Jefferies Financial Group Inc

Total Non-interest Expenses

Non-interest expenses were$6.03 billion for 2024, an increase of

$1.68 billion, or 38.7%, compared to$4.35 billion for 2023,

primarily due to an increase in overall business activity and

compensation expense. Non-compensation expenses are also

impacted by the inclusion of Stratos and Tessellis as operating

subsidiaries following the consolidation of these entities in the

fourth quarter of 2023, partially offset by the impact of the spin-

off of Vitesse Energy in January 2023 and the sale of Foursight in

April 2024.

Compensation and Benefits

Compensation and benefits expense consists of salaries,

benefits, commissions, annual cash compensation and share-

based awards and the amortization of share-based and cash

compensation awards to employees.

Cash and share-based awards and a portion of cash awards

granted to employees as part of year end compensation generally

contain provisions such that employees who terminate their

employment or are terminated without cause may continue to

vest in their awards, so long as those awards are not forfeited as

a result of other forfeiture provisions (primarily non-compete

clauses) of those awards. Accordingly, the compensation

expense for a portion of awards granted at year end as part of

annual compensation is recorded during the year of the award.

Compensation and benefits expense includes amortization

expense associated with these awards to the extent vesting is

contingent on future service. In addition, certain awards to our

Chief Executive Officer and our President contain market and

performance conditions and the awards are amortized over their

service periods.

Compensation and benefits expense was$3.66 billion for 2024

compared to$2.54 billion for 2023. A significant portion of our

compensation expense is highly variable with net revenues.

Compensation and benefits expense as a percentage of Net

revenues was 52.0% for 2024 and 53.9% for 2023. The ratio for

2024 was impacted by the consolidation of Stratos and Tessellis,

which have much lower compensation rates proportionate to net

revenues.

Compensation expense related to the amortization of share- and

cash-based awards amounted to$513.7 million for 2024

compared to$370.0 million for 2023.

At November 30, 2024, we had 7,822 employees globally across

all of our consolidated subsidiaries within our Investment

Banking and Capital Markets and Asset Management reportable

segments, an increase of 258 employees from our headcount of

7,564 at November 30,2023. Included within our global

headcount are 2,063 employees of our Stratos, Tessellis,

HomeFed, and M Science subsidiaries. During the past year, we

have increased the number of our Investment Banking Managing

Directors and related staff along with additional technology and

corporate staff to support our growth and strategic priorities.

Refer to Note 15, Compensation Plans included in this Annual

Report on Form 10-K, for further details on compensation and

benefits.

Non-interest Expenses (Excluding Compensation and Benefits)

Non-interest expenses, excluding Compensation and benefits, as

a percentage of Net revenues improved from 38.5% in 2023 to

33.7% in 2024 as our revenue growth outpaced expense growth.

The ratio includes our Other investments portfolio, which has a

higher non-compensation expense ratio.

Non-interest expenses was impacted by the following:

•Brokerage and clearing fees were higher by$66.0 million due

to increased trading volumes.

•Technology and communication were higher by$69.6 million

related to the continued development of various trading and

management systems and increased market data costs.

•Business development was higher by$105.9 million reflecting

increased investment banking advisory and capital markets

underwriting activity.

•Professional services expenses were higher by$29.8 million

primarily on increased transaction related legal fees

associated with capital markets transaction and litigation as

well as consulting fees paid to outsourced vendors related to

strategic technology investment initiatives.

•Cost of sales and depreciation and amortization expenses

were higher by$255.0 million primarily reflecting the

consolidation of Stratos and Tessellis, partially offset by the

spin-off of Vitesse Energy in January 2023 and sale of

Foursight in April 2024.

•The provision for income taxes on continuing operations was

$293.2 million for 2024, equating to an effective tax rate of

29.2%, compared to$91.9 million for 2023, equating to an

effective tax rate of 25.9%. The higher rate for 2024 is largely

due to a smaller tax benefit from share-based awards in the

current year.

•The Organization for Economic Co-operation and Development

(“OECD”) Pillar Two Model Rules (“Pillar Two”) for the global

15% minimum tax have been adopted in a number of

jurisdictions in which we operate. Pillar Two will be applicable

to us beginning December 1, 2024 and we do not expect a

material impact on our income taxexpense for the year ended

November 30, 2025.

Refer to Note 20, Income Taxes in our consolidated financial

statements included in this Annual Report on Form 10-K, for

further details on income taxes.