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Leucadia National Corporation Announces Third Quarter 2017 Results

October 26, 2017

NEW YORK--(BUSINESS WIRE)-- Leucadia National Corporation (NYSE:LUK) today announced its financial results for the three and nine month periods ended September 30, 2017. Income before income taxes was $200.0 million and net income attributable to Leucadia National Corporation common shareholders was $99.4 million, or $0.27 per diluted share for the three month period. Income before income taxes was $722.8 million and net income attributable to Leucadia National Corporation common shareholders was $439.0 million, or $1.17 per diluted share for the nine month period. During the third quarter, the stock price of HRG Group reversed substantially all of its earlier 2017 gains, resulting in an unrealized pre-tax mark-to-market decrease in value of $97.9 million in the third quarter, which compares to an unrealized pre-tax mark-to-market gain of $91.8 million in the third quarter of 2016.

Rich Handler, CEO of Leucadia, and Brian Friedman, President of Leucadia, said: "We are pleased with Leucadia's third quarter results, reflecting an excellent quarter for both Jefferies and National Beef. A quarterly record $476 million in Investment Banking revenues, combined with solid Equities and Fixed Income results, generated more than $800 million in net revenues at Jefferies. National Beef's third quarter pre-tax income of $174.5 million represents an all-time record quarter, as a balanced supply of cattle and robust end market demand supported strong margins. Momentum continued within our other free-cash generating businesses, including Berkadia, Garcadia and Idaho Timber, while we continued to build value across our remaining businesses."

During the third quarter, Leucadia repurchased a total of 2.5 million common shares at an average price of $24.89 per share. Under the current authorization, including share acquisitions this quarter, we have repurchased a total of 12.5 million shares over the past three years at an average price of $20.98 per share. Leucadia currently has 12.5 million remaining shares authorized for repurchase.

In addition, the Company announced today that its Board of Directors has declared a quarterly cash dividend equal to $0.10 per Leucadia common share payable on December 27, 2017 to record holders of Leucadia common shares on December 13, 2017.

More information on the Company’s results of operations for the three and nine months ended September 30, 2017 will be provided upon filing of the Company’s Form 10-Q with the Securities and Exchange Commission.

This press release contains “forward looking statements” within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward looking statements include statements about our future and statements that are not historical facts. These forward looking statements are usually preceded by the words “should,” “expect,” “intend,” “may,” “will,” or similar expressions. Forward looking statements may contain expectations regarding revenues, earnings, operations, and other results, and may include statements of future performance, plans, and objectives. Forward looking statements also include statements pertaining to our strategies for future development of our business and products. Forward looking statements represent only our belief regarding future events, many of which by their nature are inherently uncertain. It is possible that the actual results may differ, possibly materially, from the anticipated results indicated in these forward looking statements. Information regarding important factors, including Risk Factors that could cause actual results to differ, perhaps materially, from those in our forward looking statements is contained in reports we file with the SEC. You should read and interpret any forward looking statement together with reports we file with the SEC.

Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy will be profitable or equal the corresponding indicated performance level(s).

SUMMARY FOR LEUCADIA NATIONAL CORPORATION AND SUBSIDIARIES

(In thousands, except per share amounts)

(Unaudited)

 
 

For the Three Months Ended

 

For the Nine Months Ended

September 30,

September 30,

2017   2016 2017   2016
 
Net revenues $ 2,896,522   $ 2,676,375   $ 8,496,884   $ 7,316,839  
 
Income (loss) before income taxes and income (loss) related to associated companies $ 169,970 $ 213,406 $ 807,219 $ (21,037 )
 
Income (loss) related to associated companies 30,057   36,503   (84,413 ) 108,445  
 
Income before income taxes 200,027 249,909 722,806 87,408
 
Income tax provision 63,260   73,703   218,054   59,192  
 
Net income 136,767 176,206 504,752 28,216
 
Net (income) loss attributable to the noncontrolling interests (28 ) 1,870 1,941 3,682
 
Net income attributable to the redeemable noncontrolling interests (36,216 ) (22,702 ) (64,538 ) (40,084 )
 
Preferred stock dividends (1,172 ) (1,016 ) (3,203 ) (3,047 )
 
Net income (loss) attributable to Leucadia National Corporation common shareholders $ 99,351   $ 154,358   $ 438,952   $ (11,233 )
 
Basic earnings (loss) per common share attributable to Leucadia National Corporation common shareholders:
Net income (loss) $ 0.27   $ 0.41   $ 1.19   $ (0.03 )
 
Number of shares in calculation 367,828   370,404   368,736   371,814  
 
Diluted earnings (loss) per common share attributable to Leucadia National Corporation common shareholders:
Net income (loss) $ 0.27   $ 0.41   $ 1.17   $ (0.03 )
 
Number of shares in calculation 370,198   374,567   375,233   371,814  
 

A summary of results for the three months ended September 30, 2017 and 2016 is as follows (in thousands):

     

Other

  

Other

      

Financial

Merchant

Services

Banking

Businesses

Businesses

Parent

National

and

and

Corporate

Company

Jefferies

Beef

Investments

Investments

and Other

Interest

Total

2017

Net revenues $ 802,909   $ 2,039,299   $ 37,707   $ (5,115 ) $ 21,722   $ —   $

2,896,522

 

 
Expenses:
Cost of sales — 1,816,480 — 71,596 — — 1,888,076
Compensation and benefits 462,933 10,505 15,217 4,511 11,665 — 504,831
Floor brokerage and clearing fees 42,852 — — — — — 42,852
Interest — 1,713 9,936 939 — 14,737 27,325
Depreciation and amortization 15,928 26,664 2,439 9,528 865 — 55,424
Selling, general and other expenses 153,084   9,458   20,362   19,445   5,695   —   208,044  
Total expenses 674,797   1,864,820   47,954   106,019   18,225   14,737   2,726,552  
Income (loss) before income taxes and income (loss) related to associated companies 128,112 174,479 (10,247 ) (111,134 ) 3,497 (14,737 ) 169,970
Income (loss) related to associated companies —   —   30,902   1,057   (1,902 ) —   30,057  
Income (loss) before income taxes $ 128,112   $ 174,479   $ 20,655   $ (110,077 ) $ 1,595   $ (14,737 ) $ 200,027  
 
 

2016

Net revenues $ 656,496   $ 1,747,042   $ 54,742   $ 217,089   $ 1,006   $ —   $ 2,676,375  
 
Expenses:
Cost of sales — 1,595,671 — 93,422 — — 1,689,093
Compensation and benefits 376,438 9,660 15,100 7,334 10,183 — 418,715
Floor brokerage and clearing fees 40,189 — — — — — 40,189
Interest — 2,967 4,596 836 — 14,722 23,121
Depreciation and amortization 16,108 23,100 3,882 8,734 867 — 52,691
Selling, general and other expenses 140,571   7,375   13,826   70,569   6,819   —   239,160  
Total expenses 573,306   1,638,773   37,404   180,895   17,869   14,722   2,462,969  
Income (loss) before income taxes and income related to associated companies 83,190 108,269 17,338 36,194 (16,863 ) (14,722 ) 213,406
Income related to associated companies —   —   27,806   8,453   244   —   36,503  
Income (loss) before income taxes $ 83,190   $ 108,269   $ 45,144   $ 44,647   $ (16,619 ) $ (14,722 ) $ 249,909  
 

A summary of results for the nine months ended September 30, 2017 and 2016 is as follows (in thousands):

     

Other

  

Other

      

Financial

Merchant

Services

Banking

Businesses

Businesses

Parent

National

and

and

Corporate

Company

Jefferies

Beef

Investments

Investments

and Other

Interest

Total

2017

Net revenues $ 2,381,967   $ 5,476,274   $ 153,270   $ 453,625   $ 31,748   $ —   $ 8,496,884  
 
Expenses:
Cost of sales — 5,030,887 — 210,834 — — 5,241,721
Compensation and benefits 1,374,127 29,649 45,349 13,880 37,582 — 1,500,587
Floor brokerage and clearing fees 133,145 — — — — — 133,145
Interest — 5,781 29,797 2,764 — 44,201 82,543
Depreciation and amortization 46,877 73,522 8,003 24,650 2,599 — 155,651
Selling, general and other expenses 444,724   26,428   47,463   36,511   20,892   —   576,018  
Total expenses 1,998,873   5,166,267   130,612   288,639   61,073   44,201   7,689,665  
Income (loss) before income taxes and income (loss) related to associated companies 383,094 310,007 22,658 164,986 (29,325 ) (44,201 ) 807,219
Income (loss) related to associated companies —   —   (91,866 ) 8,295   (842 ) —   (84,413 )
Income (loss) before income taxes $ 383,094   $ 310,007   $ (69,208 ) $ 173,281   $ (30,167 ) $ (44,201 ) $ 722,806  
 
 

2016

Net revenues $ 1,678,212   $ 5,180,127   $ (71,338 ) $ 451,484   $ 78,354   $ —   $ 7,316,839  
 
Expenses:
Cost of sales — 4,856,045 — 257,470 — — 5,113,515
Compensation and benefits 1,141,873 28,628 44,292 22,083 29,337 — 1,266,213
Floor brokerage and clearing fees 124,259 — — — — — 124,259
Interest — 10,730 10,988 2,272 — 44,155 68,145
Depreciation and amortization 45,331 68,511 9,973 26,501 2,754 — 153,070
Selling, general and other expenses 421,876   23,680   31,806   111,898   23,414   —   612,674  
Total expenses 1,733,339   4,987,594   97,059   420,224   55,505   44,155   7,337,876  
Income (loss) before income taxes and income related to associated companies (55,127 ) 192,533 (168,397 ) 31,260 22,849 (44,155 ) (21,037 )
Income related to associated companies —   —   86,121   21,247   1,077   —   108,445  
Income (loss) before income taxes $ (55,127 ) $ 192,533   $ (82,276 ) $ 52,507   $ 23,926   $ (44,155 ) $ 87,408  

 

Leucadia National Corporation
Laura Ulbrandt, 212-460-1900

Source: Leucadia National Corporation

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