Leucadia National (LUK) Posts Q4 GAAP Loss of 3c/Share

Leucadia National (NYSE: LUK) reported Q4 EPS of ($0.03), $0.05 worse than the analyst estimate of $0.02. Revenue for the quarter came in at $2.69 million versus the consensus estimate of $2.92 million.

These consolidated fourth quarter results include a $52.3 million charge, or $41.0 million net of tax, recorded by Jefferies in the fourth quarter for a bad debt provision in respect to a receivable from a Bache customer, OW Bunker.

During January 2015, we invested $300 million in FXCM (NYSE: FXCM) to rescue the online provider of foreign exchange trading and related services, which had experienced significant losses as a result of the Swiss National Bank scrapping its three-year old peg of 1.20 Swiss francs per euro. Our investment in FXCM, an industry leader with a $1.5 billion total capitalization the day prior to the Swiss National Bank’s action, is structured as a two-year secured term loan with an initial interest rate of 10% per annum, increasing by 1.5% per annum each quarter for so long as the loan is outstanding. The term loan is entitled to monthly payments from proceeds received during the immediately preceding calendar month from collections of accounts receivable. We are also entitled to a deferred financing fee of $10 million, with an additional fee of up to $30 million becoming payable in the event the aggregate principal amount of the term loan outstanding on April 16, 2015 is greater than $250 million. We have already begun to receive payments and expect to have received back over a quarter of our investment in repayment of principal and fees within three months of closing. FXCM has also agreed to pay us in cash a percentage of the proceeds received in connection with the sale of assets, any dividend or distribution or the sale or indirect sale of FXCM’s business as follows: 100% until all amounts due under the loan are repaid; 50% of the next $350 million; then 90% of an amount equal to two times the balance outstanding on the term loan as of April 16, 2015 (not to be less than $500 million or more than $680 million); and 60% of all amounts thereafter.

For earnings history and earnings-related data on Leucadia National (LUK) click here.

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