Leucadia National Corp. (LUK) 2015 Investor Day
Leucadia Today
- Goal is long-term value creation
- Senior management is aligned with shareholders – 11.2%(1) ownership for top three officers
- 14 of our 16 businesses are operating well and have strong value creation potential
?Jefferies Investment Banking and Equities are performing well, growing and creating value; we are addressing the challenges in Fixed Income; Bache exit is accretive
?We expect National Beef to recover on the back of a steady increase in the cattle herd - Leveraging the Jefferies platform to source unique investment opportunities is working well (LAM, FXCM, HRG)
Leucadia – Operating Profile in 2015 vs. 2012
Leucadia Overview
Leucadia’s Potential
Footnotes: Leucadia’s Potential
- Leucadia Tangible Capital is a non-GAAP financial measure excluding goodwill and intangibles from Book Value. See appendix on pages 174 for reconciliation to GAAP measures.
- Our share of Garcadia pre-tax income, excluding our interest in Garcadia land, is a non-GAAP measure, however, there are no income taxes at the Garcadia level; therefore our share of their net income equals our share of their pre-tax income.
- Common Book Value per Share (fully-diluted) and Common Tangible Book Value per Share (fully-diluted) are non-GAAP financial measures widely used by investors in assessing investment and financial services firms. See Appendix on page 173 for a reconciliation to c.
A Unique Financial Services and Merchant Banking Platform
- Financial Services – Our historic sector; post-crisis opportunity
— Jefferies- Drive market share, margin expansion and earnings growth by growing Investment Banking and Equities and refocusing in Fixed Income
- Jefferies Finance and Jefferies LoanCore – Execute on the opportunity and momentum of our corporate and commercial real estate lending platforms
- KCG Holdings – Significant interest in a leading global electronic market maker (>100% of cost recovered)(1)
— Berkadia - Become the best full-service mortgage banking firm in the industry
- Build out geographic coverage, products and capabilities to drive profitability and cash flow
— Leucadia Asset Management - Leverage Leucadia’s brand, Jefferies’ relationships and Leucadia capital to own significant general partnership stakes in differentiated alternative asset management strategies (business model inherently avoids goodwill and acquisition costs)
— FXCM - Opportunistic and well-structured investment, with significant near and long-term value creation potential
- Counter-cyclical performance relative to Jefferies’ core business
- Leucadia’s results may continue to be volatile for several more quarters as we fair value the FXCM investment quarterly
— HomeFed - Following recent $150 million Otay Ranch acquisition, begin to harvest ripening projects and assets
— Foursight and Chrome - Drive market share and originations, while maintaining a disciplined approach to credit quality
- Merchant Banking – Opportunistic value investments in businesses we understand
— National Beef- Manage business through the cattle cycle
- Maintain core market share and enhance profitability through efficiency and growth of value-added segments (tannery, consumer ready, Kansas City Steaks)
— HRG - Drive value through simplification and strategic focus, as well as growth of Spectrum Brands
— Vitesse and Juneau - Drive cash flow on existing investments
- Opportunities for new investments following oil price collapse
— Garcadia - Enhance performance in existing dealerships
- Selectively expand dealership network in a robust market environment
— Linkem - Increase coverage through LTE network deployment
- Prepare for launch in major Italian cities
— Conwed - Drive organic growth with new applications and market expansion
— Idaho Timber - Drive volume and production efficiency
— Golden Queen - Deliver working mine on time and on budget
See full slides below.
