Jefferies Financial Group Inc

Our CFO and Global Treasurer are responsible for developing and

implementing our liquidity, funding and capital management

strategies. These policies are determined by the nature and

needs of our day-to-day business operations, business

opportunities, regulatory obligations, and liquidity requirements.

Our actual levels of capital, total assets and financial leverage are

a function of a number of factors, including asset composition,

business initiatives and opportunities, regulatory requirements

and cost and availability of both long term and short-term

funding. We have historically maintained a balance sheet

consisting of a large portion of our total assets in cash and liquid

marketable securities. The liquid nature of these assets provides

us with flexibility in financing and managing our business.

We also own a legacy portfolio of businesses and investments

that are reflected as consolidated subsidiaries, equity

investments or securities. Over the most recent years, we

completed several critical steps to substantially liquidate our

legacy Other investments portfolio of businesses, including the

spin-off of Vitesse Energy in January 2023 and thesalesof

Golden Queen in November 2023, Foursight in April 2024 and the

wholesale operations of OpNet in August 2024.

In keeping with our strategy of returning excess liquidity to

shareholders, during the year ended November 30, 2024, we

returned an aggregate of$347.3 million to shareholders primarily

in the form of$303.0 million in cash dividends and the

repurchases of $1.1 million common shares for a total of$44.3

million at a weighted average price of$40.72 per share in

connection with the net share settlement for tax purposes of

stock awards under our equity compensation plans.

We maintain modest leverage to support our investment grade

ratings. The growth of our balance sheet is supported by our

equity and we have quantitative metrics in place to monitor

leverage and double leverage. Our capital plan is robust, in order

to sustain our operating model through stressed conditions. We

maintain adequate financial resources to support business

activities in both normal and stressed market conditions,

including a buffer in excess of our regulatory, or other internal or

external, requirements. Our access to funding and liquidity is

stable and efficient to ensure that there is sufficient liquidity to

meet our financial obligations in normal and stressed market

conditions.

Our Balance Sheet

A business unit level balance sheet and cash capital analysis are

prepared and reviewed with senior management on a weekly

basis. As a part of this balance sheet review process, capital is

allocated to all assets and gross balance sheet limits are

adjusted, as necessary. This process ensures that the allocation

of capital and costs of capital are incorporated into business

decisions. The goals of this process are to protect the firm’s

platform, enable our businesses to remain competitive, maintain

the ability to manage capital proactively and hold businesses

accountable for both balance sheet and capital usage.

We actively monitor and evaluate our financial condition and the

composition of our assets and liabilities. We continually monitor

our overall securities inventory, including the inventory turnover

rate, which confirms the liquidity of our overall assets. A

significant portion of our financial instruments are valued on a

daily basis and we monitor and employ balance sheet limits for

our various businesses.

Total assets at November 30, 2024 and 2023 were$64.36 billion

and$57.91 billion, respectively, an increase of 11.1%. During

2024, average total assets were approximately 10.3% higher than

total assets at November 30, 2024.

Our total Financial instruments owned inventory was$24.14

billion and$21.75 billion at November 30, 2024 and 2023,

respectively. During the year ended November 30, 2024, our total

Financial instruments owned increased primarily due to the

increase in corporate equity securities. Financial instruments

sold, not yet purchased inventory was$11.01 billion at

November 30, 2024, a decrease of 2.2% from$11.25 billion at

November 30, 2023, with thedecrease primarily driven by

decreases in sovereign obligations and derivative contracts,

partially offset by increases in corporate equity and debt

securities. Our overall net inventory position was$13.13 billion

and$10.50 billion at November 30, 2024 and 2023, respectively,

with the increase primarily due to an increases in corporate

equity securities.

Level 3 assets:

(1)At November 30, 2024 and 2023,$218.3 million and$121.4 million,

respectively, are attributed to Other investments within our Asset Management

reportable segment.

Securities financing assets and liabilities include financing for

our financial instruments trading activity, matched book

transactions and mortgage finance transactions. Matched book

transactions accommodate customers, as well as obtain

securities for the settlement and financing of inventory positions.

Our average month end balance of total reverse repos and stock

borrows during 2024 were 34.4% higher than the November 30,

2024 balance. Our average month end balance of total repos and

stock loans during 2024 were 23.8% higher than the

November 30, 2024 balance.

Select information related to repurchase agreements:

Fluctuations in the balance of our repurchase agreements from

period to period and intraperiod are dependent on business

activity in those periods. Additionally, the fluctuations in the

balances of our securities purchased under agreements to resell

are influenced in any given period by our clients’ balances and

our clients’ desires to execute collateralized financing

arrangements via the repurchase market or via other financing

products. Average balances and period end balances will

fluctuate based on market and liquidity conditions and we

consider the fluctuations intraperiod to be typical for the

repurchase market.

Leverage Ratios:

(1)Leverage ratio equals total assets divided by total equity.

(2)Tangible gross leverage ratio (a non-GAAP financial measure) equals total

assets less goodwill and identifiable intangible assets divided by tangible

shareholders’ equity. The tangible gross leverage ratio is used by rating

agencies in assessing our leverage ratio.

Liquidity Management

The key objectives of the liquidity management framework are to

support the successful execution of our business strategies

while ensuring sufficient liquidity through the business cycle and

during periods of financial and idiosyncratic distress. Our liquidity

management policies are designed to mitigate the potential risk

that we may be unable to access adequate financing to service

our financial obligations without material franchise or business

impact.

The principal elements of our liquidity management framework

are our Cash Capital Policy, our assessment of Modeled Liquidity

Outflow (“MLO”) and our Contingency Funding Plan (“CFP”).

Liquidity Management Framework. Our Liquidity Management

Framework is based on a model of a potential liquidity

contraction over a one-year time period. This incorporates

potential cash outflows during a market or our idiosyncratic

liquidity stress event, including, but not limited to, the following:

•Repayment of all unsecured debt maturing within one year and

no incremental unsecured debt issuance;

•Maturity rolloff of outstanding letters of credit with no further

issuance and replacement with cash collateral;

•Higher margin requirements than currently exist on assets on

securities financing activity, including repurchase agreements

and other secured funding including central counterparty

clearinghouses;

•Liquidity outflows related to possible credit downgrade;

•Lower availability of secured funding;

•Client cash withdrawals;

•The anticipated funding of outstanding investment and loan

commitments; and

•Certain accrued expenses and other liabilities and fixed costs.

Cash Capital Policy. We maintain a cash capital model that

measures long-term funding sources against requirements.

Sources of cash capital include our equity, mezzanine equity and

the noncurrent portion of long-term borrowings. Uses of cash

capital include the following:

•Illiquid assets such as equipment, goodwill, net intangible

assets, exchange memberships, deferred tax assets and

certain investments;

•A portion of securities inventory and other assets not expected

to be financed on a secured basis in a credit stressed

environment (i.e., margin requirements); and

•Drawdowns of unfunded commitments.

To ensure that we do not need to liquidate inventory in the event

of a funding stress, we seek to maintain surplus cash capital. Our

total long-term capital of$21.66 billion at November 30, 2024

exceeded our cash capital requirements.

MLO. Our businesses are diverse, and our liquidity needs are

determined by many factors, including market movements,

collateral requirements and client commitments, all of which can

change dramatically in a difficult funding environment. During a

liquidity stress, credit-sensitive funding, including unsecured debt

and some types of secured financing agreements, may be

unavailable, and the terms (e.g., interest rates, collateral

provisions and tenor) or availability of other types of secured

financing may change. As a result of our policy to ensure we have

sufficient funds to cover what we estimate may be needed in a

liquidity stress, we hold more cash and unencumbered securities

and have greater long-term debt balances than our businesses

would otherwise require. As part of this estimation process, we

calculate an MLO that could be experienced in a liquidity stress.

MLO is based on a scenario that includes both a market-wide

stress and firm-specific stress, characterized by some or all of

the following elements:

•Global recession, default by a medium-sized sovereign, low

consumer and corporate confidence, and general financial

instability.

•Severely challenged market environment with material declines

in equity markets and widening of credit spreads.

•Damaging follow-on impacts to financial institutions leading to

the failure of a large bank.

•A firm-specific crisis potentially triggered by material losses,

reputational damage, litigation, executive departure, and/or a

ratings downgrade.

The following are the critical modeling parameters of the MLO:

•Liquidity needs over a 30-day scenario.

•A two-notch downgrade of our long-term senior unsecured

credit ratings.

•No support from government funding facilities.

•A combination of contractual outflows, such as upcoming

maturities of unsecured debt, and contingent outflows (e.g.,

actions though not contractually required, we may deem

necessary in a crisis). We assume that most contingent

outflows will occur within the initial days and weeks of a

stress.

•No diversification benefit across liquidity risks. We assume

that liquidity risks are additive.

The calculation of our MLO under the above stresses and

modeling parameters considers the following potential

contractual and contingent cash and collateral outflows:

•All upcoming maturities of unsecured long-term debt,

promissory notes and other unsecured funding products

assuming we will be unable to issue new unsecured debt or

rollover any maturing debt.

•Repurchases of our outstanding long-term debt in the ordinary

course of business as a market maker.

•A portion of upcoming contractual maturities of secured

funding activity due to either the inability to refinance or the

ability to refinance only at wider haircuts (i.e., on terms which

require us to post additional collateral). Our assumptions

reflect, among other factors, the quality of the underlying

collateral and counterparty concentration.

•Collateral postings to counterparties due to adverse changes in

the value of our over-the-counter (“OTC”) derivatives and other

outflows due to trade terminations, collateral substitutions,

collateral disputes, collateral calls or termination payments

required by a two-notch downgrade in our credit ratings.

•Variation margin postings required due to adverse changes in

the value of our outstanding exchange-traded derivatives and

any increase in initial margin and guarantee fund requirements

by derivative clearing houses.

•Liquidity outflows associated with our prime services business,

including withdrawals of customer credit balances, and a

reduction in customer short positions.

•Liquidity outflows to clearing banks to ensure timely

settlements of cash and securities transactions.

•Draws on our unfunded commitments considering, among

other things, the type of commitment and counterparty.

•Other upcoming large cash outflows, such as employee

compensation, tax and dividend payments, with no expectation

of future dividends from any subsidiaries.

Based on the sources and uses of liquidity calculated under the

MLO scenarios, we determine, based on a calculated surplus or

deficit, additional long-term funding that may be needed versus

funding through the repurchase financing market and consider

any adjustments that may be necessary to our inventory balances

and cash holdings. At November 30, 2024, we had sufficient

excess liquidity to meet all contingent cash outflows detailed in

the MLO for at least 30 days without balance sheet reduction. We

regularly refine our model to reflect changes in market or

economic conditions and our business mix.

CFP. Our CFP ensures the ability to access adequate liquid

financial resources to meet liquidity shortfalls that may arise in

emergency situations. The CFP triggers the following actions:

•Sets out the governance for managing liquidity during a

liquidity crisis;

•Identifies key liquidity and capital early warning indicators that

will help guide the response to the liquidity crisis;

•Identifies the actions and escalation procedures should we

experience a liquidity crisis including coordination amongst

senior management and the Board of Directors;

•Sets out the sources of funding available during a liquidity

crisis;

•Sets out the communication plan during a liquidity crisis for

key external stakeholders including regulators, relationship

banks, rating agencies and funding counterparties; and

•Sets out an action plan to source additional funding.

Sources of Liquidity

Financial instruments that are cash and cash equivalents or are

deemed by management to be generally readily convertible into

cash, marginable or accessible for liquidity purposes within a

relatively short period of time:

(1)Average balances are calculated based on weekly balances.

(2)At November 30, 2024 and 2023,$8.21 billion and$5.90 billion, respectively,

was invested in U.S. government money funds that invest primarily in cash,

securities issued by the U.S. government and U.S. government-sponsored

entities, and repurchase agreements that are fully collateralized by cash or

government securities. The remaining balances at November 30, 2024 and

2023 are primarily invested in AAA-rated prime money funds. The average

balance of U.S. government money funds for the quarter ended November 30,

2024 was$5.07 billion.

(3)Consists of high-quality sovereign government securities and reverse

repurchase agreements collateralized by U.S. government securities and other

high quality sovereign government securities; deposits with a central bank

within the European Economic Area, United Kingdom, Canada, Australia,

Japan, Switzerland or the U.S.; and securities issued by a designated

multilateral development bank and reverse repurchase agreements with

underlying collateral composed of these securities.

(4)Other includes unencumbered inventory representing an estimate of the

amount of additional secured financing that could be reasonably expected to

be obtained from our Financial instruments owned that are currently not

pledged after considering reasonable financing haircuts.

In addition to the cash balances and liquidity pool presented

above, the majority of financial instruments (both long and short)

in our trading accounts are actively traded and readily

marketable. At November 30, 2024, we had the ability to readily

obtain repurchase financing for 77.0% of our inventory at haircuts

of 10% or less, which reflects the liquidity of our inventory. In

addition, as a matter of our policy, all of these assets have

internal capital assessed, which is in addition to the funding

haircuts provided in the securities finance markets. Additionally,

certain of our Financial instruments owned primarily consisting

of loans and investments are predominantly funded by long term

capital. Under our cash capital policy, we model capital allocation

levels that are more stringent than the haircuts used in the

market for secured funding; and we maintain surplus capital at

these more stringent levels. We continually assess the liquidity of

our inventory based on the level at which we could obtain

financing in the marketplace for a given asset. Assets are

considered to be liquid if financing can be obtained in the

repurchase market or the securities lending market at collateral

haircut levels of 10% or less.

Financial instruments by asset class that we consider to be of a

liquid nature and the amount of such assets that have not been

pledged as collateral:

(1)Consists solely of agency mortgage-backed securities issued by the Federal

Home Loan Mortgage Corporation (“Freddie Mac”), the Federal National

Mortgage Association (“Fannie Mae”) and the Government National Mortgage

Association (“Ginnie Mae”).

(2)Unencumbered liquid balances represent assets that can be sold or used as

collateral for a loan but have not been.

In addition to being able to be readily financed at reasonable

haircut levels, we estimate that each of the individual securities

within each asset class above could be sold into the market and

converted into cash within three business days under normal

market conditions, assuming that the entire portfolio of a given

asset class was not simultaneously liquidated. There are no

restrictions on the unencumbered liquid securities, nor have they

been pledged as collateral.

Sources of Funding and Capital Resources

Our assets are funded by equity capital, senior debt, securities

loaned, securities sold under agreements to repurchase,

customer free credit balances, bank loans and other payables.

Secured Financing

We rely principally on readily available secured funding to finance

our inventory of financial instruments owned and financial

instruments sold. Our ability to support increases in total assets

is largely a function of our ability to obtain short- and

intermediate term secured funding, primarily through securities

financing transactions. We finance a portion of our long inventory

and cover some of our short inventory by pledging and borrowing

securities in the form of repurchase or reverse repurchase

agreements (collectively “repos”), respectively. During 2024, an

average of approximately 61.0% of our cash and noncash

repurchase financing activities used collateral that was

considered eligible collateral by central clearing corporations.

Central clearing corporations are situated between participating

members who borrow cash and lend securities (or vice versa);

accordingly, repo participants contract with the central clearing

corporation and not one another individually. Therefore,

counterparty credit risk is borne by the central clearing

corporation which mitigates the risk through initial margin

demands and variation margin calls from repo participants. The

comparatively large proportion of our total repo activity that is

eligible for central clearing reflects the high quality and liquid

composition of the inventory we carry in our trading books. For

those asset classes not eligible for central clearing house

financing, we seek to execute our bi-lateral financings on an

extended term basis and the tenor of our repurchase and reverse

repurchase agreements generally exceeds the expected holding

period of the assets we are financing. The weighted average

maturity of cash and noncash repurchase agreements for non-

clearing corporation eligible funded inventory is approximately

six months at November 30, 2024.

Our ability to finance our inventory via central clearinghouses and

bi-lateral arrangements is augmented by our ability to draw bank

loans on an uncommitted basis under our various banking

arrangements. At November 30, 2024, short-term borrowings,

which must be repaid within one year or less include bank loans,

overdrafts and borrowings under revolving credit facilities.

Letters of credit are used in the normal course of business

mostly to satisfy various collateral requirements in favor of

exchanges in lieu of depositing cash or securities. Average daily

short-term borrowings outstanding were$1.25 billion and$787.9

million for 2024 and 2023, respectively.

At November 30, 2024 and 2023, our borrowings under bank

loans in Short-term borrowings were$414.5 million and

$937.1 million, 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 November 30, 2024,

we were in compliance with all covenants under these credit

In addition to the above financing arrangements, we issue notes

backed by eligible collateral under master repurchase

agreements, which provides an additional financing source for

our inventory (our “repurchase agreement financing program”).

The notes issued under the program are presented within Other

secured financings. At November 30, 2024, the outstanding notes

totaled$2.11 billion, bear interest at a spread over the Secured

Overnight Funding Rate (“SOFR”) or the Euro Short-Term Rate

(“ESTER”) andmature from December 2024 to October 2026.

For additional details on our repurchase agreement financing

program, refer to Note 10, Variable Interest Entities in our

Total Long-Term Capital

At November 30, 2024 and 2023, we had total long-term capital

of$21.66 billion and$17.70 billion, respectively, resulting in a

long-term debt to equity capital ratio of 1.12:1 and 0.81:1,

respectively. Refer to “Equity Capital” herein for further

information on our change in total equity.

(1)The amounts at November 30, 2024 and 2023 exclude our secured long-term

debt. The amount at November 30, 2023 excludes$544.2 million of our 1%

Euro Medium Term Notes as the note fully matured on July 19, 2024. The

amount at November 30, 2024 excludes$8.5 million of our 5.500% Callable

Note as the note matures on February 22, 2025,$5.4 million of our 6.000%

Callable Note as the note matures on June 16, 2025,$6.2 million of our

4.500% Callable Note as the note matures on July 22, 2025, and$500.0 million

of our 5.100% Callable Note as the note matures on September 15, 2025. The

amounts at November 30, 2024 and 2023 exclude$157.6 million and$51.0

million, respectively, of structured notes as the senior notes mature within one

year.

Long-Term Debt

During 2024, long-term debt increased by$3.83 billion to$13.53

billion at November 30, 2024, as presented in our Consolidated

Statements of Financial Condition. This increase isprimarily due

toproceeds of$3.98 billion from the issuances of unsecured

senior notes,$487.0 million from net issuances of structured

notes,$254.8 million from increased subsidiaries borrowings,

and valuation losses on structured notes of$175.7 million. These

increases were partially offset by a$350.0 million paydown of a

revolving credit facility and repayments of$720.5 million on our

unsecured senior notes.

At November 30, 2024, our unsecured long-term debt has a

weighted average maturity of approximately 7.5 years.

At November 30, 2024 and 2023 our borrowings under several

credit facilities classified within Long-term debt in our

Consolidated Statements of Financial Condition amounted to

$775.3 million and$735.2 million, respectively. Interest on these

credit facilities is based on an adjusted SOFR plus a spread or

other adjusted rates, as defined in the various credit agreements.

The credit facility agreements contain certain 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 November 30, 2024,

we were in compliance with all covenants under theses credit

For further information, refer to Note 18, Borrowings, in our

Our long-term debt ratings at November 30, 2024 are as follows:

Access to external financing to finance our day-to-day operations,

as well as the cost of that financing, is dependent upon various

factors, including our debt ratings. Our current debt ratings are

dependent upon many factors, including industry dynamics,

operating and economic environment, operating results,

operating margins, earnings trend and volatility, balance sheet

composition, liquidity and liquidity management, our capital

structure, our overall risk management, business diversification

and our market share and competitive position in the markets in

which we operate. Deterioration in any of these factors could

impact our credit ratings. While certain aspects of a credit rating

downgrade are quantifiable pursuant to contractual provisions,

the impact on our business and trading results in future periods

is inherently uncertain and depends on a number of factors,

including the magnitude of the downgrade, the behavior of

individual clients and future mitigating action taken by us.

In connection with certain over-the-counter derivative contract

arrangements and certain other trading arrangements, we may be

required to provide additional collateral to counterparties,

exchanges and clearing organizations in the event of a credit

rating downgrade. At November 30, 2024, the amount of

additional collateral that could be called by counterparties,

exchanges and clearing organizations under the terms of such

agreements in the event of a downgrade of our long-term credit

rating below investment grade was$120.1 million. For certain

foreign clearing organizations, credit rating is only one of several

factors employed in determining collateral that could be called.

The above represents management’s best estimate for additional

collateral to be called in the event of a credit rating downgrade.

The impact of additional collateral requirements is considered in

our CFP and calculation of MLO, as described above.

Equity Capital

Common Stock

At November 30, 2024 and 2023, we had 565,000,000 authorized

shares of voting common stock with a par value of$1.00 per

share and had 205,504,272 and 210,626,642 common shares

outstanding, respectively. At November 30, 2024, we had

15,768,229 share-based awards that do not require the holder to

pay any exercise price and 5,064,740 stock options that require

the holder to pay a weighted average exercise price of$22.69 per

share.

program. We did not purchase any shares under our share

repurchase program during 2024. Treasury stock repurchases

during 2024 represent repurchases of common stock for net-

share withholding under our equity compensation plan.

In February 2023, our mandatorily redeemable convertible

preferred shares were converted into 4,654,362 common shares.

Dividends

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

quarterly dividend from$0.35 to$0.40 per common share to be

paid on February 27, 2025 to common shareholders of record at

February 14, 2025.

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.

Non-Voting Common Stock

On June 28, 2023, shareholders approved an Amended and

Restated Certificate of Incorporation, which authorized the

issuance of 35,000,000 shares of non-voting common stock with

a par value of$1.00 per share (the “Non-Voting Common

Shares”). The Non-Voting Common Shares are entitled to share

equally, on a per share basis, with the voting common stock, in

dividends and distributions. Upon the effectiveness of the

Amended and Restated Certificate of Corporation on June 30,

2023, the number of authorized shares of common stock

remains at 600,000,000 shares, composed of 565,000,000 shares

of voting common stock and 35,000,000 shares of Non-Voting

Common Shares.

Series B Preferred Stock

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 is required to pay$1.50 per

share of voting common stock so exchanged. During the year-

ended November 30, 2023, SMBC exchanged 21.0 million shares

of voting common stock for 42,000 shares of Series B Preferred

Stock and we received cash of$31.5 million in connection with

the exchange. As a result of the exchange, our equity attributed

to our voting common stock decreased by$21.0 million, our

equity attributed to the Series B Preferred Stock increased by

$42,000 and additional paid-in capital increased by$52.4 million.

On June 20, 2024, SMBC exchanged an additional 6.6 million

shares of voting common stock for 13,125 shares of Series B

Preferred Stock and we received$9.8 million from SMBC in

connection with the exchange. Following this exchange, SMBC

increased its ownership to 11.8% of our common stock on an as-

converted basis and 10.9% on a 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 November 30, 2024, SMBC owns

approximately 15.8% of our common stock on an as-converted

basis and 14.5% on a fully-diluted, as-converted basis. Refer to

Note 24, Related Party Transactions for further information

regarding transactions with SMBC.

During theyear ended November 30, 2024 and 2023, we paid

cash dividends of$31.9 million and$12.6 million, respectively,

with respect to the Series B Preferred Stock.

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 November 30, 2024, Jefferies LLC’s and JFSI’s net capital and

excess net capital were as follows (in thousands):

In addition, the equivalent capital requirements for Jefferies

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

$1,781.0 million and an excess capital of$1,054.0 million at

At November 30, 2024, 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

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 November 30, 2024,

Jefferies LLC had$142.6 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 November 30, 2024,

Jefferies LLC had$581.9 million in cash and qualified U.S.

Government securities in special reserve bank accounts for the

exclusive benefit of PABs.

Other Developments

In February 2022, Russia invaded Ukraine. Following Russia’s

invasion, the U.S., the U.K., and the European Union governments,

among others, developed coordinated financial and economic

sanctions targeting Russia that, in various ways, constrain

transactions with numerous Russian entities, including major

Russian banks and individuals; transactions in Russian sovereign

debt; and investment, trade and financing to, from, or in Ukraine.

We do not have any operations in Russia or any clients with

significant Russian operations and we have minimal market risk

related to securities of companies either domiciled or operating

in Russia. We continue to closely monitor the status of global

sanctions and restrictions, trading conditions related to Russian

securities and the credit risk and nature of our counterparties.

In October 2023, Hamas attacked Israel. Our investments and

assets in our growing Israeli business could be negatively

affected by consequences from the geopolitical and military

conflict in the region. We continue to closely monitor the status

of global sanctions and restrictions arising from the conflict.

Off-Balance Sheet Arrangements

We have contractual commitments arising in the ordinary course

of business for securities loaned or purchased under agreements

to resell, repurchase agreements, future purchases and sales of

foreign currencies, securities transactions on a when-issued

basis, purchases and sales of corporate loans in the secondary

market and underwriting. Each of these financial instruments and

activities contains varying degrees of off-balance sheet risk

whereby the fair values of the securities underlying the financial

instruments may be in excess of, or less than, the contract

amount. The settlement of these transactions is not expected to

have a material effect upon our consolidated financial

statements.

In the normal course of business, we engage in other off balance-

sheet arrangements, including derivative contracts. Neither

derivatives’ notional amounts nor underlying instrument values

are reflected as assets or liabilities in our Consolidated

Statements of Financial Condition. Rather, the fair values of

derivative contracts are reported in our Consolidated Statements

of Financial Condition as Financial instruments owned or

Financial instruments sold, not yet purchased as applicable.

Derivative contracts are reflected net of cash paid or received

pursuant to credit support agreements and are reported on a net

by counterparty basis when a legal right of offset exists under an

enforceable master netting agreement. For additional information

about our accounting policies and our derivative activities, 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,

2023 and Note 6, Fair Value Disclosures and Note 7, Derivative

Financial Instruments in our consolidated financial statements

included in this Annual Report on Form 10-K.

Contractual Obligations

Subsequent to November 30, 2024 and on or before January 31,

2025, we expect to make cash payments of$1.82 billion related

to year-end compensation awards for fiscal 2024. Refer to Note

15, Compensation Plans in our consolidated financial statements

included in this Annual Report on Form 10-K for further