar arrangements. These arrangements are accounted for on an accrual basis and, as we are not the primary obligor for these arrangements, netted against commission revenues in the Consolidated Statements of Earnings. The commissions and related expenses on client transactions executed by Jefferies Bache, LLC, a futures commission merchant, are recorded on a half-turn basis. | |||
Principal Transactions. Financial instruments owned and Financial instruments sold, but not yet purchased (all of which are recorded on a trade-date basis) are carried at fair value with gains and losses reflected in Principal transactions in the Consolidated Statements of Earnings on a trade date basis. Fees received on loans carried at fair value are also recorded within Principal transactions. | |||
Investment Banking. Underwriting revenues and fees from mergers and acquisitions, restructuring and other investment banking advisory assignments or engagements are recorded when the services related to the underlying transactions are completed under the terms of the assignment or engagement. Expenses associated with such assignments are deferred until reimbursed by the client, the related revenue is recognized or the engagement is otherwise concluded. Expenses are recorded net of client reimbursements and netted against revenues. Unreimbursed expenses with no related revenues are included in Business development and Professional services expenses in the Consolidated Statements of Earnings. | |||
Asset Management Fees and Investment Income From Managed Funds. Asset management fees and investment income from managed funds include revenues we earn from management, administrative and performance fees from funds and accounts managed by us, revenues from management and performance fees we earn from related-party managed funds and investment income from our investments in these funds. We earn fees in connection with management and investment advisory services performed for various funds and managed accounts. These fees are based on assets under management or an agreed upon notional amount and may include performance fees based upon the performance of the funds. Management and administrative fees are generally recognized over the period that the related service is provided. Generally, performance fees are earned when the return on assets under management exceeds certain benchmark returns, “high-water marks” or other performance targets. Performance fees are accrued (or reversed) on a monthly basis based on measuring performance to date versus any relevant benchmark return hurdles stated in the investment management agreement. Performance fees are not subject to adjustment once the measurement period ends (generally annual periods) and the performance fees have been realized. | |||
Interest Revenue and Expense. We recognize contractual interest on Financial instruments owned and Financial instruments sold, but not yet purchased, on an accrual basis as a component of interest revenue and expense. Interest flows on derivative trading transactions and dividends are included as part of the fair valuation of these contracts and recognized in Principal transactions in the Consolidated Statements of Earnings rather than as a component of interest revenue or expense. We account for our short-term borrowings, long-term borrowings and our mandatorily redeemable convertible preferred stock on an accrual basis with related interest recorded as Interest expense. Discounts/premiums arising on our long-term debt are accreted / amortized to Interest expense using the effective yield method over the remaining lives of the underlying debt obligations. In addition, we recognize interest revenue related to our securities borrowed and securities purchased under agreements to resell activities and interest expense related to our securities loaned and securities sold under agreements to repurchase activities on an accrual basis. | |||
Cash Equivalents | Cash Equivalents | ||
Cash equivalents include highly liquid investments, including money market funds, not held for resale with original maturities of three months or less. | |||
Cash and Securities Segregated and on Deposit for Regulatory Purposes or Deposited With Clearing and Depository Organizations | Cash and Securities Segregated and on Deposit for Regulatory Purposes or Deposited With Clearing and Depository Organizations | ||
In accordance with Rule 15c3-3 of the Securities Exchange Act of 1934, Jefferies as a broker-dealer carrying client accounts, is subject to requirements related to maintaining cash or qualified securities in a segregated reserve account for the exclusive benefit of its clients. In addition, certain financial instruments used for initial and variation margin purposes with clearing and depository organizations are recorded in this caption. Jefferies Bache, LLC, as a futures commission merchant, is obligated by rules mandated by the Commodities Futures Trading Commission under the Commodities Exchange Act, to segregate or set aside cash or qualified securities to satisfy such regulations, which regulations have been promulgated to protect customer assets. Certain other entities are also obligated by rules mandated by their primary regulators to segregate or set aside cash or equivalent securities to satisfy regulations, promulgated to protect customer assets. | |||
Financial Instruments | Financial Instruments | ||
Financial instruments owned and Financial instruments sold, not yet purchased are recorded at fair value, either as required by accounting pronouncements or through the fair value option election. These instruments primarily represent our trading activities and include both cash and derivative products. Gains and losses are recognized in Principal transactions in our Consolidated Statements of Earnings. The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). | |||
Fair Value Hierarchy | |||
In determining fair value, we maximize the use of observable inputs and minimize the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. Unobservable inputs reflect our assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. We apply a hierarchy to categorize our fair value measurements broken down into three levels based on the transparency of inputs as follows: | |||
Level 1: | Quoted prices are available in active markets for identical assets or liabilities as of the reported date. | ||
Level 2: | Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these financial instruments include cash instruments for which quoted prices are available but traded less frequently, derivative instruments whose fair value have been derived using a model where inputs to the model are directly observable in the market, or can be derived principally from or corroborated by observable market data, and instruments that are fair valued using other financial instruments, the parameters of which can be directly observed. | ||
Level 3: | Instruments that have little to no pricing observability as of the reported date. These financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation. | ||
Financial instruments are valued at quoted market prices, if available. Certain financial instruments have bid and ask prices that can be observed in the marketplace. For financial instruments whose inputs are based on bid-ask prices, the financial instrument is valued at the point within the bid-ask range that meets our best estimate of fair value. We use prices and inputs that are current as of the measurement date. For financial instruments that do not have readily determinable fair values using quoted market prices, the determination of fair value is based upon consideration of available information, including types of financial instruments, current financial information, restrictions on dispositions, fair values of underlying financial instruments and quotations for similar instruments. | |||
The valuation of financial instruments may include the use of valuation models and other techniques. Adjustments to valuations derived from valuation models may be made when, in management’s judgment, features of the financial instrument such as its complexity, the market in which the financial instrument is traded and risk uncertainties about market conditions require that an adjustment be made to the value derived from the models. Adjustments from the price derived from a valuation model reflect management’s judgment that other participants in the market for the financial instrument being measured at fair value would also consider in valuing that same financial instrument. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. | |||
The availability of observable inputs can vary and is affected by a wide variety of factors, including, for example, the type of financial instrument and market conditions. As the observability of prices and inputs may change for a financial instrument from period to period, this condition may cause a transfer of an instrument among the fair value hierarchy levels. Transfers among the levels are recognized at the beginning of each period. The degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. | |||
Valuation Process for Financial Instruments | |||
Our Independent Price Verification (“IPV”) Group, which is part of our Finance department, in partnership with Risk Management, is responsible for establishing our valuation policies and procedures. The IPV Group and Risk Management, which are independent of our business functions, play an important role and serve as a control function in determining that our financial instruments are appropriately valued and that fair value measurements are reliable. This is particularly important where prices or valuations that require inputs are less observable. In the event that observable inputs are not available, the control processes are designed to assure that the valuation approach utilized is appropriate and consistently applied and that the assumptions are reasonable. The IPV Group reports to the Global Controller and is subject to the oversight of the IPV Committee, which is comprised of our Chief Financial Officer, Global Controller, Global Head of Product Control, Chief Risk Officer and Principal Accounting Officer, among other personnel. Our independent price verification policies and procedures are reviewed, at a minimum, annually and changes to the policies require the approval of the IPV Committee. | |||
Price Testing Process. The business units are responsible for determining the fair value of our financial instruments using approved valuation models and methodologies. In order to ensure that the business unit valuations represent a fair value exit price, the IPV Group tests and validates the fair value of our financial instruments inventory. In the testing process, the IPV Group obtains prices and valuation inputs from sources independent of Jefferies, consistently adheres to established procedures set forth in our valuation policies for sourcing prices and valuation inputs and utilizing valuation methodologies. Sources used to validate fair value prices and inputs include, but are not limited to, exchange data, recently executed transactions, pricing data obtained from third party vendors, pricing and valuation services, broker quotes and observed comparable transactions. | |||
To the extent discrepancies between the business unit valuations and the pricing or valuations resulting from the price testing process are identified, such discrepancies are investigated by the IPV Group and fair values are adjusted, as appropriate. The IPV Group maintains documentation of its testing, results, rationale and recommendations and prepares a monthly summary of its valuation results. This process also forms the basis for our classification of fair values within the fair value hierarchy (i.e., Level 1, Level 2 or Level 3). The IPV Group utilizes the additional expertise of Risk Management personnel in valuing more complex financial instruments and financial instruments with less or limited pricing observability. The results of the valuation testing are reported to the IPV Committee on a monthly basis, which discusses the results and is charged with the final conclusions as to the financial instrument fair values in the consolidated financial statements. This process specifically assists the Chief Financial Officer in asserting as to the fair presentation of our financial condition and results of operations as included within our Quarterly Reports on Form 10-Q and Annual Report on Form 10-K. At each quarter end, the overall valuation results, as concluded upon by the IPV Committee, are presented to the Audit Committee. | |||
Judgment exercised in determining Level 3 fair value measurements is supplemented by daily analysis of profit and loss performed by the Product Control functions. Gains and losses, which result from changes in fair value, are evaluated and corroborated daily based on an understanding of each of the trading desks’ overall risk positions and developments in a particular market on the given day. Valuation techniques generally rely on recent transactions of suitably comparable financial instruments and use the observable inputs from those comparable transactions as a validation basis for Level 3 inputs. Level 3 fair value measurements are further validated through subsequent sales testing and market comparable sales, if such information is available. Level 3 fair value measurements require documentation of the valuation rationale applied, which is reviewed for consistency in application from period to period; and the documentation includes benchmarking the assumptions underlying the valuation rationale against relevant analytic data. | |||
Third Party Pricing Information. Pricing information obtained from external data providers (including independent pricing services and brokers) may incorporate a range of market quotes from dealers, recent market transactions and benchmarking model derived prices to quoted market prices and trade data for comparable securities. External pricing data is subject to evaluation for reasonableness by the IPV Group using a variety of means including comparisons of prices to those of similar product types, quality and maturities, consideration of the narrowness or wideness of the range of prices obtained, knowledge of recent market transactions and an assessment of the similarity in prices to comparable dealer offerings in a recent time period. We have a process whereby we challenge the appropriateness of pricing information obtained from external data providers (including independent pricing services and brokers) in order to validate the data for consistency with the definition of a fair value exit price. Our process includes understanding and evaluating the external data providers’ valuation methodologies. For corporate, U.S. government and agency, and municipal debt securities, and loans, to the extent independent pricing services or broker quotes are utilized in our valuation process, the vendor service providers are collecting and aggregating observable market information as to recent trade activity and active bid-ask submissions. The composite pricing information received from the independent pricing service is not based on unobservable inputs or proprietary models. For mortgage- and other asset-backed securities and collateralized debt obligations, our independent pricing service uses a matrix evaluation approach incorporating both observable yield curves and market yields on comparable securities as well as implied inputs from observed trades for comparable securities in order to determine prepayment speeds, cumulative default rates and loss severity. Further, we consider pricing data from multiple service providers as available as well as compare pricing data to prices we have observed for recent transactions, if any, in order to corroborate our valuation inputs. | |||
Model Review Process. Where a pricing model is to be used to determine fair value, the pricing model is reviewed for theoretical soundness and appropriateness by Risk Management, independent from the trading desks, and then approved by Risk Management to be used in the valuation process. Review and approval of a model for use includes benchmarking the model against relevant third party valuations, testing sample trades in the model, backtesting the results of the model against actual trades and stress-testing the sensitivity of the pricing model using varying inputs and assumptions. In addition, recently executed comparable transactions and other observable market data are considered for purposes of validating assumptions underlying the model. Models are independently reviewed and validated by Risk Management annually or more frequently if market conditions or use of the valuation model changes. | |||
Investments in Managed Funds | Investments in Managed Funds | ||
Investments in managed funds include our investments in funds managed by us and our investments in related-party managed funds in which we are entitled to a portion of the management and/or performance fees. Investments in nonconsolidated managed funds are accounted for at fair value with gains or losses included in Asset management fees and investment income from managed funds in the Consolidated Statements of Earnings. | |||
Loans to and Investments in Related Parties | Loans to and Investments in Related Parties | ||
Loans to and investments in related parties include investments in private equity and other operating entities made in connection with our capital markets activities in which we exercise significant influence over operating and capital decisions and loans issued in connection with such activities. Loans to and investments in related parties are accounted for using the equity method or at cost, as appropriate. Revenues on Loans to and investments in related parties are included in Other revenues in the Consolidated Statements of Earnings. See Note 12, Investments, and Note 25, Related Party Transactions, for additional information regarding certain of these investments. | |||
Receivable from and Payable to Customers | Receivable from and Payable to Customers | ||
Receivable from and payable to customers includes amounts receivable and payable on cash and margin transactions. Securities owned by customers and held as collateral for these receivables are not reflected in the accompanying consolidated financial statements. Receivable from officers and directors included within this financial statement line item represents balances arising from their individual security transactions. These transactions are subject to the same regulations as customer transactions and are provided on substantially the same terms. | |||
Securities Borrowed and Securities Loaned | Securities Borrowed and Securities Loaned | ||
Securities borrowed and securities loaned are carried at the amounts of cash collateral advanced and received in connection with the transactions and accounted for as collateralized financing transactions. In connection with both trading and brokerage activities, we borrow securities to cover short sales and to complete transactions in which customers have failed to deliver securities by the required settlement date, and lend securities to other brokers and dealers for similar purposes. We have an active securities borrowed and lending matched book business in which we borrow securities from one party and lend them to another party. When we borrow securities, we generally provide cash to the lender as collateral, which is reflected in our Consolidated Statements of Financial Condition as Securities borrowed. We earn interest revenues on this cash collateral. Similarly, when we lend securities to another party, that party provides cash to us as collateral, which is reflected in our Consolidated Statements of Financial Condition as Securities loaned. We pay interest expense on the cash collateral received from the party borrowing the securities. The initial collateral advanced or received approximates or is greater than the fair value of the securities borrowed or loaned. We monitor the fair value of the securities borrowed and loaned on a daily basis and request additional collateral or return excess collateral, as appropriate. | |||
Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase | Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase | ||
Securities purchased under agreements to resell and Securities sold under agreements to repurchase (collectively “repos”) are accounted for as collateralized financing transactions and are recorded at their contracted resale or repurchase amount plus accrued interest. We earn and incur interest over the term of the repo, which is reflected in Interest income and Interest expense on our Consolidated Statements of Earnings on an accrual basis. Repos are presented in the Consolidated Statements of Financial Condition on a net-basis-by counterparty, where permitted by generally accepted accounting principles. We monitor the fair value of the underlying securities daily versus the related receivable or payable balances. Should the fair value of the underlying securities decline or increase, additional collateral is requested or excess collateral is returned, as appropriate. | |||
Premises and Equipment | Premises and Equipment | ||
Premises and equipment are depreciated using the straight-line method over the estimated useful lives of the related assets (generally three to ten years). Leasehold improvements are amortized using the straight-line method over the term of the related leases or the estimated useful lives of the assets, whichever is shorter. Premises and equipment includes internally developed software, which was increased to its fair market value in the allocation of the purchase price on March 1, 2013. The revised carrying values of internally developed software ready for its intended use are depreciated over the remaining useful life. See Note 4, Leucadia Merger and Related Transactions for more information regarding the allocation of the purchase price. | |||
Goodwill and Intangible Assets | Goodwill and Intangible Assets | ||
Goodwill. Goodwill represents the excess acquisition cost over the fair value of net tangible and intangible assets acquired. Goodwill is not amortized and is subject to annual impairment testing on August 1 or between annual tests if an event or change in circumstance occurs that would more likely than not reduce the fair value of a reporting unit below its carrying value. In testing for goodwill impairment, we have the option to first assess qualitative factors to determine whether the existence of events or circumstances lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events and circumstances, we conclude that it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then performing the two-step impairment test is not required. If we conclude otherwise, we are required to perform the two-step impairment test. The goodwill impairment test is performed at the reporting unit level by comparing the estimated fair value of a reporting unit with its respective carrying value. If the estimated fair value exceeds the carrying value, goodwill at the reporting unit level is not impaired. If the estimated fair value is less than carrying value, further analysis is necessary to determine the amount of impairment, if any. | |||
The fair value of reporting units are based on widely accepted valuation techniques that we believe market participants would use, although the valuation process requires significant judgment and often involves the use of significant estimates and assumptions. The methodologies we utilize in estimating the fair value of reporting units include market capitalization, price-to-book multiples of comparable exchange traded companies and multiples of merger and acquisitions of similar businesses. The estimates and assumptions used in determining fair value could have a significant effect on whether or not an impairment charge is recorded and the magnitude of such a charge. Adverse market or economic events could result in impairment charges in future periods. Refer to Note 13, Goodwill and Other Intangible Assets, for further information on our assessment of goodwill. | |||
Intangible Assets. Intangible assets deemed to have finite lives are amortized on a straight line basis over their estimated useful lives, where the useful life is the period over which the asset is expected to contribute directly, or indirectly, to our future cash flows. Intangible assets are reviewed for impairment on an interim basis when certain events or circumstances exist. For amortizable intangible assets, impairment exists when the carrying amount of the intangible asset exceeds its fair value. At least annually, the remaining useful life is evaluated. | |||
An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value. In testing for impairment, we have the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If we conclude otherwise, we are required to perform a quantitative impairment test. Subsequent reversal of impairment losses is not permitted. Our annual indefinite-lived intangible asset impairment testing date is August 1. | |||
To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset that is amortized over the remaining useful life of that asset, if any. Subsequent reversal of impairment losses is not permitted. | |||
Income Taxes | Income Taxes | ||
We are a single-member limited liability company treated as a disregarded entity for federal and state income tax purposes and our results of operations are included in the consolidated federal and applicable state income tax returns filed by Leucadia. Prior to the Merger Transaction we filed a consolidated U.S. federal income tax return, which included all of our qualifying subsidiaries. We also are subject to income tax in various states and municipalities and those foreign jurisdictions in which we operate. Amounts provided for income taxes are based on income reported for financial statement purposes and do not necessarily represent amounts currently payable. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and for tax loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. Under acquisition accounting for the Merger Transaction the recognition of certain assets and liabilities at fair value created a change in the financial reporting basis for our assets and liabilities, while the tax basis of our assets and liabilities remained the same. As a result, deferred tax assets and liabilities were recognized for the change in the basis differences. The realization of deferred tax assets is assessed and a valuation allowance is recorded to the extent that it is more likely than not that any portion of the deferred tax asset will not be realized. | |||
The tax benefit related to dividends and dividend equivalents paid on nonvested share-based payment awards are recognized as an increase to Additional paid-in capital. These amounts are included in tax benefits for issuance of share-based awards on the Consolidated Statements of Changes in Equity. | |||
Legal Reserves | Legal Reserves | ||
In the normal course of business, we have been named, from time to time, as a defendant in legal and regulatory proceedings. We are also involved, from time to time, in other exams, investigations and similar reviews (both formal and informal) by governmental and self-regulatory agencies regarding our businesses, certain of which may result in judgments, settlements, fines, penalties or other injunctions. | |||
We recognize a liability for a contingency in Accrued expenses and other liabilities when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. If the reasonable estimate of a probable loss is a range, we accrue the most likely amount of such loss, and if such amount is not determinable, then we accrue the minimum in the range as the loss accrual. The determination of the outcome and loss estimates requires significant judgment on the part of management. | |||
In many instances, it is not possible to determine whether any loss is probable or even possible or to estimate the amount of any loss or the size of any range of loss. We believe that, in the aggregate, the pending legal actions or regulatory proceedings and any other exams, investigations or similar reviews (both formal and informal) should not have a material adverse effect on our consolidated results of operations, cash flows or financial condition. In addition, we believe that any amount that could be reasonably estimated of potential loss or range of potential loss in excess of what has been provided in the consolidated financial statements is not material. | |||
Share-based Compensation | Share-based Compensation | ||
Share-based awards are measured based on the grant-date fair value of the award and recognized over the period from the service inception date through the date the employee is no longer required to provide service to earn the award. Expected forfeitures are included in determining share-based compensation expense. | |||
Foreign Currency Translation | Foreign Currency Translation | ||
Assets and liabilities of foreign subsidiaries having non-U.S. dollar functional currencies are translated at exchange rates at the end of a period. Revenues and expenses are translated at average exchange rates during the period. The gains or losses resulting from translating foreign currency financial statements into U.S. dollars, net of hedging gains or losses and taxes, if any, are included in Other comprehensive income. Gains or losses resulting from foreign currency transactions are included in Principal transactions in the Consolidated Statements of Earnings. | |||
Earnings per Common Share | Earnings per Common Share | ||
As a single member limited liability company, earnings per share is not calculated for Jefferies Group LLC (the Successor company). | |||
Prior to the Merger Transaction, Jefferies Group, Inc. (the Predecessor company) had common shares and other common share equivalents outstanding. For the Predecessor periods, basic earnings per share (“EPS”) is computed by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding and certain other shares committed to be, but not yet issued. Net earnings available to common shareholders represent net earnings to common shareholders reduced by the allocation of earnings to participating securities. Losses are not allocated to participating securities. Common shares outstanding and certain other shares committed to be, but not yet issued, include restricted stock and restricted stock units (“RSUs”) for which no future service is required. For Predecessor periods, diluted EPS is computed by dividing net earnings available to common shareholders plus dividends on dilutive mandatorily redeemable convertible preferred stock by the weighted average number of common shares outstanding and certain other shares committed to be, but not yet issued, plus all dilutive common stock equivalents outstanding during the period. Unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and, therefore, are included in the earnings allocation in computing earnings per share under the two-class method of earning per share. Restricted stock and RSUs granted as part of our share-based compensation contain nonforfeitable rights to dividends and dividend equivalents, respectively, and therefore, prior to the requisite service being rendered for the right to retain the award, restricted stock and RSUs meet the definition of a participating security. As such, we calculate Basic and Diluted earnings per share under the two-class method. | |||
Securitization Activities | Securitization Activities | ||
We engage in securitization activities related to corporate loans, commercial mortgage loans and mortgage-backed and other asset-backed securities. Such transfers of financial assets are accounted for as sales when we have relinquished control over the transferred assets. The gain or loss on sale of such financial assets depends, in part, on the previous carrying amount of the assets involved in the transfer allocated between the assets sold and the retained interests, if any, based upon their respective fair values at the date of sale. We may retain interests in the securitized financial assets as one or more tranches of the securitization. These retained interests are included within Financial instruments owned in the Consolidated Statements of Financial Condition at fair value. Any changes in the fair value of such retained interests are recognized within Principal transactions revenues in the Consolidated Statements of Earnings. | |||
When a transfer of assets does not meet the criteria of a sale, we account for the transfer as a secured borrowing and continue to recognize the assets of a secured borrowing in Financial instruments owned and recognize the associated financing in Other secured financings in the Consolidated Statements of Financial Condition. |
Leucadia_Merger_and_Related_Tr1
Leucadia Merger and Related Transactions (Tables) | 9 Months Ended | ||||
Aug. 31, 2013 | |||||
Business Combinations [Abstract] | |||||
Summary Computation of Purchase Price and Fair Values Assigned to Assets and Liabilities | The summary computation of the purchase price and the fair values assigned to the assets and liabilities are presented as follows (in thousands except share amounts): | ||||
Purchase Price | |||||
Jefferies common stock outstanding | 205,368,031 | ||||
Less: Jefferies common stock owned by Leucadia | (58,006,024 | ) | |||
Jefferies common stock acquired by Leucadia | 147,362,007 | ||||
Exchange ratio | 0.81 | ||||
Leucadia’s shares issued (excluding for Jefferies shares held by Leucadia) | 119,363,226 | ||||
Less: restricted shares issued for share-base payment awards (1) | (6,894,856 | ) | |||
Leucadia’s shares issued, excluding share-based payment awards | 112,468,370 | ||||
Closing price of Leucadia’s common stock (2) | $ | 26.9 | |||
Fair value of common shares acquired by Leucadia | 3,025,399 | ||||
Fair value of 3.25% cumulative convertible preferred shares (3) | 125,000 | ||||
Fair value of shares-based payment awards (4) | 343,811 | ||||
Fair value of Jefferies shares owned by Leucadia (5) | 1,259,891 | ||||
Total purchase price | $ | 4,754,101 | |||
-1 | Represents shares of restricted stock included in Jefferies common stock outstanding that contained a future service requirement as of March 1, 2013. | ||||
-2 | The value of the shares of common stock exchanged with Jefferies shareholders was based upon the closing price of Leucadia’s common stock at February 28, 2013, the last trading day prior to the date of acquisition. | ||||
-3 | Represents Leucadia’s 3.25% Cumulative Convertible Preferred Shares issued in exchange for Jefferies Group, Inc.‘s 3.25% Series A-1 Convertible Cumulative Preferred Stock. | ||||
-4 | The fair value of share-based payment awards is calculated in accordance with ASC 718, Compensation – Stock Compensation. Share-based payment awards attributable to pre-combination service are included as part of the total purchase price. Share-based payment awards attributable to pre-combination service is estimated based on the ratio of the pre-combination service performed to the original service period of the award. | ||||
-5 | The fair value of Jefferies shares owned by Leucadia was based upon a price of $21.72, the closing price of Jefferies common stock at February 28, 2013. | ||||
Assets Acquired and Liabilities Assumed by Major Class | |||||
Assets acquired (1): | |||||
Cash and cash equivalents | $ | 3,017,958 | |||
Cash and securities segregated | 3,728,742 | ||||
Financial instruments owned, at fair value | 16,413,535 | ||||
Investments in managed funds | 59,976 | ||||
Loans to and investments in related parties | 766,893 | ||||
Securities borrowed | 5,315,488 | ||||
Securities purchased under agreements to resell | 3,578,366 | ||||
Securities received as collateral | 25,338 | ||||
Receivables: | |||||
Brokers, dealers and clearing organizations | 2,444,085 | ||||
Customers | 1,045,251 | ||||
Fees, interest and other | 225,555 | ||||
Premises and equipment | 192,603 | ||||
Indefinite-lived intangible exchange memberships and licenses (2) | 15,551 | ||||
Finite-lived intangible customer relationships (2)(3) | 136,002 | ||||
Finite-lived trade name (2)(4) | 131,299 | ||||
Other assets | 939,600 | ||||
Total assets | $ | 38,036,242 | |||
Liabilities assumed (1): | |||||
Short-term borrowings | $ | 100,000 | |||
Financial instruments sold, not yet purchased, at fair value | 9,766,876 | ||||
Securities loaned | 1,902,687 | ||||
Securities sold under agreements to repurchase | 7,976,492 | ||||
Other secured financings | 122,294 | ||||
Obligation to return securities received as collateral | 25,338 | ||||
Payables: | |||||
Brokers, dealers and clearing organizations | 1,787,055 | ||||
Customers | 5,450,781 | ||||
Accrued expenses and other liabilities | 789,449 | ||||
Long-term debt | 6,362,024 | ||||
Mandatorily redeemable preferred interests | 358,951 | ||||
Total liabilities | $ | 34,641,947 | |||
Noncontrolling interests | 356,180 | ||||
Fair value of net assets acquired, excluding goodwill (1) | $ | 3,038,115 | |||
Goodwill (1) | $ | 1,715,986 | |||
-1 | Modifications to the purchase price allocation have been made since the initial presentation included in our Quarterly Report on Form 10-Q for the three months ended May 31, 2013, which reflect additional information obtained about the fair value of the assets acquired and liabilities assumed. These modifications include adjustments of $4.8 million to reduce the fair value of the total assets acquired and $9.6 million to increase the total liabilities assumed at March 1, 2013. The impact of the adjustments resulted in an increase of goodwill of $14.4 million from the previously presented balance of $1,701.6 million to $1,716.0 million as reflected in this table. | ||||
-2 | Intangible assets are recorded within Other assets on the Consolidated Statements of Financial Condition. | ||||
-3 | The fair value of the finite-lived customer relationships will be amortized on a straight line basis over a weighted average useful life of approximately 14.4 years. | ||||
-4 | The fair value of the finite-lived trade name will be amortized on a straight line basis over a useful life of 35 years. |
Cash_Cash_Equivalents_and_Shor1
Cash, Cash Equivalents and Short-Term Investments (Tables) | 9 Months Ended | ||||||||||
Aug. 31, 2013 | |||||||||||
Cash And Cash Equivalents [Abstract] | |||||||||||
Schedule of Cash, Cash Equivalents and Short-Term Investments | The following are financial instruments classified as cash and cash equivalents that are deemed by us to be generally readily convertible into cash as of August 31, 2013 and November 30, 2012 (in thousands): | ||||||||||
Successor | Predecessor | ||||||||||
August 31, | November 30, | ||||||||||
2013 | 2012 | ||||||||||
Cash and cash equivalents: | |||||||||||
Cash in banks | $ | 938,881 | $ | 1,038,664 | |||||||
Money market investments | 3,180,215 | 1,653,931 | |||||||||
Total cash and cash equivalents | $ | 4,119,096 | $ | 2,692,595 | |||||||
Cash and securities segregated (1) | $ | 3,457,926 | $ | 4,082,595 | |||||||
-1 | Consists of deposits at exchanges and clearing organizations, as well as deposits in accordance with Rule 15c3-3 of the Securities Exchange Act of 1934, which subjects Jefferies as a broker-dealer carrying client accounts to requirements related to maintaining cash or qualified securities in a segregated reserve account for the exclusive benefit of its clients, and Jefferies Bache, LLC which, as a futures commission merchant, is subject to the segregation requirements pursuant to the Commodity Exchange Act. |
Fair_Value_Disclosures_Tables
Fair Value Disclosures (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||
Aug. 31, 2013 | |||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||
Financial Assets and Liabilities Accounted for at Fair Value on Recurring Basis | The following is a summary of our financial assets and liabilities that are accounted for at fair value on a recurring basis as of August 31, 2013 and November 30, 2012 by level within the fair value hierarchy (in thousands): | ||||||||||||||||||||||||||||||||
Successor | |||||||||||||||||||||||||||||||||
31-Aug-13 | |||||||||||||||||||||||||||||||||
Level 1 (1) | Level 2 (1) | Level 3 | Counterparty and | Total | |||||||||||||||||||||||||||||
Cash Collateral | |||||||||||||||||||||||||||||||||
Netting (2) | |||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Financial instruments owned: | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 1,753,178 | $ | 164,045 | $ | 16,079 | $ | — | $ | 1,933,302 | |||||||||||||||||||||||
Corporate debt securities | — | 2,334,115 | 20,633 | — | 2,354,748 | ||||||||||||||||||||||||||||
Collateralized debt obligations | — | 196,639 | 45,872 | — | 242,511 | ||||||||||||||||||||||||||||
U.S. government and federal agency securities | 1,559,899 | 45,993 | — | — | 1,605,892 | ||||||||||||||||||||||||||||
Municipal securities | — | 504,981 | — | — | 504,981 | ||||||||||||||||||||||||||||
Sovereign obligations | 1,225,076 | 691,921 | — | — | 1,916,997 | ||||||||||||||||||||||||||||
Residential mortgage-backed securities | — | 2,951,619 | 132,183 | — | 3,083,802 | ||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 728,365 | 14,423 | — | 742,788 | ||||||||||||||||||||||||||||
Other asset-backed securities | — | 49,020 | 8,570 | — | 57,590 | ||||||||||||||||||||||||||||
Loans and other receivables | — | 812,517 | 130,452 | — | 942,969 | ||||||||||||||||||||||||||||
Derivatives | 38,410 | 1,937,799 | 2,567 | (1,856,907 | ) | 121,869 | |||||||||||||||||||||||||||
Investments at fair value | — | 6,465 | 73,452 | — | 79,917 | ||||||||||||||||||||||||||||
Physical commodities | — | 110,915 | — | — | 110,915 | ||||||||||||||||||||||||||||
Total financial instruments owned | $ | 4,576,563 | $ | 10,534,394 | $ | 444,231 | $ | (1,856,907 | ) | $ | 13,698,281 | ||||||||||||||||||||||
Cash and cash equivalents | $ | 4,119,096 | $ | — | $ | — | $ | — | $ | 4,119,096 | |||||||||||||||||||||||
Investments in managed funds | $ | — | $ | — | $ | 55,897 | $ | — | $ | 55,897 | |||||||||||||||||||||||
Cash and securities segregated and on deposit for regulatory purposes (3) | $ | 3,457,926 | $ | — | $ | — | $ | — | $ | 3,457,926 | |||||||||||||||||||||||
Securities received as collateral | $ | 45,133 | $ | — | $ | — | $ | — | $ | 45,133 | |||||||||||||||||||||||
Total Level 3 assets | $ | 500,128 | |||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Financial instruments sold, not yet purchased: | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 1,675,406 | $ | 64,047 | $ | 38 | $ | — | $ | 1,739,491 | |||||||||||||||||||||||
Corporate debt securities | — | 1,320,896 | — | — | 1,320,896 | ||||||||||||||||||||||||||||
U.S. government and federal agency securities | 1,299,404 | — | — | — | 1,299,404 | ||||||||||||||||||||||||||||
Sovereign obligations | 1,043,906 | 644,205 | — | — | 1,688,111 | ||||||||||||||||||||||||||||
Residential mortgage-backed securities | — | 24,569 | — | — | 24,569 | ||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 13,399 | — | — | 13,399 | ||||||||||||||||||||||||||||
Loans | — | 359,561 | 976 | — | 360,537 | ||||||||||||||||||||||||||||
Derivatives | 39,794 | 1,991,520 | 17,205 | (1,914,692 | ) | 133,827 | |||||||||||||||||||||||||||
Physical commodities | — | 44,796 | — | — | 44,796 | ||||||||||||||||||||||||||||
Total financial instruments sold, not yet purchased | $ | 4,058,510 | $ | 4,462,993 | $ | 18,219 | $ | (1,914,692 | ) | $ | 6,625,030 | ||||||||||||||||||||||
Obligation to return securities received as collateral | $ | 45,133 | $ | — | $ | — | $ | — | $ | 45,133 | |||||||||||||||||||||||
Other secured financings | $ | — | $ | 30,000 | $ | 3,025 | $ | — | $ | 33,025 | |||||||||||||||||||||||
Embedded conversion option | $ | — | $ | 7,336 | $ | — | $ | — | $ | 7,336 | |||||||||||||||||||||||
-1 | During the three months ended August 31, 2013, we transferred from Level 1 to Level 2 listed equity options with a fair value of $403.0 million within Financial instruments owned and $423.0 million within Financial instruments sold, not yet purchased as adjustments to the exchange closing price are necessary to best reflect the fair value of the population at its exit price. | ||||||||||||||||||||||||||||||||
-2 | Represents counterparty and cash collateral netting across the levels of the fair value hierarchy for positions with the same counterparty. | ||||||||||||||||||||||||||||||||
-3 | Securities comprise U.S. government securities segregated for regulatory purposes with a fair value of $279.3 million. | ||||||||||||||||||||||||||||||||
Predecessor | |||||||||||||||||||||||||||||||||
30-Nov-12 | |||||||||||||||||||||||||||||||||
Level 1 (1) | Level 2 (1) | Level 3 | Counterparty and | Total | |||||||||||||||||||||||||||||
Cash Collateral | |||||||||||||||||||||||||||||||||
Netting (2) | |||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Financial instruments owned: | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 1,608,715 | $ | 137,245 | $ | 16,815 | $ | — | $ | 1,762,775 | |||||||||||||||||||||||
Corporate debt securities | — | 3,034,515 | 3,631 | — | 3,038,146 | ||||||||||||||||||||||||||||
Collateralized debt obligations | — | 87,239 | 31,255 | — | 118,494 | ||||||||||||||||||||||||||||
U.S. government and federal agency securities | 1,720,617 | 115,310 | — | — | 1,835,927 | ||||||||||||||||||||||||||||
Municipal securities | — | 619,969 | — | — | 619,969 | ||||||||||||||||||||||||||||
Sovereign obligations | 1,722,044 | 975,810 | — | — | 2,697,854 | ||||||||||||||||||||||||||||
Residential mortgage-backed securities | — | 4,008,844 | 156,069 | — | 4,164,913 | ||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 1,060,333 | 30,202 | — | 1,090,535 | ||||||||||||||||||||||||||||
Other asset-backed securities | — | 93,228 | 1,114 | — | 94,342 | ||||||||||||||||||||||||||||
Loans and other receivables | — | 497,918 | 180,393 | — | 678,311 | ||||||||||||||||||||||||||||
Derivatives | 615,024 | 1,547,984 | 328 | (1,865,250 | ) | 298,086 | |||||||||||||||||||||||||||
Investments at fair value | — | 43,126 | 83,897 | — | 127,023 | ||||||||||||||||||||||||||||
Physical commodities | — | 144,016 | — | — | 144,016 | ||||||||||||||||||||||||||||
Total financial instruments owned | $ | 5,666,400 | $ | 12,365,537 | $ | 503,704 | $ | (1,865,250 | ) | $ | 16,670,391 | ||||||||||||||||||||||
Level 3 financial instruments for which the firm does not bear economic exposure (3) | (53,289 | ) | |||||||||||||||||||||||||||||||
Level 3 financial instruments for which the firm bears economic exposure | $ | 450,415 | |||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 2,692,595 | $ | — | $ | — | $ | — | $ | 2,692,595 | |||||||||||||||||||||||
Investments in managed funds | $ | — | $ | — | $ | 57,763 | $ | — | $ | 57,763 | |||||||||||||||||||||||
Cash and securities segregated and on deposit for regulatory purposes (4) | $ | 4,082,595 | $ | — | $ | — | $ | — | $ | 4,082,595 | |||||||||||||||||||||||
Total Level 3 assets for which the firm bears economic exposure | $ | 508,178 | |||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Financial instruments sold, not yet purchased: | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 1,442,347 | $ | 96,947 | $ | 38 | $ | — | $ | 1,539,332 | |||||||||||||||||||||||
Corporate debt securities | — | 1,389,312 | — | — | 1,389,312 | ||||||||||||||||||||||||||||
U.S. government and federal agency securities | 1,428,746 | 250,387 | — | — | 1,679,133 | ||||||||||||||||||||||||||||
Sovereign obligations | 1,395,355 | 591,624 | — | — | 1,986,979 | ||||||||||||||||||||||||||||
Residential mortgage-backed securities | — | 239,063 | — | — | 239,063 | ||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 2,148 | — | — | 2,148 | ||||||||||||||||||||||||||||
Loans | — | 205,516 | 1,711 | — | 207,227 | ||||||||||||||||||||||||||||
Derivatives | 547,605 | 1,684,884 | 9,516 | (2,012,878 | ) | 229,127 | |||||||||||||||||||||||||||
Physical commodities | — | 183,142 | — | — | 183,142 | ||||||||||||||||||||||||||||
Total financial instruments sold, not yet purchased | $ | 4,814,053 | $ | 4,643,023 | $ | 11,265 | $ | (2,012,878 | ) | $ | 7,455,463 | ||||||||||||||||||||||
-1 | There were no transfers between Level 1 and Level 2 for the year ended November 30, 2012. | ||||||||||||||||||||||||||||||||
-2 | Represents counterparty and cash collateral netting across the levels of the fair value hierarchy for positions with the same counterparty. | ||||||||||||||||||||||||||||||||
-3 | Consists of Level 3 assets attributable to third party or employee noncontrolling interests in certain consolidated entities. | ||||||||||||||||||||||||||||||||
-4 | Securities comprise U.S. government securities segregated for regulatory purposes with a fair value of $404.3 million. | ||||||||||||||||||||||||||||||||
Investments Measured at Fair Value Based on Net Asset Value Per Share | The following tables present information about our investments in entities that have the characteristics of an investment company at August 31, 2013 and November 30, 2012 (in thousands): | ||||||||||||||||||||||||||||||||
Successor | |||||||||||||||||||||||||||||||||
31-Aug-13 | |||||||||||||||||||||||||||||||||
Fair Value (7) | Unfunded | Redemption Frequency | |||||||||||||||||||||||||||||||
Commitments | (if currently eligible) | ||||||||||||||||||||||||||||||||
Equity Long/Short Hedge Funds (1) | $ | 20,360 | $ | — | Monthly, Quarterly | ||||||||||||||||||||||||||||
High Yield Hedge Funds(2) | 341 | — | — | ||||||||||||||||||||||||||||||
Fund of Funds(3) | 474 | 106 | — | ||||||||||||||||||||||||||||||
Equity Funds(4) | 66,526 | 49,019 | — | ||||||||||||||||||||||||||||||
Convertible Bond Funds(5) | 3,081 | — | At Will | ||||||||||||||||||||||||||||||
Other Investments(6) | 17 | — | Bi-Monthly | ||||||||||||||||||||||||||||||
Total(8) | $ | 90,799 | $ | 49,125 | |||||||||||||||||||||||||||||
Predecessor | |||||||||||||||||||||||||||||||||
30-Nov-12 | |||||||||||||||||||||||||||||||||
Fair Value (7) | Unfunded | Redemption Frequency | |||||||||||||||||||||||||||||||
Commitments | (if currently eligible) | ||||||||||||||||||||||||||||||||
Equity Long/Short Hedge Funds (1) | $ | 19,554 | $ | — | Monthly, Quarterly | ||||||||||||||||||||||||||||
High Yield Hedge Funds(2) | 612 | — | — | ||||||||||||||||||||||||||||||
Fund of Funds(3) | 604 | 106 | — | ||||||||||||||||||||||||||||||
Equity Funds(4) | 69,223 | 59,272 | — | ||||||||||||||||||||||||||||||
Convertible Bond Funds(5) | 3,002 | — | At Will | ||||||||||||||||||||||||||||||
Other Investments(6) | 19 | — | Bi-Monthly | ||||||||||||||||||||||||||||||
Total(8) | $ | 93,014 | $ | 59,378 | |||||||||||||||||||||||||||||
-1 | This category includes investments in hedge funds that invest, long and short, in equity securities in domestic and international markets in both the public and private sectors. At August 31, 2013 and November 30, 2012, investments representing approximately 98% and 96%, respectively, of the fair value of investments in this category are redeemable with 30 – 65 days prior written notice. The remaining investments in this category cannot be redeemed as they are in liquidation and distributions will be received through the liquidation of the underlying assets of the funds. We are unable to estimate when the underlying assets will be liquidated. | ||||||||||||||||||||||||||||||||
-2 | Includes investments in funds that invest in domestic and international public high yield debt, private high yield investments, senior bank loans, public leveraged equities, distressed debt, and private equity investments. There are no redemption provisions. The underlying assets of the funds are being liquidated and we are unable to estimate when the underlying assets will be fully liquidated. | ||||||||||||||||||||||||||||||||
-3 | Includes investments in fund of funds that invest in various private equity funds. At August 31, 2013 and November 30, 2012, approximately 98% and 94%, respectively, of the fair value of investments in this category are managed by us and have no redemption provisions, instead distributions are received through the liquidation of the underlying assets of the fund of funds, which are estimated to be liquidated in one to two years. For the remaining investments we have requested redemption; however, we are unable to estimate when these funds will be received. | ||||||||||||||||||||||||||||||||
-4 | At August 31, 2013 and November 30, 2012, investments representing approximately 99% and 98%, respectively of the fair value of investments in this category include investments in equity funds that invest in the equity of various U.S. and foreign private companies in the energy, technology, internet service and telecommunication service industries. These investments cannot be redeemed, instead distributions are received through the liquidation of the underlying assets of the funds which are expected to liquidate in one to eight years. The remaining investments are in liquidation and we are unable to estimate when the underlying assets will be fully liquidated. At August 31, 2013 and November 30, 2012, this category includes investments in equity funds managed by us with a fair value of $53.7 million and $55.6 million and unfunded commitments of $47.5 million and $56.9 million, respectively. | ||||||||||||||||||||||||||||||||
-5 | Investment in the Jefferies Umbrella Fund, an open-ended investment company managed by us that invests primarily in convertible bonds. The investment is redeemable with 5 days prior written notice. | ||||||||||||||||||||||||||||||||
-6 | Other investments at August 31, 2013 and November 30, 2012 included investments in funds that invest in commodity futures and options contracts. | ||||||||||||||||||||||||||||||||
-7 | Fair value has been estimated using the net asset value derived from each of the funds’ capital statements. | ||||||||||||||||||||||||||||||||
-8 | Investments at fair value in the Consolidated Statements of Financial Condition at August 31, 2013 and November 30, 2012 include $45.0 million and $91.8 million, respectively, of direct investments which do not have the characteristics of investment companies and therefore not included within this table. | ||||||||||||||||||||||||||||||||
Summary of Valuation Bases (Pricing Information) for Financial Instruments | At August 31, 2013 and November 30, 2012, our Financial instruments owned and Financial instruments sold, not yet purchased are measured using different valuation bases as follows: | ||||||||||||||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||||||||||||||
31-Aug-13 | 30-Nov-12 | ||||||||||||||||||||||||||||||||
Financial | Financial | Financial | Financial | ||||||||||||||||||||||||||||||
Instruments | Instruments Sold, | Instruments | Instruments Sold, | ||||||||||||||||||||||||||||||
Owned | Not Yet | Owned | Not Yet | ||||||||||||||||||||||||||||||
Purchased | Purchased | ||||||||||||||||||||||||||||||||
Exchange closing prices | 13 | % | 26 | % | 11 | % | 19 | % | |||||||||||||||||||||||||
Recently observed transaction prices | 7 | % | 4 | % | 5 | % | 6 | % | |||||||||||||||||||||||||
External pricing services | 56 | % | 65 | % | 70 | % | 71 | % | |||||||||||||||||||||||||
Broker quotes | 3 | % | 3 | % | 1 | % | 0 | % | |||||||||||||||||||||||||
Valuation techniques | 21 | % | 2 | % | 13 | % | 4 | % | |||||||||||||||||||||||||
100 | % | 100 | % | 100 | % | 100 | % | ||||||||||||||||||||||||||
Summary of Changes in Fair Value of Financial Assets and Liabilities Classified as Level 3 | The following is a summary of changes in fair value of our financial assets and liabilities that have been categorized within Level 3 of the fair value hierarchy for the three months ended August 31, 2013 (in thousands): | ||||||||||||||||||||||||||||||||
Successor | |||||||||||||||||||||||||||||||||
Three Months Ended August 31, 2013 (3) | |||||||||||||||||||||||||||||||||
Balance, | Total gains/ | Purchases | Sales | Settlements | Net | Balance, | Change in | ||||||||||||||||||||||||||
May 31, | losses | transfers | August 31, | unrealized gains/ | |||||||||||||||||||||||||||||
2013 | (realized and | into/ (out | 2013 | (losses) relating | |||||||||||||||||||||||||||||
unrealized) | of) | to instruments | |||||||||||||||||||||||||||||||
-1 | Level 3 | still held at | |||||||||||||||||||||||||||||||
August 31, | |||||||||||||||||||||||||||||||||
2013 (1) | |||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Financial instruments owned: | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 19,577 | $ | (788 | ) | $ | — | $ | (930 | ) | $ | — | $ | (1,780 | ) | $ | 16,079 | $ | (786 | ) | |||||||||||||
Corporate debt securities | 18,615 | (4,285 | ) | 68 | (571 | ) | — | 6,806 | 20,633 | (4,342 | ) | ||||||||||||||||||||||
Collateralized debt obligations | 45,124 | (1,903 | ) | 8,222 | (4,236 | ) | — | (1,335 | ) | 45,872 | (2,388 | ) | |||||||||||||||||||||
Residential mortgage-backed securities | 143,766 | (1,876 | ) | 33,831 | (50,938 | ) | (2,306 | ) | 9,706 | 132,183 | (3,898 | ) | |||||||||||||||||||||
Commercial mortgage-backed securities | 16,068 | 2,033 | 130 | (310 | ) | (3,703 | ) | 205 | 14,423 | (1,106 | ) | ||||||||||||||||||||||
Other asset-backed securities | 1,444 | 2,170 | 7,576 | (3,279 | ) | — | 659 | 8,570 | 2,142 | ||||||||||||||||||||||||
Loans and other receivables | 117,496 | (198 | ) | 52,246 | (12,139 | ) | (25,395 | ) | (1,558 | ) | 130,452 | 609 | |||||||||||||||||||||
Investments, at fair value | 76,364 | 1,848 | — | (101 | ) | (710 | ) | (3,949 | ) | 73,452 | 2,002 | ||||||||||||||||||||||
Investments in managed funds | 55,141 | 4,034 | 6,598 | — | (9,876 | ) | — | 55,897 | 4,034 | ||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Financial instruments sold, not yet purchased: | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 38 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 38 | $ | — | |||||||||||||||||
Net derivatives (2) | 10,799 | 3,899 | — | — | (60 | ) | — | 14,638 | (3,899 | ) | |||||||||||||||||||||||
Loans | 15,212 | — | (14,952 | ) | 716 | — | — | 976 | — | ||||||||||||||||||||||||
Other secured financing | 2,294 | 731 | — | — | — | — | 3,025 | (731 | ) | ||||||||||||||||||||||||
-1 | Realized and unrealized gains/losses are reported in Principal transactions in the Consolidated Statements of Earnings. | ||||||||||||||||||||||||||||||||
-2 | Net derivatives represent Financial instruments owned – Derivatives and Financial instruments sold, not yet purchased – Derivatives. | ||||||||||||||||||||||||||||||||
-3 | There were no issuances during the three months ended August 31, 2013. | ||||||||||||||||||||||||||||||||
The following is a summary of changes in fair value of our financial assets and liabilities that have been categorized within Level 3 of the fair value hierarchy for the six months ended August 31, 2013 (in thousands): | |||||||||||||||||||||||||||||||||
Successor | |||||||||||||||||||||||||||||||||
Six Months Ended August 31, 2013 (3) | |||||||||||||||||||||||||||||||||
Balance, | Total gains/ | Purchases | Sales | Settlements | Net | Balance, | Change in | ||||||||||||||||||||||||||
February 28, | losses | transfers | August 31, | unrealized gains/ | |||||||||||||||||||||||||||||
2013 | (realized and | into/ (out | 2013 | (losses) relating | |||||||||||||||||||||||||||||
unrealized) | of) | to instruments | |||||||||||||||||||||||||||||||
-1 | Level 3 | still held at | |||||||||||||||||||||||||||||||
August 31, | |||||||||||||||||||||||||||||||||
2013 (1) | |||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Financial instruments owned: | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 13,234 | $ | 1,053 | $ | 213 | $ | (753 | ) | $ | 266 | $ | 2,066 | $ | 16,079 | $ | 1,243 | ||||||||||||||||
Corporate debt securities | 31,820 | (17,415 | ) | 708 | (2,556 | ) | — | 8,076 | 20,633 | (6,933 | ) | ||||||||||||||||||||||
Collateralized debt obligations | 29,776 | (2,008 | ) | 43,152 | (27,676 | ) | — | 2,628 | 45,872 | (3,830 | ) | ||||||||||||||||||||||
Residential mortgage-backed securities | 169,426 | 5,594 | 79,531 | (105,671 | ) | (4,851 | ) | (11,846 | ) | 132,183 | 586 | ||||||||||||||||||||||
Commercial mortgage-backed securities | 17,794 | (735 | ) | 1,533 | (3,054 | ) | (5,281 | ) | 4,166 | 14,423 | (5,007 | ) | |||||||||||||||||||||
Other asset-backed securities | 1,252 | 2,168 | 7,618 | (3,127 | ) | — | 659 | 8,570 | 2,077 | ||||||||||||||||||||||||
Loans and other receivables | 170,986 | (5,103 | ) | 206,672 | (26,630 | ) | (213,662 | ) | (1,811 | ) | 130,452 | (8,063 | ) | ||||||||||||||||||||
Investments, at fair value | 70,067 | 653 | 5,000 | (102 | ) | (3,204 | ) | 1,038 | 73,452 | 668 | |||||||||||||||||||||||
Investments in managed funds | 59,976 | 3,108 | 9,130 | — | (16,439 | ) | 122 | 55,897 | 3,108 | ||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Financial instruments sold, not yet purchased: | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 38 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 38 | $ | — | |||||||||||||||||
Residential mortgage-backed securities | 1,542 | (1,542 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||
Net derivatives (2) | 11,185 | 3,453 | — | — | — | — | 14,638 | (3,453 | ) | ||||||||||||||||||||||||
Loans | 7,398 | — | (20,221 | ) | 13,799 | — | — | 976 | — | ||||||||||||||||||||||||
Other secured financing | — | 731 | — | — | — | 2,294 | 3,025 | (731 | ) | ||||||||||||||||||||||||
-1 | Realized and unrealized gains/losses are reported in Principal transactions in the Consolidated Statements of Earnings. | ||||||||||||||||||||||||||||||||
-2 | Net derivatives represent Financial instruments owned – Derivatives and Financial instruments sold, not yet purchased – Derivatives. | ||||||||||||||||||||||||||||||||
-3 | There were no issuances during the six months ended August 31, 2013. | ||||||||||||||||||||||||||||||||
The following is a summary of changes in fair value of our financial assets and liabilities that have been categorized within Level 3 of the fair value hierarchy for the three months ended February 28, 2013 (in thousands): | |||||||||||||||||||||||||||||||||
Predecessor | |||||||||||||||||||||||||||||||||
Three Months Ended February 28, 2013 (3) | |||||||||||||||||||||||||||||||||
Balance, | Total gains/ | Purchases | Sales | Settlements | Net | Balance, | Change in | ||||||||||||||||||||||||||
November 30, | losses | transfers | February 28, | unrealized gains/ | |||||||||||||||||||||||||||||
2012 | (realized and | into/ (out | 2013 | (losses) relating | |||||||||||||||||||||||||||||
unrealized) | of) | to instruments | |||||||||||||||||||||||||||||||
-1 | Level 3 | still held at | |||||||||||||||||||||||||||||||
February 28, | |||||||||||||||||||||||||||||||||
2013 (1) | |||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Financial instruments owned: | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 16,815 | $ | 200 | $ | 707 | $ | 109 | $ | — | $ | (4,597 | ) | $ | 13,234 | $ | 172 | ||||||||||||||||
Corporate debt securities | 3,631 | 7,836 | 11,510 | (1,918 | ) | — | 10,761 | 31,820 | 7,833 | ||||||||||||||||||||||||
Collateralized debt obligations | 31,255 | 3,624 | 9,406 | (17,374 | ) | — | 2,865 | 29,776 | (1,125 | ) | |||||||||||||||||||||||
Residential mortgage-backed securities | 156,069 | 11,906 | 132,773 | (130,143 | ) | (6,057 | ) | 4,878 | 169,426 | 4,511 | |||||||||||||||||||||||
Commercial mortgage-backed securities | 30,202 | (995 | ) | 2,280 | (2,866 | ) | (1,188 | ) | (9,639 | ) | 17,794 | (2,059 | ) | ||||||||||||||||||||
Other asset-backed securities | 1,114 | 50 | 1,627 | (1,342 | ) | (19 | ) | (178 | ) | 1,252 | (1 | ) | |||||||||||||||||||||
Loans and other receivables | 180,393 | (8,682 | ) | 105,650 | (29,828 | ) | (61,407 | ) | (15,140 | ) | 170,986 | (12,374 | ) | ||||||||||||||||||||
Investments, at fair value | 83,897 | 961 | 952 | (4,923 | ) | (9,721 | ) | (1,099 | ) | 70,067 | 1,171 | ||||||||||||||||||||||
Investments in managed funds | 57,763 | (363 | ) | 11,068 | — | (8,492 | ) | — | 59,976 | (363 | ) | ||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Financial instruments sold, not yet purchased: | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 38 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 38 | $ | — | |||||||||||||||||
Residential mortgage-backed securities | — | 25 | (73,846 | ) | 75,363 | — | — | 1,542 | (19 | ) | |||||||||||||||||||||||
Net derivatives (2) | 9,188 | 2,648 | — | — | — | (651 | ) | 11,185 | 2,648 | ||||||||||||||||||||||||
Loans | 1,711 | — | (1,711 | ) | 7,398 | — | — | 7,398 | — | ||||||||||||||||||||||||
-1 | Realized and unrealized gains/losses are reported in Principal transactions in the Consolidated Statements of Earnings. | ||||||||||||||||||||||||||||||||
-2 | Net derivatives represent Financial instruments owned – Derivatives and Financial instruments sold, not yet purchased – Derivatives. | ||||||||||||||||||||||||||||||||
-3 | There were no issuances during the three months ended February 28, 2013. | ||||||||||||||||||||||||||||||||
The following is a summary of changes in fair value of our financial assets and liabilities that have been categorized within Level 3 of the fair value hierarchy for the three months ended August 31, 2012 (in thousands): | |||||||||||||||||||||||||||||||||
Predecessor | |||||||||||||||||||||||||||||||||
Three Months Ended August 31, 2012 (3) | |||||||||||||||||||||||||||||||||
Balance, | Total gains/ | Purchases | Sales | Settlements | Net | Balance, | Change in | ||||||||||||||||||||||||||
May 31, | losses | transfers | August 31, | unrealized gains/ | |||||||||||||||||||||||||||||
2012 | (realized and | into/ (out | 2012 | (losses) relating | |||||||||||||||||||||||||||||
unrealized) | of) | to instruments | |||||||||||||||||||||||||||||||
-1 | Level 3 | still held at | |||||||||||||||||||||||||||||||
August 31, | |||||||||||||||||||||||||||||||||
2012 (1) | |||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Financial instruments owned: | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 25,789 | $ | 260 | $ | 2,991 | $ | (15,418 | ) | $ | — | $ | 6,161 | $ | 19,783 | $ | (907 | ) | |||||||||||||||
Corporate debt securities | 7,972 | (101 | ) | 521 | (1,118 | ) | — | 284 | 7,558 | (136 | ) | ||||||||||||||||||||||
Collateralized debt obligations | 84,006 | 6,710 | — | (11,008 | ) | — | 1,890 | 81,598 | 5,836 | ||||||||||||||||||||||||
Municipal securities | 465 | 5 | — | (387 | ) | — | — | 83 | 5 | ||||||||||||||||||||||||
Residential mortgage-backed securities | 123,555 | 2,542 | 27,401 | (65,422 | ) | (5,216 | ) | 62,128 | 144,988 | 359 | |||||||||||||||||||||||
Commercial mortgage-backed securities | 40,594 | (1,327 | ) | 2,092 | (1,307 | ) | (450 | ) | (8,089 | ) | 31,513 | (1,310 | ) | ||||||||||||||||||||
Other asset-backed securities | 1,273 | — | — | — | (291 | ) | (774 | ) | 208 | — | |||||||||||||||||||||||
Loans and other receivables | 108,674 | (528 | ) | 57,790 | (30,632 | ) | (56,404 | ) | 29,889 | 108,789 | (237 | ) | |||||||||||||||||||||
Investments, at fair value | 91,836 | (202 | ) | 1,120 | — | (775 | ) | — | 91,979 | (466 | ) | ||||||||||||||||||||||
Investments in managed funds | 68,314 | (5,389 | ) | 2,173 | — | (4,987 | ) | 10 | 60,121 | (5,382 | ) | ||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Financial instruments sold, not yet purchased: | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 12,039 | $ | (410 | ) | $ | (11,782 | ) | $ | 191 | $ | — | $ | — | $ | 38 | $ | — | |||||||||||||||
Corporate debt securities | 74 | (15 | ) | (59 | ) | — | — | — | — | — | |||||||||||||||||||||||
Net derivatives (2) | 4,395 | 7,342 | — | — | — | 10 | 11,747 | 6,209 | |||||||||||||||||||||||||
Loans | — | — | — | 4,285 | — | — | 4,285 | — | |||||||||||||||||||||||||
-1 | Realized and unrealized gains/losses are reported in Principal transactions in the Consolidated Statements of Earnings. | ||||||||||||||||||||||||||||||||
-2 | Net derivatives represent Financial instruments owned – Derivatives and Financial instruments sold, not yet purchased – Derivatives. | ||||||||||||||||||||||||||||||||
-3 | There were no issuances during the three months ended August 31, 2012. | ||||||||||||||||||||||||||||||||
The following is a summary of changes in fair value of our financial assets and liabilities that have been categorized within Level 3 of the fair value hierarchy for the nine months ended August 31, 2012 (in thousands): | |||||||||||||||||||||||||||||||||
Predecessor | |||||||||||||||||||||||||||||||||
Nine Months Ended August 31, 2012 (3) | |||||||||||||||||||||||||||||||||
Balance, | Total gains/ | Purchases | Sales | Settlements | Net | Balance, | Change in | ||||||||||||||||||||||||||
November 30, | losses | transfers | August 31, | unrealized gains/ | |||||||||||||||||||||||||||||
2011 | (realized and | into/ (out | 2012 | (losses) relating | |||||||||||||||||||||||||||||
unrealized) | of) | to instruments | |||||||||||||||||||||||||||||||
-1 | Level 3 | still held at | |||||||||||||||||||||||||||||||
August 31, | |||||||||||||||||||||||||||||||||
2012 (1) | |||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Financial instruments owned: | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 13,489 | $ | (2,580 | ) | $ | 20,676 | $ | (13,437 | ) | $ | — | $ | 1,635 | $ | 19,783 | $ | (4,636 | ) | ||||||||||||||
Corporate debt securities | 48,140 | 85 | 7,228 | (39,367 | ) | (1,276 | ) | (7,252 | ) | 7,558 | (656 | ) | |||||||||||||||||||||
Collateralized debt obligations | 47,988 | 4,278 | 8,479 | (18,699 | ) | (3,892 | ) | 43,444 | 81,598 | 3,515 | |||||||||||||||||||||||
Municipal securities | 6,904 | (74 | ) | — | (1,366 | ) | — | (5,381 | ) | 83 | 5 | ||||||||||||||||||||||
Sovereign obligations | 140 | — | — | — | — | (140 | ) | — | — | ||||||||||||||||||||||||
Residential mortgage-backed securities | 149,965 | (17,833 | ) | 59,477 | (101,039 | ) | (8,489 | ) | 62,907 | 144,988 | (8,884 | ) | |||||||||||||||||||||
Commercial mortgage-backed securities | 52,407 | (2,221 | ) | 5,090 | (5,441 | ) | (115 | ) | (18,207 | ) | 31,513 | (2,769 | ) | ||||||||||||||||||||
Other asset-backed securities | 3,284 | 141 | 19,397 | (20,351 | ) | (51 | ) | (2,212 | ) | 208 | 3 | ||||||||||||||||||||||
Loans and other receivables | 97,291 | (2,674 | ) | 158,305 | (60,111 | ) | (104,476 | ) | 20,454 | 108,789 | (4,109 | ) | |||||||||||||||||||||
Investments, at fair value | 78,326 | 15,076 | 1,909 | (6 | ) | (3,326 | ) | — | 91,979 | 14,412 | |||||||||||||||||||||||
Investments in managed funds | 70,740 | (17,765 | ) | 12,683 | — | (5,537 | ) | — | 60,121 | (17,765 | ) | ||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Financial instruments sold, not yet purchased: | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | — | $ | 38 | $ | — | $ | — | $ | — | $ | — | $ | 38 | $ | 38 | |||||||||||||||||
Corporate debt securities | 74 | (15 | ) | (59 | ) | — | — | — | — | — | |||||||||||||||||||||||
Net derivatives (2) | 9,285 | 5,064 | (389 | ) | — | — | (2,213 | ) | 11,747 | 6,087 | |||||||||||||||||||||||
Loans | 10,157 | — | (10,157 | ) | 4,285 | — | — | 4,285 | — | ||||||||||||||||||||||||
-1 | Realized and unrealized gains/losses are reported in Principal transactions in the Consolidated Statements of Earnings. | ||||||||||||||||||||||||||||||||
-2 | Net derivatives represent Financial instruments owned – Derivatives and Financial instruments sold, not yet purchased – Derivatives. | ||||||||||||||||||||||||||||||||
-3 | There were no issuances during the nine months ended August 31, 2012. | ||||||||||||||||||||||||||||||||
Quantitative Information about Significant Unobservable Inputs Used in Level 3 Fair Value Measurements | The disclosed inputs when compared with the inputs as disclosed in other quarters should not be expected to necessarily be indicative of changes in our estimates of unobservable inputs for a particular financial instrument as the population of financial instruments comprising the category will vary from period to period based on purchases and sales of financial instruments during the period as well as transfers into and out of Level 3 each period. | ||||||||||||||||||||||||||||||||
Successor | |||||||||||||||||||||||||||||||||
August 31, 2013 | |||||||||||||||||||||||||||||||||
Financial Instruments Owned | Fair Value (in | Valuation Technique | Significant Unobservable Input(s) | Input / Range | Weighted | ||||||||||||||||||||||||||||
thousands) | Average | ||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 11,665 | |||||||||||||||||||||||||||||||
Non-exchange traded securities | Market approach | EBITDA (a) multiple | 16 | ||||||||||||||||||||||||||||||
Comparable pricing | Comparable share price | $76.75 | |||||||||||||||||||||||||||||||
Warrants | Option model | Volatility | 37% | ||||||||||||||||||||||||||||||
Corporate debt securities | $ | 18,313 | |||||||||||||||||||||||||||||||
Scenario analysis | Estimated recovery percentage | 21% | |||||||||||||||||||||||||||||||
Comparable pricing | Comparable bond or loan price | $63.70 to $126 | $ | 78.28 | |||||||||||||||||||||||||||||
Market approach | Yield | 12.60% | |||||||||||||||||||||||||||||||
Collateralized debt obligations | $ | 35,512 | |||||||||||||||||||||||||||||||
Discounted cash flows | Constant prepayment rate | 0% to 20% | 14 | % | |||||||||||||||||||||||||||||
Constant default rate | 0% to 10% | 2 | % | ||||||||||||||||||||||||||||||
Loss severity | 13% to 75% | 49 | % | ||||||||||||||||||||||||||||||
Yield | 5% to 75% | 24 | % | ||||||||||||||||||||||||||||||
Residential mortgage-backed | $ | 114,278 | |||||||||||||||||||||||||||||||
Discounted cash flows | Constant prepayment rate | 0% to 22% | 5 | % | |||||||||||||||||||||||||||||
Constant default rate | 1% to 50% | 6 | % | ||||||||||||||||||||||||||||||
Loss severity | 25% to 75% | 50 | % | ||||||||||||||||||||||||||||||
Yield | 0% to 28% | 7 | % | ||||||||||||||||||||||||||||||
Commercial mortgage-backed | $ | 5,847 | |||||||||||||||||||||||||||||||
Comparable pricing | Comparable bond or loan price | $12.50 | |||||||||||||||||||||||||||||||
Discounted cash flows | Yield | 15% to 26% | 21 | % | |||||||||||||||||||||||||||||
Cumulative loss rate | 0% to 22% | 12 | % | ||||||||||||||||||||||||||||||
Other asset-backed securities | $ | 7,711 | |||||||||||||||||||||||||||||||
Discounted cash flows | Constant prepayment rate | 0% to 30% | 22 | % | |||||||||||||||||||||||||||||
Constant default rate | 0% to 11% | 8 | % | ||||||||||||||||||||||||||||||
Loss severity | 75% to 92% | 89 | % | ||||||||||||||||||||||||||||||
Yield | 9% to 25% | 20 | % | ||||||||||||||||||||||||||||||
Loans and other receivables | $ | 81,282 | |||||||||||||||||||||||||||||||
Comparable pricing | Comparable bond or loan price | $90.50 to $100 | $ | 98.9 | |||||||||||||||||||||||||||||
Market approach | Yield | 12% | |||||||||||||||||||||||||||||||
EBITDA (a) multiple | 6.5 | ||||||||||||||||||||||||||||||||
Scenario analysis | Estimated recovery percentage | 17% to 86% | 52 | % | |||||||||||||||||||||||||||||
Derivatives | $ | 1,600 | |||||||||||||||||||||||||||||||
Loan Commitments | Comparable pricing | Comparable bond or loan price | $101.38 | ||||||||||||||||||||||||||||||
Investments at fair value | $ | 5,975 | |||||||||||||||||||||||||||||||
Private equity securities | Comparable pricing | Comparable share price | $ | 414 | |||||||||||||||||||||||||||||
Financial Instruments Sold, Not Yet | Fair Value (in | Valuation Technique | Significant Unobservable Input(s) | Input / Range | Weighted | ||||||||||||||||||||||||||||
Purchased | thousands) | Average | |||||||||||||||||||||||||||||||
Derivatives | $ | (12,879 | ) | ||||||||||||||||||||||||||||||
Equity options | Option model | Volatility | 36% to 41% | 39 | % | ||||||||||||||||||||||||||||
Loan commitments | Comparable pricing | Comparable bond or loan price | $101.38 | ||||||||||||||||||||||||||||||
(a) | Earnings before interest, taxes, depreciation and amortization (“EBITDA”). | ||||||||||||||||||||||||||||||||
Predecessor | |||||||||||||||||||||||||||||||||
30-Nov-12 | |||||||||||||||||||||||||||||||||
Financial Instruments Owned | Fair Value (in | Valuation Technique | Significant Unobservable Input(s) | Range | |||||||||||||||||||||||||||||
thousands) | |||||||||||||||||||||||||||||||||
Corporate equity securities | $ | 16,815 | |||||||||||||||||||||||||||||||
Non-exchange traded securities | Market approach | EBITDA (a) multiple | 4.0 to 16.3 | ||||||||||||||||||||||||||||||
Scenario analysis | Estimated recovery percentage | 35% | |||||||||||||||||||||||||||||||
Warrants | Option model | Volatility | 39% | ||||||||||||||||||||||||||||||
Collateralized debt obligations | $ | 26,705 | |||||||||||||||||||||||||||||||
Discounted cash flows | Constant prepayment rate | 0% to 5% | |||||||||||||||||||||||||||||||
Constant default rate | 0% to 10% | ||||||||||||||||||||||||||||||||
Loss severity | 13% to 75% | ||||||||||||||||||||||||||||||||
Yield | 10% to 35% | ||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | $ | 156,069 | |||||||||||||||||||||||||||||||
Discounted cash flows | Constant prepayment rate | 0% to 25% | |||||||||||||||||||||||||||||||
Constant default rate | 0% to 50% | ||||||||||||||||||||||||||||||||
Loss severity | 0% to 80% | ||||||||||||||||||||||||||||||||
Yield | 1% to 50% | ||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | $ | 30,202 | |||||||||||||||||||||||||||||||
Discounted cash flows | Yield | 22% to 57% | |||||||||||||||||||||||||||||||
Cumulative loss rate | 2% to 20% | ||||||||||||||||||||||||||||||||
Loans and other receivables | $ | 153,365 | |||||||||||||||||||||||||||||||
Comparable pricing | Comparable bond or loan price | $81.88 to $101.25 | |||||||||||||||||||||||||||||||
Discounted cash flows | Yield | 19% | |||||||||||||||||||||||||||||||
Cumulative loss rate | 0% | ||||||||||||||||||||||||||||||||
Market approach | Yield | 5% to 54% | |||||||||||||||||||||||||||||||
EBITDA (a) multiple | 8.3 | ||||||||||||||||||||||||||||||||
Scenario analysis | Estimated recovery percentage | 15% | |||||||||||||||||||||||||||||||
Investments at fair value | $ | 32,751 | |||||||||||||||||||||||||||||||
Private equity securities | Market approach | EBITDA (a) multiple | 6.6 | ||||||||||||||||||||||||||||||
Comparable pricing | Comparable share price | $400.00 | |||||||||||||||||||||||||||||||
Scenario analysis | Estimated recovery percentage | 50% | |||||||||||||||||||||||||||||||
Financial Instruments Sold, Not Yet Purchased | Fair Value (in | Valuation Technique | Significant Unobservable Input(s) | Range | |||||||||||||||||||||||||||||
thousands) | |||||||||||||||||||||||||||||||||
Derivatives | $ | (9,516 | ) | ||||||||||||||||||||||||||||||
Equity options | Option model | Volatility | 39% | ||||||||||||||||||||||||||||||
Loan commitments | Comparable pricing | Comparable bond or loan price | $ | 101.13 | |||||||||||||||||||||||||||||
(a) | Earnings before interest, taxes, depreciation and amortization (“EBITDA”). | ||||||||||||||||||||||||||||||||
Summary of Gains (Losses) Due to Changes in Instrument Specific Credit Risk and Summary of Contractual Principal Exceeds Fair Value for Loans and Other Receivables | The following is a summary of gains (losses) due to changes in instrument specific credit risk on loans and other receivables and loan commitments measured at fair value under the fair value option (in thousands): | ||||||||||||||||||||||||||||||||
Successor | Successor | Predecessor | |||||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | Three Months Ended | Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||
August 31, 2013 | August 31, 2013 | February 28, 2013 | August 31, 2012 | August 31, 2012 | |||||||||||||||||||||||||||||
Financial Instruments Owned: | |||||||||||||||||||||||||||||||||
Loans and other receivables | $ | 1,097 | $ | 2,284 | $ | 3,924 | $ | 5,012 | $ | 9,664 | |||||||||||||||||||||||
Financial Instruments Sold: | |||||||||||||||||||||||||||||||||
Loans | $ | — | $ | — | $ | — | $ | (320 | ) | $ | (466 | ) | |||||||||||||||||||||
Loan commitments | 4,440 | (2,059 | ) | (2,746 | ) | (5,213 | ) | (7,088 | ) | ||||||||||||||||||||||||
The following is a summary of the amount by which contractual principal exceeds fair value for loans and other receivables measured at fair value under the fair value option (in thousands): | |||||||||||||||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||||||||||||||
August 31, | November 30, | ||||||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||||||
Financial Instruments Owned: | |||||||||||||||||||||||||||||||||
Loans and other receivables (2) | $ | 226,332 | $ | 256,271 | |||||||||||||||||||||||||||||
Loans greater than 90 days past due (1) (2) | 7,809 | 10,433 | |||||||||||||||||||||||||||||||
-1 | The aggregate fair value of loans that were 90 or more days past due was $5.2 million and $34.7 million at August 31, 2013 and November 30, 2012. | ||||||||||||||||||||||||||||||||
-2 | Interest income is recognized separately from other changes in fair value and is included within Interest revenues on the Consolidated Statements of Earnings. |
Derivative_Financial_Instrumen1
Derivative Financial Instruments (Tables) | 9 Months Ended | ||||||||||||||||||||||
Aug. 31, 2013 | |||||||||||||||||||||||
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||
Fair Value and Related Number of Derivative Contracts Categorized by Type of Derivative Contract | The following tables present the fair value and related number of derivative contracts at August 31, 2013 and November 30, 2012 categorized by type of derivative contract. The fair value of assets/liabilities related to derivative contracts represents our receivable/payable for derivative financial instruments, gross of counterparty netting and cash collateral received and pledged (in thousands, except contract amounts): | ||||||||||||||||||||||
Successor | |||||||||||||||||||||||
31-Aug-13 | |||||||||||||||||||||||
Assets | Liabilities | ||||||||||||||||||||||
Fair Value | Number of | Fair Value | Number of | ||||||||||||||||||||
Contracts | Contracts | ||||||||||||||||||||||
Interest rate contracts | $ | 846,497 | 32,663 | $ | 881,518 | 57,449 | |||||||||||||||||
Foreign exchange contracts | 534,443 | 120,650 | 548,061 | 114,965 | |||||||||||||||||||
Equity contracts | 447,376 | 1,853,291 | 468,562 | 1,875,348 | |||||||||||||||||||
Commodity contracts | 135,866 | 464,064 | 130,612 | 464,679 | |||||||||||||||||||
Credit contracts: centrally cleared swaps | 10,015 | 19 | 10,855 | 17 | |||||||||||||||||||
Credit contracts: other credit derivatives | 4,580 | 24 | 8,910 | 19 | |||||||||||||||||||
Total | 1,978,777 | 2,048,518 | |||||||||||||||||||||
Counterparty/cash-collateral netting | (1,856,908 | ) | (1,914,691 | ) | |||||||||||||||||||
Total per Consolidated Statement of Financial Condition | $ | 121,869 | $ | 133,827 | |||||||||||||||||||
Predecessor | |||||||||||||||||||||||
30-Nov-12 | |||||||||||||||||||||||
Assets | Liabilities | ||||||||||||||||||||||
Fair Value | Number of | Fair Value | Number of | ||||||||||||||||||||
Contracts | Contracts | ||||||||||||||||||||||
Interest rate contracts | $ | 927,896 | 67,410 | $ | 1,065,788 | 90,831 | |||||||||||||||||
Foreign exchange contracts | 387,325 | 118,958 | 357,277 | 116,758 | |||||||||||||||||||
Equity contracts | 577,964 | 1,526,127 | 528,979 | 1,396,213 | |||||||||||||||||||
Commodity contracts | 265,703 | 754,987 | 278,660 | 728,696 | |||||||||||||||||||
Credit contracts | 4,448 | 13 | 11,301 | 40 | |||||||||||||||||||
Total | 2,163,336 | 2,242,005 | |||||||||||||||||||||
Counterparty/cash-collateral netting | (1,865,250 | ) | (2,012,878 | ) | |||||||||||||||||||
Total per Consolidated Statement of Financial Condition | $ | 298,086 | $ | 229,127 | |||||||||||||||||||
Unrealized and Realized Gains (Losses) on Derivative Contracts | The following table presents unrealized and realized gains (losses) on derivative contracts for the three and six months ended August 31, 2013, three months ended February 28, 2013 and for the three and nine months ended August 31, 2012 (in thousands): | ||||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||||
Gains (Losses) | Three Months Ended | Six Months Ended | Three Months Ended | Three Months Ended | Nine Months Ended | ||||||||||||||||||
31-Aug-13 | 31-Aug-13 | 28-Feb-13 | 31-Aug-12 | 31-Aug-12 | |||||||||||||||||||
Interest rate contracts | $ | 65,628 | $ | 95,009 | $ | 25,713 | $ | 38,067 | $ | (39,667 | ) | ||||||||||||
Foreign exchange contracts | (4,149 | ) | (13 | ) | 11,895 | (4,616 | ) | 4,193 | |||||||||||||||
Equity contracts | 32,918 | 66,811 | (5,436 | ) | (46,930 | ) | (72,691 | ) | |||||||||||||||
Commodity contracts | 15,080 | 36,593 | 19,585 | 11,074 | 57,586 | ||||||||||||||||||
Credit contracts | (904 | ) | (11,914 | ) | (3,742 | ) | (5,887 | ) | (15,274 | ) | |||||||||||||
Total | $ | 108,573 | $ | 186,486 | $ | 48,015 | $ | (8,292 | ) | $ | (65,853 | ) | |||||||||||
Remaining Contract Maturity of Fair Value of OTC Derivative Assets and Liabilities | The following tables set forth by remaining contract maturity the fair value of OTC derivative assets and liabilities as of August 31, 2013 (in thousands): | ||||||||||||||||||||||
Successor | |||||||||||||||||||||||
OTC Derivative Assets (1) (2) (4) | |||||||||||||||||||||||
0 – 12 | 1 – 5 Years | Greater Than | Cross- | Total | |||||||||||||||||||
Months | 5 Years | Maturity | |||||||||||||||||||||
Netting (3) | |||||||||||||||||||||||
Commodity swaps, options and forwards | $ | 36,869 | $ | 783 | $ | — | $ | (47 | ) | $ | 37,605 | ||||||||||||
Credit default swaps | 73 | 607 | — | 680 | |||||||||||||||||||
Equity swaps and options | 3,650 | — | — | — | 3,650 | ||||||||||||||||||
Total return swaps | 817 | — | — | (114 | ) | 703 | |||||||||||||||||
Foreign currency forwards, swaps and options | 70,110 | 32,782 | — | (16,218 | ) | 86,674 | |||||||||||||||||
Interest rate swaps and options | 7,340 | 64,407 | 147,654 | (82,057 | ) | 137,344 | |||||||||||||||||
Total | $ | 118,859 | $ | 98,579 | $ | 147,654 | $ | (98,436 | ) | 266,656 | |||||||||||||
Cross product counterparty netting | (579 | ) | |||||||||||||||||||||
Total OTC derivative assets included in Financial instruments owned | $ | 266,077 | |||||||||||||||||||||
-1 | At August 31, 2013, we held exchange traded derivative assets and other credit agreements with a fair value of $10.9 million, which are not included in this table. | ||||||||||||||||||||||
-2 | OTC derivative assets in the table above are gross of collateral received. OTC derivative assets are recorded net of collateral received on the Consolidated Statements of Financial Condition. At August 31, 2013, cash collateral received was $155.1 million. | ||||||||||||||||||||||
-3 | Amounts represent the netting of receivable balances with payable balances for the same counterparty within product category across maturity categories. | ||||||||||||||||||||||
-4 | Derivative fair values include counterparty netting within product category. | ||||||||||||||||||||||
Successor | |||||||||||||||||||||||
OTC Derivative Liabilities (1) (2) (4) | |||||||||||||||||||||||
0 – 12 | 1 – 5 Years | Greater Than | Cross- | Total | |||||||||||||||||||
Months | 5 Years | Maturity | |||||||||||||||||||||
Netting (3) | |||||||||||||||||||||||
Commodity swaps, options and forwards | $ | 28,734 | $ | 47 | $ | — | $ | (47 | ) | $ | 28,734 | ||||||||||||
Credit default swaps | — | 2,062 | 380 | — | 2,442 | ||||||||||||||||||
Equity swaps and options | 8,455 | — | 2,852 | — | 11,307 | ||||||||||||||||||
Total return swaps | 650 | — | 549 | (114 | ) | 1,085 | |||||||||||||||||
Foreign currency forwards, swaps and options | 81,858 | 34,725 | — | (16,218 | ) | 100,365 | |||||||||||||||||
Interest rate swaps and options | 16,291 | 89,710 | 151,371 | (82,057 | ) | 175,315 | |||||||||||||||||
Total | $ | 135,988 | $ | 126,544 | $ | 155,152 | $ | (98,436 | ) | 319,248 | |||||||||||||
Cross product counterparty netting | (579 | ) | |||||||||||||||||||||
Total OTC derivative liabilities included in Financial instruments sold, not yet purchased | $ | 318,669 | |||||||||||||||||||||
-1 | At August 31, 2013, we held exchange traded derivative liabilities and other credit agreements with a fair value of $28.0 million, which are not included in this table. | ||||||||||||||||||||||
-2 | OTC derivative liabilities in the table above are gross of collateral pledged. OTC derivative liabilities are recorded net of collateral pledged on the Consolidated Statements of Financial Condition. At August 31, 2013, cash collateral pledged was $212.9 million. | ||||||||||||||||||||||
-3 | Amounts represent the netting of receivable balances with payable balances for the same counterparty within product category across maturity categories. | ||||||||||||||||||||||
-4 | Derivative fair values include counterparty netting within product category. | ||||||||||||||||||||||
Counterparty Credit Quality with Respect to Fair Value of OTC Derivatives Assets | At August 31, 2013, the counterparty credit quality with respect to the fair value of our OTC derivatives assets was as follows (in thousands): | ||||||||||||||||||||||
Counterparty credit quality (1): | |||||||||||||||||||||||
A- or higher | $ | 199,298 | |||||||||||||||||||||
BBB- to BBB+ | 9,447 | ||||||||||||||||||||||
BB+ or lower | 51,448 | ||||||||||||||||||||||
Unrated | 5,884 | ||||||||||||||||||||||
Total | $ | 266,077 | |||||||||||||||||||||
-1 | We utilize internal credit ratings determined by our Risk Management. Credit ratings determined by Risk Management use methodologies that produce ratings generally consistent with those produced by external rating agencies. |
Collateralized_Transactions_Ta
Collateralized Transactions (Tables) | 9 Months Ended | ||||||||||
Aug. 31, 2013 | |||||||||||
Text Block [Abstract] | |||||||||||
Fair Value of Securities Received as Collateral | The fair value of securities received as collateral at August 31, 2013 and November 30, 2012 that pertains to our securities financing activities at August 31, 2013 and November 30, 2012 are as follows (in thousands): | ||||||||||
Successor | Predecessor | ||||||||||
August 31, | November 30, | ||||||||||
2013 | 2012 | ||||||||||
Carrying amount: | |||||||||||
Securities purchased under agreements to resell | $ | 4,420,886 | $ | 3,357,602 | |||||||
Securities borrowed | 5,316,449 | 5,094,679 | |||||||||
Securities received as collateral | 45,133 | — | |||||||||
Total assets on Consolidated Statement of Financial Condition | 9,782,468 | 8,452,281 | |||||||||
Netting of securities purchased under agreements to resell (1) | 8,481,994 | 9,982,752 | |||||||||
18,264,462 | 18,435,033 | ||||||||||
Fair value of additional collateral received (2) | 3,098,873 | 2,683,767 | |||||||||
Fair value of securities received as collateral | $ | 21,363,335 | $ | 21,118,800 | |||||||
-1 | Represents the netting of securities purchased under agreements to resell with securities sold under agreements to repurchase balances for the same counterparty under legally enforceable netting agreements. | ||||||||||
-2 | Includes 1) collateral received from customers for margin balances unrelated to arrangements for securities purchased under agreements to resell or securities borrowed with a fair value of $1,092.2 million and $1,252.6 million at August 31, 2013 and November 30, 2012, respectively, of which $634.5 million and $727.7 million had been rehypothecated, 2) collateral received on securities for securities transactions of $1,669.8 million and $1,378.8 million at August 31, 2013 and November 30, 2012, respectively and 3) collateral received in excess of the reverse repurchase and securities borrowed contract amounts. |
Securitization_Activities_Tabl
Securitization Activities (Tables) | 9 Months Ended | ||||||||||||||||||||||
Aug. 31, 2013 | |||||||||||||||||||||||
Text Block [Abstract] | |||||||||||||||||||||||
Activity Related to Securitizations Accounted for as Sales | The following table presents activity related to our securitizations that were accounted for as sales in which we had continuing involvement (in millions): | ||||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||||
Three Months | Six Months Ended | Three Months | Three Months | Nine Months Ended | |||||||||||||||||||
Ended | 31-Aug-13 | Ended | Ended | 31-Aug-12 | |||||||||||||||||||
August 31, 2013 | February 28, 2013 | August 31, 2012 | |||||||||||||||||||||
Transferred assets | $ | 918.4 | $ | 3,102.40 | $ | 2,735.20 | $ | 2,132.30 | $ | 7,070.90 | |||||||||||||
Proceeds on new securitizations | 921.5 | 3,112.50 | 2,751.30 | 2,375.00 | 7,654.10 | ||||||||||||||||||
Net revenues | 1.7 | 6.5 | 12.9 | 2.4 | 16.5 | ||||||||||||||||||
Cash flows received on retained interests | $ | 13 | $ | 24.2 | $ | 32.3 | $ | 19.7 | $ | 44.6 | |||||||||||||
Summary of Retained Interests in SPEs | The following tables summarize our retained interests in SPEs where we transferred assets and have continuing involvement and received sale accounting treatment (in millions): | ||||||||||||||||||||||
Successor | |||||||||||||||||||||||
As of August 31, 2013 | |||||||||||||||||||||||
Securitization Type | Total Assets | Retained | |||||||||||||||||||||
Interests | |||||||||||||||||||||||
U.S. government agency residential mortgage-backed securities | $ | 7,056.50 | $ | 362.8 | (1) | ||||||||||||||||||
U.S. government agency commercial mortgage-backed securities | 2,263.30 | 102.3 | (1) | ||||||||||||||||||||
Collateralized loan obligations | 1,191.50 | (2) | 13.8 | (2) | |||||||||||||||||||
-1 | A portion of these securities have been subsequently sold in secondary-market transactions to third parties. As of September 23, 2013, we continue to hold approximately $285.0 million and $91.0 million of these Residential mortgage-backed securities and Commercial mortgage-backed securities, respectively, in inventory. | ||||||||||||||||||||||
-2 | Total assets include assets transferred by unrelated transferors. Retained interests at September 23, 2013 was $9.3 million. | ||||||||||||||||||||||
Predecessor | |||||||||||||||||||||||
As of November 30, 2012 | |||||||||||||||||||||||
Securitization Type | Total Assets | Retained | |||||||||||||||||||||
Interests | |||||||||||||||||||||||
U.S. government agency residential mortgage-backed securities | $ | 3,791.50 | $ | 335.2 | (1) | ||||||||||||||||||
U.S. government agency commercial mortgage-backed securities | 2,193.40 | 28.9 | (1) | ||||||||||||||||||||
-1 | A significant portion of these securities have been subsequently sold in secondary-market transactions to third parties. As of September 23, 2013, we continue to hold approximately $57.9 million and $13.0 million of these Residential mortgage-backed securities and Commercial mortgage-backed securities, respectively, in inventory. |
Variable_Interest_Entities_Tab
Variable Interest Entities (Tables) | 9 Months Ended | ||||||||||||||||||||||||||
Aug. 31, 2013 | |||||||||||||||||||||||||||
Assets and Liabilities of Consolidated VIEs Prior to Consolidation | The following table presents information about the assets and liabilities of our consolidated VIEs, which are presented within our Consolidated Statements of Financial Condition in the respective asset and liability categories, as of August 31, 2013 and November 30, 2012. The assets and liabilities in the tables below are presented prior to consolidation and thus a portion of these assets and liabilities are eliminated in consolidation. We have aggregated our consolidated VIEs based upon principal business activity. | ||||||||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||||||||
(in millions) | 31-Aug-13 | 30-Nov-12 | |||||||||||||||||||||||||
High Yield | Securitization | Other | High Yield | Securitization | Other | ||||||||||||||||||||||
Vehicles | Vehicles | ||||||||||||||||||||||||||
Cash | $ | 43.8 | $ | — | $ | 0.2 | $ | 388.1 | $ | — | $ | 0.2 | |||||||||||||||
Financial instruments owned | — | 108.7 | 0.5 | 894.2 | 10 | 0.5 | |||||||||||||||||||||
Securities borrowed | — | — | — | 372.1 | — | — | |||||||||||||||||||||
Securities purchased under agreement to resell (3) | — | 195.1 | — | — | 60 | — | |||||||||||||||||||||
Receivable from brokers and dealers | — | — | — | 264.5 | — | — | |||||||||||||||||||||
Other | — | — | — | 11.4 | — | — | |||||||||||||||||||||
$ | 43.8 | $ | 303.8 | $ | 0.7 | $ | 1,930.30 | $ | 70 | $ | 0.7 | ||||||||||||||||
Financial instruments sold, not yet purchased | $ | — | $ | — | $ | — | $ | 526.1 | $ | — | $ | — | |||||||||||||||
Securities loaned | — | — | — | 112 | — | — | |||||||||||||||||||||
Payable to brokers and dealers | — | — | — | 201.2 | — | — | |||||||||||||||||||||
Mandatorily redeemable interests (1) | — | — | — | 1,076.00 | — | — | |||||||||||||||||||||
Redemption payable | 40.8 | — | — | — | — | — | |||||||||||||||||||||
Other secured financings (2) | — | 303.7 | — | — | 70 | — | |||||||||||||||||||||
Other | 2.9 | — | 0.2 | 15 | — | 0.2 | |||||||||||||||||||||
$ | 43.7 | $ | 303.7 | $ | 0.2 | $ | 1,930.30 | $ | 70 | $ | 0.2 | ||||||||||||||||
-1 | After consolidation, which eliminates our interests and the interests of our consolidated subsidiaries, JSOP and JESOP, the carrying amount of the mandatorily redeemable financial interests pertaining to the above VIEs included within Mandatorily redeemable preferred interests of consolidated subsidiaries was approximately $348.1 million at November 30, 2012. These amounts represent the portion of the mandatorily redeemable preferred interests held by our joint venture partner. | ||||||||||||||||||||||||||
-2 | Approximately $75.7 million and $7.7 million of the secured financing represents an amount held by us in inventory and eliminated in consolidation at August 31, 2013 and November 30, 2012, respectively. | ||||||||||||||||||||||||||
-3 | Securities purchased under agreement to resell represent an amount due under a collateralized transaction on a related consolidated entity, which is eliminated in consolidation. | ||||||||||||||||||||||||||
Variable Interest Entity Not Primary Beneficiary [Member] | |||||||||||||||||||||||||||
Non-Consolidated Variable Interest Entities | The following tables present information about nonconsolidated VIEs in which we had variable interests aggregated by principal business activity. The tables include VIEs where we have determined that the maximum exposure to loss is greater than specific thresholds or meets certain other criteria. | ||||||||||||||||||||||||||
Successor | |||||||||||||||||||||||||||
31-Aug-13 | |||||||||||||||||||||||||||
Variable Interests | |||||||||||||||||||||||||||
(in millions) | Financial Statement | Maximum | VIE Assets | ||||||||||||||||||||||||
Carrying Amount | exposure to loss | ||||||||||||||||||||||||||
Collateralized loan obligations | $ | 17.8 | (2) | $ | 17.8 | (4) | $ | 1,784.50 | |||||||||||||||||||
Agency mortgage- and asset-backed securitizations (1) | 1,122.40 | (2) | 1,122.40 | (4) | 5,397.10 | ||||||||||||||||||||||
Non-agency mortgage- and asset-backed securitizations (1) | 647 | (2) | 647 | (4) | 69,737.10 | ||||||||||||||||||||||
Asset management vehicle | 3.1 | (3) | 3.1 | (4) | 377.4 | ||||||||||||||||||||||
Private equity vehicles | 51.9 | (3) | 89.9 | 92.4 | |||||||||||||||||||||||
Total | $ | 1,842.20 | $ | 1,880.20 | $ | 77,388.50 | |||||||||||||||||||||
-1 | VIE assets represent the unpaid principal balance of the assets in these vehicles at August 31, 2013 and represent the underlying assets that provide the cash flows supporting our variable interests. | ||||||||||||||||||||||||||
-2 | Consists of debt securities accounted for at fair value, which are included within Financial instruments owned. | ||||||||||||||||||||||||||
-3 | Consists of equity interests and loans, which are included within Investments in managed funds and Loans to and investments in related parties. | ||||||||||||||||||||||||||
-4 | Our maximum exposure to loss in these non-consolidated VIEs is limited to our investment, which is represented by the financial statement carrying amount of our purchased or retained interests. | ||||||||||||||||||||||||||
Predecessor | |||||||||||||||||||||||||||
30-Nov-12 | |||||||||||||||||||||||||||
Variable Interests | |||||||||||||||||||||||||||
(in millions) | Financial Statement | Maximum | VIE Assets | ||||||||||||||||||||||||
Carrying Amount | exposure to loss | ||||||||||||||||||||||||||
Collateralized loan obligations | $ | 5.3 | (2) | $ | 5.3 | (4) | $ | 499.7 | |||||||||||||||||||
Agency mortgage- and asset-backed securitizations (1) | 1,579.10 | (2) | 1,579.10 | (4) | 6,396.60 | ||||||||||||||||||||||
Non-agency mortgage- and asset-backed securitizations (1) | 814.1 | (2) | 814.1 | (4) | 54,436.20 | ||||||||||||||||||||||
Asset management vehicle | 3 | (3) | 3 | (4) | 505.3 | ||||||||||||||||||||||
Private equity vehicles | 55 | (3) | 107.7 | 82.1 | |||||||||||||||||||||||
Total | $ | 2,456.50 | $ | 2,509.20 | $ | 61,919.90 | |||||||||||||||||||||
-1 | VIE assets represent the unpaid principal balance of the assets in these vehicles at November 30, 2012 and represent the underlying assets that provide the cash flows supporting our variable interests. | ||||||||||||||||||||||||||
-2 | Consists of debt securities accounted for at fair value, which are included within Financial instruments owned. | ||||||||||||||||||||||||||
-3 | Consists of equity interests and loans, which are included within Investments in managed funds and Loans to and investments in related parties. | ||||||||||||||||||||||||||
-4 | Our maximum exposure to loss in these non-consolidated VIEs is limited to our investment, which is represented by the financial statement carrying amount of our purchased or retained interests. | ||||||||||||||||||||||||||
Summary of Securities Issued by Securitization Vehicles | Total securities issued by securitization SPEs at August 31, 2013 consist of the following (in millions): | ||||||||||||||||||||||||||
Nonagency | Agency | Total | |||||||||||||||||||||||||
Variable interests in collateralized loan obligations | $ | 17.8 | $ | — | $ | 17.8 | |||||||||||||||||||||
Variable interests in agency mortgage- and asset-backed securitizations | — | 1,122.40 | 1,122.40 | ||||||||||||||||||||||||
Variable interests in nonagency mortgage- and asset-backed securitizations | 647 | — | 647 | ||||||||||||||||||||||||
Additional securities in connection with trading and market making activities: | |||||||||||||||||||||||||||
Residential mortgage-backed securities | 47.9 | 1,692.40 | 1,740.30 | ||||||||||||||||||||||||
Commercial mortgage-backed securities | 38.7 | 505.3 | 544 | ||||||||||||||||||||||||
Collateralized debt obligations | 25 | — | 25 | ||||||||||||||||||||||||
Other asset-backed securities | 30.2 | — | 30.2 | ||||||||||||||||||||||||
Total mortgage- and asset-backed securities on the Consolidated Statement of Financial Condition | $ | 806.6 | $ | 3,320.10 | $ | 4,126.70 | |||||||||||||||||||||
Investments_Tables
Investments (Tables) | 9 Months Ended | ||||||||
Aug. 31, 2013 | |||||||||
Jefferies Finance, LLC [Member] | |||||||||
Summary of Selected Financial Information | The following is a summary of selected financial information for Jefferies Finance as of August 31, 2013 and November 30, 2012 (in millions): | ||||||||
August 31, | November 30, | ||||||||
2013 | 2012 | ||||||||
Total assets | $ | 2,643.00 | $ | 1,730.40 | |||||
Total liabilities | 2,013.40 | 1,188.20 | |||||||
Total equity | 629.6 | 542.2 | |||||||
Our total equity balance | 314.8 | 271.1 | |||||||
Jefferies LoanCore, LLC [Member] | |||||||||
Summary of Selected Financial Information | The following is a summary of selected financial information for Jefferies LoanCore as of August 31, 2013 and November 30, 2012 (in millions): | ||||||||
August 31, | November 30, | ||||||||
2013 | 2012 | ||||||||
Total assets | $ | 1,048.20 | $ | 372 | |||||
Total liabilities | 594.1 | 98.4 | |||||||
Total equity | 454.1 | 273.6 | |||||||
Our total equity balance | 220.2 | 132.7 | |||||||
Knight Capital Group, Inc. [Member] | |||||||||
Summary of Selected Financial Information for Knight Capital | The following is a summary of selected financial information for Knight Capital as of June 30, 2013 and December 31, 2012, the most recently available public financial information for the company (in millions): | ||||||||
June 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Total assets | $ | 11,433.00 | $ | 9,778.40 | |||||
Total liabilities | 9,951.30 | 8,295.90 | |||||||
Total equity and convertible preferred stock | 1,481.70 | 1,482.50 |
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended | ||||||||||||||||||||
Aug. 31, 2013 | |||||||||||||||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||
Schedule of Goodwill from Merger Transaction Attributable to Reportable Segments | The following table presents goodwill resulting from the Merger Transaction attributed to our reportable segments: | ||||||||||||||||||||
August 31, 2013 | |||||||||||||||||||||
Capital Markets | $ | 1,707,315 | |||||||||||||||||||
Asset Management | 10,800 | ||||||||||||||||||||
Total goodwill | $ | 1,718,115 | |||||||||||||||||||
Summary of Goodwill | The following table is a summary of the changes to goodwill for the three and six months ended August 31, 2013, three months ended February 28, 2013 and twelve months ended November 30, 2012 (in thousands): | ||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||
Three Months Ended | Six Months Ended | Three Months Ended | Twelve Months Ended | ||||||||||||||||||
31-Aug-13 | 31-Aug-13 | 28-Feb-13 | 30-Nov-12 | ||||||||||||||||||
Balance, at beginning of period | $ | 1,713,776 | $ | 1,715,986 | (2) | $ | 365,670 | $ | 365,574 | ||||||||||||
Add: Contingent consideration | — | — | 2,394 | — | |||||||||||||||||
Add: Translation adjustments | 4,339 | 2,129 | -1,287 | 96 | |||||||||||||||||
Balance, at end of period | $ | 1,718,115 | $ | 1,718,115 | $ | 366,777 | (1) | $ | 365,670 | ||||||||||||
-1 | Predecessor Company goodwill as of February 28, 2013 was reduced to $-0- as of March 1, 2013, as a result of purchase accounting adjustments. | ||||||||||||||||||||
-2 | The balance of goodwill as March 1, 2013 has been adjusted from the prior presentation in our Quarterly Report on Form 10-Q for the three months ended May 31, 2013 based on refinements to the purchase price allocation for additional information obtained regarding the fair values of the assets acquired and liabilities assumed. See Note 4, Leucadia Merger and Related Transactions for further information. | ||||||||||||||||||||
Intangible Assets | The following tables present the gross carrying amount, accumulated amortization, net carrying amount and weighted average amortization period of identifiable intangible assets as of August 31, 2013 and November 30, 2012 (in thousands): | ||||||||||||||||||||
Successor | |||||||||||||||||||||
31-Aug-13 | |||||||||||||||||||||
Gross cost | Impairment | Accumulated | Net carrying | Weighted | |||||||||||||||||
losses | amortization | amount | average | ||||||||||||||||||
remaining | |||||||||||||||||||||
lives (years) | |||||||||||||||||||||
Customer relationships | $ | 136,311 | $ | — | $ | (11,711 | ) | $ | 124,600 | 14.6 | |||||||||||
Trade name | 131,609 | — | (1,876 | ) | 129,733 | 34.5 | |||||||||||||||
Exchange and clearing organization membership interests and registrations | 15,492 | (378 | ) | — | 15,114 | N/A | |||||||||||||||
$ | 283,412 | $ | (378 | ) | $ | (13,587 | ) | $ | 269,447 | ||||||||||||
Predecessor | |||||||||||||||||||||
30-Nov-12 | |||||||||||||||||||||
Gross cost | Impairment | Accumulated | Net carrying | Weighted | |||||||||||||||||
losses | amortization | amount | average | ||||||||||||||||||
remaining | |||||||||||||||||||||
lives (years) | |||||||||||||||||||||
Customer relationships | $ | 10,542 | $ | — | $ | (4,107 | ) | 6,435 | 7.9 | ||||||||||||
Trade name | 1,680 | — | (1,287 | ) | 393 | 3.5 | |||||||||||||||
Other | 100 | — | (15 | ) | 85 | 12.8 | |||||||||||||||
Exchange and clearing organization membership interests and registrations | 11,219 | (2,873 | ) | — | $ | 8,346 | N/A | ||||||||||||||
$ | 23,541 | $ | (2,873 | ) | $ | (5,409 | ) | $ | 15,259 | ||||||||||||
Future Amortization Expense Related to Intangible Assets | Estimated future amortization expense for the next five fiscal years are as follows (in thousands): | ||||||||||||||||||||
Fiscal year | Estimated future | ||||||||||||||||||||
amortization expense | |||||||||||||||||||||
Remainder of 2013 | $ | 6,767 | |||||||||||||||||||
2014 | 12,668 | ||||||||||||||||||||
2015 | 12,668 | ||||||||||||||||||||
2016 | 12,668 | ||||||||||||||||||||
2017 | 12,668 | ||||||||||||||||||||
Mortgage Servicing Rights | The following presents the activity in the balance of these servicing rights for the three and six months ended August 31, 2013, three months ended February 28, 2013 and year ended November 30, 2012 (in thousands): | ||||||||||||||||||||
Predecessor | |||||||||||||||||||||
Six Months Ended | Three Months Ended | Twelve Months Ended | |||||||||||||||||||
31-Aug-13 | 28-Feb-13 | 30-Nov-12 | |||||||||||||||||||
Balance, beginning of period | $ | 2,000 | $ | 805 | $ | 8,202 | |||||||||||||||
Add: Acquisition | — | — | 162 | ||||||||||||||||||
Less: Sales, net | (2,000 | ) | — | (6,959 | ) | ||||||||||||||||
Less: Pay down | — | — | (211 | ) | |||||||||||||||||
Less: Amortization | — | (10 | ) | (389 | ) | ||||||||||||||||
Balance, end of period | $ | — | $ | 795 | $ | 805 | |||||||||||||||
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 9 Months Ended | ||||||||
Aug. 31, 2013 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Summary of Long-Term Debt Carrying Values Including Unamortized Discounts and Premiums | The following summarizes our long-term debt carrying values (including unamortized discounts and premiums and valuation adjustment, where applicable) at August 31, 2013 and November 30, 2012 (in thousands): | ||||||||
Successor | Predecessor | ||||||||
August 31, | November 30, | ||||||||
2013 | 2012 | ||||||||
Unsecured Long-Term Debt | |||||||||
$ | 258,377 | $ | 249,564 | ||||||
5.875% Senior Notes, due June 8, 2014 (effective interest rate of 1.51%) | |||||||||
3.875% Senior Notes, due November 9, 2015 (effective interest rate of 2.17%) | 518,241 | 499,382 | |||||||
5.5% Senior Notes, due March 15, 2016 (effective interest rate of 2.52%) | 375,626 | 349,248 | |||||||
5.125% Senior Notes, due April 13, 2018 (effective interest rate of 3.46%) | 856,862 | 771,450 | |||||||
8.5% Senior Notes, due July 15, 2019 (effective interest rate of 4.00%) | 864,673 | 706,990 | |||||||
6.875% Senior Notes, due April 15, 2021 (effective interest rate of 4.40%) | 870,136 | 743,945 | |||||||
2.25% Euro Medium Term Notes, due July 13, 2022 (effective rate of 3.82%) | 4,647 | 3,708 | |||||||
5.125% Senior Notes, due January 20, 2023 (effective interest rate of 4.55%) | 626,188 | — | |||||||
6.45% Senior Debentures, due June 8, 2027 (effective interest rate of 5.46%) | 383,637 | 346,792 | |||||||
3.875% Convertible Senior Debentures, due November 1, 2029 (effective interest rate of 3.50%) (1) | 357,323 | 290,617 | |||||||
6.25% Senior Debentures, due January 15, 2036 (effective interest rate of 6.03%) | 513,415 | 492,904 | |||||||
6.50% Senior Notes, due January 20, 2043 (effective interest rate of 6.09%) | 422,314 | — | |||||||
$ | 6,051,439 | $ | 4,454,600 | ||||||
Secured Long-Term Debt | |||||||||
Credit facility, due August 26, 2014 | 295,000 | 350,007 | |||||||
$ | 6,346,439 | $ | 4,804,607 | ||||||
-1 | As a result of the Merger Transaction with Leucadia on March 1, 2013, the value of the 3.875% Convertible Senior debentures at August 31, 2013 includes the fair value of the conversion feature of $7.3 million. The change in fair value is included within Revenues – Principal transactions in the Consolidated Statement of Earnings and amounted to a gain of $16.3 million and $9.2 million for the three and six months ended August 31, 2013, respectively. The fair value of the embedded option at August 31, 2013 and the unrealized gain for the second quarter has been adjusted to reflect the retrospective adjustment to the valuation of the embedded option at the date of the merger and for the three months ended May 31, 2013. See Note 1, Organization and Basis of Presentation for further information. |
Noncontrolling_Interests_and_M1
Noncontrolling Interests and Mandatorily Redeemable Preferred Interests of Consolidated Subsidiaries (Tables) | 9 Months Ended | ||||||||
Aug. 31, 2013 | |||||||||
Noncontrolling Interest [Abstract] | |||||||||
Noncontrolling Interests | The following table presents noncontrolling interests at August 31, 2013 and November 30, 2012 (in thousands): | ||||||||
Successor | Predecessor | ||||||||
August 31, | November 30, | ||||||||
2013 | 2012 | ||||||||
JSOP | $ | — | $ | 303,178 | |||||
JESOP | — | 35,239 | |||||||
Other (1) | 77,048 | 8,321 | |||||||
Noncontrolling interests | $ | 77,048 | $ | 346,738 | |||||
-1 | Other includes asset management entities and investment vehicles set up for the benefit of our employees, and includes an investment by Leucadia in a consolidated asset management entity of $50.0 million at August 21, 2013. |
Benefit_Plans_Tables
Benefit Plans (Tables) | 9 Months Ended | ||||||||||||||||||||||
Aug. 31, 2013 | |||||||||||||||||||||||
Compensation And Retirement Disclosure [Abstract] | |||||||||||||||||||||||
Net Periodic Pension Cost | The following tables summarize the components of our net periodic pension cost (in thousands): | ||||||||||||||||||||||
U.S. Pension Plan | |||||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||||
Three Months Ended | Six Months Ended | Three Months Ended | Three Months Ended | Nine Months Ended | |||||||||||||||||||
31-Aug-13 | 31-Aug-13 | 28-Feb-13 | 31-Aug-12 | 31-Aug-12 | |||||||||||||||||||
Components of net periodic pension cost | |||||||||||||||||||||||
Service cost | $ | 56 | $ | 112 | $ | 56 | $ | 44 | $ | 132 | |||||||||||||
Interest cost on projected benefit obligation | 557 | 1,114 | 529 | 584 | 1,752 | ||||||||||||||||||
Expected return on plan assets | (680 | ) | (1,360 | ) | (665 | ) | (616 | ) | (1,848 | ) | |||||||||||||
Net amortization | — | — | 300 | 317 | 951 | ||||||||||||||||||
Net periodic pension cost | $ | (67 | ) | $ | (134 | ) | $ | 220 | $ | 329 | $ | 987 | |||||||||||
German Pension Plan | |||||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||||
Three Months Ended | Six Months Ended | Three Months Ended | Three Months Ended | Nine Months Ended | |||||||||||||||||||
31-Aug-13 | 31-Aug-13 | 28-Feb-13 | 31-Aug-12 | 31-Aug-12 | |||||||||||||||||||
Components of net periodic pension cost | |||||||||||||||||||||||
Service cost | $ | 16 | $ | 32 | $ | 16 | $ | 9 | $ | 27 | |||||||||||||
Interest cost on projected benefit obligation | 220 | 433 | 220 | 252 | 767 | ||||||||||||||||||
Net amortization | 45 | 89 | 45 | — | — | ||||||||||||||||||
Net periodic pension cost | $ | 281 | $ | 554 | $ | 281 | $ | 261 | $ | 794 | |||||||||||||
Earnings_per_Share_Tables
Earnings per Share (Tables) | 9 Months Ended | ||||||||||||
Aug. 31, 2013 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
Basic and Diluted Earnings per Common Share | The following is a reconciliation of the numerators and denominators of the Basic and Diluted earnings per common share computations for the three months ended February 28, 2013 and the three and nine months ended August 31, 2012 (in thousands, except per share amounts): | ||||||||||||
Predecessor | |||||||||||||
Three Months Ended | Three Months Ended | Nine Months Ended | |||||||||||
28-Feb-13 | 31-Aug-12 | 31-Aug-12 | |||||||||||
Earnings for basic earnings per common share: | |||||||||||||
Net earnings | $ | 90,842 | $ | 78,321 | $ | 243,417 | |||||||
Net earnings to noncontrolling interests | 10,704 | 8,150 | 32,612 | ||||||||||
Net earnings to common shareholders | 80,138 | 70,171 | 210,805 | ||||||||||
Less: Allocation of earnings to participating securities (1) | 5,890 | 3,913 | 12,243 | ||||||||||
Net earnings available to common shareholders | $ | 74,248 | $ | 66,258 | $ | 198,562 | |||||||
Earnings for diluted earnings per common share: | |||||||||||||
Net earnings | $ | 90,842 | $ | 78,321 | $ | 243,417 | |||||||
Net earnings to noncontrolling interests | 10,704 | 8,150 | 32,612 | ||||||||||
Net earnings to common shareholders | 80,138 | 70,171 | 210,805 | ||||||||||
Add: Mandatorily redeemable convertible preferred stock dividends | 1,016 | 1,016 | 3,047 | ||||||||||
Less: Allocation of earnings to participating securities (1) | 5,882 | 3,916 | 12,254 | ||||||||||
Net earnings available to common shareholders | $ | 75,272 | $ | 67,271 | $ | 201,598 | |||||||
Shares: | |||||||||||||
Average common shares used in basic computation | 213,732 | 214,756 | 216,509 | ||||||||||
Stock options | 2 | 1 | 2 | ||||||||||
Mandatorily redeemable convertible preferred stock | 4,110 | 4,110 | 4,110 | ||||||||||
Convertible debt | — | — | — | ||||||||||
Average common shares used in diluted computation | 217,844 | 218,867 | 220,621 | ||||||||||
Earnings per common share: | |||||||||||||
Basic | $ | 0.35 | $ | 0.31 | $ | 0.92 | |||||||
Diluted | $ | 0.35 | $ | 0.31 | $ | 0.91 | |||||||
-1 | Represents dividends declared during the period on participating securities plus an allocation of undistributed earnings to participating securities. Net losses are not allocated to participating securities. Participating securities represent restricted stock and restricted stock units for which requisite service has not yet been rendered and amounted to weighted average shares of 16,756,000, 12,732,000 and 13,337,000 for the three months ended February 28, 2013 and three and nine months ended August 31, 2012, respectively. Dividends declared on participating securities during the three months ended February 28, 2013 and three and nine months ended August 31, 2012 amounted to approximately $1,315,000, $924,000 and $2,988,000, respectively. Undistributed earnings are allocated to participating securities based upon their right to share in earnings if all earnings for the period had been distributed. | ||||||||||||
Dividends per Share of Common Stock Declared | Dividends per share of common stock declared during the quarter are reflected below: | ||||||||||||
1st Quarter | 2nd Quarter | 3rd Quarter | |||||||||||
2013 | $ | 0.075 | N/a | N/a | |||||||||
2012 | $ | 0.075 | $ | 0.075 | $ | 0.075 |
Income_Taxes_Tables
Income Taxes (Tables) | 9 Months Ended | ||
Aug. 31, 2013 | |||
Income Tax Disclosure [Abstract] | |||
Earliest Tax Years Subject to Examination in the Major Tax Jurisdictions in which Company Operates | The table below summarizes the earliest tax years that remain subject to examination in the major tax jurisdictions in which we operate: | ||
Jurisdiction | Tax Year | ||
United States | 2006 | ||
United Kingdom | 2011 | ||
California | 2004 | ||
Connecticut | 2006 | ||
Massachusetts | 2006 | ||
New Jersey | 2007 | ||
New York State | 2001 | ||
New York City | 2003 |
Commitments_Contingencies_and_1
Commitments, Contingencies and Guarantees (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||
Aug. 31, 2013 | |||||||||||||||||||||||||||||
Commitments And Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||
Commitments and Contingencies | The following table summarizes our commitments associated with our capital market and asset management business activities at August 31, 2013 (in millions): | ||||||||||||||||||||||||||||
Expected Maturity Date | |||||||||||||||||||||||||||||
2015 | 2017 | 2019 | |||||||||||||||||||||||||||
and | and | and | Maximum | ||||||||||||||||||||||||||
2013 | 2014 | 2016 | 2018 | Later | Payout | ||||||||||||||||||||||||
Equity commitments (1) | $ | 0.3 | $ | 1.7 | $ | 7.2 | $ | 0.8 | $ | 444.8 | $ | 454.8 | |||||||||||||||||
Loan commitments (1) | 4.2 | 7.6 | 354.7 | 114 | — | 480.5 | |||||||||||||||||||||||
Mortgage-related commitments | 507.1 | 213.2 | 796.2 | — | — | 1,516.50 | |||||||||||||||||||||||
Forward starting reverse repos and repos | 848.8 | — | — | — | — | 848.8 | |||||||||||||||||||||||
$ | 1,360.40 | $ | 222.5 | $ | 1,158.10 | $ | 114.8 | $ | 444.8 | $ | 3,300.60 | ||||||||||||||||||
-1 | Equity and loan commitments are presented by contractual maturity date. The amounts are however available on demand. | ||||||||||||||||||||||||||||
Credit Exposure from Loan Commitments | The table below presents our credit exposure from our loan commitments, including funded amounts, summarized by period of expiration as of August 31, 2013. Credit exposure is based on the external credit ratings of the underlyings or referenced assets of our loan commitments. Since commitments associated with these business activities may expire unused, they do not necessarily reflect the actual future cash funding requirements (in millions): | ||||||||||||||||||||||||||||
Total | Corporate | ||||||||||||||||||||||||||||
Corporate | Lending | ||||||||||||||||||||||||||||
0 – 12 | Greater Than | Lending | Exposure at | Corporate Lending | |||||||||||||||||||||||||
Credit Ratings | Months | 1 – 5 Years | 5 Years | Exposure (1) | Fair Value (2) | Commitments (3) | |||||||||||||||||||||||
Non-investment grade | $ | — | $ | 48.2 | $ | — | $ | 48.2 | $ | 8 | $ | 40.2 | |||||||||||||||||
Unrated | 26.8 | 613.8 | — | 640.6 | 200.3 | 440.3 | |||||||||||||||||||||||
Total | $ | 26.8 | $ | 662 | $ | — | $ | 688.8 | $ | 208.3 | $ | 480.5 | |||||||||||||||||
-1 | Total corporate lending exposure represents the potential loss assuming the fair value of funded loans and lending commitments were zero. | ||||||||||||||||||||||||||||
-2 | The corporate lending exposure includes $211.0 million of funded loans included in Financial instruments owned – Loans and Loans to and investments in related parties, and a $2.7 million net liability related to lending commitments recorded in Financial instruments sold – Derivatives and Financial instruments owned – Derivatives in the Consolidated Statement of Financial Condition as of August 31, 2013. | ||||||||||||||||||||||||||||
-3 | Amounts represent the notional amount of unfunded lending commitments. | ||||||||||||||||||||||||||||
Guarantees | The following table summarizes the notional amounts associated with our derivative contracts meeting the definition of a guarantee under U.S. GAAP at August 31, 2013 (in millions): | ||||||||||||||||||||||||||||
Expected Maturity Date | |||||||||||||||||||||||||||||
2015 | 2017 | 2019 | Notional/ | ||||||||||||||||||||||||||
and | and | and | Maximum | ||||||||||||||||||||||||||
Guarantee Type | 2013 | 2014 | 2016 | 2018 | Later | Payout | |||||||||||||||||||||||
Derivative contracts - non-credit related | $ | 831,159.50 | $ | 7,556.10 | $ | 2,974.80 | $ | 1.2 | $ | 523 | $ | 842,214.60 | |||||||||||||||||
Written derivative contracts - credit related | — | — | — | 1,184.00 | — | 1,184.00 | |||||||||||||||||||||||
Total derivative contracts | $ | 831,159.50 | $ | 7,556.10 | $ | 2,974.80 | $ | 1,185.20 | $ | 523 | $ | 843,398.60 | |||||||||||||||||
External Credit Ratings of Underlying or Referenced Assets for Credit Related Derivatives Contracts | At August 31, 2013 the external credit ratings of the underlyings or referenced assets for our credit related derivatives contracts (in millions): | ||||||||||||||||||||||||||||
External Credit Rating | |||||||||||||||||||||||||||||
Below | Notional/ | ||||||||||||||||||||||||||||
AAA/ | Investment | Maximum | |||||||||||||||||||||||||||
Aaa | AA/Aa | A | BBB/Baa | Grade | Unrated | Payout | |||||||||||||||||||||||
Credit related derivative contracts: | |||||||||||||||||||||||||||||
Index credit default swaps | $ | 1,115.00 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1,115.00 | |||||||||||||||
Single name credit default swaps | 7 | — | — | 49.5 | 12.5 | — | 69 |
Net_Capital_Requirements_Table
Net Capital Requirements (Tables) | 9 Months Ended | ||||||||
Aug. 31, 2013 | |||||||||
Text Block [Abstract] | |||||||||
Net Capital Adjusted and Excess Net Capital | As of August 31, 2013, Jefferies and Jefferies Execution and Jefferies Bache, LLC’s net capital, adjusted net capital, and excess net capital were as follows (in thousands): | ||||||||
Net Capital | Excess Net Capital | ||||||||
Jefferies | $ | 1,303,564 | $ | 1,260,099 | |||||
Jefferies Execution | 3,751 | 3,501 | |||||||
Adjusted Net Capital | Excess Net Capital | ||||||||
Jefferies Bache, LLC | $ | 242,273 | $ | 113,424 |
Segment_Reporting_Tables
Segment Reporting (Tables) | 9 Months Ended | ||||||||||||||||||||
Aug. 31, 2013 | |||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||
Net Revenues, Expenses and Total Assets by Segment | Our net revenues and expenses by segment are summarized below for the Successor period three and six months ended August 31, 2013 and Predecessor periods three months ended February 28, 2013 and August 31, 2012 and nine months ended August 31, 2012 (in millions): | ||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||
Three Months Ended | Six Months Ended | Three Months Ended | Three Months Ended | Nine Months Ended | |||||||||||||||||
31-Aug-13 | 31-Aug-13 | February 28, 2013 (1) | 31-Aug-12 | 31-Aug-12 | |||||||||||||||||
Capital Markets: | |||||||||||||||||||||
Net revenues | $ | 500.6 | 1,119.40 | $ | 792.5 | $ | 735.8 | $ | 2,219.30 | ||||||||||||
Expenses | $ | 485.4 | 1,047.00 | $ | 645.4 | $ | 603.6 | $ | 1,794.10 | ||||||||||||
Asset Management: | |||||||||||||||||||||
Net revenues | $ | 16.4 | 40.2 | $ | 10.9 | $ | 3.1 | $ | 10.6 | ||||||||||||
Expenses | $ | 8.2 | 20.6 | $ | 7.5 | $ | 4.7 | $ | 23.4 | ||||||||||||
Total: | |||||||||||||||||||||
Net revenues | $ | 517 | 1,159.60 | $ | 803.4 | $ | 738.9 | $ | 2,229.90 | ||||||||||||
Expenses | $ | 493.6 | 1,067.60 | $ | 652.9 | $ | 608.3 | $ | 1,817.50 | ||||||||||||
-1 | Our consolidated net earnings for the three months ended February 28, 2013 reflects an adjustment of $5.3 million, after tax, to correct for the effect of an overstatement of professional service fees of $8.5 million relating to the Merger Transaction with Leucadia. We evaluated the effects of this error and concluded that it is not material to the previously issued Quarterly Report on Form 10-Q for the three month period ended February 28, 2013. Nevertheless, in the table above we have revised our consolidated expenses for the three month period ended February 28, 2013 to correct for the effect of this error and appropriately reflected the $8.5 million of professional service fees as an expense in the three months ended May 31, 2013. | ||||||||||||||||||||
The following table summarizes our total assets by segment as of August 31, 2013 and November 30, 2012 (in millions): | |||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||
August 31, 2013 | November 30, 2012 | ||||||||||||||||||||
Segment Assets: | |||||||||||||||||||||
Capital Markets | $ | 37,978.60 | $ | 35,588.60 | |||||||||||||||||
Asset Management | 851.6 | 704.9 | |||||||||||||||||||
Total assets | $ | 38,830.20 | $ | 36,293.50 | |||||||||||||||||
Net Revenues by Geographic Region | Net revenues for the Capital Market segment are recorded in the geographic region in which the position was risk-managed or, in the case of investment banking, in which the senior coverage banker is located. For Asset Management, net revenues are allocated according to the location of the investment advisor. Net revenues by geographic region for the Successor period three and six months ended August 31 , 2013 and the Predecessor periods three months ended February 28, 2013 and August 31, 2012 and nine months ended August 31, 2012, were as follows (in thousands): | ||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||
Three Months Ended | Six Months Ended | Three Months Ended | Three Months Ended | Nine Months Ended | |||||||||||||||||
31-Aug-13 | 31-Aug-13 | 28-Feb-13 | 31-Aug-12 | 31-Aug-12 | |||||||||||||||||
Americas (1) | $ | 353,173 | $ | 865,190 | $ | 653,608 | $ | 577,646 | $ | 1,832,523 | |||||||||||
Europe (2) | 154,491 | 265,901 | 127,970 | 127,237 | 330,092 | ||||||||||||||||
Asia | 9,365 | 28,465 | 21,809 | 34,055 | 67,320 | ||||||||||||||||
Net revenues | $ | 517,029 | $ | 1,159,556 | $ | 803,387 | $ | 738,938 | $ | 2,229,935 | |||||||||||
-1 | Substantially all relates to U.S. results. | ||||||||||||||||||||
-2 | Substantially all relates to U.K. results. |
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 9 Months Ended | ||||||||||||||||||||
Aug. 31, 2013 | |||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||
Summary of Interest Income, Other Revenues and Investment Income to Private Equity Related Funds | The following table presents interest income earned on loans to Private Equity Related Funds and other revenues and investment income related to net gains and losses on our investment in Private Equity Related Funds (in thousands): | ||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||
Three Months Ended | Six Months Ended | Three Months Ended | Three Months Ended | Nine Months Ended | |||||||||||||||||
31-Aug-13 | 31-Aug-13 | 28-Feb-13 | 31-Aug-12 | 31-Aug-12 | |||||||||||||||||
Interest income | $ | 339 | $ | 837 | $ | 516 | $ | 767 | $ | 2,462 | |||||||||||
Other revenues and investment income (loss) | 4,005 | 3,031 | 947 | (6,354 | ) | (15,625 | ) |
Organization_and_Basis_of_Pres1
Organization and Basis of Presentation - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
31-May-13 | Aug. 31, 2013 | Aug. 31, 2013 | Feb. 28, 2013 | Feb. 28, 2013 | 31-May-13 | Feb. 28, 2013 | Feb. 28, 2013 | Feb. 28, 2013 | Feb. 28, 2013 | Feb. 28, 2013 | Feb. 28, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | |
Segment | Immaterial Restatement [Member] | Leucadia [Member] | Leucadia [Member] | Overstatement [Member] | Revised value [Member] | Revised value [Member] | Previously Reported [Member] | Restatement Adjustment [Member] | 3.875% Convertible Senior Debentures, due 2029 [Member] | Preferred Stock Subject to Mandatory Redemption [Member] | ||||
Immaterial Restatement [Member] | Immaterial Restatement [Member] | Immaterial Restatement [Member] | Leucadia [Member] | Leucadia [Member] | ||||||||||
Organization And Basis Of Presentation [Line Items] | ||||||||||||||
Number of operating segments | 2 | |||||||||||||
Number of shares of Leucadia common stock received for each share of Jefferies common stock | 0.81 | |||||||||||||
Convertible Senior Debentures, interest rate | 3.88% | 3.88% | ||||||||||||
Convertible Senior Debentures, due date | 2029 | |||||||||||||
Dividend of Series A Convertible Preferred Stock | 3.25% | |||||||||||||
Reduction in principal transaction revenues | $3,900,000 | |||||||||||||
Reduction in Net earnings | 2,500,000 | |||||||||||||
Conversion option liability recognized at fair value | 7,700,000 | 16,500,000 | ||||||||||||
Purchase price allocation | 5,300,000 | 1,715,986,000 | ||||||||||||
Increase in goodwill | 5,300,000 | |||||||||||||
Professional services | 24,100,000 | 8,500,000 | 32,600,000 | |||||||||||
Professional service fees related to merger transaction, net of taxes | 5,300,000 | |||||||||||||
Net earnings | $80,100,000 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies - Additional Information (Detail) | 9 Months Ended |
Aug. 31, 2013 | |
Minimum [Member] | |
Summary Of Significant Accounting Policies [Line Items] | |
Useful life of premises and equipment | 3 years |
Maximum [Member] | |
Summary Of Significant Accounting Policies [Line Items] | |
Useful life of premises and equipment | 10 years |
Leucadia_Merger_and_Related_Tr2
Leucadia Merger and Related Transactions - Additional Information (Detail) (USD $) | 31-May-13 | Feb. 28, 2013 | 31-May-13 | Mar. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Feb. 28, 2013 | Feb. 28, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Feb. 28, 2013 | Feb. 28, 2013 | Feb. 28, 2013 | Feb. 28, 2013 |
Leucadia [Member] | Leucadia [Member] | Leucadia [Member] | Leucadia [Member] | Leucadia [Member] | Leucadia [Member] | Jefferies High Yield Holdings, LLC [Member] | 3.875% Convertible Senior Debentures, due 2029 [Member] | 3.875% Convertible Senior Debentures, due 2029 [Member] | 3.25% Cumulative Convertible Preferred Shares [Member] | 3.25% Cumulative Convertible Preferred Shares [Member] | Series A-1 Convertible Cumulative Preferred Stock [Member] | Series A-1 Convertible Cumulative Preferred Stock [Member] | ||
Successor [Member] | Successor [Member] | Predecessor [Member] | Successor [Member] | Leucadia [Member] | Leucadia [Member] | Jefferies Group Inc. [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||||||||
Exchange ratio | 0.81 | |||||||||||||
Convertible Cumulative Preferred Stock | $125,000,000 | $125,000,000 | $125,000,000 | |||||||||||
Convertible Cumulative Preferred Stock, dividend rate | 3.25% | 3.25% | 3.25% | 3.25% | 3.25% | |||||||||
Debt instrument principal amount | 345,000,000 | |||||||||||||
Debt instrument interest rate | 3.88% | 3.88% | 3.88% | |||||||||||
Debt instrument maturity year | 2029 | |||||||||||||
Cost of assets acquired | 4,754,101,000 | |||||||||||||
Business acquisition transaction cost | 2,500,000 | 11,500,000 | 2,100,000 | |||||||||||
Intangible assets, not including good will | 282,900,000 | |||||||||||||
Goodwill | 5,300,000 | 1,715,986,000 | ||||||||||||
Third party noncontrolling interests redeemed | 347,600,000 | |||||||||||||
Redeemable preferred interests | $362,300,000 |
Leucadia_Merger_and_Related_Tr3
Leucadia Merger and Related Transactions - Summary Computation of Purchase Price and Fair Values Assigned to Assets and Liabilities (Detail) (Leucadia [Member], USD $) | 3 Months Ended |
In Thousands, except Share data, unless otherwise specified | Feb. 28, 2013 |
Leucadia [Member] | |
Business Acquisition [Line Items] | |
Jefferies common stock outstanding | 205,368,031 |
Less: Jefferies common stock owned by Leucadia | -58,006,024 |
Jefferies common stock acquired by Leucadia | 147,362,007 |
Exchange ratio | 0.81 |
Leucadia's shares issued (excluding for Jefferies shares held by Leucadia) | 119,363,226 |
Less: restricted shares issued for share-base payment awards | -6,894,856 |
Leucadia's shares issued, excluding share-based payment awards | 112,468,370 |
Closing price of Leucadia's common stock | $26.90 |
Fair value of common shares acquired by Leucadia | $3,025,399 |
Fair value of 3.25% cumulative convertible preferred shares | 125,000 |
Fair value of shares-based payment awards | 343,811 |
Fair value of Jefferies shares owned by Leucadia | 1,259,891 |
Total purchase price | $4,754,101 |
Leucadia_Merger_and_Related_Tr4
Leucadia Merger and Related Transactions - Summary Computation of Purchase Price and Fair Values Assigned to Assets and Liabilities (Parenthetical) (Detail) (USD $) | 3 Months Ended |
Feb. 28, 2013 | |
Leucadia [Member] | |
Business Acquisition [Line Items] | |
Convertible Cumulative Preferred Stock, dividend rate | 3.25% |
Closing price common stock | $21.72 |
3.25% Cumulative Convertible Preferred Shares [Member] | |
Business Acquisition [Line Items] | |
Convertible Cumulative Preferred Stock, dividend rate | 3.25% |
3.25% Cumulative Convertible Preferred Shares [Member] | Leucadia [Member] | |
Business Acquisition [Line Items] | |
Convertible Cumulative Preferred Stock, dividend rate | 3.25% |
Series A-1 Convertible Cumulative Preferred Stock [Member] | |
Business Acquisition [Line Items] | |
Convertible Cumulative Preferred Stock, dividend rate | 3.25% |
Leucadia_Merger_and_Related_Tr5
Leucadia Merger and Related Transactions - Assets Acquired and Liabilities Assumed by Major Class (Detail) (USD $) | 31-May-13 | Feb. 28, 2013 | Feb. 28, 2013 | Feb. 28, 2013 |
In Thousands, unless otherwise specified | Leucadia [Member] | Customer relationships [Member] | Trade names (intangible assets) [Member] | |
Leucadia [Member] | Leucadia [Member] | |||
Assets acquired: | ||||
Cash and cash equivalents | $3,017,958 | |||
Cash and securities segregated | 3,728,742 | |||
Financial instruments owned, at fair value | 16,413,535 | |||
Investments in managed funds | 59,976 | |||
Loans to and investments in related parties | 766,893 | |||
Securities borrowed | 5,315,488 | |||
Securities purchased under agreements to resell | 3,578,366 | |||
Securities received as collateral | 25,338 | |||
Brokers, dealers and clearing organizations | 2,444,085 | |||
Customers | 1,045,251 | |||
Fees, interest and other | 225,555 | |||
Premises and equipment | 192,603 | |||
Indefinite-lived intangible exchange memberships and licenses | 15,551 | |||
Finite-lived intangible assets | 136,002 | 131,299 | ||
Other assets | 939,600 | |||
Total assets | 38,036,242 | |||
Liabilities assumed: | ||||
Short-term borrowings | 100,000 | |||
Financial instruments sold, not yet purchased, at fair value | 9,766,876 | |||
Securities loaned | 1,902,687 | |||
Securities sold under agreements to repurchase | 7,976,492 | |||
Other secured financings | 122,294 | |||
Obligation to return securities received as collateral | 25,338 | |||
Brokers, dealers and clearing organizations | 1,787,055 | |||
Customers | 5,450,781 | |||
Accrued expenses and other liabilities | 789,449 | |||
Long-term debt | 6,362,024 | |||
Mandatorily redeemable preferred interests | 358,951 | |||
Total liabilities | 34,641,947 | |||
Noncontrolling interests | 356,180 | |||
Fair value of net assets acquired, excluding goodwill | 3,038,115 | |||
Goodwill | $5,300 | $1,715,986 |
Leucadia_Merger_and_Related_Tr6
Leucadia Merger and Related Transactions - Assets Acquired and Liabilities Assumed by Major Class (Parenthetical) (Detail) (Leucadia [Member], USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Feb. 28, 2013 |
Business Acquisition [Line Items] | |
Increase of goodwill | $14.40 |
Fair value of the assets acquired | 4.8 |
Fair value of the liabilities assumed | $9.60 |
Customer relationships [Member] | |
Business Acquisition [Line Items] | |
Finite-lived Intangible Assets, Weighted Average Useful Life | 14 years 4 months 24 days |
Trade names (intangible assets) [Member] | |
Business Acquisition [Line Items] | |
Useful life of intangible assets | 35 years |
Hoare_Govett_Acquisition_Addit
Hoare Govett Acquisition - Additional Information (Detail) | Feb. 01, 2012 | Aug. 31, 2012 | Feb. 01, 2012 | Feb. 01, 2012 |
GBP (£) | Hoare Govett [Member] | Hoare Govett [Member] | Hoare Govett [Member] | |
USD ($) | USD ($) | GBP (£) | ||
Business Acquisition [Line Items] | ||||
Business acquisition employee retention payments agreed by acquiree maximum | £ 1,900,000 | £ 1,900,000 | ||
Cash paid for acquisition | 1 | |||
Fair values of net assets acquired, including identifiable intangible assets | 300,000 | |||
Purchase price of net assets acquired | 3,100,000 | |||
Bargain purchase gain | $3,400,000 |
Cash_Cash_Equivalents_and_Shor2
Cash, Cash Equivalents and Short-Term Investments - Schedule of Cash, Cash Equivalents and Short-Term Investments (Detail) (USD $) | Aug. 31, 2013 | Feb. 28, 2013 | Feb. 28, 2013 | Nov. 30, 2012 | Aug. 31, 2012 | Nov. 30, 2011 |
In Thousands, unless otherwise specified | Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] |
Cash and cash equivalents: | ||||||
Cash in banks | $938,881 | $1,038,664 | ||||
Money market investments | 3,180,215 | 1,653,931 | ||||
Total cash and cash equivalents | 4,119,096 | 3,017,958 | 3,017,958 | 2,692,595 | 2,844,513 | 2,393,797 |
Cash and securities segregated | $3,457,926 | $4,082,595 |
Fair_Value_Disclosures_Financi
Fair Value Disclosures - Financial Assets and Liabilities Accounted for at Fair Value on Recurring Basis (Detail) (USD $) | Aug. 31, 2013 | Nov. 30, 2012 | Feb. 28, 2013 | Nov. 30, 2012 | Aug. 31, 2012 | Nov. 30, 2011 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 |
In Thousands, unless otherwise specified | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | ||
Level 1 [Member] | Level 2 [Member] | Level 3 [Member] | Counterparty and Cash Collateral Netting [Member] | Residential mortgage-backed securities [Member] | Residential mortgage-backed securities [Member] | Residential mortgage-backed securities [Member] | Commercial mortgage-backed securities [Member] | Commercial mortgage-backed securities [Member] | Commercial mortgage-backed securities [Member] | Other asset-backed securities [Member] | Other asset-backed securities [Member] | Other asset-backed securities [Member] | Level 1 [Member] | Level 2 [Member] | Level 3 [Member] | Counterparty and Cash Collateral Netting [Member] | Residential mortgage-backed securities [Member] | Residential mortgage-backed securities [Member] | Residential mortgage-backed securities [Member] | Commercial mortgage-backed securities [Member] | Commercial mortgage-backed securities [Member] | Commercial mortgage-backed securities [Member] | Other asset-backed securities [Member] | Other asset-backed securities [Member] | Other asset-backed securities [Member] | |||||||||
Level 2 [Member] | Level 3 [Member] | Level 2 [Member] | Level 3 [Member] | Level 2 [Member] | Level 3 [Member] | Level 2 [Member] | Level 3 [Member] | Level 2 [Member] | Level 3 [Member] | Level 2 [Member] | Level 3 [Member] | |||||||||||||||||||||||
Financial instruments owned: | ||||||||||||||||||||||||||||||||||
Corporate equity securities | $1,762,775 | $1,608,715 | $137,245 | $16,815 | $1,933,302 | $1,753,178 | $164,045 | $16,079 | ||||||||||||||||||||||||||
Corporate debt securities | 3,038,146 | 3,034,515 | 3,631 | 2,354,748 | 2,334,115 | 20,633 | ||||||||||||||||||||||||||||
Collateralized debt obligations | 118,494 | 87,239 | 31,255 | 242,511 | 196,639 | 45,872 | ||||||||||||||||||||||||||||
U.S. government and federal agency securities | 1,835,927 | 1,720,617 | 115,310 | 1,605,892 | 1,559,899 | 45,993 | ||||||||||||||||||||||||||||
Municipal securities | 619,969 | 619,969 | 504,981 | 504,981 | ||||||||||||||||||||||||||||||
Sovereign obligations | 2,697,854 | 1,722,044 | 975,810 | 1,916,997 | 1,225,076 | 691,921 | ||||||||||||||||||||||||||||
Mortgage- and asset-backed securities, assets | 5,468,284 | 4,164,913 | 4,008,844 | 156,069 | 1,090,535 | 1,060,333 | 30,202 | 94,342 | 93,228 | 1,114 | 4,126,691 | 3,083,802 | 2,951,619 | 132,183 | 742,788 | 728,365 | 14,423 | 57,590 | 49,020 | 8,570 | ||||||||||||||
Loans and other receivables | 678,311 | 497,918 | 180,393 | 942,969 | 812,517 | 130,452 | ||||||||||||||||||||||||||||
Derivatives | 121,869 | 298,086 | 615,024 | 1,547,984 | 328 | -1,865,250 | 121,869 | 38,410 | 1,937,799 | 2,567 | -1,856,907 | |||||||||||||||||||||||
Investments at fair value | 127,023 | 43,126 | 83,897 | 79,917 | 6,465 | 73,452 | ||||||||||||||||||||||||||||
Physical commodities | 144,016 | 144,016 | 110,915 | 110,915 | ||||||||||||||||||||||||||||||
Total financial instruments owned | 16,670,391 | 5,666,400 | 12,365,537 | 503,704 | -1,865,250 | 13,698,281 | 4,576,563 | 10,534,394 | 444,231 | -1,856,907 | ||||||||||||||||||||||||
Cash and cash equivalents | 3,017,958 | 2,692,595 | 2,844,513 | 2,393,797 | 2,692,595 | 4,119,096 | 3,017,958 | 4,119,096 | ||||||||||||||||||||||||||
Investments in managed funds | 57,763 | 57,763 | 55,897 | 55,897 | ||||||||||||||||||||||||||||||
Cash and securities segregated and on deposit for regulatory purposes | 4,082,595 | 4,082,595 | 3,457,926 | 3,457,926 | ||||||||||||||||||||||||||||||
Securities received as collateral | 45,100 | 0 | 45,133 | 45,133 | ||||||||||||||||||||||||||||||
Total Level 3 assets | 508,178 | 500,128 | ||||||||||||||||||||||||||||||||
Financial instruments sold, not yet purchased: | ||||||||||||||||||||||||||||||||||
Corporate equity securities | 1,539,332 | 1,442,347 | 96,947 | 38 | 1,739,491 | 1,675,406 | 64,047 | 38 | ||||||||||||||||||||||||||
Corporate debt securities | 1,389,312 | 1,389,312 | 1,320,896 | 1,320,896 | ||||||||||||||||||||||||||||||
U.S. government and federal agency securities | 1,679,133 | 1,428,746 | 250,387 | 1,299,404 | 1,299,404 | |||||||||||||||||||||||||||||
Sovereign obligations | 1,986,979 | 1,395,355 | 591,624 | 1,688,111 | 1,043,906 | 644,205 | ||||||||||||||||||||||||||||
Mortgage- and asset-backed securities, liabilities | 241,211 | 239,063 | 239,063 | 2,148 | 2,148 | 37,968 | 24,569 | 24,569 | 13,399 | 13,399 | ||||||||||||||||||||||||
Loans | 207,227 | 205,516 | 1,711 | 360,537 | 359,561 | 976 | ||||||||||||||||||||||||||||
Derivatives | 133,827 | 229,127 | 547,605 | 1,684,884 | 9,516 | -2,012,878 | 133,827 | 39,794 | 1,991,520 | 17,205 | -1,914,692 | |||||||||||||||||||||||
Physical commodities | 183,142 | 183,142 | 44,796 | 44,796 | ||||||||||||||||||||||||||||||
Total financial instruments sold, not yet purchased | 7,455,463 | 4,814,053 | 4,643,023 | 11,265 | -2,012,878 | 6,625,030 | 4,058,510 | 4,462,993 | 18,219 | -1,914,692 | ||||||||||||||||||||||||
Obligation to return securities received as collateral | 45,133 | 45,133 | ||||||||||||||||||||||||||||||||
Other secured financings | 33,025 | 30,000 | 3,025 | |||||||||||||||||||||||||||||||
Embedded conversion option | 7,336 | 7,336 | ||||||||||||||||||||||||||||||||
Level 3 financial instruments for which the firm does not bear economic exposure | -53,289 | |||||||||||||||||||||||||||||||||
Level 3 financial instruments for which the firm bears economic exposure | $450,415 |
Fair_Value_Disclosures_Financi1
Fair Value Disclosures - Financial Assets and Liabilities Accounted for at Fair Value on Recurring Basis (Parenthetical) (Detail) (USD $) | Nov. 30, 2012 | Aug. 31, 2013 |
In Millions, unless otherwise specified | Predecessor [Member] | Successor [Member] |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of equity options transferred from Level 1 to Level 2 within Financial instruments owned | $403 | |
Fair value of equity options transferred from Level 1 to Level 2 within Financial instruments sold, not yet purchased | 423 | |
U.S. government securities at fair value segregated for regulatory purposes | $404.30 | $279.30 |
Fair_Value_Disclosures_Investm
Fair Value Disclosures - Investments Measured at Fair Value Based on Net Asset Value Per Share (Detail) (USD $) | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 |
In Thousands, unless otherwise specified | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] |
Equity Long/Short Hedge Funds [Member] | High Yield Hedge Funds [Member] | Fund of Funds [Member] | Equity Funds [Member] | Convertible Bond Funds [Member] | Other Investments [Member] | Equity Long/Short Hedge Funds [Member] | High Yield Hedge Funds [Member] | Fund of Funds [Member] | Equity Funds [Member] | Convertible Bond Funds [Member] | Other Investments [Member] | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||||||||||||||
Fair Value | $93,014 | $19,554 | $612 | $604 | $69,223 | $3,002 | $19 | $90,799 | $20,360 | $341 | $474 | $66,526 | $3,081 | $17 |
Unfunded commitments | $59,378 | $106 | $59,272 | $49,125 | $106 | $49,019 | ||||||||
Redemption Frequency (if currently eligible) | Monthly, Quarterly | - | - | - | At Will | Bi-Monthly | Monthly, Quarterly | - | - | - | At Will | Bi-Monthly |
Fair_Value_Disclosures_Investm1
Fair Value Disclosures - Investments Measured at Fair Value Based on Net Asset Value Per Share (Parenthetical) (Detail) (USD $) | Nov. 30, 2012 | Aug. 31, 2013 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 |
Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | |
Convertible Bonds [Member] | Equity Long/Short Hedge Funds [Member] | Fund of Funds [Member] | Investments Which are Not Investment Companies [Member] | Private Equity Related Funds [Member] | Equity Funds [Member] | Equity Long/Short Hedge Funds [Member] | Fund of Funds [Member] | Investments Which are Not Investment Companies [Member] | Private Equity Related Funds [Member] | Equity Funds [Member] | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||||||||||||
Percentage of redeemable investments | 96.00% | 98.00% | |||||||||||
Notice period redemption of investment prior written notice period | 30 - 65 days | ||||||||||||
Percentage of investments with no redemption provisions | 94.00% | 98.00% | |||||||||||
Estimated period for the liquidation of the underlying assets, Minimum | 1 year | 1 year | |||||||||||
Estimated period for the liquidation of the underlying assets, Maximum | 2 years | 8 years | |||||||||||
Percentage of investments at fair value expected to liquidate | 98.00% | 99.00% | |||||||||||
Fair value of investments in equity funds | $55,600,000 | $53,700,000 | |||||||||||
Unfunded commitments | 59,378,000 | 106,000 | 56,900,000 | 49,125,000 | 106,000 | 47,500,000 | |||||||
Redeemable period of investments | 5 days | ||||||||||||
Investments, at fair value | $127,023,000 | $91,800,000 | $79,917,000 | $45,000,000 |
Fair_Value_Disclosures_Additio
Fair Value Disclosures - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||||||||
Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | 31-May-12 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2012 | Nov. 30, 2012 | 31-May-13 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2012 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2012 | Aug. 31, 2012 | |
Leucadia [Member] | 3.875% Convertible Senior Debentures, due 2029 [Member] | Embedded Conversion Option [Member] | Residential mortgage-backed securities [Member] | Residential mortgage-backed securities [Member] | Residential mortgage-backed securities [Member] | Residential mortgage-backed securities [Member] | Residential mortgage-backed securities [Member] | Commercial mortgage-backed securities [Member] | Commercial mortgage-backed securities [Member] | Commercial mortgage-backed securities [Member] | Commercial mortgage-backed securities [Member] | Commercial mortgage-backed securities [Member] | Corporate debt securities [Member] | Corporate debt securities [Member] | Corporate debt securities [Member] | Corporate debt securities [Member] | Corporate debt securities [Member] | Corporate equity securities [Member] | Corporate equity securities [Member] | Corporate equity securities [Member] | Corporate equity securities [Member] | Corporate equity securities [Member] | Collateralized debt obligations [Member] | Collateralized debt obligations [Member] | Collateralized debt obligations [Member] | Collateralized debt obligations [Member] | Collateralized debt obligations [Member] | Loans and other receivables [Member] | Loans and other receivables [Member] | Loans and other receivables [Member] | Loans and other receivables [Member] | Loans and other receivables [Member] | Other asset-backed securities [Member] | Other asset-backed securities [Member] | Other asset-backed securities [Member] | Municipal Securities [Member] | |||||||||
Leucadia [Member] | Leucadia [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 3.88% | 3.88% | |||||||||||||||||||||||||||||||||||||||||||
Debt instrument maturity year | 1-Mar-16 | 1-Nov-29 | 1-Nov-17 | ||||||||||||||||||||||||||||||||||||||||||
Volatility curve used in valuing embedded option | 252 days | ||||||||||||||||||||||||||||||||||||||||||||
Transfers of assets from Level 2 to Level 3 | $91,400,000 | $100,500,000 | $156,500,000 | $53,600,000 | $184,200,000 | $50,300,000 | $78,400,000 | $74,500,000 | $17,900,000 | $67,500,000 | $2,400,000 | $1,300,000 | $5,300,000 | $11,700,000 | $8,300,000 | $10,800,000 | $6,300,000 | $8,500,000 | $600,000 | $5,600,000 | $100,000 | $4,400,000 | $7,000,000 | $1,700,000 | $22,300,000 | $5,300,000 | $9,300,000 | $12,100,000 | $47,300,000 | $4,800,000 | $53,000,000 | $400,000 | $55,200,000 | $9,000,000 | |||||||||||
Transfers of assets from Level 3 to Level 2 | 82,700,000 | 112,700,000 | 65,000,000 | 48,500,000 | 88,900,000 | 40,600,000 | 73,500,000 | 12,400,000 | 29,700,000 | 4,500,000 | 2,200,000 | 10,900,000 | 17,100,000 | 1,200,000 | 29,900,000 | 1,500,000 | 100,000 | 400,000 | 7,900,000 | 7,400,000 | 4,700,000 | 4,100,000 | 4,900,000 | 23,600,000 | 2,400,000 | 7,400,000 | 9,500,000 | 3,900,000 | 1,600,000 | 19,900,000 | 23,100,000 | 2,200,000 | 34,800,000 | 200,000 | 800,000 | 2,400,000 | 5,400,000 | ||||||||
Transfers of liabilities from Level 2 to Level 3 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||
Transfers of liabilities from Level 3 to Level 2 | 0 | 700,000 | 0 | 2,200,000 | |||||||||||||||||||||||||||||||||||||||||
Net gains/losses on Level 3 assets (realized and unrealized) | -1,000,000 | 14,500,000 | 2,000,000 | -12,700,000 | -23,600,000 | ||||||||||||||||||||||||||||||||||||||||
Net gains/losses on Level 3 liabilities (realized and unrealized) | -4,600,000 | -2,700,000 | -6,900,000 | -2,600,000 | -5,100,000 | ||||||||||||||||||||||||||||||||||||||||
Transfers of liabilities from Level 2 to Level 3 | 10,000 | ||||||||||||||||||||||||||||||||||||||||||||
Unadjusted net asset value of the funds | $106,100,000 | $82,700,000 |
Fair_Value_Disclosures_Summary
Fair Value Disclosures - Summary of Valuation Bases (Pricing Information) for Financial Instruments (Detail) | Aug. 31, 2013 | Nov. 30, 2012 | Aug. 31, 2013 | Nov. 30, 2012 | Aug. 31, 2013 | Nov. 30, 2012 | Aug. 31, 2013 | Nov. 30, 2012 | Aug. 31, 2013 | Nov. 30, 2012 | Aug. 31, 2013 | Nov. 30, 2012 |
Successor [Member] | Predecessor [Member] | Exchange closing prices [Member] | Exchange closing prices [Member] | Recently observed transaction prices [Member] | Recently observed transaction prices [Member] | External pricing services [Member] | External pricing services [Member] | Broker quotes [Member] | Broker quotes [Member] | Valuation techniques [Member] | Valuation techniques [Member] | |
Successor [Member] | Predecessor [Member] | Successor [Member] | Predecessor [Member] | Successor [Member] | Predecessor [Member] | Successor [Member] | Predecessor [Member] | Successor [Member] | Predecessor [Member] | |||
Financial Instruments Owned And Sold Not Yet Purchased Measured Using Different Valuation Basis [Line Items] | ||||||||||||
Financial Instruments Owned | 100.00% | 100.00% | 13.00% | 11.00% | 7.00% | 5.00% | 56.00% | 70.00% | 3.00% | 1.00% | 21.00% | 13.00% |
Financial Instruments Sold, Not Yet Purchased | 100.00% | 100.00% | 26.00% | 19.00% | 4.00% | 6.00% | 65.00% | 71.00% | 3.00% | 0.00% | 2.00% | 4.00% |
Fair_Value_Disclosures_Summary1
Fair Value Disclosures - Summary of Changes in Fair Value of Financial Assets Classified as Level 3 (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2012 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Total gains/losses (realized and unrealized) | $1,000 | ($14,500) | ($2,000) | $12,700 | $23,600 |
Corporate equity securities [Member] | Successor [Member] | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Beginning Balance | 19,577 | 13,234 | |||
Total gains/losses (realized and unrealized) | -788 | 1,053 | |||
Purchases | 213 | ||||
Sales | -930 | -753 | |||
Settlements | 266 | ||||
Net transfers into/ (out of) Level 3 | -1,780 | 2,066 | |||
Ending Balance | 16,079 | 16,079 | |||
Change in unrealized gains/(losses) relating to instruments still held | -786 | 1,243 | |||
Corporate equity securities [Member] | Predecessor [Member] | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Beginning Balance | 16,815 | 25,789 | 13,489 | ||
Total gains/losses (realized and unrealized) | 200 | 260 | -2,580 | ||
Purchases | 707 | 2,991 | 20,676 | ||
Sales | 109 | -15,418 | -13,437 | ||
Net transfers into/ (out of) Level 3 | -4,597 | 6,161 | 1,635 | ||
Ending Balance | 13,234 | 19,783 | 19,783 | ||
Change in unrealized gains/(losses) relating to instruments still held | 172 | -907 | -4,636 | ||
Corporate debt securities [Member] | Successor [Member] | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Beginning Balance | 18,615 | 31,820 | |||
Total gains/losses (realized and unrealized) | -4,285 | -17,415 | |||
Purchases | 68 | 708 | |||
Sales | -571 | -2,556 | |||
Settlements | |||||
Net transfers into/ (out of) Level 3 | 6,806 | 8,076 | |||
Ending Balance | 20,633 | 20,633 | |||
Change in unrealized gains/(losses) relating to instruments still held | -4,342 | -6,933 | |||
Corporate debt securities [Member] | Predecessor [Member] | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Beginning Balance | 3,631 | 7,972 | 48,140 | ||
Total gains/losses (realized and unrealized) | 7,836 | -101 | 85 | ||
Purchases | 11,510 | 521 | 7,228 | ||
Sales | -1,918 | -1,118 | -39,367 | ||
Settlements | -1,276 | ||||
Net transfers into/ (out of) Level 3 | 10,761 | 284 | -7,252 | ||
Ending Balance | 31,820 | 7,558 | 7,558 | ||
Change in unrealized gains/(losses) relating to instruments still held | 7,833 | -136 | -656 | ||
Collateralized debt obligations [Member] | Successor [Member] | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Beginning Balance | 45,124 | 29,776 | |||
Total gains/losses (realized and unrealized) | -1,903 | -2,008 | |||
Purchases | 8,222 | 43,152 | |||
Sales | -4,236 | -27,676 | |||
Settlements | |||||
Net transfers into/ (out of) Level 3 | -1,335 | 2,628 | |||
Ending Balance | 45,872 | 45,872 | |||
Change in unrealized gains/(losses) relating to instruments still held | -2,388 | -3,830 | |||
Collateralized debt obligations [Member] | Predecessor [Member] | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Beginning Balance | 31,255 | 84,006 | 47,988 | ||
Total gains/losses (realized and unrealized) | 3,624 | 6,710 | 4,278 | ||
Purchases | 9,406 | 8,479 | |||
Sales | -17,374 | -11,008 | -18,699 | ||
Settlements | -3,892 | ||||
Net transfers into/ (out of) Level 3 | 2,865 | 1,890 | 43,444 | ||
Ending Balance | 29,776 | 81,598 | 81,598 | ||
Change in unrealized gains/(losses) relating to instruments still held | -1,125 | 5,836 | 3,515 | ||
Residential mortgage-backed securities [Member] | Successor [Member] | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Beginning Balance | 143,766 | 169,426 | |||
Total gains/losses (realized and unrealized) | -1,876 | 5,594 | |||
Purchases | 33,831 | 79,531 | |||
Sales | -50,938 | -105,671 | |||
Settlements | -2,306 | -4,851 | |||
Net transfers into/ (out of) Level 3 | 9,706 | -11,846 | |||
Ending Balance | 132,183 | 132,183 | |||
Change in unrealized gains/(losses) relating to instruments still held | -3,898 | 586 | |||
Residential mortgage-backed securities [Member] | Predecessor [Member] | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Beginning Balance | 156,069 | 123,555 | 149,965 | ||
Total gains/losses (realized and unrealized) | 11,906 | 2,542 | -17,833 | ||
Purchases | 132,773 | 27,401 | 59,477 | ||
Sales | -130,143 | -65,422 | -101,039 | ||
Settlements | -6,057 | -5,216 | -8,489 | ||
Net transfers into/ (out of) Level 3 | 4,878 | 62,128 | 62,907 | ||
Ending Balance | 169,426 | 144,988 | 144,988 | ||
Change in unrealized gains/(losses) relating to instruments still held | 4,511 | 359 | -8,884 | ||
Commercial mortgage-backed securities [Member] | Successor [Member] | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Beginning Balance | 16,068 | 17,794 | |||
Total gains/losses (realized and unrealized) | 2,033 | -735 | |||
Purchases | 130 | 1,533 | |||
Sales | -310 | -3,054 | |||
Settlements | -3,703 | -5,281 | |||
Net transfers into/ (out of) Level 3 | 205 | 4,166 | |||
Ending Balance | 14,423 | 14,423 | |||
Change in unrealized gains/(losses) relating to instruments still held | -1,106 | -5,007 | |||
Commercial mortgage-backed securities [Member] | Predecessor [Member] | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Beginning Balance | 30,202 | 40,594 | 52,407 | ||
Total gains/losses (realized and unrealized) | -995 | -1,327 | -2,221 | ||
Purchases | 2,280 | 2,092 | 5,090 | ||
Sales | -2,866 | -1,307 | -5,441 | ||
Settlements | -1,188 | -450 | -115 | ||
Net transfers into/ (out of) Level 3 | -9,639 | -8,089 | -18,207 | ||
Ending Balance | 17,794 | 31,513 | 31,513 | ||
Change in unrealized gains/(losses) relating to instruments still held | -2,059 | -1,310 | -2,769 | ||
Other asset-backed securities [Member] | Successor [Member] | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Beginning Balance | 1,444 | 1,252 | |||
Total gains/losses (realized and unrealized) | 2,170 | 2,168 | |||
Purchases | 7,576 | 7,618 | |||
Sales | -3,279 | -3,127 | |||
Settlements | |||||
Net transfers into/ (out of) Level 3 | 659 | 659 | |||
Ending Balance | 8,570 | 8,570 | |||
Change in unrealized gains/(losses) relating to instruments still held | 2,142 | 2,077 | |||
Other asset-backed securities [Member] | Predecessor [Member] | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Beginning Balance | 1,114 | 1,273 | 3,284 | ||
Total gains/losses (realized and unrealized) | 50 | 141 | |||
Purchases | 1,627 | 19,397 | |||
Sales | -1,342 | -20,351 | |||
Settlements | -19 | -291 | -51 | ||
Net transfers into/ (out of) Level 3 | -178 | -774 | -2,212 | ||
Ending Balance | 1,252 | 208 | 208 | ||
Change in unrealized gains/(losses) relating to instruments still held | -1 | 3 | |||
Loans and other receivables [Member] | Successor [Member] | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Beginning Balance | 117,496 | 170,986 | |||
Total gains/losses (realized and unrealized) | -198 | -5,103 | |||
Purchases | 52,246 | 206,672 | |||
Sales | -12,139 | -26,630 | |||
Settlements | -25,395 | -213,662 | |||
Net transfers into/ (out of) Level 3 | -1,558 | -1,811 | |||
Ending Balance | 130,452 | 130,452 | |||
Change in unrealized gains/(losses) relating to instruments still held | 609 | -8,063 | |||
Loans and other receivables [Member] | Predecessor [Member] | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Beginning Balance | 180,393 | 108,674 | 97,291 | ||
Total gains/losses (realized and unrealized) | -8,682 | -528 | -2,674 | ||
Purchases | 105,650 | 57,790 | 158,305 | ||
Sales | -29,828 | -30,632 | -60,111 | ||
Settlements | -61,407 | -56,404 | -104,476 | ||
Net transfers into/ (out of) Level 3 | -15,140 | 29,889 | 20,454 | ||
Ending Balance | 170,986 | 108,789 | 108,789 | ||
Change in unrealized gains/(losses) relating to instruments still held | -12,374 | -237 | -4,109 | ||
Investments, at fair value [Member] | Successor [Member] | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Beginning Balance | 76,364 | 70,067 | |||
Total gains/losses (realized and unrealized) | 1,848 | 653 | |||
Purchases | 5,000 | ||||
Sales | -101 | -102 | |||
Settlements | -710 | -3,204 | |||
Net transfers into/ (out of) Level 3 | -3,949 | 1,038 | |||
Ending Balance | 73,452 | 73,452 | |||
Change in unrealized gains/(losses) relating to instruments still held | 2,002 | 668 | |||
Investments, at fair value [Member] | Predecessor [Member] | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Beginning Balance | 83,897 | 91,836 | 78,326 | ||
Total gains/losses (realized and unrealized) | 961 | -202 | 15,076 | ||
Purchases | 952 | 1,120 | 1,909 | ||
Sales | -4,923 | -6 | |||
Settlements | -9,721 | -775 | -3,326 | ||
Net transfers into/ (out of) Level 3 | -1,099 | ||||
Ending Balance | 70,067 | 91,979 | 91,979 | ||
Change in unrealized gains/(losses) relating to instruments still held | 1,171 | -466 | 14,412 | ||
Investments in managed funds [Member] | Successor [Member] | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Beginning Balance | 55,141 | 59,976 | |||
Total gains/losses (realized and unrealized) | 4,034 | 3,108 | |||
Purchases | 6,598 | 9,130 | |||
Sales | |||||
Settlements | -9,876 | -16,439 | |||
Net transfers into/ (out of) Level 3 | 122 | ||||
Ending Balance | 55,897 | 55,897 | |||
Change in unrealized gains/(losses) relating to instruments still held | 4,034 | 3,108 | |||
Investments in managed funds [Member] | Predecessor [Member] | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Beginning Balance | 57,763 | 68,314 | 70,740 | ||
Total gains/losses (realized and unrealized) | -363 | -5,389 | -17,765 | ||
Purchases | 11,068 | 2,173 | 12,683 | ||
Settlements | -8,492 | -4,987 | -5,537 | ||
Net transfers into/ (out of) Level 3 | 10 | ||||
Ending Balance | 59,976 | 60,121 | 60,121 | ||
Change in unrealized gains/(losses) relating to instruments still held | -363 | -5,382 | -17,765 | ||
Municipal securities [Member] | Predecessor [Member] | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Beginning Balance | 465 | 6,904 | |||
Total gains/losses (realized and unrealized) | 5 | -74 | |||
Sales | -387 | -1,366 | |||
Net transfers into/ (out of) Level 3 | -5,381 | ||||
Ending Balance | 83 | 83 | |||
Change in unrealized gains/(losses) relating to instruments still held | 5 | 5 | |||
Sovereign obligations [Member] | Predecessor [Member] | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Beginning Balance | 140 | ||||
Net transfers into/ (out of) Level 3 | ($140) |
Fair_Value_Disclosures_Summary2
Fair Value Disclosures - Summary of Changes in Fair Value of Financial Liabilities Classified as Level 3 (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 9 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
In Thousands, unless otherwise specified | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2012 | Feb. 28, 2013 | Nov. 30, 2012 | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2012 |
Corporate equity securities [Member] | Corporate equity securities [Member] | Corporate equity securities [Member] | Corporate equity securities [Member] | Corporate equity securities [Member] | Corporate equity securities [Member] | Residential mortgage-backed securities [Member] | Residential mortgage-backed securities [Member] | Net derivatives [Member] | Net derivatives [Member] | Net derivatives [Member] | Net derivatives [Member] | Net derivatives [Member] | Loans [Member] | Loans [Member] | Loans [Member] | Loans [Member] | Loans [Member] | Other secured financing [Member] | Other secured financing [Member] | Corporate debt securities [Member] | Corporate debt securities [Member] | ||||||
Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Successor [Member] | Predecessor [Member] | Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||||||||||||||||||||||||
Beginning Balance | $38 | $38 | $12,039 | $38 | $38 | $1,542 | $10,799 | $11,185 | $9,188 | $4,395 | $9,285 | $15,212 | $7,398 | $1,711 | $10,157 | $2,294 | $74 | $74 | |||||||||
Total gains/losses (realized and unrealized) | -4,600 | -2,700 | -6,900 | -2,600 | -5,100 | -410 | 38 | -1,542 | 25 | 3,899 | 3,453 | 2,648 | 7,342 | 5,064 | 731 | 731 | -15 | -15 | |||||||||
Purchases | -11,782 | -73,846 | -389 | -14,952 | -20,221 | -1,711 | -10,157 | -59 | -59 | ||||||||||||||||||
Sales | 191 | 75,363 | 716 | 13,799 | 7,398 | 4,285 | 4,285 | ||||||||||||||||||||
Settlements | -60 | ||||||||||||||||||||||||||
Net transfers into/ (out of) Level 3 | -651 | 10 | -2,213 | 2,294 | |||||||||||||||||||||||
Ending Balance | 38 | 38 | 38 | 38 | 38 | 38 | 1,542 | 14,638 | 14,638 | 11,185 | 11,747 | 11,747 | 976 | 976 | 7,398 | 4,285 | 4,285 | 3,025 | 3,025 | ||||||||
Change in unrealized gains/(losses) relating to instruments still held | $38 | ($19) | ($3,899) | ($3,453) | $2,648 | $6,209 | $6,087 | ($731) | ($731) |
Fair_Value_Disclosures_Quantit
Fair Value Disclosures - Quantitative Information about Significant Unobservable Inputs used in Level 3 Fair Value Measurements (Detail) (USD $) | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 |
Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | |
Derivatives [Member] | Derivatives [Member] | Derivatives [Member] | Derivatives [Member] | Derivatives [Member] | Derivatives [Member] | Derivatives [Member] | Corporate equity securities [Member] | Corporate equity securities [Member] | Corporate equity securities [Member] | Corporate equity securities [Member] | Corporate debt securities [Member] | Corporate debt securities [Member] | Corporate debt securities [Member] | Corporate debt securities [Member] | Corporate debt securities [Member] | Corporate debt securities [Member] | Collateralized debt obligations [Member] | Collateralized debt obligations [Member] | Collateralized debt obligations [Member] | Collateralized debt obligations [Member] | Residential mortgage-backed securities [Member] | Residential mortgage-backed securities [Member] | Residential mortgage-backed securities [Member] | Residential mortgage-backed securities [Member] | Residential mortgage-backed securities [Member] | Commercial mortgage-backed securities [Member] | Commercial mortgage-backed securities [Member] | Commercial mortgage-backed securities [Member] | Commercial mortgage-backed securities [Member] | Other asset-backed securities [Member] | Other asset-backed securities [Member] | Other asset-backed securities [Member] | Other asset-backed securities [Member] | Other asset-backed securities [Member] | Other asset-backed securities [Member] | Other asset-backed securities [Member] | Other asset-backed securities [Member] | Other asset-backed securities [Member] | Loans and other receivables [Member] | Loans and other receivables [Member] | Loans and other receivables [Member] | Loans and other receivables [Member] | Loans and other receivables [Member] | Loans and other receivables [Member] | Loans and other receivables [Member] | Loans and other receivables [Member] | Loans and other receivables [Member] | Investments, at fair value [Member] | Investments, at fair value [Member] | Investments, at fair value [Member] | Derivatives [Member] | Derivatives [Member] | Derivatives [Member] | Corporate equity securities [Member] | Corporate equity securities [Member] | Corporate equity securities [Member] | Corporate equity securities [Member] | Corporate equity securities [Member] | Corporate equity securities [Member] | Collateralized debt obligations [Member] | Collateralized debt obligations [Member] | Collateralized debt obligations [Member] | Collateralized debt obligations [Member] | Residential mortgage-backed securities [Member] | Residential mortgage-backed securities [Member] | Residential mortgage-backed securities [Member] | Residential mortgage-backed securities [Member] | Residential mortgage-backed securities [Member] | Commercial mortgage-backed securities [Member] | Commercial mortgage-backed securities [Member] | Commercial mortgage-backed securities [Member] | Loans and other receivables [Member] | Loans and other receivables [Member] | Loans and other receivables [Member] | Loans and other receivables [Member] | Loans and other receivables [Member] | Loans and other receivables [Member] | Loans and other receivables [Member] | Loans and other receivables [Member] | Loans and other receivables [Member] | Investments, at fair value [Member] | Investments, at fair value [Member] | Investments, at fair value [Member] | Investments, at fair value [Member] | |
Financial Instruments Sold, Not Yet Purchased [Member] | Equity options [Member] | Equity options [Member] | Loan commitments [Member] | Loan commitments [Member] | Loan commitments [Member] | Loan commitments [Member] | Non-exchange traded securities [Member] | Non-exchange traded securities [Member] | Warrants [Member] | Range One [Member] | Range Two [Member] | Range Three [Member] | Minimum [Member] | Maximum [Member] | Range One [Member] | Range Two [Member] | Range Three [Member] | Range One [Member] | Range Two [Member] | Range Three [Member] | Range Four [Member] | Range One [Member] | Range Two [Member] | Range Three [Member] | Range One [Member] | Range Two [Member] | Range Three [Member] | Range Four [Member] | Range One [Member] | Range Two [Member] | Range Three [Member] | Range Four [Member] | Range One [Member] | Range Two [Member] | Range Three [Member] | Range Four [Member] | Range Six [Member] | Minimum [Member] | Maximum [Member] | Range Five [Member] | Range One [Member] | Private equity securities [Member] | Private equity securities [Member] | Financial Instruments Sold, Not Yet Purchased [Member] | Equity options [Member] | Loan commitments [Member] | Non-exchange traded securities [Member] | Non-exchange traded securities [Member] | Non-exchange traded securities [Member] | Non-exchange traded securities [Member] | Warrants [Member] | Range One [Member] | Range Two [Member] | Range Three [Member] | Range One [Member] | Range Two [Member] | Range Three [Member] | Range Four [Member] | Range One [Member] | Range Two [Member] | Range One [Member] | Range Two [Member] | Range Three [Member] | Range Four [Member] | Range Six [Member] | Minimum [Member] | Maximum [Member] | Range Five [Member] | Private equity securities [Member] | Private equity securities [Member] | Private equity securities [Member] | Private equity securities [Member] | |||||||||||||
Financial Instruments Sold, Not Yet Purchased [Member] | Minimum [Member] | Financial Instruments Sold, Not Yet Purchased [Member] | Range One [Member] | Maximum [Member] | Range One [Member] | Range Two [Member] | Range One [Member] | Range One [Member] | Financial Instruments Sold, Not Yet Purchased [Member] | Financial Instruments Sold, Not Yet Purchased [Member] | Range One [Member] | Range Two [Member] | Minimum [Member] | Maximum [Member] | Range One [Member] | Range One [Member] | Range Two [Member] | Range Three [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments Sold, Not Yet Purchased [Member] | Financial Instruments Sold, Not Yet Purchased [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Assets And Liabilities Measured On Unobservable Inputs [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Valuation Technique | Option model | Comparable pricing | Option model | Comparable pricing | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Market Value of Financial Instruments Sold, Not Yet Purchased | ($12,879,000) | ($9,516,000) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Unobservable Input(s) | Volatility | Comparable bond or loan price | Volatility | Comparable bond or loan price | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted Average | 39 | 78.28 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Market Value of Financial Instruments Owned | 1,600,000 | 11,665,000 | 18,313,000 | 35,512,000 | 114,278,000 | 5,847,000 | 7,711,000 | 81,282,000 | 5,975,000 | 16,815,000 | 26,705,000 | 156,069,000 | 30,202,000 | 153,365,000 | 32,751,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Valuation Technique | Comparable pricing | Market approach | Comparable pricing | Option model | Scenario analysis | Comparable pricing | Market approach | Discounted cash flows | Discounted cash flows | Comparable pricing | Discounted cash flows | Discounted cash flows | Comparable pricing | Market approach | Scenario analysis | Comparable pricing | Market approach | Scenario analysis | Option model | Discounted cash flows | Discounted cash flows | Discounted cash flows | Comparable pricing | Discounted cash flows | Market approach | Scenario analysis | Market approach | Comparable pricing | Scenario analysis | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Unobservable Input(s) | Comparable bond or loan price | EBITDA multiple | Comparable share price | Volatility | Estimated recovery percentage | Comparable bond or loan price | Yield | Constant prepayment rate | Constant default rate | Loss severity | Yield | Constant prepayment rate | Constant default rate | Loss severity | Yield | Comparable bond or loan price | Yield | Cumulative loss rate | Constant prepayment rate | Constant default rate | Loss severity | Yield | Comparable bond or loan price | Yield | Estimated recovery percentage | EBITDA multiple | Comparable share price | EBITDA multiple | Estimated recovery percentage | Volatility | Constant prepayment rate | Constant default rate | Loss severity | Yield | Constant prepayment rate | Constant default rate | Loss severity | Yield | Yield | Cumulative loss rate | Comparable bond or loan price | Yield | Cumulative loss rate | Yield | Estimated recovery percentage | EBITDA multiple | EBITDA multiple | Comparable share price | Estimated recovery percentage | ||||||||||||||||||||||||||||||||||||
Fair Value Inputs Comparable Share Price | 76.75 | 414 | 400 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Assumptions Expected Volatility | 36 | 41 | 37 | 39 | 39 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated recovery percentage | 21.00% | 17.00% | 86.00% | 35.00% | 15.00% | 50.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Inputs Yield | 12.60% | 19.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value inputs comparable bond or loan price | $101.75 | $101.38 | $63.70 | $126 | $12.50 | $90.50 | $100 | $101.13 | $81.88 | $101.25 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative loss rate | 12.00% | 0.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Inputs, Earnings before Interest, Taxes, Depreciation, and Amortization Multiple | 16 | 6.5 | 4 | 16.3 | 8.3 | 6.6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Range, Minimum | 0.00% | 0.00% | 13.00% | 5.00% | 0.00% | 1.00% | 25.00% | 0.00% | 15.00% | 0.00% | 0.00% | 0.00% | 75.00% | 9.00% | 0.00% | 0.00% | 13.00% | 10.00% | 0.00% | 0.00% | 0.00% | 1.00% | 22.00% | 2.00% | 5.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Range, Maximum | 20.00% | 10.00% | 75.00% | 75.00% | 22.00% | 50.00% | 75.00% | 28.00% | 26.00% | 22.00% | 30.00% | 11.00% | 92.00% | 25.00% | 5.00% | 10.00% | 75.00% | 35.00% | 25.00% | 50.00% | 80.00% | 50.00% | 57.00% | 20.00% | 54.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted Average, percentage | 14.00% | 2.00% | 49.00% | 24.00% | 5.00% | 6.00% | 50.00% | 7.00% | 21.00% | 12.00% | 22.00% | 8.00% | 89.00% | 20.00% | 98.90% | 52.00% |
Fair_Value_Disclosures_Summary3
Fair Value Disclosures - Summary of Gains (Losses) Due to Changes in Instrument Specific Credit Risk for Loans and Other Receivables and Loan Commitments Measured at Fair Value under Fair Value Option (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2012 | Aug. 31, 2012 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2012 |
Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Loans [Member] | Loans [Member] | Loan commitments [Member] | Loan commitments [Member] | Loan commitments [Member] | Loan commitments [Member] | Loan commitments [Member] | |
Predecessor [Member] | Predecessor [Member] | Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | ||||||
Financial Instruments Owned: | ||||||||||||
Loans and other receivables | $1,097 | $2,284 | $3,924 | $5,012 | $9,664 | |||||||
Financial Instruments Sold: | ||||||||||||
Loans and loan commitments | ($320) | ($466) | $4,440 | ($2,059) | ($2,746) | ($5,213) | ($7,088) |
Fair_Value_Disclosures_Summary4
Fair Value Disclosures - Summary of Amount by Which Contractual Principal Exceeds Fair Value for Loans and Other Receivables Measured at Fair Value under Fair Value Option (Detail) (USD $) | Aug. 31, 2013 | Nov. 30, 2012 |
In Thousands, unless otherwise specified | Successor [Member] | Predecessor [Member] |
Financial Instruments Owned: | ||
Loans and other receivables | $226,332 | $256,271 |
Loans greater than 90 days past due | $7,809 | $10,433 |
Fair_Value_Disclosures_Summary5
Fair Value Disclosures - Summary of Amount by Which Contractual Principal Exceeds Fair Value for Loans and Other Receivables Measured at Fair Value under Fair Value Option (Parenthetical) (Detail) (USD $) | Aug. 31, 2013 | Nov. 30, 2012 |
In Millions, unless otherwise specified | Successor [Member] | Predecessor [Member] |
Gain (Loss) on Investments [Line Items] | ||
Aggregate fair value of loans | $5.20 | $34.70 |
Derivative_Financial_Instrumen2
Derivative Financial Instruments - Fair Value and Related Number of Derivative Contracts Categorized by Type of Derivative Contract (Detail) (USD $) | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 |
In Thousands, unless otherwise specified | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | |
Interest rate contracts [Member] | Foreign exchange contracts [Member] | Equity contracts [Member] | Commodity contracts [Member] | Credit contracts: centrally cleared swaps [Member] | Credit contracts: other credit derivatives [Member] | Interest rate contracts [Member] | Foreign exchange contracts [Member] | Equity contracts [Member] | Commodity contracts [Member] | Credit contracts [Member] | ||||
Contracts | Contracts | Contracts | Contracts | Contracts | Contracts | Contracts | Contracts | Contracts | Contracts | Contracts | ||||
Derivatives, Fair Value [Line Items] | ||||||||||||||
Fair Value, Assets | $1,978,777 | $846,497 | $534,443 | $447,376 | $135,866 | $10,015 | $4,580 | $2,163,336 | $927,896 | $387,325 | $577,964 | $265,703 | $4,448 | |
Number of Contracts, Assets | 32,663 | 120,650 | 1,853,291 | 464,064 | 19 | 24 | 67,410 | 118,958 | 1,526,127 | 754,987 | 13 | |||
Fair Value, Liabilities | 2,048,518 | 881,518 | 548,061 | 468,562 | 130,612 | 10,855 | 8,910 | 2,242,005 | 1,065,788 | 357,277 | 528,979 | 278,660 | 11,301 | |
Number of Contracts, Liabilities | 57,449 | 114,965 | 1,875,348 | 464,679 | 17 | 19 | 90,831 | 116,758 | 1,396,213 | 728,696 | 40 | |||
Counterparty/cash-collateral netting, Assets | -1,856,908 | -1,865,250 | ||||||||||||
Counterparty/cash-collateral netting, Liabilities | -1,914,691 | -2,012,878 | ||||||||||||
Total Derivative Assets per Consolidated Statement of Financial Condition | 121,869 | 121,869 | 298,086 | |||||||||||
Total Derivative Liabilities per Consolidated Statement of Financial Condition | $133,827 | $133,827 | $229,127 |
Derivative_Financial_Instrumen3
Derivative Financial Instruments - Unrealized and Realized Gains (Losses) on Derivative Contracts (Detail) (USD $) | 9 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | ||||||||||||||||
In Thousands, unless otherwise specified | Aug. 31, 2012 | Aug. 31, 2012 | Aug. 31, 2012 | Aug. 31, 2012 | Aug. 31, 2012 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Feb. 28, 2013 | Aug. 31, 2012 | Feb. 28, 2013 | Aug. 31, 2012 | Feb. 28, 2013 | Aug. 31, 2012 | Feb. 28, 2013 | Aug. 31, 2012 | Feb. 28, 2013 | Aug. 31, 2012 |
Interest rate contracts [Member] | Foreign exchange contracts [Member] | Equity contracts [Member] | Commodity contracts [Member] | Credit contracts [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | ||
Interest rate contracts [Member] | Interest rate contracts [Member] | Foreign exchange contracts [Member] | Foreign exchange contracts [Member] | Equity contracts [Member] | Equity contracts [Member] | Commodity contracts [Member] | Commodity contracts [Member] | Credit contracts [Member] | Credit contracts [Member] | Interest rate contracts [Member] | Interest rate contracts [Member] | Foreign exchange contracts [Member] | Foreign exchange contracts [Member] | Equity contracts [Member] | Equity contracts [Member] | Commodity contracts [Member] | Commodity contracts [Member] | Credit contracts [Member] | Credit contracts [Member] | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||||||||||||||||||||||
Unrealized and realized gains (losses) | ($65,853) | ($39,667) | $4,193 | ($72,691) | $57,586 | ($15,274) | $108,573 | $186,486 | $65,628 | $95,009 | ($4,149) | ($13) | $32,918 | $66,811 | $15,080 | $36,593 | ($904) | ($11,914) | $48,015 | ($8,292) | $25,713 | $38,067 | $11,895 | ($4,616) | ($5,436) | ($46,930) | $19,585 | $11,074 | ($3,742) | ($5,887) |
Derivative_Financial_Instrumen4
Derivative Financial Instruments - Remaining Contract Maturity of Fair Value of OTC Derivative Assets and Liabilities (Detail) (USD $) | Aug. 31, 2013 |
In Thousands, unless otherwise specified | |
Remaining Contract Maturity Of Fair Value Of Over Counter Derivative Assets And Liabilities [Line Items] | |
Total OTC derivative assets included in Financial instruments owned | $266,077 |
Successor [Member] | |
Remaining Contract Maturity Of Fair Value Of Over Counter Derivative Assets And Liabilities [Line Items] | |
OTC derivative assets having maturity period of 0 to 12 months | 118,859 |
OTC derivative assets having maturity period of 1 to 5 years | 98,579 |
OTC derivative assets having maturity period of greater than 5 years | 147,654 |
OTC derivative assets cross-maturity netting | -98,436 |
Total OTC derivative assets, net of cross-maturity netting | 266,656 |
Cross product counterparty netting | -579 |
Total OTC derivative assets included in Financial instruments owned | 266,077 |
OTC derivative liabilities having maturity period of 0 to 12 months | 135,988 |
OTC derivative liabilities having maturity period of 1 to 5 years | 126,544 |
OTC derivative liabilities having maturity period of greater than 5 years | 155,152 |
OTC derivative liabilities cross-maturity netting | -98,436 |
Total OTC derivative liabilities, net of cross-maturity netting | 319,248 |
Cross product counterparty netting | -579 |
Total OTC derivative liabilities included in Financial instruments sold, not yet purchased | 318,669 |
Successor [Member] | Commodity swaps, options and forwards [Member] | |
Remaining Contract Maturity Of Fair Value Of Over Counter Derivative Assets And Liabilities [Line Items] | |
OTC derivative assets having maturity period of 0 to 12 months | 36,869 |
OTC derivative assets having maturity period of 1 to 5 years | 783 |
OTC derivative assets cross-maturity netting | -47 |
Total OTC derivative assets, net of cross-maturity netting | 37,605 |
OTC derivative liabilities having maturity period of 0 to 12 months | 28,734 |
OTC derivative liabilities having maturity period of 1 to 5 years | 47 |
OTC derivative liabilities cross-maturity netting | -47 |
Total OTC derivative liabilities, net of cross-maturity netting | 28,734 |
Successor [Member] | Credit default swaps [Member] | |
Remaining Contract Maturity Of Fair Value Of Over Counter Derivative Assets And Liabilities [Line Items] | |
OTC derivative assets having maturity period of 0 to 12 months | 73 |
OTC derivative assets having maturity period of 1 to 5 years | 607 |
Total OTC derivative assets, net of cross-maturity netting | 680 |
OTC derivative liabilities having maturity period of 1 to 5 years | 2,062 |
OTC derivative liabilities having maturity period of greater than 5 years | 380 |
Total OTC derivative liabilities, net of cross-maturity netting | 2,442 |
Successor [Member] | Equity swaps and options [Member] | |
Remaining Contract Maturity Of Fair Value Of Over Counter Derivative Assets And Liabilities [Line Items] | |
OTC derivative assets having maturity period of 0 to 12 months | 3,650 |
Total OTC derivative assets, net of cross-maturity netting | 3,650 |
OTC derivative liabilities having maturity period of 0 to 12 months | 8,455 |
OTC derivative liabilities having maturity period of greater than 5 years | 2,852 |
Total OTC derivative liabilities, net of cross-maturity netting | 11,307 |
Successor [Member] | Total return swaps [Member] | |
Remaining Contract Maturity Of Fair Value Of Over Counter Derivative Assets And Liabilities [Line Items] | |
OTC derivative assets having maturity period of 0 to 12 months | 817 |
OTC derivative assets cross-maturity netting | -114 |
Total OTC derivative assets, net of cross-maturity netting | 703 |
OTC derivative liabilities having maturity period of 0 to 12 months | 650 |
OTC derivative liabilities having maturity period of greater than 5 years | 549 |
OTC derivative liabilities cross-maturity netting | -114 |
Total OTC derivative liabilities, net of cross-maturity netting | 1,085 |
Successor [Member] | Foreign currency forwards, swaps and options [Member] | |
Remaining Contract Maturity Of Fair Value Of Over Counter Derivative Assets And Liabilities [Line Items] | |
OTC derivative assets having maturity period of 0 to 12 months | 70,110 |
OTC derivative assets having maturity period of 1 to 5 years | 32,782 |
OTC derivative assets cross-maturity netting | -16,218 |
Total OTC derivative assets, net of cross-maturity netting | 86,674 |
OTC derivative liabilities having maturity period of 0 to 12 months | 81,858 |
OTC derivative liabilities having maturity period of 1 to 5 years | 34,725 |
OTC derivative liabilities cross-maturity netting | -16,218 |
Total OTC derivative liabilities, net of cross-maturity netting | 100,365 |
Successor [Member] | Interest rate swaps and options [Member] | |
Remaining Contract Maturity Of Fair Value Of Over Counter Derivative Assets And Liabilities [Line Items] | |
OTC derivative assets having maturity period of 0 to 12 months | 7,340 |
OTC derivative assets having maturity period of 1 to 5 years | 64,407 |
OTC derivative assets having maturity period of greater than 5 years | 147,654 |
OTC derivative assets cross-maturity netting | -82,057 |
Total OTC derivative assets, net of cross-maturity netting | 137,344 |
OTC derivative liabilities having maturity period of 0 to 12 months | 16,291 |
OTC derivative liabilities having maturity period of 1 to 5 years | 89,710 |
OTC derivative liabilities having maturity period of greater than 5 years | 151,371 |
OTC derivative liabilities cross-maturity netting | -82,057 |
Total OTC derivative liabilities, net of cross-maturity netting | $175,315 |
Derivative_Financial_Instrumen5
Derivative Financial Instruments - Remaining Contract Maturity of Fair Value of OTC Derivative Assets and Liabilities (Parenthetical) (Detail) (Successor [Member], USD $) | Aug. 31, 2013 |
In Millions, unless otherwise specified | |
Successor [Member] | |
Remaining Contract Maturity Of Fair Value Of Over Counter Derivative Assets And Liabilities [Line Items] | |
Exchange traded derivative assets | $10.90 |
Cash collateral received | 155.1 |
Exchange traded derivative liabilities, with fair value | 28 |
Cash collateral pledged | $212.90 |
Derivative_Financial_Instrumen6
Derivative Financial Instruments - Counterparty Credit Quality with Respect to Fair Value of OTC Derivatives Assets (Detail) (USD $) | Aug. 31, 2013 |
In Thousands, unless otherwise specified | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Fair value of OTC derivatives assets, Counterparty credit quality, A- or higher | $199,298 |
Fair value of OTC derivatives assets, Counterparty credit quality, BBB- to BBB+ | 9,447 |
Fair value of OTC derivatives assets, Counterparty credit quality, BB+ or lower | 51,448 |
Fair value of OTC derivatives assets, Counterparty credit quality, Unrated | 5,884 |
Fair value of Over the Counter Derivatives Assets Counterparty credit quality | $266,077 |
Derivative_Financial_Instrumen7
Derivative Financial Instruments - Additional Information (Detail) (USD $) | Aug. 31, 2013 | Nov. 30, 2012 |
In Millions, unless otherwise specified | ||
Derivative Instruments And Hedging Activities Disclosure [Abstract] | ||
Fair value of derivative instruments in a liability position | $67.20 | $164.80 |
Collateral posted for derivative instruments in a liability position | 61.3 | 129.2 |
Additional collateral required for derivative instruments in a liability position | $10.60 | $38.10 |
Collateralized_Transactions_Ad
Collateralized Transactions - Additional Information (Detail) (USD $) | Aug. 31, 2013 | Nov. 30, 2012 |
Collateralized Securities Transactions [Abstract] | ||
Fair value of securities received as collateral | $21,363,355,000 | $21,118,800,000 |
Securities received as collateral | $45,100,000 | $0 |
Collateralized_Transactions_Fa
Collateralized Transactions - Fair Value of Securities Received as Collateral (Detail) (USD $) | Aug. 31, 2013 | Nov. 30, 2012 |
In Thousands, unless otherwise specified | ||
Collateralized Securities Transactions [Line Items] | ||
Securities received as collateral | $45,100 | $0 |
Fair value of securities received as collateral | 21,363,355 | 21,118,800 |
Successor [Member] | ||
Collateralized Securities Transactions [Line Items] | ||
Securities purchased under agreements to resell | 4,420,886 | |
Securities borrowed | 5,316,449 | |
Securities received as collateral | 45,133 | |
Total assets on Consolidated Statement of Financial Condition | 9,782,468 | |
Netting of securities purchased under agreements to resell | 8,481,994 | |
Total | 18,264,462 | |
Fair value of additional collateral received | 3,098,873 | |
Fair value of securities received as collateral | 21,363,335 | |
Predecessor [Member] | ||
Collateralized Securities Transactions [Line Items] | ||
Securities purchased under agreements to resell | 3,357,602 | |
Securities borrowed | 5,094,679 | |
Total assets on Consolidated Statement of Financial Condition | 8,452,281 | |
Netting of securities purchased under agreements to resell | 9,982,752 | |
Total | 18,435,033 | |
Fair value of additional collateral received | 2,683,767 | |
Fair value of securities received as collateral | $21,118,800 |
Collateralized_Transactions_Fa1
Collateralized Transactions - Fair Value of Securities Received as Collateral (Parenthetical) (Detail) (USD $) | Aug. 31, 2013 | Nov. 30, 2012 |
In Millions, unless otherwise specified | Successor [Member] | Predecessor [Member] |
Collateralized Securities Transactions [Line Items] | ||
Fair value of collateral received | $1,092.20 | $1,252.60 |
Rehypothecated value | 634.5 | 727.7 |
Collateral received on securities for securities transactions | $1,669.80 | $1,378.80 |
Securitization_Activities_Acti
Securitization Activities - Activity Related to Securitizations Accounted for as Sales (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 9 Months Ended | |
In Millions, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2012 |
Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | |
Securitization Vehicles [Line Items] | |||||
Transferred assets | $918.40 | $3,102.40 | $2,735.20 | $2,132.30 | $7,070.90 |
Proceeds on new securitizations | 921.5 | 3,112.50 | 2,751.30 | 2,375 | 7,654.10 |
Net revenues | 1.7 | 6.5 | 12.9 | 2.4 | 16.5 |
Cash flows received on retained interests | $13 | $24.20 | $32.30 | $19.70 | $44.60 |
Securitization_Activities_Summ
Securitization Activities - Summary of Retained Interests in SPEs (Detail) (USD $) | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 |
In Millions, unless otherwise specified | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] |
U.S. government agency residential mortgage-backed securities [Member] | U.S. government agency commercial mortgage-backed securities [Member] | Collateralized loan obligations securitizations [Member] | U.S. government agency residential mortgage-backed securities [Member] | U.S. government agency commercial mortgage-backed securities [Member] | |||
Securitization Vehicles [Line Items] | |||||||
Total RMBS securitization assets | $7,056.50 | $3,791.50 | |||||
Total CMBS securitization assets | 2,263.30 | 2,193.40 | |||||
Total Collateralized loan obligations | 1,191.50 | ||||||
Fair Value of Securitizations Initially Retained | $362.80 | $102.30 | $13.80 | $335.20 | $28.90 |
Securitization_Activities_Summ1
Securitization Activities - Summary of Retained Interests in SPEs (Parenthetical) (Detail) (Subsequent event [Member], USD $) | Sep. 23, 2013 |
In Millions, unless otherwise specified | |
U.S. government agency residential mortgage-backed securities [Member] | Current year securities [Member] | |
Securitization Vehicles [Line Items] | |
Retained interests | $285 |
U.S. government agency residential mortgage-backed securities [Member] | Previous year securities [Member] | |
Securitization Vehicles [Line Items] | |
Retained interests | 57.9 |
U.S. government agency commercial mortgage-backed securities [Member] | Current year securities [Member] | |
Securitization Vehicles [Line Items] | |
Retained interests | 91 |
U.S. government agency commercial mortgage-backed securities [Member] | Previous year securities [Member] | |
Securitization Vehicles [Line Items] | |
Retained interests | 13 |
Collateralized loan obligations securitizations [Member] | Current year securities [Member] | |
Securitization Vehicles [Line Items] | |
Retained interests | $9.30 |
Variable_Interest_Entities_Ass
Variable Interest Entities - Assets and Liabilities of Consolidated VIEs Prior to Consolidation (Detail) (USD $) | Nov. 30, 2012 | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Feb. 28, 2013 | Nov. 30, 2012 | Aug. 31, 2012 | Nov. 30, 2011 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 |
Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | ||
High Yield [Member] | Securitization Vehicles [Member] | Other [Member] | High Yield [Member] | Securitization Vehicles [Member] | Other [Member] | ||||||||
Assets and Liabilities of Consolidated VIEs [Line Items] | |||||||||||||
Cash | $4,119,096,000 | $3,017,958,000 | $43,800,000 | $200,000 | $3,017,958,000 | $2,692,595,000 | $2,844,513,000 | $2,393,797,000 | $388,100,000 | $200,000 | |||
Financial instruments owned | 13,698,281,000 | 108,700,000 | 500,000 | 16,670,391,000 | 894,200,000 | 10,000,000 | 500,000 | ||||||
Securities borrowed | 5,316,449,000 | 5,094,679,000 | 372,100,000 | ||||||||||
Securities purchased under agreement to resell | 4,420,886,000 | 195,100,000 | 3,357,602,000 | 60,000,000 | |||||||||
Receivable from brokers and dealers | 2,738,047,000 | 1,424,027,000 | 264,500,000 | ||||||||||
Other | 1,168,206,000 | 662,713,000 | 11,400,000 | ||||||||||
Total assets | 38,830,213,000 | 43,800,000 | 303,800,000 | 700,000 | 36,293,541,000 | 1,930,300,000 | 70,000,000 | 700,000 | |||||
Financial instruments sold, not yet purchased | 6,625,030,000 | 7,455,463,000 | 526,100,000 | ||||||||||
Securities loaned | 2,578,401,000 | 1,934,355,000 | 112,000,000 | ||||||||||
Payable to brokers and dealers | 1,058,396,000 | 2,819,677,000 | 201,200,000 | ||||||||||
Mandatorily redeemable interests | 348,051,000 | 348,051,000 | 1,076,000,000 | ||||||||||
Redemption payable | 40,800,000 | ||||||||||||
Other secured financings | 303,700,000 | 70,000,000 | |||||||||||
Other | 2,900,000 | 200,000 | 15,000,000 | 200,000 | |||||||||
Total liabilities | $33,589,218,000 | $43,700,000 | $303,700,000 | $200,000 | $32,510,788,000 | $1,930,300,000 | $70,000,000 | $200,000 |
Variable_Interest_Entities_Ass1
Variable Interest Entities - Assets and Liabilities of Consolidated VIEs Prior to Consolidation (Parenthetical) (Detail) (USD $) | Nov. 30, 2012 | Nov. 30, 2012 | Aug. 31, 2013 | Nov. 30, 2012 |
Predecessor [Member] | Securitization Vehicles [Member] | Securitization Vehicles [Member] | ||
Successor [Member] | Predecessor [Member] | |||
Assets and Liabilities of Consolidated VIEs [Line Items] | ||||
Carrying amount of mandatorily redeemable preferred interest of consolidated subsidiaries | $348,051,000 | $348,051,000 | ||
Secured financing included in inventory and eliminated | $75,700,000 | $7,700,000 |
Variable_Interest_Entities_Con
Variable Interest Entities - Consolidated VIEs - Additional Information (Detail) (High Yield [Member], USD $) | 1 Months Ended | |
In Millions, unless otherwise specified | Feb. 28, 2013 | Nov. 30, 2012 |
High Yield [Member] | ||
Assets and Liabilities of Consolidated VIEs [Line Items] | ||
Carrying amount of variable interest as debt, equity and partnership interest | $389.40 | |
Cash payable to redeemed third party interest in consolidated VIEs | $347.60 |
Variable_Interest_Entities_Non
Variable Interest Entities - Non consolidated VIEs - Additional Information (Detail) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Aug. 31, 2013 | Nov. 30, 2012 |
Assets and Liabilities of Consolidated VIEs [Line Items] | ||
Additional financial support to securitization of vehicles | $0 | $0 |
Liabilities related to these securitization of vehicles | 0 | 0 |
Collateralized loan obligations | 17.8 | |
Jefferies Employee Partners IV, LLC [Member] | ||
Assets and Liabilities of Consolidated VIEs [Line Items] | ||
Carrying amount of equity investment | 1.8 | 1.5 |
Maximum amount committed to make as per agreement | 21.6 | |
Funded loan commitments | 17.4 | 32.7 |
USA Fund [Member] | ||
Assets and Liabilities of Consolidated VIEs [Line Items] | ||
Equity investment in Jefferies SBI USA Fund L.P. (the "USA Fund") | 75 | |
Funded Equity Commitments | 41.2 | 27.1 |
Carrying amount of equity investment | 32.6 | 20.8 |
Agency mortgage- and asset-backed securitizations [Member] | ||
Assets and Liabilities of Consolidated VIEs [Line Items] | ||
Carrying Amount | 1,122.40 | |
Non-agency mortgage- and asset-backed securitizations [Member] | ||
Assets and Liabilities of Consolidated VIEs [Line Items] | ||
Carrying Amount | 647 | |
Collateralized loan obligations securitizations [Member] | Variable Interest Entity Not Primary Beneficiary [Member] | ||
Assets and Liabilities of Consolidated VIEs [Line Items] | ||
Fair value of debt securities of variable interests entities | 3.9 | 5.3 |
Carrying Amount | $17.80 |
Variable_Interest_Entities_Non1
Variable Interest Entities - Non-Consolidated Variable Interest Entities (Detail) (USD $) | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 |
In Millions, unless otherwise specified | Agency mortgage- and asset-backed securitizations [Member] | Non-agency mortgage- and asset-backed securitizations [Member] | Variable Interest Entity Not Primary Beneficiary [Member] | Variable Interest Entity Not Primary Beneficiary [Member] | Variable Interest Entity Not Primary Beneficiary [Member] | Variable Interest Entity Not Primary Beneficiary [Member] | Variable Interest Entity Not Primary Beneficiary [Member] | Variable Interest Entity Not Primary Beneficiary [Member] | Variable Interest Entity Not Primary Beneficiary [Member] | Variable Interest Entity Not Primary Beneficiary [Member] | Variable Interest Entity Not Primary Beneficiary [Member] | Variable Interest Entity Not Primary Beneficiary [Member] | Variable Interest Entity Not Primary Beneficiary [Member] | Variable Interest Entity Not Primary Beneficiary [Member] | Variable Interest Entity Not Primary Beneficiary [Member] |
Collateralized loan obligations securitizations [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | |||
Collateralized loan obligations securitizations [Member] | Agency mortgage- and asset-backed securitizations [Member] | Non-agency mortgage- and asset-backed securitizations [Member] | Asset management vehicle [Member] | Private equity vehicles [Member] | Collateralized loan obligations securitizations [Member] | Agency mortgage- and asset-backed securitizations [Member] | Non-agency mortgage- and asset-backed securitizations [Member] | Asset management vehicle [Member] | Private equity vehicles [Member] | ||||||
Assets and Liabilities of Consolidated VIEs [Line Items] | |||||||||||||||
Financial Statement Carrying Amount | $1,122.40 | $647 | $17.80 | $1,842.20 | $17.80 | $1,122.40 | $647 | $3.10 | $51.90 | $2,456.50 | $5.30 | $1,579.10 | $814.10 | $3 | $55 |
Maximum exposure to loss in non-consolidated VIEs | 1,880.20 | 17.8 | 1,122.40 | 647 | 3.1 | 89.9 | 2,509.20 | 5.3 | 1,579.10 | 814.1 | 3 | 107.7 | |||
Size of the variable interest entity measured by total assets | $77,388.50 | $1,784.50 | $5,397.10 | $69,737.10 | $377.40 | $92.40 | $61,919.90 | $499.70 | $6,396.60 | $54,436.20 | $505.30 | $82.10 |
Variable_Interest_Entities_Sum
Variable Interest Entities - Summary of Securities Issued by Securitization Vehicles (Detail) (Variable Interest Entity Not Primary Beneficiary [Member], USD $) | Aug. 31, 2013 |
In Millions, unless otherwise specified | |
Mortgage- and asset-backed securitization activity - Agency [Member] | |
Assets and Liabilities of Consolidated VIEs [Line Items] | |
Carrying Amount | $1,122.40 |
Mortgage- and asset- backed securitization activity - Non-agency [Member] | |
Assets and Liabilities of Consolidated VIEs [Line Items] | |
Carrying Amount | 647 |
Mortgage- and Asset-backed Vehicles [Member] | |
Assets and Liabilities of Consolidated VIEs [Line Items] | |
Carrying Amount | 4,126.70 |
Collateralized loan obligations securitizations [Member] | |
Assets and Liabilities of Consolidated VIEs [Line Items] | |
Carrying Amount | 17.8 |
Residential mortgage-backed securities [Member] | |
Assets and Liabilities of Consolidated VIEs [Line Items] | |
Carrying Amount | 1,740.30 |
Commercial mortgage-backed securities [Member] | |
Assets and Liabilities of Consolidated VIEs [Line Items] | |
Carrying Amount | 544 |
Collateralized debt obligations [Member] | |
Assets and Liabilities of Consolidated VIEs [Line Items] | |
Carrying Amount | 25 |
Other asset-backed securities [Member] | |
Assets and Liabilities of Consolidated VIEs [Line Items] | |
Carrying Amount | 30.2 |
Nonagency [Member] | |
Assets and Liabilities of Consolidated VIEs [Line Items] | |
Carrying Amount | 806.6 |
Nonagency [Member] | Mortgage- and asset- backed securitization activity - Non-agency [Member] | |
Assets and Liabilities of Consolidated VIEs [Line Items] | |
Carrying Amount | 647 |
Nonagency [Member] | Collateralized loan obligations securitizations [Member] | |
Assets and Liabilities of Consolidated VIEs [Line Items] | |
Carrying Amount | 17.8 |
Nonagency [Member] | Residential mortgage-backed securities [Member] | Mortgage- and asset- backed securitization activity - Non-agency [Member] | |
Assets and Liabilities of Consolidated VIEs [Line Items] | |
Carrying Amount | 47.9 |
Nonagency [Member] | Commercial mortgage-backed securities [Member] | Mortgage- and asset- backed securitization activity - Non-agency [Member] | |
Assets and Liabilities of Consolidated VIEs [Line Items] | |
Carrying Amount | 38.7 |
Nonagency [Member] | Collateralized debt obligations [Member] | Mortgage- and asset- backed securitization activity - Non-agency [Member] | |
Assets and Liabilities of Consolidated VIEs [Line Items] | |
Carrying Amount | 25 |
Nonagency [Member] | Other asset-backed securities [Member] | Mortgage- and asset- backed securitization activity - Non-agency [Member] | |
Assets and Liabilities of Consolidated VIEs [Line Items] | |
Carrying Amount | 30.2 |
Agency [Member] | |
Assets and Liabilities of Consolidated VIEs [Line Items] | |
Carrying Amount | 3,320.10 |
Agency [Member] | Mortgage- and asset-backed securitization activity - Agency [Member] | |
Assets and Liabilities of Consolidated VIEs [Line Items] | |
Carrying Amount | 1,122.40 |
Agency [Member] | Residential mortgage-backed securities [Member] | Mortgage- and asset-backed securitization activity - Agency [Member] | |
Assets and Liabilities of Consolidated VIEs [Line Items] | |
Carrying Amount | 1,692.40 |
Agency [Member] | Commercial mortgage-backed securities [Member] | Mortgage- and asset-backed securitization activity - Agency [Member] | |
Assets and Liabilities of Consolidated VIEs [Line Items] | |
Carrying Amount | $505.30 |
Investments_Jefferies_Finance_
Investments - Jefferies Finance - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||
Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2012 | Nov. 30, 2012 | |
Guarantee Obligations [Line Items] | |||||||
Equity commitments to JFIN | $600,000,000 | $600,000,000 | $600,000,000 | ||||
Total committed equity capitalization of JIFN | 1,200,000,000 | 1,200,000,000 | 1,200,000,000 | ||||
Funded portion of equity commitment to subsidiary | 314,600,000 | 314,600,000 | 314,600,000 | ||||
Unfunded portion of equity commitment to subsidiary | 285,400,000 | 285,400,000 | 285,400,000 | ||||
Investment maturity date | 1-Mar-16 | ||||||
Committed line of credit facility amount | 700,000,000 | 700,000,000 | 700,000,000 | ||||
Loan maturity description | Scheduled to mature on March 1, 2016 with automatic one year extentions subject to a 60 day termination notice by either party | ||||||
Extension period | 1 year | ||||||
Termination notice period | 60 days | ||||||
Loan commitment | 350,000,000 | 350,000,000 | 350,000,000 | ||||
Interest income | 800,000 | ||||||
Unfunded commitment fees | 800,000 | ||||||
Net underwriting fees paid by JFIN related to originations of loans by JFIN | 35,200,000 | 31,000,000 | 29,300,000 | 70,400,000 | 85,200,000 | ||
Fees paid to JFIN related to origination of loans by JFIN | 1,600,000 | 800,000 | 1,000,000 | 7,900,000 | 7,200,000 | ||
Jefferies Finance, LLC [Member] | |||||||
Guarantee Obligations [Line Items] | |||||||
Net income earnings | 30,400,000 | 34,200,000 | 87,400,000 | 91,800,000 | |||
Administrative services | 4,100,000 | 15,700,000 | 3,600,000 | 9,500,000 | 21,400,000 | ||
Administrative services | 17,900,000 | 17,900,000 | 17,900,000 | 32,100,000 | |||
Secured Revolving Credit Facility [Member] | |||||||
Guarantee Obligations [Line Items] | |||||||
Interest income | 400,000 | 4,100,000 | 2,300,000 | 5,700,000 | |||
Unfunded commitment fees | $400,000 | $300,000 | $500,000 | $1,400,000 |
Investments_Summary_of_Selecte
Investments - Summary of Selected Financial Information for Jefferies Finance (Detail) (Jefferies Finance, LLC [Member], USD $) | Aug. 31, 2013 | Nov. 30, 2012 |
In Millions, unless otherwise specified | ||
Jefferies Finance, LLC [Member] | ||
Total assets | $2,643 | $1,730.40 |
Total liabilities | 2,013.40 | 1,188.20 |
Total equity | 629.6 | 542.2 |
Our total equity balance | $314.80 | $271.10 |
Investments_Jefferies_LoanCore
Investments - Jefferies LoanCore - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2012 | Nov. 30, 2012 | |
Guarantee Obligations [Line Items] | |||||||
Equity commitment | $600,000,000 | $600,000,000 | $600,000,000 | ||||
Jefferies LoanCore, LLC [Member] | |||||||
Guarantee Obligations [Line Items] | |||||||
Aggregate commitment | 600,000,000 | 600,000,000 | 600,000,000 | ||||
Funded portion of equity commitment to subsidiary | 174,800,000 | 110,000,000 | |||||
Equity commitment | 291,000,000 | 291,000,000 | 291,000,000 | ||||
Percentage of the Variable Interest Entity's (VIE) voting interest | 48.50% | 48.50% | 48.50% | ||||
Net earnings from equity method investment | 16,700,000 | 5,500,000 | 65,800,000 | 50,100,000 | |||
Reimbursed administrative services | 100,000 | 600,000 | 100,000 | 200,000 | 400,000 | ||
Receivable from loan core under service agreement | 31,000 | 31,000 | 31,000 | 37,000 | |||
Aggregate fair market value of derivative transactions outstanding | 600,000 | 600,000 | 600,000 | ||||
Recognized net gains within Principal transaction revenues | 200,000 | 1,100,000 | 3,200,000 | 20,900,000 | |||
Recognized net loss within Principal transaction revenues | $3,800,000 |
Investments_Summary_of_Selecte1
Investments - Summary of Selected Financial Information for Jefferies LoanCore (Detail) (Jefferies LoanCore, LLC [Member], USD $) | Aug. 31, 2013 | Nov. 30, 2012 |
In Millions, unless otherwise specified | ||
Jefferies LoanCore, LLC [Member] | ||
Total assets | $1,048.20 | $372 |
Total liabilities | 594.1 | 98.4 |
Total equity | 454.1 | 273.6 |
Our total equity balance | $220.20 | $132.70 |
Investments_Knight_Capital_Add
Investments - Knight Capital - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 3 Months Ended | 6 Months Ended | |||||||||
Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2012 | Jul. 01, 2013 | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | Jun. 30, 2013 | Jun. 30, 2013 | Aug. 06, 2012 | Aug. 06, 2012 | Aug. 06, 2012 | |
KCG Holdings, Inc. [Member] | KCG Holdings, Inc. [Member] | KCG Holdings, Inc. [Member] | KCG Holdings, Inc. [Member] | KCG Holdings, Inc. [Member] | KCG Holdings, Inc. [Member] | KCG Holdings, Inc. [Member] | KCG Holdings, Inc. [Member] | Knight Capital Group, Inc. [Member] | Knight Capital Group, Inc. [Member] | Knight Capital Group, Inc. [Member] | Knight Capital Group, Inc. [Member] | Knight Capital Group, Inc. [Member] | ||||||
Ratio | Senior secured credit agreement [Member] | Series A-1 Cumulative Perpetual Convertible Preferred Stock [Member] | Series A-2 Non-voting Cumulative Perpetual Convertible Preferred Stock [Member] | |||||||||||||||
Guarantee Obligations [Line Items] | ||||||||||||||||||
Purchased preferred stock in exchange for cash consideration | $125,000,000 | |||||||||||||||||
Preferred stock issued under Purchase Agreement | 24,876 | 100,124 | ||||||||||||||||
Conversion of preferred stock to common stock, conversion rate | 666.667 | |||||||||||||||||
Consummation of merger received cash consideration per share | $3.75 | |||||||||||||||||
Consummation of merger received cash consideration | 192,000,000 | |||||||||||||||||
Percentage of holding redeemed for cash | 63.00% | |||||||||||||||||
Stock consideration received | 0.33 | |||||||||||||||||
Percentage of outstanding common stock owned | 9.10% | 9.10% | 9.10% | |||||||||||||||
Recognized changes in the fair value of equity method investment | -16,000,000 | 26,500,000 | 103,300,000 | -21,700,000 | 103,300,000 | |||||||||||||
Net earnings from equity method investment | 30,800,000 | 40,200,000 | ||||||||||||||||
Securities borrowed | 6,200,000 | 6,200,000 | 6,200,000 | |||||||||||||||
Securities loaned | 30,600,000 | 30,600,000 | 30,600,000 | |||||||||||||||
Net underwriting fees paid by JFIN related to originations of loans by JFIN | 35,200,000 | 31,000,000 | 29,300,000 | 70,400,000 | 85,200,000 | 10,000,000 | ||||||||||||
Issuance of senior secured credit agreement | $535,000,000 |
Investments_Summary_of_Selecte2
Investments - Summary of Selected Financial Information for Knight Capital (Detail) (Knight Capital Group, Inc. [Member], USD $) | Jun. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Knight Capital Group, Inc. [Member] | ||
Schedule of Investments [Line Items] | ||
Total assets | $11,433 | $9,778.40 |
Total liabilities | 9,951.30 | 8,295.90 |
Total equity | $1,481.70 | $1,482.50 |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 6 Months Ended | 6 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||
Feb. 28, 2013 | Aug. 31, 2012 | 31-May-12 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | 20-May-13 | Aug. 31, 2013 | Aug. 31, 2013 | 31-May-13 | Feb. 28, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2012 | Nov. 30, 2012 | Nov. 30, 2011 | Nov. 30, 2012 | |
Investment Banking, Equities and Fixed Income Reporting Unit [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | |||||||
Exchange and clearing organization membership interests and registrations [Member] | Exchange and clearing organization membership interests and registrations [Member] | Exchange and clearing organization membership interests and registrations [Member] | ||||||||||||||||||
Goodwill | $1,700,000,000 | $1,718,115,000 | $1,718,115,000 | $1,655,400,000 | $1,718,115,000 | $1,718,115,000 | $1,713,776,000 | $1,715,986,000 | $366,777,000 | $365,670,000 | $365,574,000 | |||||||||
Percentage of goodwill not allocated to reporting units | 3.60% | |||||||||||||||||||
Impairment loss | 2,900,000 | 378,000 | 378,000 | 378,000 | 2,873,000 | 2,873,000 | ||||||||||||||
Aggregate amortization expense | 7,200,000 | 14,000,000 | 400,000 | 600,000 | 1,700,000 | |||||||||||||||
Mortgage servicing rights sold | 30,900,000 | |||||||||||||||||||
Option to purchase servicing rights | 2,000,000 | |||||||||||||||||||
Fees related to mortgage servicing rights | $114,000 | $900,000 | $104,000 | $2,800,000 |
Goodwill_and_Other_Intangible_3
Goodwill and Other Intangible Assets - Schedule of Goodwill Resulting from Merger Transaction Attributable to Reportable Segments (Detail) (USD $) | Aug. 31, 2013 | Feb. 28, 2013 |
In Thousands, unless otherwise specified | ||
Business Combination Transactions [Line Items] | ||
Total goodwill | $1,718,115 | $1,700,000 |
Capital Markets [Member] | ||
Business Combination Transactions [Line Items] | ||
Total goodwill | 1,707,315 | |
Asset Management [Member] | ||
Business Combination Transactions [Line Items] | ||
Total goodwill | $10,800 |
Goodwill_and_Other_Intangible_4
Goodwill and Other Intangible Assets - Summary of Goodwill (Detail) (USD $) | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Feb. 28, 2013 | Nov. 30, 2012 |
In Thousands, unless otherwise specified | Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | ||
Balance, at beginning of period | $1,718,115 | $1,700,000 | $1,713,776 | $1,715,986 | $365,670 | $365,574 |
Add: Contingent consideration | 2,394 | |||||
Add: Translation adjustments | 4,339 | 2,129 | -1,287 | 96 | ||
Balance, at end of period | $1,718,115 | $1,700,000 | $1,718,115 | $1,718,115 | $366,777 | $365,670 |
Goodwill_and_Other_Intangible_5
Goodwill and Other Intangible Assets - Summary of Goodwill (Parenthetical) (Detail) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Feb. 28, 2013 |
Business Combinations [Abstract] | |
Goodwill Purchase accounting adjustments | $0 |
Goodwill_and_Other_Intangible_6
Goodwill and Other Intangible Assets - Intangible Assets (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
In Thousands, unless otherwise specified | 31-May-12 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 |
Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | ||
Exchange and clearing organization membership interests and registrations [Member] | Exchange and clearing organization membership interests and registrations [Member] | Customer relationships [Member] | Trade names (intangible assets) [Member] | Exchange and clearing organization membership interests and registrations [Member] | Customer relationships [Member] | Trade names (intangible assets) [Member] | Other intangible assets [Member] | ||||
Gross Costs - finite lived intangible assets | $136,311 | $131,609 | $10,542 | $1,680 | $100 | ||||||
Total gross costs - intangible assets | 283,412 | 23,541 | |||||||||
Gross costs - indefinite lived intangible assets | 15,492 | 15,492 | 11,219 | ||||||||
Impairment losses | -2,900 | -378 | -378 | -378 | -2,873 | -2,873 | |||||
Net carrying amount - indefinte lived intangible assets | 15,114 | 15,114 | 8,346 | ||||||||
Accumulated amortization - finite lived intangible assets | -13,587 | -11,711 | -1,876 | -5,409 | -4,107 | -1,287 | -15 | ||||
Net carrying amount - finite lived intangible assets | 124,600 | 129,733 | 6,435 | 393 | 85 | ||||||
Total net carrying amount - intangible assets | $269,447 | $15,259 | |||||||||
Weighted average remaining lives (years) | 14 years 7 months 6 days | 34 years 6 months | 7 years 10 months 24 days | 3 years 6 months | 12 years 9 months 18 days |
Goodwill_and_Other_Intangible_7
Goodwill and Other Intangible Assets - Future Amortization Expense Related to Intangible Assets (Detail) (USD $) | Aug. 31, 2013 |
In Thousands, unless otherwise specified | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Remainder of 2013 | $6,767 |
2014 | 12,668 |
2015 | 12,668 |
2016 | 12,668 |
2017 | $12,668 |
Goodwill_and_Other_Intangible_8
Goodwill and Other Intangible Assets - Mortgage Servicing Rights (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2013 | Feb. 28, 2013 | Nov. 30, 2012 |
Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | |
Balance, beginning of period | $2,000 | $2,000 | $805 | $8,202 |
Add: Acquisition | 162 | |||
Less: Sales, net | -2,000 | -2,000 | -6,959 | |
Less: Pay down | -211 | |||
Less: Amortization | -10 | -389 | ||
Balance, end of period | $795 | $805 |
ShortTerm_Borrowings_Additiona
Short-Term Borrowings - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Feb. 28, 2013 | Aug. 31, 2013 | Nov. 30, 2012 |
Debt Disclosure [Abstract] | |||
Short-term bank loans | $50 | $150 | |
Secured bank loans | 100 | ||
Average daily bank loans outstanding | $110 | $34 | $66.40 |
Interest rate on short-term borrowings outstanding | 1.07% |
LongTerm_Debt_Additional_Infor
Long-Term Debt - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | 6 Months Ended | 1 Months Ended | 1 Months Ended | 6 Months Ended | |||||||
Feb. 28, 2013 | Aug. 31, 2013 | Aug. 26, 2011 | Aug. 31, 2013 | 31-May-13 | Jan. 15, 2013 | Jan. 15, 2013 | Jan. 15, 2013 | Jul. 13, 2012 | Jul. 13, 2013 | Apr. 19, 2012 | Oct. 31, 2009 | Aug. 31, 2013 | |
USD ($) | USD ($) | USD ($) | Leucadia [Member] | Leucadia [Member] | New senior unsecured long-term debt [Member] | 5.125% Senior Notes, due 2023 [Member] | 6.5% Senior Notes, due 2043 [Member] | 2.25% Euro Medium Term Notes, due 2022 [Member] | 2.25% Euro Medium Term Notes, due 2022 [Member] | 6.875% Senior Note, due 2021 [Member] | 3.875% Convertible Senior Debentures, due 2029 [Member] | 3.875% Convertible Senior Debentures, due 2029 [Member] | |
USD ($) | USD ($) | USD ($) | USD ($) | EUR (€) | EUR (€) | USD ($) | USD ($) | Leucadia [Member] | |||||
USD ($) | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Long-term debt at fair value | $6,100,000,000 | ||||||||||||
Difference between fair value over the total principal amount | 536,500,000 | ||||||||||||
Issuance of senior unsecured long-term debt | 1,000,000,000 | 600,000,000 | 400,000,000 | 4,000,000 | 750,000,000 | 345,000,000 | |||||||
Proceeds, net of original issue discount amount | 595,600,000 | 391,700,000 | 2,800,000 | 197,700,000 | |||||||||
Senior long-term debt, interest rate | 3.88% | 5.13% | 6.50% | 2.25% | 6.88% | 3.88% | |||||||
Senior long-term debt, due date | 2023 | 2043 | |||||||||||
Expiry date of term loan | 1-Mar-16 | 13-Jul-22 | 1-Nov-29 | ||||||||||
Additional aggregate principal amount | 200,000,000 | ||||||||||||
Gain on repurchase of long-term debt | 9,900,000 | ||||||||||||
Unamortized discount arising on repurchase of own long-term debt | 30,900,000 | ||||||||||||
Unamortized balance reduced | 0 | ||||||||||||
Debenture principal amount | 1,000 | ||||||||||||
Debt instrument convertible conversion ratio | 21.922 | ||||||||||||
Conversion price of common stock | $45.62 | ||||||||||||
Debt instrument convertible conversion ratio | 130.00% | ||||||||||||
Earliest period of conversion price | 20 days | ||||||||||||
Latest period of conversion price | 30 days | ||||||||||||
Consecutive trading days | 10 days | ||||||||||||
Trading price per debenture related to common stock | 95.00% | ||||||||||||
Debentures convertible at holder's options | 1) Leucadia's common stock price is greater than or equal to 130% of the conversion price for at least 20 trading days in a period of 30 consecutive trading days; 2) if the trading price per debenture is less than 95% of the price of the common stock times the conversion ratio for any 10 consecutive trading days; 3) if the debentures are called for redemption; or 4) upon the occurrence of specific corporate actions. | ||||||||||||
Description to redeem the debentures for par, plus accrued interest | On or after November 1, 2012 if the price of Leucadia's common stock is greater than 130% of the conversion price for at least 20 days in a period of 30 consecutive trading days and we may redeem the debentures for par, plus accrued interest, at our election any time on or after November 1, 2017. | ||||||||||||
Description of Contingent Debenture Interest Payment | November 1, 2017, contingent interest will accrue at 0.375% if the average trading price of a debenture for 5 trading days ending on and including the third trading day immediately preceding a six-month interest period equals or exceed $1,200 per $1,000 debenture. | ||||||||||||
Trading price of contingent interest | 1,200 | ||||||||||||
Revolving credit facility | 950,000,000 | 950,000,000 | |||||||||||
Borrowed unsecured credit facility | $250,000,000 |
LongTerm_Debt_Summary_of_LongT
Long-Term Debt - Summary of Long-Term Debt Carrying Values Including Unamortized Discounts and Premiums (Detail) (USD $) | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 |
In Thousands, unless otherwise specified | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] |
Unsecured debt [Member] | Secured debt [Member] | 5.875% Senior Notes, due 2014 [Member] | 3.875% Senior Note, due 2015 [Member] | 5.5% Senior Notes, due 2016 [Member] | 5.125% Senior Notes, due 2018 [Member] | 8.5% Senior Notes, due 2019 [Member] | 6.875% Senior Note, due 2021 [Member] | 2.25% Euro Medium Term Notes, due 2022 [Member] | 5.125% Senior Notes, due 2023 [Member] | 6.45% Senior Debentures, due 2027 [Member] | 3.875% Convertible Senior Debentures, due 2029 [Member] | 6.25% Senior Debentures, due 2036 [Member] | 6.50% Senior Notes, due 2043 [Member] | Unsecured debt [Member] | Secured debt [Member] | 5.875% Senior Notes, due 2014 [Member] | 3.875% Senior Note, due 2015 [Member] | 5.5% Senior Notes, due 2016 [Member] | 5.125% Senior Notes, due 2018 [Member] | 8.5% Senior Notes, due 2019 [Member] | 6.875% Senior Note, due 2021 [Member] | 2.25% Euro Medium Term Notes, due 2022 [Member] | 6.45% Senior Debentures, due 2027 [Member] | 3.875% Convertible Senior Debentures, due 2029 [Member] | 6.25% Senior Debentures, due 2036 [Member] | |||
Unsecured debt [Member] | Unsecured debt [Member] | Unsecured debt [Member] | Unsecured debt [Member] | Unsecured debt [Member] | Unsecured debt [Member] | Unsecured debt [Member] | Unsecured debt [Member] | Unsecured debt [Member] | Unsecured debt [Member] | Unsecured debt [Member] | Unsecured debt [Member] | Unsecured debt [Member] | Unsecured debt [Member] | Unsecured debt [Member] | Unsecured debt [Member] | Unsecured debt [Member] | Unsecured debt [Member] | Unsecured debt [Member] | Unsecured debt [Member] | Unsecured debt [Member] | Unsecured debt [Member] | |||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||
Long-term debt | $6,346,439 | $6,051,439 | $295,000 | $258,377 | $518,241 | $375,626 | $856,862 | $864,673 | $870,136 | $4,647 | $626,188 | $383,637 | $357,323 | $513,415 | $422,314 | $4,804,607 | $4,454,600 | $350,007 | $249,564 | $499,382 | $349,248 | $771,450 | $706,990 | $743,945 | $3,708 | $346,792 | $290,617 | $492,904 |
LongTerm_Debt_Summary_of_LongT1
Long-Term Debt - Summary of Long-Term Debt Carrying Values Including Unamortized Discounts and Premiums (Parenthetical) (Detail) (USD $) | Apr. 19, 2012 | Jul. 13, 2012 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 |
In Millions, unless otherwise specified | 6.875% Senior Note, due 2021 [Member] | 2.25% Euro Medium Term Notes, due 2022 [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] |
5.875% Senior Notes, due 2014 [Member] | 3.875% Senior Note, due 2015 [Member] | 5.5% Senior Notes, due 2016 [Member] | 5.125% Senior Notes, due 2018 [Member] | 8.5% Senior Notes, due 2019 [Member] | 6.875% Senior Note, due 2021 [Member] | 2.25% Euro Medium Term Notes, due 2022 [Member] | 5.125% Senior Notes, due 2023 [Member] | 6.45% Senior Debentures, due 2027 [Member] | 3.875% Convertible Senior Debentures, due 2029 [Member] | 3.875% Convertible Senior Debentures, due 2029 [Member] | 6.25% Senior Debentures, due 2036 [Member] | 6.50% Senior Notes, due 2043 [Member] | |||
Debt Instrument [Line Items] | |||||||||||||||
Interest rates | 6.88% | 2.25% | 5.88% | 3.88% | 5.50% | 5.13% | 8.50% | 6.88% | 2.25% | 5.13% | 6.45% | 3.88% | 3.88% | 6.25% | 6.50% |
Effective interest rates | 1.51% | 2.17% | 2.52% | 3.46% | 4.00% | 4.40% | 3.82% | 4.55% | 5.46% | 3.50% | 3.50% | 6.03% | 6.09% | ||
Convertible Senior debentures includes fair value | $7.30 | $7.30 | |||||||||||||
Consolidated Statement of Earnings loss amount | $16.30 | $9.20 |
Mandatorily_Redeemable_Convert1
Mandatorily Redeemable Convertible Preferred Stock - Additional Information (Detail) (Preferred Stock Subject to Mandatory Redemption [Member], Predecessor [Member]) | 1 Months Ended |
Feb. 28, 2013 | |
Preferred Stock Subject to Mandatory Redemption [Member] | Predecessor [Member] | |
Preferred Stock [Line Items] | |
Dividend of Series A Convertible Preferred Stock | 3.25% |
Cumulative convertible preferred stock, issued | 125,000 |
Cumulative convertible preferred stock, outstanding | 125,000 |
Noncontrolling_Interests_and_M2
Noncontrolling Interests and Mandatorily Redeemable Preferred Interests of Consolidated Subsidiaries - Noncontrolling Interests (Detail) (USD $) | Aug. 31, 2013 | Aug. 31, 2013 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Nov. 30, 2012 |
In Thousands, unless otherwise specified | Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] |
Other [Member] | JSOP [Member] | JESOP [Member] | Other [Member] | |||
Noncontrolling Interest [Line Items] | ||||||
Noncontrolling interests | $77,048 | $77,048 | $346,738 | $303,178 | $35,239 | $8,321 |
Noncontrolling_Interests_and_M3
Noncontrolling Interests and Mandatorily Redeemable Preferred Interests of Consolidated Subsidiaries - Noncontrolling Interests (Parenthetical) (Detail) (USD $) | Aug. 31, 2013 | Jul. 01, 2013 | 1-May-13 |
In Millions, unless otherwise specified | |||
Noncontrolling Interest [Abstract] | |||
Asset Management entity | $50 | $25 | $25 |
Noncontrolling_Interests_and_M4
Noncontrolling Interests and Mandatorily Redeemable Preferred Interests of Consolidated Subsidiaries - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2012 | Nov. 30, 2012 |
Noncontrolling Interest [Abstract] | ||||||
Other comprehensive income attributable to noncontrolling interests | $0 | $0 | $0 | $0 | $0 | |
Carrying amount of mandatorily redeemable preferred interest of consolidated subsidiaries | $348,051 |
Benefit_Plans_Additional_Infor
Benefit Plans - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Jul. 01, 2011 | Aug. 31, 2013 | Nov. 30, 2012 | Aug. 31, 2013 | Aug. 31, 2013 |
German Pension Plan [Member] | German Pension Plan [Member] | German Pension Plan [Member] | U.S. Pension Plan [Member] | U.S. Pension Plan [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |||||
Liability recognized under employee benefit plan | $21.80 | ||||
Investment in insurance contract | 19.2 | 18.6 | |||
Contributions made to U.S. pension plans | $3 | $3 |
Benefit_Plans_Net_Periodic_Pen
Benefit Plans - Net Periodic Pension Cost (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2012 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2012 |
Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | |
U.S. Pension Plan [Member] | U.S. Pension Plan [Member] | German Pension Plan [Member] | German Pension Plan [Member] | U.S. Pension Plan [Member] | U.S. Pension Plan [Member] | U.S. Pension Plan [Member] | German Pension Plan [Member] | German Pension Plan [Member] | German Pension Plan [Member] | |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||||||||||
Service cost | $56 | $112 | $16 | $32 | $56 | $44 | $132 | $16 | $9 | $27 |
Interest cost on projected benefit obligation | 557 | 1,114 | 220 | 433 | 529 | 584 | 1,752 | 220 | 252 | 767 |
Expected return on plan assets | -680 | -1,360 | -665 | -616 | -1,848 | |||||
Net amortization | 45 | 89 | 300 | 317 | 951 | 45 | ||||
Net periodic pension cost | ($67) | ($134) | $281 | $554 | $220 | $329 | $987 | $281 | $261 | $794 |
Compensation_Plans_Additional_
Compensation Plans - Additional Information (Detail) (USD $) | 9 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2012 | Nov. 30, 2012 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2012 | |
Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | |||
Restricted Stock Awards [Member] | Restricted Stock Awards [Member] | Restricted Stock Awards [Member] | Restricted Stock Awards [Member] | Restricted Stock Awards [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Number of years in which Restricted Stock Awards amortized as compensation expense | 4 years | ||||||||||||
Total compensation cost related to share-based compensation plans | $20,700,000 | $44,100,000 | $23,505,000 | $65,457,000 | $22,300,000 | $44,200,000 | $136,600,000 | ||||||
Increase in the unrecognized compensation cost | 45,100,000 | ||||||||||||
Total unrecognized compensation cost related to nonvested share-based awards | 221,100,000 | ||||||||||||
Employee service share-based compensation, unrecognized compensation costs on nonvested awards, weighted average period of recognition | 2 years 6 months | ||||||||||||
Annual employee contributions | 21,250 | ||||||||||||
Employee service share based compensation plan stock price | 95.00% | ||||||||||||
Compensation cost related to deferred compensation plan | 22,000 | 73,000 | 72,000 | 41,000 | 164,000 | ||||||||
Compensation cost related to profit sharing plan | 1,300,000 | 3,000,000 | 2,600,000 | 1,100,000 | 5,500,000 | ||||||||
Weighted average vesting period | 2 years | ||||||||||||
Compensation cost associated with deferred cash awards | 43,700,000 | 89,100,000 | 44,700,000 | 56,000,000 | 140,800,000 | ||||||||
Unamortized portion of compensation expense | $214,400,000 | $214,400,000 | $198,900,000 |
Earnings_per_Share_Basic_and_D
Earnings per Share - Basic and Diluted Earnings per Common Share (Detail) (Predecessor [Member], USD $) | 3 Months Ended | 9 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2012 |
Predecessor [Member] | |||
Earnings for basic earnings per common share: | |||
Net earnings | $90,842 | $78,321 | $243,417 |
Net earnings to noncontrolling interests | 10,704 | 8,150 | 32,612 |
Net earnings to common shareholders | 80,138 | 70,171 | 210,805 |
Less: Allocation of earnings to participating securities | 5,890 | 3,913 | 12,243 |
Net earnings available to common shareholders | 74,248 | 66,258 | 198,562 |
Earnings for diluted earnings per common share: | |||
Net earnings | 90,842 | 78,321 | 243,417 |
Net earnings to noncontrolling interests | 10,704 | 8,150 | 32,612 |
Net earnings to common shareholders | 80,138 | 70,171 | 210,805 |
Add: Mandatorily redeemable convertible preferred stock dividends | 1,016 | 1,016 | 3,047 |
Less: Allocation of earnings to participating securities | 5,882 | 3,916 | 12,254 |
Net earnings available to common shareholders | $75,272 | $67,271 | $201,598 |
Shares: | |||
Average common shares used in basic computation | 213,732 | 214,756 | 216,509 |
Stock options | 2 | 1 | 2 |
Mandatorily redeemable convertible preferred stock | 4,110 | 4,110 | 4,110 |
Convertible debt | |||
Average common shares used in diluted computation | 217,844 | 218,867 | 220,621 |
Earnings per common share: | |||
Basic | $0.35 | $0.31 | $0.92 |
Diluted | $0.35 | $0.31 | $0.91 |
Earnings_per_Share_Basic_and_D1
Earnings per Share - Basic and Diluted Earnings per Common Share (Parenthetical) (Detail) (Predecessor [Member], USD $) | 3 Months Ended | 9 Months Ended | |
Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2012 | |
Predecessor [Member] | |||
Earnings Per Share [Line Items] | |||
Weighted average shares of participating securities | 16,756,000 | 12,732,000 | 13,337,000 |
Dividends declared on participating securities | $1,315,000 | $924,000 | $2,988,000 |
Earnings_per_Share_Additional_
Earnings per Share - Additional Information (Detail) (USD $) | Aug. 31, 2013 | Aug. 26, 2011 |
In Millions, unless otherwise specified | ||
Earnings Per Share [Abstract] | ||
Line of credit facility, maximum borrowing capacity | $950 | $950 |
Earnings_per_Share_Dividends_p
Earnings per Share - Dividends per Share of Common Stock Declared (Detail) (USD $) | 3 Months Ended | |||||
Aug. 31, 2013 | 31-May-13 | Feb. 28, 2013 | Aug. 31, 2012 | 31-May-12 | Feb. 29, 2012 | |
Earnings Per Share [Abstract] | ||||||
Dividends per share of common stock declared | $0.08 | $0.08 | $0.08 | $0.08 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | Aug. 31, 2013 | Nov. 30, 2012 |
In Millions, unless otherwise specified | Successor [Member] | Predecessor [Member] |
Income Taxes [Line Items] | ||
Total gross unrecognized tax benefits | $132.70 | $110.50 |
Unrecognized tax benefits that would impact effective tax rate in future | 87.4 | 72.4 |
Accrued interest on unrecognized tax benefits | $20.90 | $15.30 |
Income_Taxes_Earliest_Tax_Year
Income Taxes - Earliest Tax Years Subject to Examination in Major Tax Jurisdictions in which Company Operates (Detail) | 9 Months Ended |
Aug. 31, 2013 | |
United States [Member] | |
Income Tax Examination [Line Items] | |
Tax Year | 2006 |
United Kingdom [Member] | |
Income Tax Examination [Line Items] | |
Tax Year | 2011 |
California [Member] | |
Income Tax Examination [Line Items] | |
Tax Year | 2004 |
Connecticut [Member] | |
Income Tax Examination [Line Items] | |
Tax Year | 2006 |
Massachusetts [Member] | |
Income Tax Examination [Line Items] | |
Tax Year | 2006 |
New Jersey [Member] | |
Income Tax Examination [Line Items] | |
Tax Year | 2007 |
New York State [Member] | |
Income Tax Examination [Line Items] | |
Tax Year | 2001 |
New York City [Member] | |
Income Tax Examination [Line Items] | |
Tax Year | 2003 |
Commitments_Contingencies_and_2
Commitments, Contingencies and Guarantees - Commitments and Contingencies (Detail) (USD $) | Aug. 31, 2013 |
In Millions, unless otherwise specified | |
Commitments And Guarantee Obligations [Line Items] | |
2013 | $1,360.40 |
2014 | 222.5 |
2015 and 2016 | 1,158.10 |
2017 and 2018 | 114.8 |
2019 and Later | 444.8 |
Maximum Payout | 3,300.60 |
Equity commitments [Member] | |
Commitments And Guarantee Obligations [Line Items] | |
2013 | 0.3 |
2014 | 1.7 |
2015 and 2016 | 7.2 |
2017 and 2018 | 0.8 |
2019 and Later | 444.8 |
Maximum Payout | 454.8 |
Loan commitments [Member] | |
Commitments And Guarantee Obligations [Line Items] | |
2013 | 4.2 |
2014 | 7.6 |
2015 and 2016 | 354.7 |
2017 and 2018 | 114 |
Maximum Payout | 480.5 |
Mortgage-related commitments [Member] | |
Commitments And Guarantee Obligations [Line Items] | |
2013 | 507.1 |
2014 | 213.2 |
2015 and 2016 | 796.2 |
Maximum Payout | 1,516.50 |
Forward starting reverse repos and repos [Member] | |
Commitments And Guarantee Obligations [Line Items] | |
2013 | 848.8 |
Maximum Payout | $848.80 |
Commitments_Contingencies_and_3
Commitments, Contingencies and Guarantees - Credit Exposure from Loan Commitments (Detail) (USD $) | Aug. 31, 2013 |
In Millions, unless otherwise specified | |
Commitments And Guarantee Obligations [Line Items] | |
0 - 12 Months | $26.80 |
1 - 5 Years | 662 |
Greater Than 5 Years | |
Total Corporate Lending Exposure | 688.8 |
Corporate Lending Exposure at Fair Value | 208.3 |
Corporate Lending Commitments | 480.5 |
Non-investment grade [Member] | |
Commitments And Guarantee Obligations [Line Items] | |
1 - 5 Years | 48.2 |
Greater Than 5 Years | |
Total Corporate Lending Exposure | 48.2 |
Corporate Lending Exposure at Fair Value | 8 |
Corporate Lending Commitments | 40.2 |
Unrated [Member] | |
Commitments And Guarantee Obligations [Line Items] | |
0 - 12 Months | 26.8 |
1 - 5 Years | 613.8 |
Greater Than 5 Years | |
Total Corporate Lending Exposure | 640.6 |
Corporate Lending Exposure at Fair Value | 200.3 |
Corporate Lending Commitments | $440.30 |
Commitments_Contingencies_and_4
Commitments, Contingencies and Guarantees - Credit Exposure from Loan Commitments (Parenthetical) (Detail) (USD $) | Aug. 31, 2013 |
In Millions, unless otherwise specified | |
Offsetting [Abstract] | |
Corporate lending exposure included in financial instruments owned | $211 |
Corporate lending exposure carried at fair value included in financial instruments sold | $2.70 |
Commitments_Contingencies_and_5
Commitments, Contingencies and Guarantees - Additional Information (Detail) (USD $) | 9 Months Ended | ||||||||||||||||
In Millions, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Nov. 30, 2012 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 |
Revolving credit facility [Member] | Unrated [Member] | Jefferies Employee Partners IV, LLC [Member] | Jefferies Employee Partners IV, LLC [Member] | Stand by Letters of Credit [Member] | Jefferies Finance, LLC [Member] | Jefferies LoanCore, LLC [Member] | USA Fund and Jefferies Capital Partners LP [Member] | USA Fund [Member] | Jefferies Capital Partners V L.P. [Member] | USA Fund and Jefferies Capital Partners V L.P. [Member] | Jefferies Capital Partners IV L.P. [Member] | Jefferies Capital Partners IV LLC [Member] | Jefferies Capital Partners IV L.P. and Jefferies Capital Partners IV LLC [Member] | Other Investments [Member] | Jefferies Capital Partners LLC [Member] | ||
Commitments Contingencies And Guarantees [Line Items] | |||||||||||||||||
Equity Commitments | $600 | $291 | $85 | $75 | $10 | $45.90 | $3.10 | $23.80 | $5.90 | ||||||||
Funded Equity Commitments | 314.6 | 174.8 | 41.2 | 5.5 | 38.7 | 2.3 | 1 | ||||||||||
Unfunded equity commitments | 38.3 | 8 | 2 | 4.9 | |||||||||||||
Loan commitments outstanding to clients | 126.3 | ||||||||||||||||
Revolving credit facility | 700 | ||||||||||||||||
Revolving credit facility maturity date | 1-Mar-16 | ||||||||||||||||
Funded loan commitments | 0 | 17.4 | 32.7 | ||||||||||||||
Unfunded loan commitments | 350 | 354.2 | 4.2 | ||||||||||||||
Corporate lending commitments | 440.3 | 21.6 | |||||||||||||||
Fair value of mortgage-related commitments | 3.1 | ||||||||||||||||
Fair value of derivative contracts approximated deemed to meet the definition of a guarantee | 347.3 | ||||||||||||||||
Letters of Credit Commitments | $28.30 |
Commitments_Contingencies_and_6
Commitments, Contingencies and Guarantees - Guarantees (Detail) (USD $) | Aug. 31, 2013 |
In Millions, unless otherwise specified | |
Guarantee Obligations [Line Items] | |
Notional/ Maximum Payout | $3,300.60 |
Derivative contracts - non-credit related [Member] | |
Guarantee Obligations [Line Items] | |
2013 | 831,159.50 |
2014 | 7,556.10 |
2015 and 2016 | 2,974.80 |
2017 and 2018 | 1.2 |
2019 and Later | 523 |
Notional/ Maximum Payout | 842,214.60 |
Written derivative contracts - credit related [Member] | |
Guarantee Obligations [Line Items] | |
2013 | |
2014 | |
2015 and 2016 | |
2017 and 2018 | 1,184 |
2019 and Later | |
Notional/ Maximum Payout | 1,184 |
Derivatives [Member] | |
Guarantee Obligations [Line Items] | |
2013 | 831,159.50 |
2014 | 7,556.10 |
2015 and 2016 | 2,974.80 |
2017 and 2018 | 1,185.20 |
2019 and Later | 523 |
Notional/ Maximum Payout | $843,398.60 |
Commitments_Contingencies_and_7
Commitments, Contingencies and Guarantees - External Credit Ratings of Underlying or Referenced Assets for Credit Related Derivatives Contracts (Detail) (USD $) | Aug. 31, 2013 |
In Millions, unless otherwise specified | |
Index credit default swaps [Member] | |
Commitments And Guarantee Obligations [Line Items] | |
External credit ratings | $1,115 |
Single name credit default swaps [Member] | |
Commitments And Guarantee Obligations [Line Items] | |
External credit ratings | 69 |
AAA/Aaa [Member] | Index credit default swaps [Member] | |
Commitments And Guarantee Obligations [Line Items] | |
External credit ratings | 1,115 |
AAA/Aaa [Member] | Single name credit default swaps [Member] | |
Commitments And Guarantee Obligations [Line Items] | |
External credit ratings | 7 |
AA/Aa [Member] | Index credit default swaps [Member] | |
Commitments And Guarantee Obligations [Line Items] | |
External credit ratings | |
AA/Aa [Member] | Single name credit default swaps [Member] | |
Commitments And Guarantee Obligations [Line Items] | |
External credit ratings | |
A [Member] | Index credit default swaps [Member] | |
Commitments And Guarantee Obligations [Line Items] | |
External credit ratings | |
A [Member] | Single name credit default swaps [Member] | |
Commitments And Guarantee Obligations [Line Items] | |
External credit ratings | |
BBB/Baa [Member] | Index credit default swaps [Member] | |
Commitments And Guarantee Obligations [Line Items] | |
External credit ratings | |
BBB/Baa [Member] | Single name credit default swaps [Member] | |
Commitments And Guarantee Obligations [Line Items] | |
External credit ratings | 49.5 |
Below Investment Grade [Member] | Index credit default swaps [Member] | |
Commitments And Guarantee Obligations [Line Items] | |
External credit ratings | |
Below Investment Grade [Member] | Single name credit default swaps [Member] | |
Commitments And Guarantee Obligations [Line Items] | |
External credit ratings | 12.5 |
Unrated [Member] | Index credit default swaps [Member] | |
Commitments And Guarantee Obligations [Line Items] | |
External credit ratings | |
Unrated [Member] | Single name credit default swaps [Member] | |
Commitments And Guarantee Obligations [Line Items] | |
External credit ratings |
Net_Capital_Requirements_Net_C
Net Capital Requirements - Net Capital, Adjusted and Excess Net Capital (Detail) (USD $) | Aug. 31, 2013 |
In Thousands, unless otherwise specified | |
Jefferies [Member] | |
Net Capital Requirements [Line Items] | |
Net Capital | $1,303,564 |
Excess Net Capital | 1,260,099 |
Jefferies Execution [Member] | |
Net Capital Requirements [Line Items] | |
Net Capital | 3,751 |
Excess Net Capital | 3,501 |
Jefferies Bache, LLC [Member] | |
Net Capital Requirements [Line Items] | |
Adjusted Net Capital | 242,273 |
Excess Net Capital | $113,424 |
Segment_Reporting_Net_Revenues
Segment Reporting - Net Revenues, Expenses and Total Assets by Segment (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2012 | Nov. 30, 2012 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2012 | Nov. 30, 2012 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2012 | Nov. 30, 2012 |
Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | |
Capital Markets [Member] | Capital Markets [Member] | Asset Management [Member] | Asset Management [Member] | Capital Markets [Member] | Capital Markets [Member] | Capital Markets [Member] | Capital Markets [Member] | Asset Management [Member] | Asset Management [Member] | Asset Management [Member] | Asset Management [Member] | |||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||||||
Net revenues | $517,029 | $1,159,556 | $500,600 | $1,119,400 | $16,400 | $40,200 | $803,387 | $738,938 | $2,229,935 | $792,500 | $735,800 | $2,219,300 | $10,900 | $3,100 | $10,600 | |||
Expenses | 493,647 | 1,067,553 | 485,400 | 1,047,000 | 8,200 | 20,600 | 652,939 | 608,265 | 1,817,511 | 645,400 | 603,600 | 1,794,100 | 7,500 | 4,700 | 23,400 | |||
Segment Assets | $38,830,213 | $38,830,213 | $37,978,600 | $37,978,600 | $851,600 | $851,600 | $36,293,541 | $35,588,600 | $704,900 |
Segment_Reporting_Net_Revenues1
Segment Reporting - Net Revenues, Expenses and Total Assets by Segment (Parenthetical) (Detail) (USD $) | 3 Months Ended | 9 Months Ended | |
In Thousands, unless otherwise specified | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2012 |
Overstatement [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Professional services | $8,500 | ||
Predecessor [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Professional services | 24,135 | 14,667 | 45,656 |
Immaterial Restatement [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Professional services | 24,100 | ||
Immaterial Restatement [Member] | Predecessor [Member] | Restatement Adjustment [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Professional service fees related to merger transaction, net of taxes | 5,300 | ||
Immaterial Restatement [Member] | Predecessor [Member] | Overstatement [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Professional services | $8,500 |
Segment_Reporting_Net_Revenues2
Segment Reporting - Net Revenues by Geographic Region (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 9 Months Ended | ||||
In Thousands, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2012 |
Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Americas [Member] | Americas [Member] | Americas [Member] | Americas [Member] | Americas [Member] | Europe [Member] | Europe [Member] | Europe [Member] | Europe [Member] | Europe [Member] | Asia [Member] | Asia [Member] | Asia [Member] | Asia [Member] | Asia [Member] | |
Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | ||||||
Revenues: | ||||||||||||||||||||
Net revenues | $517,029 | $1,159,556 | $803,387 | $738,938 | $2,229,935 | $353,173 | $865,190 | $653,608 | $577,646 | $1,832,523 | $154,491 | $265,901 | $127,970 | $127,237 | $330,092 | $9,365 | $28,465 | $21,809 | $34,055 | $67,320 |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (USD $) | Aug. 31, 2013 | Jul. 01, 2013 | 1-May-13 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2012 | Nov. 30, 2012 | Nov. 30, 2012 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2012 |
Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | ||||
Private Equity Related Funds [Member] | Leucadia [Member] | Leucadia [Member] | Private Equity Related Funds [Member] | Leucadia [Member] | Leucadia [Member] | Leucadia [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Equity investments loans in related funds | $80,900,000 | $104,200,000 | |||||||||||||||
Purchase commitments from Bercadia Commercial Mortgage, LLC | 169,600,000 | 411,600,000 | |||||||||||||||
Loans outstanding to certain employees | 14,000,000 | 14,000,000 | 14,000,000 | 16,300,000 | |||||||||||||
Commissions for conducting brokerage services | 138,736,000 | 285,584,000 | 131,083,000 | 119,200,000 | 358,495,000 | 5,000 | 1,500,000 | 9,800,000 | |||||||||
Earnings associated with their investment | 65,000 | 61,000 | 42,000 | 5,300,000 | |||||||||||||
Asset Management Investment | $50,000,000 | $25,000,000 | $25,000,000 |
Related_Party_Transactions_Sum
Related Party Transactions - Summary of Interest Income, Other Revenues and Investment Income to Private Equity Related Funds (Detail) (Private Equity Related Funds [Member], USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 9 Months Ended | |
In Thousands, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2013 | Feb. 28, 2013 | Aug. 31, 2012 | Aug. 31, 2012 |
Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | |
Related Party Transaction [Line Items] | |||||
Interest income | $339 | $837 | $516 | $767 | $2,462 |
Other revenues and investment income (loss) | $4,005 | $3,031 | $947 | ($6,354) | ($15,625) |