Jefferies Financial Group Inc.

(Unaudited)

Index

Note 1. Organization and Basis of Presentation

Organization

Jefferies Financial Group Inc. is a U.S.-headquartered global full

service, integrated investment banking and capital markets firm.

The accompanying Consolidated Financial Statements represent

the accounts of Jefferies Financial Group Inc. and subsidiaries

(together, the “Company,” “we” or “us”). We, collectively with our

consolidated subsidiaries and through our affiliates, deliver a

broad range of financial services across investment banking,

capital markets and asset management.

We operate intwo reportable business segments: (1) Investment

Banking and Capital Markets and (2) Asset Management. The

Investment Banking and Capital Markets reportable business

segment includes our capital markets activities and our

investment banking business, which provides underwriting and

financial advisory services to our clients. We operate in the

Americas; Europe and the Middle East; and Asia-Pacific.

Investment Banking and Capital Markets also includes our

corporate lending joint venture (“Jefferies Finance LLC” or

“Jefferies Finance”), our commercial real estate joint venture

(“Berkadia Commercial Holding LLC” or “Berkadia”) and

historically our automobile lending and servicing activities. The

Asset Management reportable business segment provides

alternative investment management services to investors in the

U.S. and overseas and generates investment income from capital

invested in and managed by us or our affiliated asset managers,

and includes certain remaining businesses and assets of our

legacy merchant banking portfolio.

During the fourth quarter of 2023, we acquired Stratos Group

International (“Stratos”) (formerly FXCM Group, LLC, or “FXCM”)

and OpNet S.p.A. (“OpNet,” formerly known as “Linkem”),

investments in our legacy merchant banking portfolio which

became consolidated subsidiaries. In April 2024, we finalized the

sale of Foursight Capital LLC (“Foursight”). In February 2024,

OpNet agreed to sell substantially all of its wholesale operating

assets to Wind Tre S.p.A., a subsidiary of CK Hutchison Group

Telecom Holdings Ltd. The sale closed in August 2024. Refer to

Note 4, Business Acquisitions and Note 5, Assets Held for Sale

and Discontinued Operations for further information.

Basis of Presentation

The accompanying consolidated financial statements have been

prepared in accordance with U.S. generally accepted accounting

principles (“U.S. GAAP”) and should be read in conjunction with

our consolidated financial statements and notes thereto included

in our Annual Report on Form 10-K for the year ended

November 30, 2024. Certain footnote disclosures included in our

Annual Report on Form 10-K for the year ended November 30,

2024 have been condensed or omitted from the consolidated

financial statements as they are not required for interim reporting

under U.S. GAAP. The consolidated financial statements reflect

all adjustments of a normal, recurring nature that are, in the

opinion of management, necessary for the fair presentation of

the results for the interim period. The results presented in our

consolidated financial statements for interim periods are not

necessarily indicative of the results for the entire year.

We have made a number of estimates and assumptions relating

to the reporting of assets and liabilities, the disclosure of

contingent assets and liabilities and the reported amounts of

revenues and expenses during the reporting period to prepare

these consolidated 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 and intangible assets and the accounting for income

taxes. Although these and other estimates and assumptions are

based on the best available information, actual results could be

materially different from these estimates.

Consolidation

Our policy is to consolidate all entities that we control by

ownership of a majority of the outstanding voting stock. In

addition, we consolidate entities that meet the definition of a

variable interest entity (“VIE”) for which we are the primary

beneficiary. The primary beneficiary is the party who has the

power to direct the activities of a VIE 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 our Consolidated Statements of

Financial Condition and Consolidated Statements of Changes in

Equity. The portion of net earnings attributable to the

noncontrolling interests is presented as Net earnings (losses)

attributable to noncontrolling interests in our Consolidated

Statements of Earnings.

In situations in which we have significant influence, but not

control, of an entity that does not qualify as a VIE, 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 in Other

revenues or Principal transactions 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.

Note 2. Summary of Significant Accounting Policies

For a detailed discussion about the Company’s significant

accounting policies, refer to Note 2, Summary of Significant

Accounting Policies in our consolidated financial statements

included in Part II, Item 8 of our Annual Report on Form 10-K for

the year ended November 30, 2024.

During thethree and six months ended May 31, 2025, there were

no significant changes made to the Company’s significant

accounting policies.

Note 3. Accounting Developments

Accounting Standards to be Adopted in Future Periods

Segment Reporting. In November 2023, the Financial Accounting

Standards Board (“FASB”) issued ASU No. 2023-07 (“ASU

2023-07”), Improvements to Reportable Segment Disclosures.

The guidance primarily will require enhanced disclosures about

significant segment expenses. The amendments in ASU 2023-07

are effective for fiscal years beginning after December 15, 2023,

and interim periods within fiscal years beginning after December

15, 2024, with early adoption permitted, and are to be applied on

a retrospective basis. We are evaluating the impact of the

standard on our segment reporting disclosures.

Income Taxes. In December 2023, the FASB issued ASU No.

2023-09 (“ASU 2023-09”), Improvements to Income Tax

Disclosures. The guidance is intended to improve income tax

disclosure requirements by requiring (i) consistent categories

and greater disaggregation of information in the rate

reconciliation and (ii) the disaggregation of income taxes paid by

jurisdiction. The guidance makes several other changes to the

income tax disclosure requirements. The amendments in ASU

2023-09 are effective for fiscal years beginning after December

15, 2024, with early adoption permitted, and are required to be

applied prospectively with the option of retrospective application.

We are evaluating the impact of the standard on our income tax

disclosures.

Expenses. In November 2024, the FASB issued ASU No. 2024-03

(“ASU 2024-03”), Disaggregation of Income Statement Expenses.

The guidance primarily will require enhanced disclosures about

certain types of expenses. The amendments in ASU 2024-03 are

effective for fiscal years beginning after December 15, 2026, and

interim periods within fiscal years beginning after December 15,

2027 and may be applied either on a prospective or retrospective

basis. We are evaluating the impact of the standard on our

disclosures.

Note 4. Business Acquisitions

We acquired OpNet during the fourth quarter of 2023. OpNet is a

fixed wireless broadband service provider in Italy and also owned

a majority of the common shares of Tessellis S.p.A. (“Tessellis”),

a telecommunications company publicly listed on the Italian

stock exchange. Upon obtaining control of OpNet, we accounted

for this transaction under the acquisition method of accounting,

which requires that the assets acquired, including identifiable

intangible assets, and liabilities assumed to be recognized at

their respective fair values as of the acquisition date.

OpNet

We historically owned 47.4% of the common shares and 50.0% of

the voting rights of OpNet and various classes of convertible

preferred stock issued by OpNet (the “preferred shares”). On

November 30, 2023, we provided notice of our intent to convert

certain classes of our preferred shares into common shares and,

as a result, we obtained control of OpNet. Upon conversion on

May 7, 2024, our ownership increased to 57.5% of the common

shares and our voting rights increased to 72.5% of the aggregate

voting rights of OpNet.

Upon obtaining control of OpNet on November 30, 2023, the

assets and liabilities of OpNet have been included in our

consolidated financial statements. The initial consolidation of

OpNet was accounted for under the acquisition method of

accounting and we remeasured our previously existing interests

at fair value and recognized a gain of$115.8 million, representing

the excess of the fair value of our previously existing interests

over the carrying value of our investment of$201.6 million.

The fair value of the previously existing interests was measured

based on an estimate of what could be recognized in a sale

transaction for wholesale net operating assets operating assets

of OpNet, which have been classified as held for sale. The

remaining identifiable assets and assumed liabilities of OpNet

represented the assets and liabilities of Tessellis. An enterprise

value for Tessellis was estimated based on its market

capitalization at November 30, 2023, which was then allocated to

the identifiable assets, including intangible assets, liabilities, and

noncontrolling interests of Tessellis using an income approach,

which calculates the present value of the estimated economic

benefit of future cash flows, in order to determine the fair value

of the identified customer relationships and Tessellis trade

name. Property and equipment and developed technology assets

were valued using a replacement cost methodology. Critical

estimates included future expected cash flows, including

forecasted revenues and expenses, and applicable discount

rates. Discount rates used to compute the present value of

expected net cash flows were based upon estimated weighted

average cost of capital. The initial allocation of the purchase

price resulted in the recognition of goodwill relating to Tessellis

of$127.1 million. No consideration was transferred in connection

with the consolidation.

The initial estimated purchase price allocation as of November

30, 2023 for Tessellis was revised during the first quarter of 2024

as new information was received and analyzed resulting in an

increase in intangible assets of$39.3 million, a decrease in

property and equipment of$12.3 million, and a decrease in

goodwill of$27.0 million.

In February 2024, OpNet agreed to sell substantially all of its

wholesale operating assets to Wind Tre S.p.A., a subsidiary of CK

Hutchison Group Telecom Holdings Ltd. The sale closed in

August 2024 and we received net cash proceeds of

$322.8 million and recognized a pre-tax gain on sale of

$3.5 million. The sale of OpNet’s operating assets did not include

our interest in Tessellis.

During 2024, Tessellis executed various acquisitions and, as a

result, recognized assets and liabilities of $27.9 million and

$20.2 million, respectively, on the acquisition dates. Total assets

primarily relate to goodwill, property and equipment, intangible

assets, and short-term trade receivables. Total liabilities primarily

relate to financial debt assumed and trade payables. The primary

acquisition executed during 2024 was the acquisition of a 97.2%

ownership interest in Go Internet S.p.A. (“Go Internet”) for a total

consideration of€4.2 million. During the second quarter of 2025,

purchase price allocation adjustments were finalized.

Note 5. Assets Held for Sale and Discontinued Operations

Foursight

During the second quarter of 2024, we closed the sale of

Foursight and recognized a gain on sale of$24.2 million, which is

included within Other revenues.

OpNet

In February 2024, we agreed to sell substantially all of OpNet’s

wholesale operating assets. The sale closed in August 2024 and

we recognized a pre-tax gain on sale of$3.5 million. For the year

ended November 30, 2024, the activities of OpNet’s wholesale

operations have been classified as discontinued operations and

OpNet’s results are presented in Net losses from discontinued

operations, net of income tax benefit.

Airplanes

During 2024, we classified certain airplanes related to a sale

leaseback transaction executed by our subsidiary, Aircadia

Leasing II LLC as held for sale. Effective with the designation of

the airplanes as held for sale, we suspended recording

depreciation on these assets. The airplanes are included within

Assets held for sale on our Consolidated Statements of Financial

Condition and had a carrying amount of$51.9 million at

November 30, 2024. During the second quarter of 2025, we

agreed to sell the airplanesand we recognized a loss of

$12.8 million during the three months ended May 31, 2025. The

sale is expected to close in the third quarter of 2025.

Note 6. Fair Value Disclosures

(1)Excludes investments at fair value based on net asset value (“NAV”) of$1.44 billion at May 31, 2025 by level within the fair value hierarchy.

(2)Represents counterparty and cash collateral netting across the levels of the fair value hierarchy for positions with the same counterparty.

(1)Excludes investments at fair value based on NAV of$1.25 billion at November 30, 2024 by level within the fair value hierarchy.

(2)Represents counterparty and cash collateral netting across the levels of the fair value hierarchy for positions with the same counterparty.

There have been no significant changes in valuation techniques

and inputs used in measuring our financial assets and liabilities

that are accounted for at fair value on a recurring basis. Refer to

our consolidated financial statements included in Part II, Item 8

of our Annual Report on Form 10-K for the year ended

November 30, 2024.

Investments at Fair Value

Investments at fair value includes investments in hedge funds,

private equity funds, credit funds, real estate funds and other

funds, which are measured at the NAV of the funds, provided by

the fund managers and are excluded from 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.

Information about our investments in entities that have the

characteristics of an investment company:

N/R - Not redeemable

(1)Where fair value is calculated based on NAV, fair value has been derived from

each of the funds’ capital statements.

(2)Includes investments in hedge funds that invest, long and short, primarily in

both public and private equity securities in domestic and international

markets, commodities and multi-asset securities.

(3)Includes investments in equity funds that invest in the equity of various U.S.

and foreign private companies in a broad range of industries. These

investments cannot be redeemed; instead, distributions are received through

the liquidation of the underlying assets of the funds which are primarily

expected to be liquidated in approximatelyone toten years.

(4)Primarily includes investments in funds that invest in:

•distressed and special situations long/short credit strategies across

sectors and asset types;

•short-term trade receivables and payables that are expected to generally

be outstanding between 90 to 120 days;

•distressed and event-driven opportunities across structured credit,

opportunistic credit, and private credit.

(5)Primarily includes investments in corporate real estate strategies focused on

buying or building real estate businesses.

Level 3 Rollforwards

(1)Realized and unrealized gains/losses are primarily reported in Principal transactions revenues. Changes in instrument-specific credit risk related to structured notes

within Long-term debt are presented net of tax in our Consolidated Statements of Comprehensive Income.

(2)Net derivatives represent Financial instruments owned—Derivatives and Financial instruments sold, not yet purchased—Derivatives.

Analysis of Level 3 Assets and Liabilities for the Three Months

Ended May 31, 2025

Transfers of assets of$31.5 million from Level 2 to Level 3 of the

•Corporate debt securities of$15.9 million, Corporate equity

securities of$11.1 million, Other ABS of$2.1 million and Loan

and other receivables of$1.6 million due to reduced pricing

transparency.

Transfers of assets of$43.0 million from Level 3 to Level 2 of the

•Loans and other receivables of$21.5 million, Investments at

fair value of$10.0 million, CDOs and CLOs of$8.0 million and

Other ABS of$2.0 million due to greater pricing transparency

supporting classification into Level 2.

Transfers of liabilities of$11.5 million from Level 2 to Level 3 of

•Structured notes within Long-term debt of$13.2 million,

partially offset by net derivatives transfers into Level 3 of$2.0

million due to reduced market and pricing transparency.

Transfers of liabilities of$11.2 million from Level 3 to Level 2 of

•Net derivatives of$5.7 million and structured notes within

Long-term debt of$5.1 million due to greater pricing and

Netgains on Level 3 assets were$12.8 million and netlosses on

Level 3 liabilities were$32.9 million for the three months ended

May 31, 2025. Netgains on Level 3 assets were primarily due to

increased market values across Corporate equity securities,

Other ABS, Investments at fair value and Corporate debt

securities, partially offset by decreased market values of Loans

and other receivables and CDOs and CLOs. Netlosses on Level 3

liabilities were primarily due toincreased valuations of structured

notes within Long-term debt, partially offset by decreased

valuations of certain derivatives.

Analysis of Level 3 Assets and Liabilities for the Six Months Ended

May 31, 2025

Transfers of assets of$71.8 million from Level 2 to Level 3 of the

•Corporate equity securities of$30.3 million, Loan and other

receivables of$27.1 million, Corporate debt securities of$8.0

million, Other ABS of$3.3 million and CDOs and CLOs of$3.0

million due to reduced pricing transparency.

Transfers of assets of$129.0 million from Level 3 to Level 2 of

•Loans and other receivables of$54.1 million, Corporate equity

securities of$50.7 million, Investments at fair value of

$10.0 million, CDOs and CLOs of$8.4 million and Other ABS of

$4.4 million due to greater pricing transparency supporting

classification into Level 2.

Transfers of liabilities of$7.9 million from Level 2 to Level 3 of

•Net derivatives of$3.9 million and structured notes within

Long-term debt of$3.9 million due to reduced market and

Transfers of liabilities of$44.4 million from Level 3 to Level 2 of

•Structured notes within Long-term debt of$28.8 million and

Loans of$14.5 million due to greater pricing and market

transparency.

Netgains on Level 3 assets were$2.5 million and netgains on

Level 3 liabilities were$36.3 million for thesix months ended

May 31, 2025. Netgains on Level 3 assets were primarily due to

increased market values across Corporate equity securities,

Investments at fair value and Corporate debt securities, partially

offset by decreased valuations of CDOs and CLOs and Loans and

other receivables. Netgains on Level 3 liabilities were primarily

due todecreased valuations of structured notes within Long-term

debt, certain derivatives and loans.

(1)Realized and unrealized gains/losses are primarily reported in Principal transactions revenues. Changes in instrument-specific credit risk related to structured notes

within Long-term debt are presented net of tax in our Consolidated Statements of Comprehensive Income.

(2)Net derivatives represent Financial instruments owned—Derivatives and Financial instruments sold, not yet purchased—Derivatives.

Analysis of Level 3 Assets and Liabilities for the Three Months

Ended May 31, 2024

Transfers of assets of$99.2 million from Level 2 to Level 3 of the

•Other ABS of$61.9 million, Corporate debt securities of$17.3

million, Loan and other receivables of$11.4 million and

Corporate equity securities of$5.4 million due to reduced

Transfers of assets of$19.2 million from Level 3 to Level 2 of the

•Oher ABS of$6.3 million, Loans and other receivables of$6.2

million, CDOs and CLOs of$4.5 million and Corporate equity

securities of$2.5 million due to greater pricing transparency

supporting classification into Level 2.

Transfers of liabilities of$47.3 million from Level 2 to Level 3 of

•Structured notes within Long-term debt of$32.8 million and

Net derivatives of$15.9 million due to reduced market and

Transfers of liabilities of$43.5 million from Level 3 to Level 2 of

•Structured notes within Long-term debt of$30.1 million and

Net derivatives of$13.4 million due to greater pricing and

Netlosses on Level 3 assets were$9.5 million and netgains on

Level 3 liabilities were$12.8 million for the three months ended

May 31, 2024. Netlosses on Level 3 assets were primarily due to

decreased market values across Corporate equity securities and

Other ABS, partially offset by increased valuations of Investments

at fair value, Corporate debt securities, Loans and other

receivables and CDOs and CLOs. Netgains on Level 3 liabilities

were primarily due todecreased valuations of certain derivatives

and structured notes within Long-term debt.

Analysis of Level 3 Assets and Liabilities for the Six Months Ended

May 31, 2024

Transfers of assets of$59.1 million from Level 2 to Level 3 of the

•Other ABS of$47.6 million, Loan and other receivables of$6.1

million, CDOs and CLOs of$2.7 million and Corporate debt

securities of$2.6 million due to reduced pricing transparency.

Transfers of assets of$33.3 million from Level 3 to Level 2 of the

•RMBS of$14.6 million, Other ABS of$7.4 million, CDOs and

CLOs of$5.1 million, Corporate equity securities of$3.6 million

and Corporate debt securities of$2.0 million due to greater

pricing transparency supporting classification into Level 2.

Transfers of liabilities of$62.0 million from Level 2 to Level 3 of

•Structured notes within Long-term debt of$38.7 million and

Net derivatives of$23.2 million due to reduced market and

Transfers of liabilities of$50.9 million from Level 3 to Level 2 of

•Structured notes within Long-term debt of$34.7 million and

Net derivatives of$13.7 million due to greater pricing and

Netlosses on Level 3 assets were$55.0 million and netgains on

Level 3 liabilities were$4.0 million for thesix months ended May

31, 2024. Netlosses on Level 3 assets were primarily due to

decreased market values across Loans and other receivables,

Corporate equity securities, Investments at fair value and Other

ABS, partially offset by increased valuations of CDOs and CLOs

and Corporate debt securities. Netgains on Level 3 liabilities

were primarily due todecreased valuations of certain derivatives,

partially offset by increased valuations of structured notes within

Long-term debt and Other secured financings.

Significant Unobservable Inputs used in Level 3 Fair Value

Measurements

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 to the

inputs as disclosed in other periods 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.

The fair values of certain Level 3 assets and liabilities that were

determined based on third-party pricing information, unadjusted

past transaction prices or a percentage of the reported enterprise

fair value are excluded from the above tables. At May 31, 2025

and November 30, 2024, asset exclusions consisted of$49.8

million and$23.9 million, respectively, primarily composed of

Corporate equity securities, CDOs and CLOs, Corporate debt

securities, Investments at fair value, certain derivatives, Other

ABS and CMBS. At May 31, 2025 and November 30, 2024, liability

exclusions consisted of$4.3 million and$2.7 million,

respectively, primarily composed of CMBS, certain derivatives,

structured notes within Long-term debt, loans, corporate equity

securities and corporate debt securities.

Uncertainty of Fair Value Measurement from Use of Significant

Unobservable Inputs

For recurring fair value measurements categorized within Level 3

of the fair value hierarchy, the uncertainty of the fair value

measurement due to the use of significant unobservable inputs

and interrelationships between those unobservable inputs (if any)

are described below:

•Non-exchange-traded securities, corporate debt securities,

CDOs and CLOs, loans and other receivables, other ABS, private

equity securities, certain derivatives, other secured financings

and structured notes using a market approach valuation

technique. A significant increase (decrease) in the price of the

private equity securities, nonexchange-traded securities,

corporate debt securities, CDOs and CLOs, other ABS, loans

and other receivables, other secured financings or structured

notes would result in a significantly higher (lower) fair value

measurement. A significant increase (decrease) in the revenue

or revenue multiple related to private equity securities would

result in a significantly higher (lower) fair value measurement.

A significant increase (decrease) in the discount rate/security

yield related to private equity securities would result in a

significantly lower (higher) fair value measurement. Depending

on whether we are a receiver or (payer) of basis points upfront,

a significant increase in basis points would result in a

significant increase (decrease) in the fair value measurement

of options.

•Loans and other receivables, other ABS and other secured

financings using a scenario analysis valuation technique. A

significant increase (decrease) in the possible recovery rates

underlying the financial instrument would result in a

significantly higher (lower) fair value measurement for the

financial instrument.

•CDOs and CLOs, corporate debt securities, RMBS and other

ABS using a discounted cash flows valuation technique. A

significant increase (decrease) in isolation in the constant

default rate, loss severity or cumulative loss rate would result

in a significantly lower (higher) fair value measurement. The

impact of changes in the constant prepayment rate and

duration would have differing impacts depending on the capital

structure and type of security. A significant increase

(decrease) in the discount rate/security yield would result in a

significantly lower (higher) fair value measurement.

•Derivative equity options using volatility benchmarking. A

significant increase (decrease) in volatility would result in a

significantly higher (lower) fair value measurement.

Fair Value Option Election

For a description of our financial assets and liabilities for which

we have elected the fair value option, refer to our consolidated

Fair value option gains (losses):

(1)Other changes in fair value are included in Principal transactions revenues.

(2)Changes in fair value of structured notes related to instrument-specific credit

risk are presented net of tax in our Consolidated Statements of

Comprehensive Income.

Fair value option amounts by which contractual principal is

greater than (less than) fair value:

(1)Interest income is recognized separately from other changes in fair value and

is included in Interest revenues.

(2)Amounts include loans and other receivables 90 days or greater past due by

which contractual principal exceeds fair value of$50.3 million and$48.8

million at May 31, 2025 and November 30, 2024, respectively.

The aggregate fair value of loans and other receivables on

nonaccrual status and/or 90 days or greater past due was$68.4

million and$126.9 million at May 31, 2025 and November 30,

2024, respectively, which includes loans and other receivables 90

days or greater past due of$60.0 million and$120.0 million at

May 31, 2025 and November 30, 2024, respectively.

Assets Measured at Fair Value on a Non-recurring Basis

Our shares in Monashee, an equity method investment, were

measured at fair value on a nonrecurring basis during thesix

months ended May 31, 2024 and are not included in the tables

above. During thesix months ended May 31, 2024, we converted

our shares in Monashee to a newly created class of

nonmarketable preferred shares and remeasured our equity

method investment to a fair value of$21.9 million in connection

with the nonmonetary exchange and the preferred shares are

subsequently accounted for at cost pursuant to the

measurement alternative.

Financial Instruments Not Measured at Fair Value

Certain of our financial instruments are not carried at fair value

but are recorded at amounts that approximate fair value due to

their liquid or short-term nature and generally negligible credit

risk. These financial assets include Cash and cash equivalents

and Cash and securities segregated and on deposit for regulatory

purposes or deposited with clearing and depository organizations

and would generally be presented within Level 1 of the fair value

We have equity securities without readily determinable fair

values, which we account for at cost, minus impairment, which

are presented within Other assets and were$21.9 million at both

May 31, 2025 and November 30, 2024. There wereno

impairments and downward adjustments on these investments

during thethree and six months ended May 31, 2025 and 2024.

Note 7. Derivative Financial Instruments

Our derivative activities are recorded at fair value in Financial

instruments owned and Financial instruments sold, not yet

purchased, net of cash paid or received under credit support

agreements and on a net counterparty basis when a legally

enforceable right to offset exists under a master netting

agreement. We enter into derivative transactions to satisfy the

needs of our clients and to manage our own exposure to market

and credit risks. In addition, we apply hedge accounting to: (1)

interest rate swaps that have been designated as fair value

hedges of the changes in fair value due to the benchmark interest

rate for certain fixed rate senior long-term debt, and (2) forward

foreign exchange contracts designated as hedges to offset the

change in the value of certain net investments in foreign

operations.

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

International Swaps and Derivatives Association, Inc. master

netting agreements or similar agreements with counterparties.

(1)Exchange-traded derivatives include derivatives executed on an organized

exchange. Cleared OTC derivatives include derivatives executed bilaterally and

subsequently novated to and cleared through central clearing counterparties.

Bilateral OTC derivatives include derivatives executed and settled bilaterally

without the use of an organized exchange or central clearing counterparty.

(2)The number of exchange-traded contracts may include open futures

contracts. The unsettled fair value of these futures contracts is included in

Receivables from/Payables to brokers, dealers and clearing organizations.

(3)Amounts netted include both netting by counterparty and for cash collateral

paid or received.

(4)We have not received or pledged additional collateral under master netting

agreements and/or other credit support agreements that is eligible to be

offset beyond what has been offset in our Consolidated Statements of

Financial Condition.

(1)Exchange-traded derivatives include derivatives executed on an organized

exchange. Cleared OTC derivatives include derivatives executed bilaterally and

subsequently novated to and cleared through central clearing counterparties.

Bilateral OTC derivatives include derivatives executed and settled bilaterally

without the use of an organized exchange or central clearing counterparty.

(2)The number of exchange-traded contracts may include open futures

contracts. The unsettled fair value of these futures contracts is included in

Receivables from/Payables to brokers, dealers and clearing organizations.

(3)Amounts netted include both netting by counterparty and for cash collateral

paid or received.

(4)We have not received or pledged additional collateral under master netting

agreements and/or other credit support agreements that is eligible to be

offset beyond what has been offset in our Consolidated Statements of

Financial Condition.

Gains (losses) recognized in Interest expense related to fair value

hedges:

(1)Includes net settlements of$12.2 million and$24.1 million for thethree and

six months ended May 31, 2025, respectively, and$16.1 million and$32.0

million for thethree and six months ended May 31, 2024, respectively.

Gains (losses) on our net investment hedges recognized in

Currency translation and other adjustments, a component of

Other comprehensive income (loss):

Unrealized and realized gains (losses) on derivative contracts

recognized primarily in Principal transactions revenues, which are

utilized in connection with our client activities and our economic

risk management activities:

The net gains (losses) on derivative contracts in the table above

are one of a number of activities comprising our business

activities and are before consideration of economic hedging

transactions, which generally offset the net gains (losses)

included above. We substantially mitigate our exposure to market

risk on our cash instruments through derivative contracts, which

generally provide offsetting revenues, and we manage the risk

associated with these contracts in the context of our overall risk

management framework.

OTC Derivatives

Remaining contract maturities at May 31, 2025:

(1)At May 31, 2025, we held net exchange-traded derivative assets and liabilities

with a fair value of$834.1 million and$42.1 million, respectively, which are not

included in these tables.

(2)OTC derivative assets and liabilities in the tables above are gross of collateral

pledged. OTC derivative assets and liabilities are recorded net of collateral

pledged in our Consolidated Statements of Financial Condition. At May 31,

2025, cash collateral received and pledged was$284.4 million and$656.1

million, respectively.

(3)Derivative fair values include counterparty netting within product category.

(4)Amounts represent the netting of receivable balances with payable balances

for the same counterparty within product category across maturity categories.

OTC derivative assets at May 31, 2025:

(1)We utilize internal credit ratings determined by our Risk Management

department. Credit ratings determined by Risk Management use

methodologies that produce ratings generally consistent with those produced

by external rating agencies.

Credit Related Derivative Contracts

External credit ratings of the underlyings or referenced assets for

our written credit related derivative contracts:

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 following table presents the

aggregate fair value of all derivative instruments with such credit-

risk-related contingent features that are in a liability position, the

collateral amounts we have posted or received in the normal

course of business and the potential collateral we would have

been required to return and/or post additionally to our

counterparties if the credit-risk-related contingent features

underlying these agreements were triggered:

(1)These potential outflows include initial margin received from counterparties at

the execution of the derivative contract. The initial margin will be returned if

counterparties elect to terminate the contract after a downgrade.

Note 8. Collateralized Transactions

We receive securities as collateral under resale agreements,

securities borrowing transactions, customer margin loans, and in

connection with securities-for-securities transactions in which we

are the lender of securities. We also receive securities as initial

margin on certain derivative transactions. In many instances, we

are permitted by contract 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 May 31, 2025 and

November 30, 2024, the approximate fair value of securities

received as collateral by us that may be sold or repledged was

$45.53 billion and$37.63 billion, respectively. At May 31, 2025

and November 30, 2024, a substantial portion of the securities

received by us had been sold or repledged.

Securities Financing Agreements

To manage our exposure to credit risk associated with securities financing transactions, we may enter into master netting agreements

and collateral arrangements with counterparties. Generally, transactions are executed under standard industry agreements, including,

but not limited to, master securities lending agreements (securities lending transactions) and master repurchase agreements

(repurchase transactions).

(1)Under master netting agreements with our counterparties, we have the legal right of offset with a counterparty, which incorporates all of the counterparty’s outstanding

rights and obligations under the arrangement. These balances reflect additional credit risk mitigation that is available by a counterparty in the event of a counterparty’s

default, but which are not netted in our Consolidated Statements of Financial Condition because other netting provisions of U.S. GAAP are not met.

(2)Includes securities received or paid under collateral arrangements with counterparties that could be liquidated in the event of a counterparty default and thus offset

against a counterparty’s rights and obligations under the respective repurchase agreements or securities borrowing or lending arrangements.

(3)Includes$5.41 billion of securities borrowing arrangements, for which we have received securities collateral of$5.38 billion, and$560.0 million of repurchase

agreements, for which we have pledged securities collateral of$573.1 million, which are subject to master netting agreements, but we have not determined the

agreements to be legally enforceable.

(4)Includes$5.31 billion of securities borrowing arrangements, for which we have received securities collateral of$5.19 billion, and$645.0 million of repurchase

agreements, for which we have pledged securities collateral of$656.9 million, which are subject to master netting agreements, but we have not determined the

agreements to be legally enforceable.

Cash and Securities Segregated and on Deposit for Regulatory

Purposes or Deposited with Clearing and Depository

Organizations

Cash and securities segregated in accordance with regulatory

regulations and deposited with clearing and depository

organizations primarily consist of deposits in accordance with

Rule 15c3-3 of the Securities Exchange Act of 1934, which

subjects Jefferies LLC as a broker-dealer carrying customer

accounts to requirements related to maintaining cash or qualified

securities in segregated special reserve bank accounts for the

exclusive benefit of its customers.

Note 9. Securitization Activities

We engage in securitization activities related to corporate loans,

mortgage loans, consumer 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 portion of our securitization

transactions are the securitization of assets issued or

guaranteed by U.S. government agencies. These SPEs generally

meet the criteria of VIEs; however, we generally do not

consolidate the SPEs as we are not considered the primary

beneficiary for these SPEs. Refer to Note 10, Variable Interest

Entities for further discussion on VIEs 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 prior to

the identification and isolation for securitization. Subsequently,

revenues recognized upon securitization are reflected as net

underwriting revenues. 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

in the form of mortgage-backed and other-asset backed

securities or CLOs). These securities are included in Financial

instruments owned, at fair value and are generally initially

categorized as Level 2 within the fair value hierarchy.

Securitizations that were accounted for as sales in which we had

continuing involvement:

We have no explicit or implicit arrangements to provide additional

financial support to these SPEs, have no liabilities related to

these SPEs and do not have any outstanding derivative contracts

executed in connection with these securitization activities at

May 31, 2025 and November 30, 2024.

Our retained interests in SPEs where we transferred assets and

have continuing involvement and received sale accounting

treatment:

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

transactions 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 in total Financial

instruments owned in our Consolidated Statements of Financial

Condition.

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. To

the extent we purchased securities through these market-making

activities, and we are not deemed to be the primary beneficiary of

the VIE, these securities are included in agency and non-agency

mortgage-backed and asset-backed securitizations in the

nonconsolidated VIEs section presented in Note 10, Variable

Interest Entities.

Note 10. Variable Interest Entities

VIEs are entities in which equity investors lack the characteristics

of a controlling financial interest. VIEs are consolidated by the

primary beneficiary. The primary beneficiary is the party who has

both (1) the power to direct the activities of a VIE that most

significantly impact the entity’s economic performance and (2)

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.

Our variable interests in VIEs include debt and equity interests,

commitments, guarantees and certain fees. Our involvement with

VIEs arises primarily from:

•Purchases of securities in connection with our trading and

secondary market making activities;

•Retained interests held as a result of securitization activities;

•Acting as placement agent and/or underwriter in connection

with client-sponsored securitizations;

•Financing of agency and non-agency mortgage-backed and

other asset-backed securities;

•Acting as servicer for a fee to automobile loan financing

vehicles;

•Warehouse funding arrangements for client-sponsored

consumer and mortgage loan vehicles and CLOs through

participation agreements, forward sale agreements, reverse

repurchase agreements, and revolving loan and note

commitments; and

•Loans to, investments in and fees from various investment

vehicles.

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 judgment. Our considerations in

determining the VIE’s most significant activities and whether we

have power to direct those activities include, but are not limited

to, the VIE’s purpose and design and the risks passed through to

investors, the 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 significant activities is shared, we assess

whether we are the party with the power over the most significant

activities. If we are the party with the power over the most

significant activities, we meet the “power” criteria of the primary

beneficiary. If we do not have the power over the most 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 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.

Consolidated VIEs:

(1)Assets and liabilities are presented prior to consolidation and thus a portion of

these assets and liabilities are eliminated in consolidation.

(2)Securities purchased under agreements to resell primarily represent amounts

due under collateralized transactions from related consolidated entities, which

are all eliminated in consolidation.

(3)$0.8 million and$1.5 million of receivables from brokers at May 31, 2025 and

November 30, 2024, respectively, are with related consolidated entities, which

are eliminated in consolidation.

(4)$3.6 million and$3.4 million of the other assets at May 31, 2025 and

November 30, 2024, respectively, represent intercompany receivables with

related consolidated entities, which are eliminated in consolidation.

(5)$734.0 million and$719.0 million of the other secured financings at May 31,

2025 and November 30, 2024, respectively, are with related consolidated

entities and are eliminated in consolidation.

(6)$24.8 million and$22.0 million of the other liabilities amounts at May 31, 2025

and November 30, 2024, respectively, are with related consolidated entities,

which are eliminated in consolidation.

Secured Funding Vehicles. We are the primary beneficiary of

asset-backed financing vehicles to which we sell agency and non-

agency residential and commercial mortgage loans, and asset-

backed securities pursuant to the terms of a master repurchase

agreement. Our variable interests in these vehicles consist of our

collateral margin maintenance obligations under the master

repurchase agreement, which we manage, and retained interests

in securities issued. The assets of these VIEs consist of reverse

repurchase agreements, which are available for the benefit of the

vehicle’s debt holders. In addition, we also from time to time

securitize other financial instruments and own variable interests

in the securitization vehicles to the extent that we consolidate

such vehicles.

Other. We are the primary beneficiary of certain investment

vehicles that we manage for external investors and certain

investment vehicles set up for the benefit of our employees as

well as investment vehicles managed by third parties where we

have a controlling financial interest. The assets of these VIEs

consist primarily of equity securities and broker receivables. Our

variable interests in these vehicles consist of equity securities,

management and performance fees and revenue share. The

creditors of these VIEs do not have recourse to our general credit

and each such VIE’s assets are not available to satisfy any other

debt.

We are the primary beneficiary of a real estate syndication entity

that develops multi-family residential property and manages the

property. The assets of the VIE consist primarily of real estate

and its liabilities primarily consist of accrued expenses and long-

term debt secured by the real estate property. Our variable

interest in the VIE primarily consists of our limited liability

company interest, a sponsor promote and development and

asset management fees for managing the project.

We are the primary beneficiary of special purpose vehicles that

hold risk retention notes issued as part of unsecured loan asset-

backed transactions. Our variable interest in the VIEs primarily

consists of our ownership of certificates issued by the VIEs.

Nonconsolidated VIEs

Our maximum exposure to loss often differs from the carrying

value of the variable interests. The maximum exposure to loss is

dependent on the nature of our variable interests in the VIEs and

is limited to the notional amounts of certain loan and equity

commitments and guarantees. Our maximum exposure to loss

does not include the offsetting benefit of any financial

instruments that may be utilized to hedge the risks associated

with our variable interests and is not reduced by the amount of

collateral held as part of a transaction with a VIE.

Collateralized Loan Obligations. Assets collateralizing the CLOs

include bank loans, participation interests, sub-investment grade

and senior secured U.S. loans, and senior secured Euro-

denominated corporate leveraged loans and bonds. We

underwrite securities issued in CLO transactions on behalf of

sponsors and provide advisory services to the sponsors. We may

also sell corporate loans to the CLOs. Our variable interests in

connection with CLOs where we have been involved in providing

underwriting and/or advisory services consist of the following:

•Forward sale agreements whereby we commit to sell, at a fixed

price, corporate loans and ownership interests in an entity

holding such corporate loans to CLOs;

•Warehouse funding arrangements in the form of:

◦Participation interests in corporate loans held by CLOs and

commitments to fund such participation interests;

◦Reverse repurchase agreements with collateral margin

maintenance obligations and commitments to fund such

reverse repurchase agreements; and

◦Senior and subordinated notes issued in connection with

CLO warehousing activities.

•Trading positions in securities issued in CLO transactions; and

•Investments in variable funding notes issued by CLOs.

Asset-Backed Vehicles. We provide financing and lending related

services to certain client-sponsored VIEs in the form of revolving

funding note agreements, revolving credit facilities, forward

purchase agreements and reverse repurchase agreements. We

also may transfer originated corporate loans to certain VIEs and

hold subordinated interests issued by the vehicle. The underlying

assets, which are collateralizing the vehicles, are primarily

composed of unsecured consumer loans, mortgage loans and

corporate loans. In addition, we may provide structuring and

advisory services and act as an underwriter or placement agent

for securities issued by the vehicles. We do not control the

activities of these entities.

Related Party Private Equity Vehicles. We have committed to

invest in private equity funds, (the “JCP Funds”, including JCP

Fund V (refer to Note 11, Investments for further information))

managed by Jefferies Capital Partners, LLC (the “JCP Manager”).

Additionally, we have committed to invest in the general partners

of the JCP Funds (the “JCP General Partners”) and the JCP

Manager. Our variable interests in the JCP Funds, JCP General

Partners and JCP Manager (collectively, the “JCP Entities”)

consist of equity interests that, in total, provide us with limited

and general partner investment returns of the JCP Funds, a

portion of the carried interest earned by the JCP General Partners

and a portion of the management fees earned by the JCP

Manager. At both May 31, 2025 and November 30, 2024, our total

equity commitment in the JCP Entitieswas$133.0 million, of

which$123.2 million had been funded. The carrying value of our

equity investments in the JCP Entities was$2.8 million and$3.2

million at May 31, 2025 and November 30, 2024, respectively. Our

exposure to loss is limited to the total of our carrying value and

unfunded equity commitment. The assets of the JCP Entities

primarily consist of private equity and equity related investments.

At both May 31, 2025 and November 30, 2024, we had also

committed to invest$1.0 million, of which$0.6 million was

funded in a private equity fund managed by us for the benefit of

our employees. The carrying value of our equity was$0.6 million

and$0.5 million at May 31, 2025 and November 30, 2024,

Other Investment Vehicles. At May 31, 2025 and November 30,

2024, we had equity commitments to invest$1.59 billion and

$1.43 billion, respectively, in various other investment vehicles, of

which$1.37 billion and$1.17 billion was funded, respectively.

The carrying value of our equity investments was$1.39 billion

and$1.11 billion at May 31, 2025 and November 30, 2024,

respectively. Our exposure to loss is limited to the total of our

carrying value and unfunded equity commitment. These

investment vehicles have assets primarily consisting of private

and public equity investments, debt instruments, trade and

insurance claims and various oil and gas assets.

Mortgage-Backed and Other Asset-Backed Secured Funding

Vehicles. In connection with our secondary trading and market-

making activities, we buy and sell agency and non-agency

mortgage-backed securities and other asset-backed securities,

which are issued by third-party securitization SPEs and are

generally considered variable interests in VIEs. Securities issued

by securitization SPEs are backed by residential mortgage loans,

U.S. agency collateralized mortgage obligations, commercial

mortgage loans, CDOs and CLOs and other consumer loans, such

as installment receivables, automobile loans and student loans.

These securities are accounted for at fair value and included in

Financial instruments owned. We have no other involvement with

the related SPEs and therefore do not consolidate these entities.

We also engage in underwriting, placement and structuring

activities for third-party-sponsored securitization trusts generally

through agency (Fannie Mae, Federal Home Loan Mortgage

Corporation (“Freddie Mac”) or Ginnie Mae) or non-agency-

sponsored SPEs and may purchase loans or mortgage-backed

securities from third-parties that are subsequently transferred

into the securitization trusts. The securitizations are backed by

residential and commercial mortgage, home equity and

automobile loans. We do not consolidate agency-sponsored

securitizations as we do not have the power to direct the

activities of the SPEs that most significantly impact their

economic performance. Further, we are not the servicer of non-

agency-sponsored securitizations and therefore do not have

power to direct the most significant activities of the SPEs and

accordingly, do not consolidate these entities. We may retain

unsold senior and/or subordinated interests at the time of

securitization in the form of securities issued by the SPEs.

At May 31, 2025 and November 30, 2024, we held $1.80 billion

and$1.84 billion of agency mortgage-backed securities,

respectively, and$153.7 million and$201.1 million of non-agency

mortgage-backed and other asset-backed securities, respectively,

as a result of our secondary trading and market-making activities,

and underwriting, placement and structuring activities. Our

maximum exposure to loss on these securities is limited to the

carrying value of our investments in these securities. These

mortgage-backed and other asset-backed secured funding

vehicles discussed are not included in the above table containing

information about our variable interests in nonconsolidated VIEs.

Note 11. Investments

Investments for which we exercise significant influence over the

investee are accounted for under the equity method of

accounting with our shares of the investees’ earnings recognized

in Other revenues. Equity method investments, including any

loans to the investees, are reported within Investments in and

loans to related parties.

The following presents summarized financial information about

our significant equity method investees. For certain investees, we

receive financial information on a lag and the summarized

information provided for these investees is based on the latest

financial information available as of May 31, 2025, November 30,

2024 and May 31, 2024.

Jefferies Finance

Jefferies Finance, our 50/50 joint venture with Massachusetts

Mutual Life Insurance Company (“MassMutual”) structures,

underwrites and syndicates primarily senior secured loans to

corporate borrowers; and manages proprietary and third-party

investments in both broadly syndicated and direct lending loans.

In connection with its Leveraged Finance business, loans are

originated primarily through our investment banking efforts and

Jefferies Finance typically syndicates to third-party investors

substantially all of its arranged volume through us. The Asset

Management business is a multi-strategy private credit platform

that manages proprietary and third-party capital across

commingled funds, funds-of-one, separately managed accounts,

business development companies, CLOs and levered balance

sheet funds. Broadly syndicated loan investments are sourced

through transactions arranged by Jefferies Finance and third-

party arrangers and managed through its subsidiary, Apex Credit

Partners LLC. Direct lending investments are primarily sourced

through us. Jefferies Finance and its subsidiaries that are

involved in investment management are registered investment

advisers with the SEC.

At May 31, 2025, we and MassMutual each had equity

commitments to Jefferies Finance of$750.0 million, for a

combined total commitment of$1.5 billion. The equity

commitment is reduced quarterly based on our share of any

undistributed earnings from Jefferies Finance and the

commitment is increased only to the extent the share of such

earnings are distributed. At May 31, 2025, our unfunded

commitment to Jefferies Finance was$15.4 million. The

investment commitment is scheduled to expire on March 1, 2026

with automaticone year extensions absent 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, which 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 Secured Revolving Credit

Facility is a committed amount of$500.0 million at May 31, 2025.

Advances are shared equally between us and MassMutual. The

facility is scheduled to mature on March 1, 2026 with automatic

one year extensions absent a 60 day termination notice by either

party. At May 31, 2025, our$250.0 million commitment was

undrawn.

Activity related to the facility:

Selected financial information for Jefferies Finance:

Activity related to our other transactions with Jefferies Finance:

(1)We engage in the origination and syndication of loans underwritten by

Jefferies Finance. In connection with such services, we earned fees, which are

recognized in Investment banking revenues. In addition, we paid fees to

Jefferies Finance in respect of certain loans originated by Jefferies Finance,

which are recognized as Business development expenses.

(2)We act as a placement and/or structuring agent for CLOs managed by

Jefferies Finance, for which we recognized fees and are included in

Investment banking revenues.

(3)We receive fees from Jefferies Finance, which are recognized in Commissions

and other fees, in connection with placement and referral activities.

(4)Under a fee and revenue sharing agreement with Jefferies Finance, we receive

fees which are included in Asset management fees and revenues.

(5)Under a service agreement, we charge Jefferies Finance for various

administrative services provided.

In connection with non-U.S. dollar loans originated by Jefferies

Finance to borrowers who are investment banking clients of ours,

we have entered into an agreement to indemnify Jefferies

Finance with respect to any foreign currency exposure.

Receivables from Jefferies Finance, included in Other assets,

were$0.3 million and$1.9 million at May 31, 2025 and

November 30, 2024, respectively, and payables to Jefferies

Finance, included in Accrued expenses and other liabilities, were

$0.7 million at May 31, 2025. Additionally, a payable to Jefferies

Finance, related to cash deposited with us and included in

Payables to customers, was$1.0 million and$13.7 million at

May 31, 2025 and November 30, 2024, respectively.

Berkadia

Berkadia is a commercial real estate finance and investment

sales joint venture that was formed by us and Berkshire

Hathaway Inc. We are entitled to receive 45.0% of the profits of

Berkadia. Berkadia originates commercial and multifamily real

estate loans that are sold to U.S. government agencies or other

investors with Berkadia retaining the servicing rights. Berkadia

also provides advisory services in connection with sales of

multifamily assets. Berkadia is a servicer of commercial real

estate loans in the U.S., performing primary, master and special

servicing functions for U.S. government agency programs and

financial services companies.

Commercial paper issued by Berkadia is supported by a

$1.50 billion surety policy issued by a Berkshire Hathaway

insurance subsidiary and corporate guaranty, and we have

agreed to reimburse Berkshire Hathaway for one-half of any

losses incurred thereunder. At May 31, 2025, the aggregate

amount of commercial paper outstanding was$1.47 billion.

Selected financial information for Berkadia:

At May 31, 2025 and November 30, 2024, we had commitments

to purchase$17.4 million and$21.8 million, respectively, of

agency CMBS from Berkadia.

Revenues from other transactions with Berkadia for the six

months ended May 31, 2025 were$0.1 million. Revenues and

expenses from other transactions with Berkadia for both the

three and six months ended May 31, 2024 were$0.3 million and

$0.4 million, respectively.

Real Estate Investments

Our real estate equity method investments primarily consist of

our equity interests in Brooklyn Renaissance Plaza and Hotel and

54 Madison. Brooklyn Renaissance Plaza is composed of a hotel,

office building complex and parking garage located in Brooklyn,

New York. We have a 25.4% equity interest in the hotel and a

61.3% equity interest in the office building and garage. Although

we have a majority interest in the office building and garage, we

do not have control, but only have the ability to exercise

significant influence on this investment. We are amortizing our

basis difference between the estimated fair value and the

underlying book value of Brooklyn Renaissance office building

and garage over the respective useful lives (weighted average life

of 39 years).

We own a 48.1% equity interest in 54 Madison, a fund that most

recently owned an interest in one real estate project and the fund

is in the process of being liquidated.

Selected financial information for our significant real estate

investments:

JCP Fund V

We have limited partnership interestsof 11% and 50% in Jefferies

Capital Partners V L.P. and Jefferies SBI USA Fund L.P. (together,

“JCP Fund V”), respectively, which are private equity funds

managed by a team led by our President and which are in the

process of being fully liquidated. The amount of our investments

in JCP Fund V included in Financial instruments owned, at fair

value was$2.7 million and$2.9 million at May 31, 2025 and

November 30, 2024, respectively. We account for these

investments at fair value based on the NAV of the funds provided

by the fund managers. The following summarizes the results

from these investments which are included in Principal

transactions revenues:

At both May 31, 2025 and November 30, 2024, we were

committed to invest equity of up to$85.0 million in JCP Fund V.

At both May 31, 2025 and November 30, 2024, our unfunded

commitment relating to JCP Fund V was$8.7 million. We do not

expect any further capital to be called by JCP Fund V.

The following is a summary of the Net change in net assets

resulting from operations for 100.0% of JCP Fund V, in which we

owned effectively 35.1% at May 31, 2025 of the combined equity

interests:

(1)Financial information for JCP Fund V within our results of operations for the

three months and six months ended May 31, 2025 and 2024 is included based

on the periods presented.

Hildene

In July 2024, we invested$25.0 million in the Class A Common

Equity Units of Hildene Insurance Holdings, LLC (“Hildene

Insurance”), an investment fund with insurance exposures. On

March 1, 2025, we made an additional investment of

$75.0 million in Hildene Insurance, which resulted in an increase

of our effective ownership from 8.83% to 23.5%. The investment

is accounted for under the equity method with a carrying amount

of$104.2 million and$27.5 million at May 31, 2025 and

Selected financial information for Hildene Insurance:

(1)Financial information for Hildene Insurance Holdings, LLC included in our

financial position at May 31, 2025 and November 30, 2024 is based on the

dates presented, and in our results of operations for thethree and six months

ended May 31, 2025 is based on the periods presented.

ApiJect

We own shares that represent a 33.6% economic interest in

ApiJect at both May 31, 2025 and at November 30, 2024, which

are accounted for at fair value by electing the fair value option

available under U.S. GAAP, and are included within corporate

equity securities in Financial instruments owned, at fair value. At

both May 31, 2025 and November 30, 2024, the total fair value of

our total equity investment in common shares of ApiJect was

$116.1 million, which is classified within Level 3 of the fair value

Additionally, we own warrants to purchase up to 950,000 shares

of common stock at any time or from time to time on or before

April 15, 2032, and we have a right to 1.125% of ApiJect’s future

revenues.

We also have a term loan agreement with a principal of ApiJect

for$23.3 million, which will mature on July 31, 2025. The loan is

accounted for at amortized cost and is reported within Other

assets. The loan has a fair value of$23.3 million at both May 31,

2025 and November 30, 2024, which would be classified as Level

3 in the fair value hierarchy.

Aircadia

In December 2023, Aircadia Leasing II LLC (“Aircadia”), a wholly

owned subsidiary, purchased airplanes and simultaneously

entered into a lease with the seller to lease the airplanes for a

term of 42 months. The transaction was accounted for as a sale

leaseback and the airplanes were recorded within Premises and

equipment at$57.7 million.

Also in December 2023, we provided a loan to the seller for

$30.0 million, which was paid off on April 1, 2025. The loan was

accounted for at amortized cost and included within Investments

in and loans to related parties. We recognized interest income of

$0.2 million and$1.0 million on the loan during the three months

and six months ended May 31, 2025, respectively, and

$0.8 million and$1.4 million during the three months and six

months ended May 31, 2024, respectively. We also hold preferred

shares in the seller, which are accounted for at fair value in

Financial instruments owned with a fair value of$41.8 million

and$37.1 million at May 31, 2025 and November 30, 2024,

respectively, and are classified within Level 3 of the fair value

In September 2024, we provided a€15.0 million loan, maturing in

November 2025, to an individual related to the seller, secured by

a privately owned aircraft and guaranteed by the individual. We

recognized interest income of$0.5 million and$0.9 million for

the three months and six months ended May 31, 2025,

During 2024, we classified the airplanes related to the sale

leaseback transaction as held for sale. Effective with the

designation of the airplanes as held for sale, we suspended

recording depreciation on these assets. The airplanes are

included within Assets held for sale on our Consolidated

Statements of Financial Condition and had a carrying amount of

$51.9 million at November 30, 2024. During the second quarter of

2025, we agreed to sell the airplanes and we recognized a loss of

$12.8 million during the three months ended May 31, 2025. The

sale is expected to close in the third quarter of 2025.

Note 12. Credit Losses on Financial Assets Measured at

Amortized Cost

Secured Financing Receivables. In evaluating secured financing

receivables (reverse repurchases agreements, securities

borrowing arrangements, and margin loans), the underlying

collateral maintenance provisions are taken into consideration.

The underlying contractual collateral maintenance for

significantly all of our secured financing receivables requires that

the counterparty continually adjust the collateralization amount,

securing the credit exposure on these contracts. Collateralization

levels for our secured financing receivables are initially

established based upon the counterparty, the type of acceptable

collateral that is monitored daily and adjusted to mitigate the

potential of any credit losses. Credit losses are not recognized

for secured financing receivables where the underlying

collateral’s fair value is equal to or exceeds the asset’s amortized

cost basis. In cases where the collateral’s fair value does not

equal or exceed the amortized cost basis, the allowance for

credit losses, if any, is limited to the difference between the fair

value of the collateral at the reporting date and the amortized

cost basis of the financial assets.

Broker Receivables. Our receivables from brokers, dealers, and

clearing organizations include deposits of cash with exchange

clearing organizations to meet margin requirements, amounts

due from clearing organizations for daily variation settlements,

securities failed-to-deliver or receive and receivables and

payables for fees and commissions. These receivables generally

do not give rise to material credit risk and have a remote

probability of default either because of their short-term nature or

due to the credit protection framework inherent in the design and

operations of brokers, dealers and clearing organizations. As

such, generally, no allowance for credit losses is held against

these receivables.

Investment Banking Fee Receivables. Our allowance for credit

losses on our investment banking fee receivables uses a

provisioning matrix based on the shared risk characteristics and

historical loss experience for such receivables. In some

instances, we may adjust the allowance calculated based on the

provision matrix to incorporate a specific allowance based on the

unique credit risk profile of a receivable. The provisioning matrix

is periodically updated to reflect changes in the underlying

portfolio’s credit characteristics and most recent historical loss

data.

Allowance for credit losses for investment banking receivables:

(1)Substantially all of the allowance for doubtful accounts relate to mergers and

acquisitions and restructuring fee receivables, which include recoverable

expense receivables.

Other Financial Assets. For all other financial assets measured at

amortized cost, we estimate expected credit losses over the

financial assets’ life as of the reporting date based on relevant

information about past events, current conditions, and

reasonable and supportable forecasts. During thesix months

ended May 31, 2024, we recognized bad debt expense of

$26.2 million related to receivables associated with our asset

management arrangements with Weiss Multi-Strategy Advisers.

Note 13. Goodwill and Intangible Assets

Goodwill

(1)Relates to a measurement period adjustment recorded during the second

quarter of 2025 attributable to the Go Internet acquisition. Refer to Note 4,

Business Acquisitions for further discussion.

(1)Includes a$27.0 million measurement period adjustment recorded during the

first quarter of 2024 related to the OpNet acquisition. Refer to Note 4,

Business Acquisitions for further discussion.

Carrying values of goodwill by reporting unit:

Intangible Assets

(1)Includes a$39.3 million measurement period adjustment recorded during the

first quarter of 2024 related to the OpNet acquisition. Refer to Note 4,

Business Acquisitions for further information.

Amortization Expense

For finite life intangible assets, we recognized aggregate

amortization expense of$8.6 million and$16.4 million for the

three months six months ended May 31, 2025, respectively, and

$8.5 million and $14.1 million for the three months six months

ended May 31, 2024, respectively. These expenses are included

in Depreciation and amortization.

Estimated future amortization expense for the next five fiscal

years (in thousands):

Note 14. Revenues from Contracts with Customers

(1)There was an immaterial correction associated with classification of certain

revenue as revenue from contracts with customers, which resulted in

decreases of$58.9 million and$122.3 million in other revenue and increases

of$58.9 million and$122.3 million in internet connection and broadband

revenues for the three and six months ended May 31, 2024, respectively.

Disaggregation of Revenue

(1)Revenues from contracts with customers associated with the equities and

fixed income businesses primarily represent commissions and other fee

revenue.

(2)There was an immaterial correction associated with classification of certain

revenue as revenue from contracts with customers, which resulted in

increases of$58.9 million and$122.3 million in Other Investments within

major business activities and increases of$58.9 million and$122.3 million in

Europe and the Middle East under primary geographic regions for the three

and six months ended May 31, 2024, respectively.

Information on Remaining Performance Obligations and Revenue

Recognized from Past Performance

We do not disclose information about remaining performance

obligations pertaining to contracts that have an original expected

duration of one year or less. The transaction price allocated to

remaining unsatisfied or partially unsatisfied performance

obligations with an original expected duration exceeding one year

was not material at May 31, 2025. Investment banking advisory

fees that are contingent upon completion of a specific milestone

and fees associated with certain distribution services are also

excluded as the fees are considered variable and not included in

the transaction price.

During thethree and six months ended May 31, 2025, we

recognized$10.1 million and$64.9 million, respectively,

compared with$16.7 million and$25.6 million during thethree

and six months ended May 31, 2024, respectively, of revenue

related to performance obligations satisfied (or partially

satisfied) in previous periods, mainly due to resolving

uncertainties in variable consideration that was constrained in

prior periods. In addition, three and six months ended May 31,

2025, we recognized$7.7 million and$15.5 million, respectively,

compared with$8.9 million and$15.2 million during thethree

and six months ended May 31, 2024, respectively, of revenues

primarily associated with distribution services, a portion of which

relates to prior periods.

Contract Balances

The timing of our revenue recognition may differ from the timing

of payment by our customers. We record a receivable when

revenue is recognized prior to payment and we have an

unconditional right to payment. Alternatively, when payment

precedes the provision of the related services, we record deferred

revenue until the performance obligations are satisfied.

Our deferred revenue primarily relates to retainer and milestone

fees received in investment banking advisory engagements

where the performance obligation has not yet been satisfied.

Deferred revenue at May 31, 2025 and November 30, 2024 was

$87.8 million and$79.1 million, respectively, which is recorded in

Accrued expenses and other liabilities. During thethree and six

months ended May 31, 2025, we recognized revenues of$25.5

million and$38.5 million, respectively, compared with$36.4

million and$32.9 million for thethree and six months ended May

31, 2024, respectively, that were recorded as deferred revenue at

the beginning of the periods.

We had receivables related to revenues from contracts with

customers of$289.4 million and$275.9 million at May 31, 2025

and November 30, 2024, respectively.

Contract Costs

We capitalize costs to fulfill contracts associated with

investment banking advisory engagements where the revenue is

recognized at a point in time and the costs are determined to be

recoverable. Capitalized costs to fulfill a contract are recognized

at the point in time that the related revenue is recognized.

At May 31, 2025 and November 30, 2024, capitalized costs to

fulfill a contract were$7.4 million and$5.8 million, respectively,

which are recorded in Receivables – Fees, interest and other.

During thethree and six months ended May 31, 2025, we

recognized expenses of$1.4 million and$1.7 million, compared

with$1.3 million and$2.0 million during thethree and six months

ended May 31, 2024, related to costs to fulfill a contract that

were capitalized as of the beginning of the period. There were no

significant impairment charges recognized in relation to these

capitalized costs during thethree and six months ended May 31,

2025 and May 31, 2024.

Note 15. Compensation Plans

For a description of Restricted Stock, Restricted Stock Units, the

Senior Executive Compensation Plan and other compensation

plans refer to Note 15. Compensation Plans in our consolidated

At May 31, 2025, there were approximately 2.2 million shares of

restricted stock outstanding with future service required,

4.4 million RSUs outstanding with future service required

(including target RSUs that may be issued under the senior

executive compensation plan),9.7 million RSUs outstanding with

no future service required, and 5.1 million stock options

outstanding. The maximum potential increase to common shares

outstanding resulting from these outstanding awards is

19.2 million at May 31, 2025.

In December 2024, the Compensation Committee of our Board of

Directors granted RSUs and performance stock units (“PSUs”) to

each of our senior executives as follows:

(1)ROTE is defined as return on tangible equity measured over three years.

(2)Performance below an ROTE of 7.5% results in forfeiture of all PSUs. An ROTE

of 15% or greater results in earning 150% of target PSUs and between 7.5% to

15%, the level of earning PSUs is linearly interpolated.

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.

Restricted cash awards are subject to ratable vesting terms with

service requirements. These awards are amortized as

compensation expense over the relevant service period, which is

generally considered to start at the beginning of the annual

compensation year.

Components of total compensation cost associated with certain

of our compensation plans:

(1)Total compensation cost associated with restricted stock and RSUs includes

the amortization of sign-on, retention and senior executive awards, less

forfeitures and clawbacks.

Remaining unamortized amounts related to certain

compensation plans at May 31, 2025:

(1)The remaining unamortized amount is included within Other assets.

Note 16. Borrowings

Short-Term Borrowings

(1)Short-term borrowings mature in one year or less and are recorded at cost,

which is a reasonable approximation of their fair values due to their liquid and

short-term nature.

At May 31, 2025 and November 30, 2024, the weighted average

interest rate on bank loans outstanding is 5.50% and 6.25% per

annum, respectively.

Our borrowings include credit facilities that contain certain

covenants that, among other things, require us to maintain a

specified level of tangible net worth, require a minimum

regulatory net capital requirement for our U.S. broker-dealer,

Jefferies LLC, and impose certain restrictions on the future

indebtedness of certain of our subsidiaries that are borrowers.

Interest is based on rates at spreads over the federal funds rate

or other adjusted rates, as defined in the various credit

agreements, or at a rate as agreed between the bank and us in

reference to the bank’s cost of funding. At May 31, 2025, we were

in compliance with all covenants under these credit facilities.

Long-Term Debt

(1)Structured notes have various interest rate payment terms and are accounted for at fair value, with changes in fair value resulting from non-credit components

recognized in Principal transactions revenues. The structured notes are classified as Level 2 or Level 3 in the fair value hierarchy. All of our long-term debt with exception

of certain of the structured notes would be classified as Level 2 in the fair value hierarchy.

(2)Carrying values of certain unsecured borrowings, totaling$2.06 billion and$2.04 billion for May 31, 2025 and November 30, 2024, respectively, include cumulative

hedging adjustments of$175.0 million and$193.7 million at May 31, 2025 and November 30, 2024, respectively, associated with interest rate swaps based on

designation as fair value hedges. Refer to Note 7, Derivative Financial Instruments for further information.

(3)Carrying values include unamortized discounts and premiums, valuation adjustments and debt issuance costs. At May 31, 2025 and November 30, 2024, our borrowings

under several credit facilities classified within Long-term debt amounted to$1.20 billion and$775.3 million, respectively. Interest on these credit facilities is based on an

adjusted Secured Overnight Financing Rate (“SOFR”) plus a spread or other adjusted rates, as defined in the various credit agreements. Additionally, certain of our

borrowings are under agreements containing covenants that, among other things, require us to maintain specified levels of tangible net worth and liquidity amounts,

certain credit and rating levels and impose certain restrictions on future indebtedness of and require specified levels of regulated capital and cash reserves for certain of

our subsidiaries. At May 31, 2025, we were in compliance with all covenants under theses credit agreements.

(4)Interest rates exclude structured notes.

During thesix months ended May 31, 2025, long-term debt

increased by$1.82 billion to$15.35 billion at May 31, 2025

primarily due to proceeds of$350.0 million from the drawdown

of an unsecured credit facility,$874.5 million from the issuances

of unsecured senior notes,$438.1 million from net issuances of

structured notes,$690.0 million from increased subsidiaries

borrowings and$237.2 million from currency losses on foreign

currency borrowings. These increases were partially offset by

repayments of$666.9 million on unsecured senior notes and

$116.9 million of valuation gains on structured notes.

Note 17. Total Equity

Common Stock

At May 31, 2025 and November 30, 2024, we had 565,000,000

authorized shares of voting common stock with a par value of

$1.00 per share. At May 31, 2025 and November 30, 2024, we

had outstanding 206,271,769 common shares and 205,504,272

common shares outstanding, respectively.

The Board of Directors has authorized the repurchase of

common stock up to$250.0 million under a share repurchase

program. Treasury stock repurchases during thethree and six

months ended May 31, 2025 represent repurchases of common

stock for net-share tax withholding under our equity

compensation plan.

Non-Voting Convertible Preferred Shares

On April 27, 2023, we established Series B Non-Voting

Convertible Preferred Shares with a par value of$1.00 per share

(“Series B Preferred Stock”) and designated 70,000 shares as

Series B Preferred Stock. The Series B Preferred Stock has a

liquidation preference of$17,500 per share and rank senior to our

voting common stock upon dissolution, liquidation or winding up

of Jefferies Financial Group Inc. Each share of Series B Preferred

Stock is automatically convertible into 500 shares of non-voting

common stock, subject to certain anti-dilution adjustments, three

years after issuance. The Series B Preferred Stock participates in

cash dividends and distributions alongside our voting common

stock on an as-converted basis.

Additionally, on April 27, 2023, we entered into an Exchange

Agreement with Sumitomo Mitsui Banking Corporation (“SMBC”),

which entitles SMBC to exchange shares of our voting common

stock for shares of the Series B Preferred Stock at a rate of 500

shares of voting common stock for one share of Series B

Preferred Stock. The Exchange Agreement is limited to 55,125

shares of Preferred Stock and SMBC will pay$1.50 per share of

voting common stock so exchanged. As of November 30, 2024,

SMBC had cumulatively exchanged approximately 27.6 million

shares of voting common stock for 55,125 shares of Series B

Preferred Stock. Following this exchange, SMBC increased its

ownership of our common stock on an as-converted basis and

fully-diluted, as-converted basis. As a result, the CEO of

Sumitomo Mitsui Financial Group, Inc. was elected and now

serves on our Board of Directors. On September 19, 2024, SMBC

purchased 9.2 million shares of our common stock. At May 31,

2025, SMBC owns approximately 15.7% of our common stock on

an as-converted basis and 14.5% on a fully-diluted, as-converted

basis. Refer to Note 22, Related Party Transactions for further

information regarding transactions with SMBC.

Earnings Per Common Share

Basic and diluted earnings per common share amounts were calculated by dividing net earnings by the weighted-average number of

common shares outstanding. The numerators and denominators used to calculate basic and diluted earnings per common share are as

follows:

(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 certain preferred stock, restricted stock and RSUs for

which requisite service has not yet been rendered and amounted to weighted average shares of 27.6 million for both thethree and six months

ended May 31, 2025, respectively, compared with 21.1 million and 21.2 million for thethree and six months ended May 31, 2024,

respectively. Dividends paid on participating securities were$11.0 million and$22.1 million for thethree and six months ended May 31, 2025,

respectively, and$6.3 million and$12.6 million for thethree and six months ended May 31, 2024, 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.

(2)Certain securities have been excluded as they would be antidilutive. However, these securities could potentially dilute earnings per share in the

future. Antidilutive shares at May 31, 2025 and was 13.4% of the weighted average common shares outstanding for both thethree and six months

ended May 31, 2025.

Dividends

On January 8, 2025, the Board of Directors increased our

quarterly dividend from$0.35 to$0.40 per common share. On

June 25, 2025, the Board of Directors declared a dividend of

$0.40 per common share to be paid on August 29, 2025 to

common shareholders of record at August 18, 2025.

During thethree and six months ended May 31, 2025, we paid

cash dividends of$11.0 million and$22.1 million, compared to

$6.3 million and$12.6 million for thethree and six months ended

May 31, 2024, respectively, to the Series B Preferred stockholder.

The payment of dividends is subject to the discretion of our

Board of Directors and depends upon general business

conditions and other factors that our Board of Directors may

deem to be relevant.

Accumulated Other Comprehensive Income (Loss)

Amounts reclassified out of accumulated other comprehensive

income (loss) to net earnings:

(1)The amounts include income tax expense of$1.8 million and$2.6 million for

thethree and six months ended May 31, 2025, respectively, compared with

income tax expense of$0.2 million and$0.9 million for thethree and six

months ended May 31, 2024, respectively, which were reclassified to Principal

transactions revenues.

(2)The amounts include income tax benefit of$0.3 million forsix months ended

May 31, 2025, compared with anincome tax benefit of$0.1 million for thesix

months ended May 31, 2024, which were reclassified to Compensation and

benefits expenses.

Note 18. Income Taxes

At May 31, 2025 and November 30, 2024, our total gross

unrecognized tax benefits were$325.3 million and

$346.4 million, respectively.

At May 31, 2025 and November 30, 2024, we had interest

accrued of$183.1 million and$176.6 million, respectively,

included in Accrued expenses and other liabilities.

The total amount of unrecognized tax benefits that, if recognized,

would favorably affect the effective tax rate was$257.0 million

and$273.8 million (net of Federal benefit) at May 31, 2025 and

We recognize interest and penalties, if any, related to

unrecognized tax benefits in income tax expense.

We are currently under examination by a number of taxing

jurisdictions. Though we do not expect that resolution of these

examinations will have a material effect on our consolidated

financial position, they may have a material impact on our

consolidated results of operations for the period in which

resolution occurs.

Earliest tax years that remain subject to examination in the major

tax jurisdictions in which we operate:

Note 19. Commitments, Contingencies and Guarantees

Commitments

(1)Equity, loan and other unfunded commitments are presented by contractual

maturity date. The amounts, however, are available on demand.

(2)Loan purchase commitments consist of unfunded commitments to acquire

secondary market loans. For the population of loans to be acquired under the

loan purchase commitments, at May 31, 2025, Jefferies had also entered into

back-to-back committed sale contracts aggregating to$3.41 billion.

(3)At May 31, 2025, all of the of the forward starting securities purchased under

agreements to resell andall of theforward starting securities sold under

agreements to repurchase settled within three business days.

Equity Commitments. Includes commitments to invest in our joint

venture, Jefferies Finance, asset management funds and in

Jefferies Capital Partners, LLC, a manager of private equity funds,

which consists of a team led by our President and a director. At

May 31, 2025, our outstanding commitments relating to Jefferies

Capital Partners, LLC and its private equity funds were$9.8

million.

Additionally, at May 31, 2025, we had other outstanding equity

commitments to invest up to$222.2 million with strategic

affiliates and$40.4 million to various other investments.

Loan Commitments. From time to time, we make commitments

to extend credit to clients and to strategic affiliates. 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. At May 31, 2025, we had outstanding loan

commitments of$99.8 million to clients and$4.0 million to a

strategic affiliate.

Loan commitments outstanding at May 31, 2025 also include our

portion of the outstanding secured revolving credit facility

provided to Jefferies Finance, to support loan underwritings by

Jefferies Finance.

Underwriting Commitments. In connection with investment

banking activities, we may from time to time provide underwriting

commitments to our clients in connection with capital raising

transactions.

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.

Other Unfunded Commitments. Other unfunded commitments

include obligations in the form of revolving notes, warehouse

financings and debt securities to provide financing to asset-

backed and CLO vehicles. Upon advancing funds, drawn amounts

are collateralized by the assets of an entity. Other unfunded

commitments also include written put options to certain

bondholders of an equity method investee.

Guarantees

Derivative Contracts. As a dealer, we 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.

Notional amounts associated with our derivative contracts

meeting the definition of a guarantee under U.S. GAAP at May 31,

2025:

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 May 31, 2025, the

fair value of derivative contracts meeting the definition of a

guarantee is approximately$357.8 million.

HomeFed. For real estate development projects, we are generally

required to obtain infrastructure improvement bonds at the

beginning of construction work and warranty bonds upon

completion of such improvements. These bonds are issued by

surety companies to guarantee a municipality satisfactory

completion of a project. As the planned area is developed and the

municipality accepts the improvements, the bonds are released.

At May 31, 2025, the aggregate amount of infrastructure

improvement bonds outstanding was$60.3 million.

Standby Letters of Credit. At May 31, 2025, we provided

guarantees to certain counterparties in the form of standby

letters of credit in the amount of$306.2 million, with a weighted

average maturity of less thanone year. Standby 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 clearing houses 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 clearing

house, other members would be required to meet these

shortfalls. To mitigate these performance risks, the exchanges

and clearing houses 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. Additionally, we provide certain

indemnifications in connection with third-party clearing and

execution arrangements whereby a third-party may clear and

settle transactions on behalf of our clients. These

indemnifications generally have standard contractual terms and

are entered into in the ordinary course of business. Our

obligations in respect of such transactions are secured by the

assets in our client’s account, as well as any proceeds received

from the transactions cleared and settled on behalf of our client.

However, we believe that it is unlikely we would have to make any

material payments under these arrangements and no material

liabilities related to these indemnifications have been recognized.

Note 20. Regulatory Requirements

Net Capital

Jefferies LLC is a broker-dealer registered with the SEC and a

member firm of the Financial Industry Regulatory Authority

(“FINRA”) and is subject to the SEC Uniform Net Capital Rule

(“Rule 15c3-1”), which requires the maintenance of minimum net

capital, and has elected to calculate minimum capital

requirements using the alternative method permitted by Rule

15c3-1 in calculating net capital. Jefferies LLC, as a dually-

registered U.S. broker-dealer and futures commission merchant

(“FCM”), is also subject to Regulation 1.17 of the Commodity

Futures Trading Commission (“CFTC”) under the Commodity

Exchange Act (“CEA”), which sets forth minimum financial

requirements. The minimum net capital requirement in

determining excess net capital for a dually registered U.S. broker-

dealer and FCM is equal to the greater of the requirement under

SEA Rule 15c3-1 or CFTC Regulation 1.17. Accordingly, FINRA is

the designated examining authority for Jefferies LLC and the

National Futures Association (“NFA”) is the designated self-

regulatory organization (“DSRO”) for Jefferies LLC as an FCM.

Jefferies Financial Services, Inc. (“JFSI”) is registered with the

SEC as a Security-Based Swap Dealer (“SBS Dealer”) and an OTC

Derivatives Dealer (“OTCDD”) subject to the SEC’s SBS dealer

regulatory rules and the SEC’s net capital requirements pursuant

to Rule 18a-1. JFSI is also registered as a swap dealer with the

CFTC and is subject to the CFTC’s regulatory capital

requirements pursuant to the minimum financial requirements for

swap dealers under CFTC Regulation 23.101. Additionally, as a

registered member firm, JFSI is subject to the net capital

requirements of the NFA. Accordingly, the SEC is the designated

examining authority for JFSI in its capacity as an SBS Dealer and

OTCDD, while the NFA is the DSRO for JFSI, as a CFTC registered

swap dealer.

Certain non-U.S. subsidiaries are subject to capital adequacy

requirements as prescribed by the regulatory authorities in their

respective jurisdictions. This includes Jefferies International

Limited which is subject to the regulatory supervision and

requirements of the Financial Conduct Authority (“FCA”) in the

U.K. Jefferies International Limited’s’ own funds requirement

represents the highest of the permanent minimum capital

requirement, fixed overheads requirement and k-factor

requirements set out in the Investment Firms Prudential Regime

(“IFPR”) under the FCA’s MIFIDPRU sourcebook.

At May 31, 2025, Jefferies LLC’s and JFSI’s net capital and

excess net capital were as follows:

In addition, the equivalent capital requirement for Jefferies

International Limited, on a consolidated basis, is a total capital of

$1.94 billion and an excess capital of$1.11 billion at May 31,

At May 31, 2025, Jefferies LLC, JFSI and JIL are in compliance

with their applicable requirements.

The regulatory capital requirements referred to above may

restrict our ability to withdraw capital from our regulated

subsidiaries.

Customer Protection and Segregation Requirement

As a registered broker dealer that clears and carries customer

accounts, Jefferies LLC is subject to the customer protection

provisions under SEC Rule 15c3-3 and is required to compute a

reserve formula requirement for customer accounts and deposit

cash or qualified securities into a special reserve bank account

for the exclusive benefit of customers. At May 31, 2025, Jefferies

LLC had$164.3 million in cash and qualified U.S. Government

securities on deposit in special reserve bank accounts for the

exclusive benefit of customers.

As a registered broker dealer that clears and carries proprietary

accounts of brokers or dealers (commonly referred to as “PAB”),

Jefferies LLC is also required to compute a reserve requirement

for PABs pursuant to SEC Rule 15c3-3. At May 31, 2025, Jefferies

LLC had$317.1 million in cash and qualified U.S. Government

securities in special reserve bank accounts for the exclusive

benefit of PABs.

The qualified securities meeting the 15c3-3 customer and PAB

requirements are included in Cash and securities segregated and

Securities purchased under agreements to resell.

Note 21. Segment Reporting

We operate intwo reportable business segments: (1) Investment

Banking and Capital Markets and (2) Asset Management. The

Investment Banking and Capital Markets reportable business

segment includes our capital markets activities and our

investment banking business, which provides underwriting and

financial advisory services to our clients. We operate in the

Americas; Europe and the Middle East; and Asia-Pacific.

Investment Banking and Capital Markets also includes our

corporate lending joint venture Jefferies Finance, our commercial

real estate joint venture Berkadia and historically our automobile

lending and servicing activities. The Asset Management

reportable business segment provides alternative investment

management services to investors in the U.S. and overseas and

generates investment income from capital invested in and

managed by us or our affiliated asset managers, and includes

certain remaining businesses and assets of our legacy merchant

banking portfolio.

Our reportable business segment information is prepared using

the following methodologies:

•Net revenues and non-interest expenses directly associated

with each reportable business segment are included in

determining earnings from continuing operations before

income taxes.

•Net revenues and non-interest 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.

Net revenues presented for our Investment Banking and Capital

Markets reportable segment include allocations of interest

income and interest expense as we assess the profitability of

these businesses inclusive of the net interest revenue or expense

associated with the respective activities, including the net

interest cost of allocated long-term debt, which is a function of

the mix of each business's associated assets and liabilities and

the related funding costs.

(1)Management does not consider debt valuation adjustments on derivative

contracts, gains and losses on investments held in deferred compensation

plans, foreign currency transaction gains or losses or certain other corporate

income and expense items in assessing the financial performance of

operating businesses. Collectively, these items are included in the

reconciliation of reportable business segment amounts to consolidated

amounts.

Net Revenues by Geographic Region

Net revenues for the Investment Banking and Capital Markets

reportable business 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 the Asset Management reportable business

segment, net revenues are allocated according to the location of

the investment advisor or the location of the invested capital.

(1)Primarily relates to U.S. results.

(2)Primarily relates to U.K. results.

Note 22. Related Party Transactions

Officers, Directors and Employees

The following sets forth information regarding related party

transactions with our officers, directors and employees:

•At May 31, 2025 and November 30, 2024, we had$22.4 million

and$29.4 million, respectively, of loans, net of allowance,

outstanding to certain of our officers and employees (none of

whom are executive officers or directors) that are included in

Other assets.

•Receivables from and payables to customers include balances

arising from officers’, directors’ and employees’ individual

security transactions. These transactions are subject to the

same regulations as all customer transactions and are

provided on substantially the same terms.

•Two of our directors and certain of our officers have total

investments in entities managed by us of approximately

$9.2 million and$5.0 million at May 31, 2025 and

SMBC

We have a strategic alliance with Sumitomo Mitsui Financial

Group, Inc., Sumitomo Mitsui Banking Corporation (“SMBC”) and

SMBC Nikko Securities Inc. (together referred to as “SMBC

Group”) to collaborate on corporate and investment banking

business opportunities as well as equity sales, trading and

research.

The following tables summarize balances with SMBC as reported

in our Consolidated Statements of Financial Condition and

Consolidated Statements of Earnings. In addition, the synergies

and value creation resulting from our strategic alliance with

SMBC generate additive benefits for us, which are not necessarily

reflected by the activity presented in the following tables.

(1)Interest on this credit facility is based on an adjusted SOFR plus a spread.

(1)Primarily represents net gains (losses) on interest rate derivatives executed

with SMBC.

Other Related Party Transactions

We have other related party transactions with equity method

investees. Refer to Note 11, Investments for further information.