Related Party Transactions

Jefferies Capital Partners Related Funds. We have equity investments in the JCP Manager and in private equity funds which are managed by a team led by Brian P. Friedman, one of our directors and our Chairman of the Executive Committee (“Private Equity Related Funds”). At February 28, 2018 and November 30, 2017, our equity investments in Private Equity Related Funds were in aggregate $30.9 million and $23.7 million, respectively. We also charge the JCP Manager for certain services under a service agreement. The following table presents revenues and service charges related to our investment in Private Equity Related Funds (in thousands):



	Three Months Ended February 28,
	2018		2017
Other revenues and investment income (loss)	$	7,022	$	(1,298	)
Service charges	53		125

For further information regarding our commitments and funded amounts to the Private Equity Related Funds, see Note 16, Commitments, Contingencies and Guarantees.

Berkadia Commercial Mortgage, LLC. At February 28, 2018 and November 30, 2017, we had commitments to purchase $898.8 million and $864.1 million, respectively, in agency CMBS from Berkadia Commercial Mortgage, LLC, which is partially owned by Leucadia.

Officers, Directors and Employees. The following sets forth information regarding related party transactions with our officers, directors and employees:


•	At February 28, 2018 and November 30, 2017, we had $45.2 million and $45.6 million, respectively, of loans outstanding to certain of our officers and employees (none of whom are executive officers or directors) that are included in Other assets in our Consolidated Statements of Financial Condition.


•	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.


•	One of our directors has investments in a hedge fund managed by us of approximately $4.7 million and $4.9 million at February 28, 2018 and November 30, 2017, respectively.

See Note 8, Variable Interest Entities, and Note 16, Commitments, Contingencies and Guarantees, for further information regarding related party transactions with our officers, directors and employees.

Leucadia. The following is a description of related party transactions with Leucadia and its affiliates:


•	Under service agreements, we provide services to and receive services from Leucadia. We also receive revenues from Leucadia under a revenue sharing agreement (in millions):



	Three Months Ended February 28,
	2018		2017
Charges to Leucadia for services provided	$	16.2	$	10.1
Charges from Leucadia for services received	2.4		4.0


•	We provide capital markets and asset management services to Leucadia and its affiliates. The following table presents the revenues earned by type of services provided (in millions):



	Three Months Ended February 28,
	2018		2017
Principal transactions	$	0.1	$	—
Other revenues	0.2		—


•	Receivables from and payables to Leucadia, included in Other assets and Accrued expenses and other liabilities, respectively, in our Consolidated Statements of Financial Condition (in millions):



	February 28, 2018		November 30, 2017
Receivable from Leucadia	$	2.8	$	2.5
Payable to Leucadia	0.9		3.1

•

On January 11, 2018 our Board of Directors approved a distribution to our sole limited liability company member, Leucadia, in the amount of $200.0 million, which was paid on January 31, 2018. In addition, our Board of Directors approved a quarterly distribution policy authorizing us to pay a quarterly distribution to our limited liability company members following the end of each of our fiscal quarters. Beginning at the end of our fiscal quarter ending February 28, 2018 and on a quarterly basis thereafter, we will pay our limited liability company member a quarterly dividend equal to 50% of our net earnings.

•

Pursuant to a tax sharing agreement entered into between us and Leucadia, payments are made between us and Leucadia to settle current tax receivables and payables. At February 28, 2018 and November 30, 2017, a net current tax payable to Leucadia of $144.5 million and $91.5 million, respectively, is included in Accrued expenses and other liabilities in our Consolidated Statements of Financial Condition. On April 3, 2018, subsequent to the end of the first quarter of 2018, we made a payment of $115.0 million to Leucadia, which reduced the cumulative net current tax payable balance.

•

In 2017, we entered into OTC foreign exchange contracts with an affiliate of Leucadia. In connection with these contracts, at February 28, 2018 and November 30, 2017, we had $20.6 million and $17.0 million, respectively, included in Payables-brokers, dealers and clearing organizations, and at February 28, 2018, we had $0.5 million in Financial instruments sold, not yet purchased in our Consolidated Statements of Financial Condition.


•	Two of our directors have investments totaling $2.7 million and $3.6 million at February 28, 2018 and November 30, 2017, respectively, in a hedge fund managed by Leucadia.


•	We have investments in hedge funds managed by Leucadia of $214.8 million and $136.1 million at February 28, 2018 and November 30, 2017, respectively. Net gains on our investments in these hedge funds were $3.7 million and $1.8 million for the three months ended February 28, 2018 and 2017, respectively, which are included in Principal transactions in our Consolidated Statements of Earnings.


•	As a result of a public offering by Landcadia Holdings Inc., an affiliate of Leucadia, we own 638,561 public units (each unit consisting of one share of Class A common stock and one public warrant) at both February 28, 2018 and November 30, 2017, with a fair value of $6.8 million included in Financial instruments owned in our Consolidated Statements of Financial Condition.


•	A subsidiary of Leucadia had an investment in a hedge fund managed by us of $27.3 million at November 30, 2017. This investment was transferred to Jefferies effective December 31, 2017, and we paid $26.7 million, the investment’s NAV, to Leucadia in January 2018.


•	We sold $25.6 million of securities to Leucadia in February 2017 at fair value for cash. There was no gain or loss on this transaction.

•

In connection with our sales and trading activities, from time to time we make a market in long-term debt securities of Leucadia (i.e., we buy and sell debt securities issued by Leucadia). At February 28, 2018, approximately $7.4 million and $0.6 million of debt securities issued by Leucadia are included in Financial instruments owned and Financial instruments sold, respectively, in our Consolidated Statements of Financial Condition. At November 30, 2017, approximately $0.2 million is included in Financial instruments owned in our Consolidated Statements of Financial Condition.

For information on transactions with our equity method investees, see Note 9, Investments.