LUK Leucadia National Corp.

Leucadia National Corporation (NYSE:LUK) today announced its financial results for the three month period ended March 31, 2018. Consistent with the expectation expressed in our press release of April 9, 2018, Income before income taxes was $107 million and net income attributable to Leucadia National Corporation common shareholders was $125 million, or $0.34 per diluted share.

Rich Handler, CEO of Leucadia, and Brian Friedman, President of Leucadia, said: "We are pleased with another quarter of solid performance across Leucadia. Jefferies' first quarter results reflect continued strong performances in Investment Banking, with net revenues of $434 million, and solid performance in both Equities and Fixed Income, with total revenues of $369 million. Investment Banking results reflect a good new-issue equity and debt environment, and another strong quarter in mergers and acquisitions. Fixed Income revenues were a strong $213 million and relatively consistent across the quarter. Equities revenues were $156 million. Our share of Berkadia’s income was $26 million, buoyed by strong originations during the quarter, and our share of HomeFed’s income was also higher than previous quarters, due to a gain from the sale of one of its assets.

"Our Leucadia Merchant Banking portfolio also continues to deliver strong results, with National Beef generating pre-tax income of $69 million during a typically lighter seasonal quarter for beef processing. The remainder of our merchant banking portfolio produced solid results, through either cash generation or value-building, offset partly by a $21 million mark-to-market reduction in the value of our HRG position.

“We patiently continue to develop our alternative asset management platform. During the first quarter, we recorded losses of $78 million mainly due to two strategies impacted by exceptional volatility during the quarter.

“Our recently announced strategic transactions, including the agreed upon sale of 48% of National Beef, the agreed upon sale of 100% of our equity interest in Garcadia and the acquisition by Vitesse Energy Finance of $190 million of additional Bakken oil and gas assets, will complete an ongoing transformation of Leucadia to a diversified financial services company. We expect these to close in the next four months.”

After the end of the first quarter, through April 26, 2018, Leucadia repurchased a total of 10.3 million common shares at an average price of $24.40 per share. 14.7 million shares remain authorized for repurchase.

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More information on the Company’s results of operations for the three months ended March 31, 2018 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 include expectations relating to the National Beef and Garcadia transactions disclosed in this press release. Forward-looking statements also include statements pertaining to our strategies for future development of our businesses 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 EndedMarch 31,

2018   2017   Net revenues $ 2,680,793   $ 2,867,982     Income before income taxes and income (loss) related to associated companies 74,554 526,671   Income (loss) related to associated companies 32,100   (128,574 )   Income before income taxes 106,654 398,097   Income tax provision (benefit) (32,495 ) 104,174     Net income 139,149 293,923   Net loss attributable to the noncontrolling interests 1,344 523   Net income attributable to the redeemable noncontrolling interests (14,796 ) (12,022 )   Preferred stock dividends (1,172 ) (1,016 )   Net income attributable to Leucadia National Corporation common shareholders $ 124,525   $ 281,408     Basic earnings per common share attributable to Leucadia National Corporation common shareholders: Net income $ 0.34   $ 0.76     Number of shares in calculation 366,427   369,267     Diluted earnings per common share attributable to Leucadia National Corporation common shareholders: Net income $ 0.34   $ 0.75     Number of shares in calculation 373,461   375,721    

A summary of results for the three months ended March 31, 2018 and 2017 is as follows (in thousands):

              Financial Services

Leucadia Merchant Banking Portfolio

Jefferies  

Other Financial Services

National Beef

 

Other Merchant Banking

Corporate and Other

Parent Company Interest

Total

2018

Net revenues $ 820,919   $ (27,930 ) $ 1,785,358   $ 94,002   $ 8,444   $ —   $ 2,680,793     Expenses: Cost of sales — — 1,670,776 81,935 — — 1,752,711 Compensation and benefits 454,760 11,245 10,207 4,625 19,029 — 499,866 Floor brokerage and clearing fees 42,176 — — — — — 42,176 Interest expense — 5,770 2,109 982 — 14,746 23,607 Depreciation and amortization 16,366 1,834 25,519 8,662 1,298 — 53,679 Selling, general and other expenses 181,887   22,776   7,856   7,780   13,901   —   234,200   Total expenses 695,189   41,625   1,716,467   103,984   34,228   14,746   2,606,239   Income (loss) before income taxes and income (loss) related to associated companies 125,730 (69,555 ) 68,891 (9,982 ) (25,784 ) (14,746 ) 74,554 Income (loss) related to associated companies —   30,045   —   (41 ) 2,096   —   32,100   Income (loss) before income taxes $ 125,730   $ (39,510 ) $ 68,891   $ (10,023 ) $ (23,688 ) $ (14,746 ) $ 106,654      

2017

Net revenues $ 797,386   $ 56,223   $ 1,561,456   $ 445,227   $ 7,690   $ —   $ 2,867,982     Expenses: Cost of sales — — 1,463,838 69,256 — — 1,533,094 Compensation and benefits 460,672 15,184 9,312 4,965 13,194 — 503,327 Floor brokerage and clearing fees 45,858 — — — — — 45,858 Interest expense — 9,971 1,814 869 — 14,730 27,384 Depreciation and amortization 15,601 2,905 22,399 7,738 867 — 49,510 Selling, general and other expenses 142,985   14,196   6,990   9,254   8,713   —   182,138   Total expenses 665,116   42,256   1,504,353   92,082   22,774   14,730   2,341,311   Income (loss) before income taxes and income (loss) related to associated companies 132,270 13,967 57,103 353,145 (15,084 ) (14,730 ) 526,671 Income (loss) related to associated companies —   (133,003 ) —   3,849   580   —   (128,574 ) Income (loss) before income taxes $ 132,270   $ (119,036 ) $ 57,103   $ 356,994   $ (14,504 ) $ (14,730 ) $ 398,097  

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Leucadia National CorporationLaura Ulbrandt, (212) 460-1900