Fair Value Disclosures (Tables)

3 Months Ended

Feb. 28, 2022

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, excluding Investments at fair value based on net asset value (“NAV”) of $1.16 billion and $1.01 billion at February 28, 2022 and November 30, 2021, respectively, by level within the fair value hierarchy (in thousands):

	February 28, 2022
	Level 1		Level 2		Level 3		Counterparty and Cash Collateral Netting (1)		Total
Assets:
Financial instruments owned:
Corporate equity securities	$	3,136,424	$	114,692	$	108,156	$	—	$	3,359,272
Corporate debt securities	—		3,625,740		42,358		—		3,668,098
Collateralized debt obligations and collateralized loan obligations	—		870,505		45,219		—		915,724
U.S. government and federal agency securities	3,767,868		50,574		—		—		3,818,442
Municipal securities	—		480,000		—		—		480,000
Sovereign obligations	1,177,045		932,076		23		—		2,109,144
Residential mortgage-backed securities	—		798,936		1,186		—		800,122
Commercial mortgage-backed securities	—		181,635		3,732		—		185,367
Other asset-backed securities	—		624,575		62,382		—		686,957
Loans and other receivables	—		3,428,850		137,942		—		3,566,792
Derivatives	4,659		3,665,534		13,144		(3,245,884)		437,453
Investments at fair value	—		4,565		125,824		—		130,389
Total financial instruments owned, excluding Investments at fair value based on NAV	$	8,085,996	$	14,777,682	$	539,966	$	(3,245,884)	$	20,157,760
Securities received as collateral	$	973	$	—	$	—	$	—	$	973
Liabilities:
Financial instruments sold, not yet purchased:
Corporate equity securities	$	2,031,781	$	13,988	$	5,666	$	—	$	2,051,435
Corporate debt securities	—		2,405,463		7,308		—		2,412,771
U.S. government and federal agency securities	4,615,370		—		—		—		4,615,370
Sovereign obligations	1,302,485		888,806		1,159		—		2,192,450
Commercial mortgage-backed securities	—		—		315		—		315
Loans	—		2,486,780		11,541		—		2,498,321
Derivatives	2,825		4,333,655		60,914		(3,485,329)		912,065
Total financial instruments sold, not yet purchased	$	7,952,461	$	10,128,692	$	86,903	$	(3,485,329)	$	14,682,727
Other secured financings	$	—	$	125,631	$	32,377	$	—	$	158,008
Obligation to return securities received as collateral	$	973	$	—	$	—	$	—	$	973
Long-term debt	$	—	$	967,703	$	794,460	$	—	$	1,762,163

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

	November 30, 2021
	Level 1		Level 2		Level 3		Counterparty and Cash Collateral Netting (1)		Total
Assets:
Financial instruments owned:
Corporate equity securities	$	2,567,690	$	199,244	$	76,082	$	—	$	2,843,016
Corporate debt securities	—		3,836,303		11,803		—		3,848,106
Collateralized debt obligations and collateralized loan obligations	—		579,518		31,944		—		611,462
U.S. government and federal agency securities	3,045,295		68,784		—		—		3,114,079
Municipal securities	—		509,559		—		—		509,559
Sovereign obligations	899,086		654,199		—		—		1,553,285
Residential mortgage-backed securities	—		1,168,246		1,477		—		1,169,723
Commercial mortgage-backed securities	—		196,419		2,333		—		198,752
Other asset-backed securities	—		337,022		93,524		—		430,546
Loans and other receivables	—		3,363,050		74,585		—		3,437,635
Derivatives	4,429		3,858,848		10,248		(3,304,566)		568,959
Investments at fair value	—		4,236		34,557		—		38,793
Total financial instruments owned, excluding Investments at fair value based on NAV	$	6,516,500	$	14,775,428	$	336,553	$	(3,304,566)	$	18,323,915
Securities received as collateral	$	7,289	$	—	$	—	$	—	$	7,289
Liabilities:
Financial instruments sold, not yet purchased:
Corporate equity securities	$	1,671,696	$	19,654	$	4,635	$	—	$	1,695,985
Corporate debt securities	—		2,111,777		482		—		2,112,259
U.S. government and federal agency securities	2,457,420		—		—		—		2,457,420
Sovereign obligations	935,801		593,040		—		—		1,528,841
Residential mortgage-backed securities	—		719		—		—		719
Commercial mortgage-backed securities	—		—		210		—		210
Loans	—		2,476,087		15,770		—		2,491,857
Derivatives	1,815		5,024,682		78,017		(3,701,010)		1,403,504
Total financial instruments sold, not yet purchased	$	5,066,732	$	10,225,959	$	99,114	$	(3,701,010)	$	11,690,795
Other secured financings	$	—	$	76,883	$	25,905	$	—	$	102,788
Obligation to return securities received as collateral	$	7,289	$	—	$	—	$	—	$	7,289
Long-term debt	$	—	$	961,866	$	881,732	$	—	$	1,843,598

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

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 (in thousands):

	February 28, 2022
	Fair Value (1)		Unfunded Commitments
Equity Long/Short Hedge Funds (2)	$	413,151	$	—
Equity Funds (3)	51,341		41,532
Commodity Funds (4)	23,636		—
Multi-asset Funds (5)	366,855		—
Other Funds (6)	304,424		25,335
Total	$	1,159,407	$	66,867

	November 30, 2021
	Fair Value (1)		Unfunded Commitments
Equity Long/Short Hedge Funds (2)	$	466,231	$	—
Equity Funds (3)	32,412		10,593
Commodity Funds (4)	24,401		—
Multi-asset Funds (5)	390,224		—
Other Funds (6)	99,054		36,090
Total	$	1,012,322	$	46,683

(1)Where fair value is calculated based on NAV, 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, primarily in both public and private equity securities in domestic and international markets. At February 28, 2022 and November 30, 2021, approximately 73% and 74%, respectively, are redeemable quarterly with 90 days prior written notice on December 31, 2021. At both February 28, 2022 and November 30, 2021, approximately 21% of the fair value of investments in this category cannot be redeemed because these investments include restrictions that do not allow for redemption before November 30, 2023. The remaining investments are redeemable quarterly with 60 days prior written notice.

(3)The investments in this category include 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 approximately one to thirteen years.

(4)This category includes investments in a hedge fund that invests, long and short, primarily in commodities. Investments in this category are redeemable quarterly with 60 days prior written notice.

(5)This category includes investments in hedge funds that invest, long and short, primarily in multi-asset securities in domestic and international markets in both the public and private sectors. At February 28, 2022 and November 30, 2021, investments representing approximately 82% and 78%, respectively, of the fair value of investments in this category are redeemable monthly with 60 days prior written notice. At February 28, 2022 and November 30, 2021, approximately 18% and 22%, respectively, of the fair value of investments in this category are redeemable quarterly with 90 days prior written notice.

(6)This category includes investments in a fund that invests in short-term trade receivables and payables that are expected to generally be outstanding between 90 to 120 days and short-term credit instruments. This category also includes investments in a fund that invests in distressed and special situations long and short credit strategies across sectors and asset types. Investments in this category are redeemable quarterly with 90 days prior written notice.

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, 2022 (in thousands):

	Three Months Ended February 28, 2022
	Balance at November 30, 2021		Total gains/losses (realized and unrealized) (1)		Purchases		Sales		Settlements		Issuances		Net transfers into/ (out of) Level 3		Balance at February 28, 2022		For instruments still held at  February 28, 2022 changes in unrealized gains/(losses) included in:
																	Earnings (1)		Other comprehensive income (1)
Assets:
Financial instruments owned:
Corporate equity securities	$	76,082	$	7,325	$	18,786	$	(706)	$	(651)	$	—	$	7,320	$	108,156	$	6,566	$	—
Corporate debt securities	11,803		(1,176)		125,968		(103,602)		(9)		—		9,374		42,358		(1,929)		—
CDOs and CLOs	31,944		(671)		13,523		(7,740)		(1,643)		—		9,806		45,219		(906)		—
Sovereign obligations	—		(306)		3,780		(3,451)		—		—		—		23		(60)		—
RMBS	1,477		(69)		—		(187)		(35)		—		—		1,186		(44)		—
CMBS	2,333		1,177		—		—		—		—		222		3,732		1,655		—
Other ABS	93,524		2,033		11,590		(14,485)		(14,269)		—		(16,011)		62,382		(3,661)		—
Loans and other receivables	74,585		(4,737)		72,203		(17,710)		—		—		13,601		137,942		(4,585)		—
Investments at fair value	34,557		26,430		72,278		(6,826)		(615)		—		—		125,824		22,953		—
Liabilities:
Financial instruments sold, not yet purchased:
Corporate equity securities	$	4,635	$	(3,447)	$	(812)	$	5,050	$	—	$	—	$	240	$	5,666	$	3,447	$	—
Corporate debt securities	482		(8,866)		(63,714)		66,976		—		—		12,430		7,308		5,210		—
Sovereign obligations	—		(1,362)		(99,374)		101,911		—		—		(16)		1,159		54		—
CMBS	210		—		—		105		—		—		—		315		—		—
Loans	15,770		(46)		(13,125)		2,695		—		—		6,247		11,541		(135)		—
Net derivatives (2)	67,769		(54,836)		—		—		—		35,069		(232)		47,770		53,352		—
Other secured financings	25,905		—		—		—		—		6,472		—		32,377		—		—
Long-term debt	881,732		(92,871)		—		—		—		23,753		(18,154)		794,460		60,739		32,132

(1)Realized and unrealized gains/losses are primarily reported in Principal transactions revenues in our Consolidated Statements of Earnings. Changes in instrument-specific credit risk related to structured notes within Long-term debt are included in our Consolidated Statement of Comprehensive Income, net of tax.

(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, 2021 (in thousands):

	Three Months Ended February 28, 2021
	Balance at November 30, 2020		Total gains/losses (realized and unrealized) (1)		Purchases		Sales		Settlements		Issuances		Net transfers into/ (out of) Level 3		Balance at February 28, 2021		For instruments still held at February 28, 2021, changes in unrealized gains/(losses) included in:
																	Earnings (1)		Other comprehensive income (1)
Assets:
Financial instruments owned:
Corporate equity securities	$	75,797	$	1,309	$	4,805	$	(4,647)	$	—	$	—	$	6,014	$	83,278	$	135	$	—
Corporate debt securities	23,146		266		130		(6)		—		—		(16,725)		6,811		297		—
CDOs and CLOs	10,513		3,840		11,427		(8,007)		(5,652)		—		13,773		25,894		3,368		—
RMBS	21,826		1,327		791		(627)		(514)		—		(1,111)		21,692		1,347		—
CMBS	2,003		(29)		1,105		(393)		—		—		(15)		2,671		97		—
Other ABS	79,995		2,361		14,604		(20,909)		(8,449)		—		(7,008)		60,594		1,721		—
Loans and other receivables	77,042		1,642		8,758		(44,427)		(66)		—		36,106		79,055		1,656		—
Investments at fair value	67,108		1,939		—		(23,575)		—		—		—		45,472		1,939		—
Liabilities:
Financial instruments sold, not yet purchased:
Corporate equity securities	$	4,434	$	9	$	—	$	—	$	—	$	—	$	—	$	4,443	$	(22)	$	—
Corporate debt securities	141		1,430		—		—		—		—		—		1,571		(1,430)		—
CMBS	35		—		(35)		35		—		—		—		35		—		—
Loans	16,635		1,559		(6,821)		3,358		—		—		185		14,916		(1,559)		—
Net derivatives (2)	26,017		43,727		—		12,670		(92)		—		223,184		305,506		(43,727)		—
Other secured financings	1,543		—		—		—		—		625		—		2,168		—		—
Long-term debt	676,028		25,357		—		—		—		21,730		—		723,115		15,501		(40,858)

(1)Realized and unrealized gains/losses are primarily reported in Principal transactions revenues in our Consolidated Statements of Earnings. Changes in instrument-specific credit risk related to structured notes within Long-term debt are included in our Consolidated Statement of Comprehensive Income, net of tax.

(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 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 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, 2022
Financial Instruments Owned:	Fair Value (in thousands)		Valuation Technique	Significant Unobservable Input(s)	Input / Range				Weighted Average
Corporate equity securities	$	107,769
Non-exchange-traded securities			Market approach	Price	$0		-	$344	$141
Corporate debt securities	$	42,358	Market approach	Price	$13		-	$100	$91
				EBITDA multiple	3.4				—
CDOs and CLOs	$	45,219	Discounted cash flows	Constant prepayment rate	20%				—
				Constant default rate	2%				—
				Loss severity	25	%	-	70%	38%
				Discount rate/yield	4	%	-	18%	13%
			Market approach	Price	$73		-	$102	$93
CMBS	$	3,732	Market approach	Price	$600				—
			Scenario analysis	Estimated recovery percentage	81%				—
Other ABS	$	46,733	Discounted cash flows	Constant prepayment rate	0	%	-	9%	4%
				Constant default rate	2%				—
				Loss severity	50	%	-	88%	72%
				Discount rate/yield	1	%	-	23%	15%
				Cumulative loss rate	8	%	-	18%	14%
				Duration (years)	1.2		-	7.0	5.0
			Market approach	Price	$37				—
Loans and other receivables	$	136,716	Market approach	Price	$29		-	$102	$89
			Scenario analysis	Estimated recovery percentage	5	%	-	94%	33%
Derivatives	$	4,762
Equity options			Volatility benchmarking	Volatility	41%				—
Interest rate swaps			Market approach	Basis points upfront	0.0		-	8.7	4.4
Total return swaps				Price	$101				—
Investments at fair value	$	113,164
Private equity securities			Market approach	Price	$1		-	$15,852	$549
Financial Instruments Sold, Not Yet Purchased:
Corporate equity securities	$	5,666
Non-exchange-traded securities			Market approach	Price	$1				—
Loans	$	11,541	Market approach	Price	$98				—
			Scenario analysis	Estimated recovery percentage	5%				—
Derivatives	$	56,329
Equity options			Volatility benchmarking	Volatility	30	%	-	57%	45%
Interest rate swaps			Market approach	Basis points upfront	0.7		-	17.5	8.8
Total return swaps				Price	$101				—
Other secured financings	$	32,377	Scenario analysis	Estimated recovery percentage	13	%	-	36%	29%
			Market approach	Price	$87				—
Long-term debt
Structured notes	$	794,460	Market approach	Price	$66		-	$106	$83
				Price	€73		-	€106	€93

November 30, 2021
Financial Instruments Owned	Fair Value (in thousands)		Valuation Technique	Significant Unobservable Input(s)	Input / Range				Weighted Average
Corporate equity securities	$	75,694
Non-exchange-traded securities			Market approach	Price	$1		-	$366	$208
Corporate debt securities	$	11,803	Market approach	Price	$13		-	$100	$86
CDOs and CLOs	$	31,944	Discounted cash flows	Constant prepayment rate	20%				—
				Constant default rate	2%				—
				Loss severity	25	%	-	30%	26%
				Discount rate/yield	8	%	-	19%	16%
			Market approach	Price	$86		-	$103	$93
CMBS	$	2,333	Scenario analysis	Estimated recovery percentage	81%				—
Other ABS	$	86,099	Discounted cash flows	Constant prepayment rate	0	%	-	35%	31%
				Constant default rate	2	%	-	4%	4%
				Loss severity	60	%	-	85%	55%
				Discount rate/yield	3	%	-	16%	10%
				Cumulative loss rate	7	%	-	20%	14%
				Duration (years)	0.7		-	1.4	1.1
			Market approach	Price	$37		-	$100	$94
Loans and other receivables	$	73,361	Market approach	Price	$31		-	$101	$54
			Scenario analysis	Estimated recovery percentage	9	%	-	100%	42%
Derivatives	$	6,501
Equity options			Volatility benchmarking	Volatility	46%				—
Interest rate swaps			Market approach	Basis points upfront	0.1		-	8.7	3.3
Total return swaps				Price	$100				—
Investments at fair value	$	34,557
Private equity securities			Market approach	Price	$1		-	$152	$48
			Scenario analysis	Estimated recovery percentage	7%				—
Financial Instruments Sold, Not Yet Purchased:
Corporate equity securities	$	4,635
Non-exchange-traded securities			Market approach	Price	$1				—
Loans	$	15,770	Market approach	Price	$31		-	$100	$43
			Scenario analysis	Estimated recovery percentage	50%				—
Derivatives	$	76,533
Equity options			Volatility benchmarking	Volatility	26	%	-	77%	40%
Interest rate swaps			Market approach	Basis points upfront	0.1		-	8.7	3.1
Total return swaps				Price	$100				—
Other secured financings	$	25,905	Scenario analysis	Estimated recovery percentage	13	%	-	98%	92%
Long-term debt
Structured notes	$	881,732	Market approach	Price	$76		-	$115	$94
				Price	€81		-	€113	€103

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, other receivables and debt instruments and gains (losses) due to other changes in fair value on Long-term debt measured at fair value under the fair value option (in thousands):

	Three Months Ended  February 28,
	2022		2021
Financial instruments owned:
Loans and other receivables	$	(2,287)	$	10,696
Financial instruments sold, not yet purchased:
Loans	$	1,548	$	—
Long-term debt:
Changes in instrument-specific credit risk (1)	$	51,248	$	(91,982)
Other changes in fair value (2)	94,551		80,819

(1)Changes in instrument-specific credit risk related to structured notes are included in our Consolidated Statements of Comprehensive Income, net of tax.

(2)Other changes in fair value are included in Principal transactions revenues in our Consolidated Statements of Earnings.

The following is a summary of the amounts by which contractual principal is greater than (less than) fair value for loans and other receivables, Other secured financings and Long-term debt measured at fair value under the fair value option (in thousands):

	February 28, 2022		November 30, 2021
Financial instruments owned:
Loans and other receivables (1)	$	5,533,863	$	5,600,648
Loans and other receivables on nonaccrual status and/or 90 days or greater past due (1) (2)	51,601		64,203
Long-term debt	107,282		(38,391)
Other secured financings	3,432		3,432

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

(2)Amounts include loans and other receivables 90 days or greater past due by which contractual principal exceeds fair value of $16.8 million and $19.7 million at February 28, 2022 and November 30, 2021, respectively.