Income Taxes

6 Months Ended

May 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income TaxesIn the first quarter of fiscal 2022, we changed our accounting policy election as it relates to where we record interest accrued on unrecognized tax benefits in order to align our accounting policy and income statement presentation with that of Jefferies. Beginning with the first quarter of fiscal 2022, we record interest on unrecognized tax benefits as a component of the provision for income taxes and reported financial information for historical comparable periods has not been revised. Prior to fiscal 2022, interest on unrecognized tax benefits was recorded in Interest expense in our Consolidated Statements of Earnings. In addition, penalties, if any, are recognized in the provision for income taxes. This change did not have a material impact on our consolidated financial statements and has no impact on Net earnings in our historical periods.

At May 31, 2022 and November 30, 2021, our total gross unrecognized tax benefits were $290.7 million and $198.9 million, respectively. The increase is primarily attributable to the inclusion of $80.7 million of accrued interest at May 31, 2022 related to the change in accounting policy discussed above. At May 31, 2022 and November 30, 2021, we had interest accrued of approximately $80.7 million and $74.3 million, respectively, included in Accrued expenses and other liabilities in our Consolidated Statements of Financial Condition. The total amount of unrecognized benefits that, if recognized, would favorably affect the effective tax rate was $229.9 million and $157.8 million (net of Federal benefit) at May 31, 2022 and November 30, 2021, respectively.

We are currently under examination by a number of taxing jurisdictions. Though we do not expect that resolution of these examinations will have a material effect on our consolidated financial position, they may have a material impact on our consolidated results of operations for the period in which resolution occurs.

The table below summarizes the earliest tax years that remain subject to examination in the major tax jurisdictions in which we operate:

Jurisdiction	Tax Year
United States	2018
New York State	2001
New York City	2006
United Kingdom	2020
Hong Kong	2016
Germany	2017

For the six months ended May 31, 2022, the provision for income taxes was $142.9 million, equating to an effective tax rate of 22.8%. For the six months ended May 31, 2021, the provision for income taxes was $288.2 million, equating to an effective tax rate of 26.2%.