Fair Value Disclosures (Tables)

3 Months Ended

Feb. 28, 2015

Fair Value Disclosures [Abstract]

Financial Assets and Liabilities Accounted for at Fair Value on Recurring Basis

The following is a summary of our financial assets and liabilities that are accounted for at fair value on a recurring basis at February 28, 2015 and November 30, 2014 by level within the fair value hierarchy (in thousands):

	February 28, 2015
	Level 1(1)		Level 2(1)		Level 3		Counterparty and Cash Collateral Netting (2)			Total
Assets:
Financial instruments owned:
Corporate equity securities	$	2,150,032	$	209,338	$	18,210	$	—		$	2,377,580
Corporate debt securities	—		3,399,249		30,735		—			3,429,984
Collateralized debt obligations	—		153,900		90,897		—			244,797
U.S. government and federal agency securities	3,783,645		106,427		—		—			3,890,072
Municipal securities	—		772,940		—		—			772,940
Sovereign obligations	1,522,227		1,057,623		333		—			2,580,183
Residential mortgage-backed securities	—		2,824,500		79,953		—			2,904,453
Commercial mortgage-backed securities	—		542,089		24,629		—			566,718
Other asset-backed securities	—		138,391		7,146		—			145,537
Loans and other receivables	—		1,349,201		111,410		—			1,460,611
Derivatives	96,660		5,083,829		46,136		(4,729,533		)	497,092
Investments at fair value	—		3		169,961		—			169,964
Physical commodities	—		58,715		—		—			58,715
Total financial instruments owned	$	7,552,564	$	15,696,205	$	579,410	$	(4,729,533	)	$	19,098,646
Cash and cash equivalents	$	3,339,965	$	—	$	—	$	—		$	3,339,965
Investments in managed funds	$	—	$	23,839	$	30,840	$	—		$	54,679
Cash and securities segregated and on deposit for     regulatory purposes (3)	$	3,186,319	$	—	$	—	$	—		$	3,186,319
Securities received as collateral	$	4,821	$	—	$	—	$	—		$	4,821
Total Level 3 assets					$	610,250
Liabilities:
Financial instruments sold, not yet purchased:
Corporate equity securities	$	1,996,335	$	60,034	$	38	$	—		$	2,056,407
Corporate debt securities	—		1,766,453		—		—			1,766,453
U.S. government and federal agency securities	1,366,689		99,422		—		—			1,466,111
Sovereign obligations	707,844		659,846		—		—			1,367,690
Residential mortgage-backed securities	—		11,925		—		—			11,925
Loans	—		910,569		9,327		—			919,896
Derivatives	71,707		5,011,935		49,450		(4,810,751		)	322,341
Total financial instruments sold, not yet      purchased	$	4,142,575	$	8,520,184	$	58,815	$	(4,810,751	)	$	7,910,823
Obligation to return securities received as collateral	$	4,821	$	—	$	—	$	—		$	4,821
Other secured financings	$	—	$	—	$	65,602	$	—		$	65,602
Embedded conversion option	$	—	$	—	$	825	$	—		$	825

(1) There were no transfers between Level 1 and Level 2 for the three months ended February 28, 2015.

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

(3) Cash and securities segregated and on deposit for regulatory purposes include U.S. government securities with a fair value of $434.8 million and Commodities Futures Trading Commission (“CFTC”) approved money market funds with a fair value of $810.0 million.

	November 30, 2014
	Level 1 (1)		Level 2 (1)		Level 3		Counterparty and Cash Collateral Netting (2)			Total
Assets:
Financial instruments owned:
Corporate equity securities	$	2,178,837	$	226,441	$	20,964	$	—		$	2,426,242
Corporate debt securities	—		3,342,276		55,918		—			3,398,194
Collateralized debt obligations	—		306,218		91,498		—			397,716
U.S. government and federal agency securities	2,694,268		81,273		—		—			2,775,541
Municipal securities	—		590,849		—		—			590,849
Sovereign obligations	1,968,747		790,764		—		—			2,759,511
Residential mortgage-backed securities	—		2,879,954		82,557		—			2,962,511
Commercial mortgage-backed securities	—		966,651		26,655		—			993,306
Other asset-backed securities	—		137,387		2,294		—			139,681
Loans and other receivables	—		1,458,760		97,258		—			1,556,018
Derivatives	65,145		5,046,278		54,190		(4,759,345		)	406,268
Investments at fair value	—		73,152		95,389		—			168,541
Physical commodities	—		62,234		—		—			62,234
Total financial instruments owned	$	6,906,997	$	15,962,237	$	526,723	$	(4,759,345	)	$	18,636,612
Cash and cash equivalents	$	4,079,968	$	—	$	—	$	—		$	4,079,968
Investments in managed funds	$	—	$	19,383	$	54,982	$	—		$	74,365
Cash and securities segregated and on deposit for     regulatory purposes (3)	$	3,444,674	$	—	$	—	$	—		$	3,444,674
Securities received as collateral	$	5,418	$	—	$	—	$	—		$	5,418
Total Level 3 assets					$	581,705
Liabilities:
Financial instruments sold, not yet purchased:
Corporate equity securities	$	1,911,145	$	74,681	$	38	$	—		$	1,985,864
Corporate debt securities	—		1,611,994		223		—			1,612,217
Collateralized debt obligations	—		4,557		—		—			4,557
U.S. government and federal agency securities	2,253,055		—		—		—			2,253,055
Sovereign obligations	1,217,075		574,010		—		—			1,791,085
Loans	—		856,525		14,450		—			870,975
Derivatives	52,778		5,117,803		49,552		(4,856,618		)	363,515
Total financial instruments sold, not yet      purchased	$	5,434,053	$	8,239,570	$	64,263	$	(4,856,618	)	$	8,881,268
Obligation to return securities received as collateral	$	5,418	$	—	$	—	$	—		$	5,418
Other secured financings	$	—	$	—	$	30,825	$	—		$	30,825
Embedded conversion option	$	—	$	—	$	693	$	—		$	693

(1) At December 1, 2013, equity options presented within Financial instruments owned and Financial instruments sold, not yet purchased of $6.1 million and $6.6 million, respectively, were transferred from Level 1 to Level 2 as adjustments were incorporated into the valuation approach for such contracts to estimate the point within the bid-ask range that meets the best estimate of fair value.

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

(3) Cash and securities segregated and on deposit for regulatory purposes include U.S. government securities with a fair value of $453.7 million and CFTC approved money market funds with a fair value of $545.0 million.

Investments Measured at Fair Value Based on Net Asset Value Per Share

The following tables present information about our investments in entities that have the characteristics of an investment company at February 28, 2015 and November 30, 2014 (in thousands):

	February 28, 2015
	Fair Value (1)		Unfunded Commitments		Redemption Frequency (if currently eligible)
Equity Long/Short Hedge Funds (2)	$	49,550	$	—	Monthly, Quarterly
High Yield Hedge Funds (3)	196		—		—
Fund of Funds (4)	340		94		—
Equity Funds (5)	40,403		25,670		—
Convertible Bond Funds (6)	3,470		—		At Will
Total (7)	$	93,959	$	25,764

	November 30, 2014
	Fair Value (1)		Unfunded Commitments		Redemption Frequency (if currently eligible)
Equity Long/Short Hedge Funds (2)	$	44,983	$	—	Monthly, Quarterly
High Yield Hedge Funds (3)	204		—		—
Fund of Funds (4)	323		94		—
Equity Funds (5)	65,216		26,023		—
Convertible Bond Funds (6)	3,355		—		At Will
Total (7)	$	114,081	$	26,117

(1) Where fair value is calculated based on net asset value, fair value has been derived from each of the funds’ capital statements.

(2) This category includes investments in hedge funds that invest, long and short, in equity securities in domestic and international markets in both the public and private sectors. At February 28, 2015 and November 30, 2014, investments representing approximately 100% and 99%, respectively, of the fair value of investments in this category are redeemable with 30-90 days prior written notice.

(3) Includes investments in funds that invest in domestic and international public high yield debt, private high yield investments, senior bank loans, public leveraged equities, distressed debt, and private equity investments. There are no redemption provisions. The underlying assets of the funds are being liquidated and we are unable to estimate when the underlying assets will be fully liquidated.

(4) Includes investments in fund of funds that invest in various private equity funds. At February 28, 2015 and November 30, 2014, approximately 96% and 95%, respectively, of the fair value of investments in this category are managed by us and have no redemption provisions, instead distributions are received through the liquidation of the underlying assets of the fund of funds, which are estimated to be liquidated in approximately two years. For the remaining investments we have requested redemption; however, we are unable to estimate when these funds will be received.

(5) At February 28, 2015 and November 30, 2014, investments representing approximately 99% and 99%, respectively, of the fair value of investments in this category include investments in equity funds that invest in the equity of various U.S. and foreign private companies in the energy, technology, internet service and telecommunication service industries. These investments cannot be redeemed, instead distributions are received through the liquidation of the underlying assets of the funds which are expected to liquidate in one to eight years. The remaining investments are in liquidation and we are unable to estimate when the underlying assets will be fully liquidated.

(6) This category represents an investment in the Jefferies Umbrella Fund, an open-ended investment company managed by us that invests primarily in convertible bonds. The investment is redeemable with five days prior written notice.

(7) Investments at fair value in Financial instruments owned in the Consolidated Statements of Financial Condition at February 28, 2015 and November 30, 2014 include $130.7 million and $128.8 million, respectively, of direct investments which do not have the characteristics of investment companies and therefore not included within this table.

Summary of Valuation Bases (Pricing Information) for Financial Instruments

At February 28, 2015 and November 30, 2014, our Financial instruments owned and Financial instruments sold, not yet purchased are measured using different valuation bases as follows:

	February 28, 2015				November 30, 2014
	Financial Instruments Owned		Financial Instruments Sold, Not Yet Purchased		Financial Instruments Owned		Financial Instruments Sold, Not Yet Purchased
Exchange closing prices	11	%	25	%	12	%	20	%
Recently observed transaction prices	4	%	3	%	4	%	2	%
External pricing services	73	%	64	%	71	%	69	%
Broker quotes	4	%	4	%	4	%	3	%
Valuation techniques	8	%	4	%	9	%	6	%
	100	%	100	%	100	%	100	%

Summary of Changes in Fair Value of Financial Assets and Liabilities Classified as Level 3

The following is a summary of changes in fair value of our financial assets and liabilities that have been categorized within Level 3 of the fair value hierarchy for the three months ended February 28, 2015 (in thousands):

	Three Months Ended February 28, 2015
	Balance at November 30, 2014			Total gains/ losses (realized and unrealized) (1)			Purchases			Sales			Settlements			Issuances		Net transfers into/  (out of) Level 3			Balance at February 28, 2015		Change in unrealized gains/ (losses) relating to instruments still held at February 28, 2015 (1)
Assets:
Financial instruments    owned:
Corporate equity     securities	$	20,964		$	63		$	—		$	(168	)	$	—		$	—	$	(2,649	)	$	18,210	$	243
Corporate debt     securities	55,918			(1,930		)	469			(533		)	—			—		(23,189		)	30,735		(1,577		)
Collateralized debt     obligations	91,498			(16,022		)	—			(13,519		)	(1,296		)	—		30,236			90,897		(15,886		)
Sovereign    obligations	—			13			—			(1		)	—			—		321			333		12
Residential     mortgage-backed     securities	82,557			(2,863		)	2,100			(1,375		)	(23		)	—		(443		)	79,953		783
Commercial     mortgage-backed     securities	26,655			(531		)	—			(382		)	(6,864		)	—		5,751			24,629		(1,369		)
Other asset-backed     securities	2,294			(167		)	26			(1		)	—			—		4,994			7,146		(167		)
Loans and other     receivables	97,258			(5,033		)	40,019			(16,122		)	(15,448		)	—		10,736			111,410		(3,262		)
Investments at fair     value	95,389			1,299			5,010			(594		)	(277		)	—		69,134			169,961		1,304
Investments in managed     funds	54,982			(24,496		)	354			—			—			—		—			30,840		(24,495		)
Liabilities:
Financial instruments     sold, not yet purchased:
Corporate equity     securities	$	38		$	—		$	—		$	—		$	—		$	—	$	—		$	38	$	—
Corporate debt     securities	223			(115		)	(6,683		)	6,698			—			—		(123		)	—		—
Net derivatives (2)	(4,638		)	6,938			—			—			(58		)	1,072		—			3,314		(8,771		)
Loans	14,450			(39		)	(2,877		)	825			—			—		(3,032		)	9,327		39
Other secured financings	30,825			—			—			—			(2,218		)	36,995		—			65,602		—
Embedded conversion      option	693			132			—			—			—			—		—			825		(132		)

(1) Realized and unrealized gains/losses are reported in Principal transaction revenues in the Consolidated Statements of Earnings.

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

The following is a summary of changes in fair value of our financial assets and liabilities that have been categorized within Level 3 of the fair value hierarchy for the three months ended February 28, 2014 (in thousands):

	Three Months Ended February 28, 2014
	Balance at November 30, 2013		Total gains/ losses (realized and unrealized) (1)			Purchases			Sales			Settlements			Issuances		Net transfers into/ (out of) Level 3			Balance at February 28, 2014		Change in unrealized gains/ (losses) relating to instruments still held at February 28, 2014 (1)
Assets:
Financial instruments     owned:
Corporate equity     securities	$	9,884	$	(1,393	)	$	134		$	—		$	—		$	—	$	3,716		$	12,341	$	(1,319	)
Corporate debt     securities	25,666		(2,014		)	4,136			(624		)	—			—		2,151			29,315		193
Collateralized debt     obligations	37,216		10,184			76,511			(78,081		)	(144		)	—		20,342			66,028		5,662
Residential     mortgage-backed     securities	105,492		(1,626		)	9,637			(13,703		)	(1,755		)	—		18,947			116,992		(2,097		)
Commercial     mortgage-backed     securities	17,568		(3,032		)	8,933			(14,645		)	(50		)	—		8,712			17,486		(958		)
Other asset-backed     securities	12,611		72			2,250			(2,048		)	(83		)	—		(10,427		)	2,375		7
Loans and other     receivables	145,890		(3,902		)	36,213			(49,475		)	(935		)	—		1,041			128,832		(3,807		)
Investments at fair     value	101,242		24,889			22,500			(29,587		)	—			—		(776		)	118,268		24,889
Investments in managed     funds	57,285		(2,859		)	5,102			—			—			—		—			59,528		(2,859		)
Liabilities:
Financial instruments     sold, not yet purchased:
Corporate equity     securities	$	38	$	8		$	—		$	411		$	—		$	—	$	558		$	1,015	$	(8	)
Net derivatives (2)	6,905		1,267			(1,327		)	2,169			197			—		(3,438		)	5,773		(1,267		)
Loans	22,462		(153		)	(18,913		)	4,887			—			—		1,977			10,260		(153		)
Other secured financings	8,711		—			—			—			—			21,683		—			30,394		—
Embedded conversion      option	9,574		(1,967		)	—			—			—			—		—			7,607		—

(1) Realized and unrealized gains/losses are reported in Principal transaction revenues in the Consolidated Statements of Earnings.

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

Quantitative Information about Significant Unobservable Inputs Used in Level 3 Fair Value Measurements

The disclosed inputs when compared with 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.

February 28, 2015
Financial Instruments Owned	Fair Value (in thousands)		Valuation Technique	Significant Unobservable Input(s)	Input / Range	Weighted Average
Corporate equity securities	$	18,210
Non-exchange traded securities			Market approach	EBITDA (a) multiple	3.5 to 8.6	4.4
			Scenario analysis	Estimated recovery percentage	78%	—
Corporate debt securities	$	24,795
			Convertible bond model	Discount rate/yield	32%	—

Collateralized debt obligations	$	51,095	Discounted cash flows	Constant prepayment rate	0% to 20%	14		%
				Constant default rate	0% to 2%	2		%
				Loss severity	0% to 70%	42		%
				Yield	6% to 20%	13		%
Residential mortgage-backed      securities	$	79,953	Discounted cash flows	Constant prepayment rate	2% to 50%	13		%
				Constant default rate	2% to 100%	21		%
				Loss severity	35% to 80%	52		%
				Yield	1% to 13%	6		%
Commercial mortgage-backed       securities	$	24,629	Discounted cash flows	Yield	8% to 22%	14		%
				Cumulative loss rate	2% to 73%	16		%
			Scenario analysis	Estimated recovery percentage	81%	—
Other asset-backed securities	$	7,146	Discounted cash flows	Constant prepayment rate	4% to 6%	4		%
				Constant default rate	3% to 4%	4		%
				Loss severity	50% to 60%	52		%
				Yield	6% to 7%	6		%
Loans and other receivables	$	102,034	Comparable pricing	Comparable bond or loan price	$100 to $101	$	100.5
			Market approach	Yield	3% to 9%	7		%
				EBITDA (a) multiple	8.2	—
			Scenario analysis	Estimated recovery percentage	10% to 81%	37		%
			Discounted cash flows	Constant prepayment rate	20%	—
				Constant default rate	2%	—
				Loss severity	25%	—
				Yield	11%	—
Derivatives	46,136
Foreign exchange options			Option Model	Volatility	12% to 23%	15		%
Commodity forwards			Discounted cash flows	Discount rate	20%	—
Unfunded commitment			Comparable pricing	Comparable loan price	$71 to $100	$	99.0
				Yield	8%	—
Investments at fair value
Private equity securities	$	9,179	Market approach	Transaction Level	$57	—
Liabilities	Fair Value (in thousands)		Valuation Technique	Significant Unobservable Input(s)	Input / Range	Weighted Average
Financial Instruments Sold, Not Yet     Purchased:
Derivatives	$	49,450
Foreign exchange options			Option model	Volatility	12% to 23%	15		%
Unfunded commitment			Comparable pricing	Comparable loan price	$71 to $100	$	78.6
			Market approach	Yield	5% to 8%	8		%
			Discounted cash flows	Constant prepayment rate	20%	—
				Constant default rate	2%	—
				Loss severity	25%	—
				Yield	11%	—
Loans and other receivables	$	9,327	Comparable pricing	Comparable loan price	$100	—
Other secured financings	$	65,602	Comparable pricing	Comparable loan price	$82 to $100	$	98.9
Embedded conversion option	$	825	Option valuation model	Historical volatility	20%	—

(a) Earnings before interest, taxes, depreciation and amortization (“EBITDA”).

November 30, 2014
Financial Instruments Owned	Fair Value (in thousands)		Valuation Technique	Significant Unobservable Input(s)	Input / Range	Weighted Average
Corporate equity securities	$	19,814
Non-exchange traded      securities			Market approach	EBITDA multiple	3.4 to 4.7	3.6
			Scenario analysis	Estimated recovery percentage	24%	—
Corporate debt securities	$	22,766	Convertible bond model	Discount rate/yield	32%	—
Collateralized debt obligations	$	41,784	Discounted cash flows	Constant prepayment rate	0% to 20%	13		%
				Constant default rate	0% to 2%	2		%
				Loss severity	0% to 70%	39		%
				Yield	2% to 51%	16		%
Residential mortgage-backed      securities	$	82,557	Discounted cash flows	Constant prepayment rate	1% to 50%	13		%
				Constant default rate	1% to 100%	14		%
				Loss severity	20% to 80%	50		%
				Yield	3% to 13%	7		%
Commercial mortgage-backed      securities	$	26,655	Discounted cash flows	Yield	8% to 12%	11		%
				Cumulative loss rate	4% to 72%	15		%
			Scenario analysis	Estimated recovery percentage	90%	—
Other asset-backed securities	$	2,294	Discounted cash flows	Constant prepayment rate	8%	—
				Constant default rate	3%	—
				Loss severity	70%	—
				Yield	7%	—
Loans and other receivables	$	88,154	Comparable pricing	Comparable loan price	$100 to $101	$	100.3
			Market approach	Yield	3% to 5%	4		%
				EBITDA multiple	3.4 to 8.2	7.6
			Scenario analysis	Estimated recovery percentage	10% to 41%	36		%
Derivatives	$	54,190
Foreign exchange options			Option Model	Volatility	13% to 23%	—
Commodity forwards			Discounted cash flows	Discount rate	17%	—
Loan commitments			Comparable pricing	Comparable loan price	$100	—
Investments at fair value	$	8,500
Private equity securities			Market approach	Transaction level	$50	—
Liabilities	Fair Value (in thousands)		Valuation Technique	Significant Unobservable Input(s)	Input / Range	Weighted Average
Financial Instruments Sold, Not     Yet Purchased:
Derivatives	$	49,552
FX options			Option model	Volatility	13% to 23%	17		%
Unfunded commitment			Comparable pricing	Comparable loan price	$89 to $100	$	92.0
				Credit spread	45bps	—
			Market approach	Yield	5%	—
Loans and other receivables	$	14,450	Comparable pricing	Comparable loan price	$100	—
Other secured financings	$	30,825	Comparable pricing	Comparable loan price	$81-$100	$	98.7
Embedded conversion option	$	693	Option valuation model	Historical volatility	18.9%	—

Summary of Gains (Losses) Due to Changes in Instrument Specific Credit Risk and Summary of Contractual Principal Exceeds Fair Value for Loans and Other Receivables

The following is a summary of gains (losses) due to changes in instrument specific credit risk on loans and other receivables and loan commitments measured at fair value under the fair value option (in thousands):

	Three Months Ended February 28, 2015			Three Months Ended February 28, 2014
Financial Instruments Owned:
Loans and other receivables	$	5,389		$	4,467
Financial Instruments Sold:
Loans	$	(1,022	)	$	(462	)
Loan commitments	(7,166		)	(2,357		)

The following is a summary of the amount by which contractual principal exceeds fair value for loans and other receivables measured at fair value under the fair value option (in thousands):

	February 28, 2015			November 30, 2014
Financial Instruments Owned:
Loans and other receivables (1)	$	426,425		$	403,119
Loans and other receivables greater than 90 days past due (1)	28,829			5,594
Loans and other receivables on nonaccrual status (1) (2)	(36,471		)	(22,360		)

(1) Interest income is recognized separately from other changes in fair value and is included within Interest revenues on the Consolidated Statements of Earnings.

(2) Amounts include all loans and other receivables greater than 90 days past due.