UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 28, 2026

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 1-05721

Jefferies Financial Group Inc.

(Exact name of registrant as specified in its charter)

New York			13-2615557
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
520 Madison Avenue,	New York,	New York	10022
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (212) 284-2300

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares, par value $1 per share	JEF	New York Stock Exchange
4.850% Senior Notes Due 2027	JEF 27A	New York Stock Exchange
5.875% Senior Notes Due 2028	JEF 28	New York Stock Exchange
2.750% Senior Notes Due 2032	JEF 32A	New York Stock Exchange
6.200% Senior Notes Due 2034	JEF 34	New York Stock Exchange
5.500% Senior Notes Due 2036	JEF 36	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the

preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the

past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation

S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging

growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of

the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or

revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

The number of shares outstanding of each of the issuer’s classes of common stock at March 30, 2026 was 204,432,307.

Jefferies Financial Group, Inc.

Index to Quarterly Report on Form 10-Q

February 28, 2026

PART I. FINANCIAL INFORMATION
	Page
Item 1. Financial Statements	2
Consolidated Statements of Financial Condition (Unaudited) .........................................................................................................	2
Consolidated Statements of Earnings (Unaudited) ............................................................................................................................	3
Consolidated Statements of Comprehensive Income (Unaudited) ..................................................................................................	4
Consolidated Statements of Changes in Equity (Unaudited) ............................................................................................................	5
Consolidated Statements of Cash Flows (Unaudited) .......................................................................................................................	6
Notes to Consolidated Financial Statements (Unaudited) ................................................................................................................	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations ...............................................	43
Item 3. Quantitative and Qualitative Disclosures About Market Risk ....................................................................................................	64
Item 4. Controls and Procedures ..................................................................................................................................................................	64
PART II. OTHER INFORMATION
Item 1. Legal Proceedings .............................................................................................................................................................................	65
Item 1A. Risk Factors .....................................................................................................................................................................................	65
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds ..................................................................................................	65
Item 5. Other Information ..............................................................................................................................................................................	65
Item 6. Exhibits ................................................................................................................................................................................................	65

2 Jefferies Financial Group Inc.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

Consolidated Statements of Financial Condition (Unaudited)	February 28,	November 30,
$ in thousands, except share and per share amounts	2026	2025
Assets
Cash and cash equivalents ...............................................................................................................................................................	$11,963,165	$14,043,889
Cash and securities segregated and on deposit for regulatory purposes or deposited with clearing and depository organizations .................................................................................................................................................................................	1,752,549	917,697
Financial instruments owned, at fair value (includes securities pledged of $18,129,409 and $17,419,373) .......................	28,079,458	27,722,739
Investments in and loans to related parties ...................................................................................................................................	1,560,602	1,496,125
Securities borrowed ...........................................................................................................................................................................	7,675,862	8,295,161
Securities purchased under agreements to resell ........................................................................................................................	7,784,070	8,449,107
Securities received as collateral, at fair value ................................................................................................................................	393,867	200,495
Receivables:
Brokers, dealers and clearing organizations ...............................................................................................................................	3,762,461	4,310,143
Customers ........................................................................................................................................................................................	3,984,448	3,439,921
Fees, interest and other ..................................................................................................................................................................	761,369	806,324
Premises and equipment ..................................................................................................................................................................	1,198,511	1,246,470
Goodwill ...............................................................................................................................................................................................	1,725,876	1,837,570
Assets held for sale ...........................................................................................................................................................................	269,707	—
Other assets (includes assets pledged of $646,883 and $627,259) ..........................................................................................	3,468,545	3,246,706
Total assets ........................................................................................................................................................................................	$74,380,490	$76,012,347
Liabilities and Equity
Short-term borrowings ......................................................................................................................................................................	$1,917,492	$1,767,206
Financial instruments sold, not yet purchased, at fair value .......................................................................................................	14,459,138	13,320,152
Securities loaned ................................................................................................................................................................................	2,690,387	2,540,759
Securities sold under agreements to repurchase .........................................................................................................................	10,380,281	12,156,737
Other secured financings (includes $424,023 and $425,964 at fair value) ...............................................................................	2,285,995	2,885,878
Obligation to return securities received as collateral, at fair value .............................................................................................	393,867	200,495
Payables:
Brokers, dealers and clearing organizations ...............................................................................................................................	5,646,053	6,955,100
Customers ........................................................................................................................................................................................	5,350,833	5,216,714
Lease liabilities ...................................................................................................................................................................................	573,096	594,097
Liabilities held for sale ......................................................................................................................................................................	257,888	—
Accrued expenses and other liabilities ...........................................................................................................................................	2,533,907	3,836,709
Long-term debt (includes $3,686,758 and $3,734,843 at fair value) ..........................................................................................	17,229,419	15,895,891
Total liabilities ....................................................................................................................................................................................	63,718,356	65,369,738
Mezzanine Equity
Redeemable noncontrolling interests .............................................................................................................................................	406	406
Equity
Series B preferred shares, par value of $1 per share, authorized 70,000 shares; 55,125 shares issued and outstanding	55	55
Common shares, par value $1 per share, authorized 565,000,000 shares; 204,422,673 and 206,296,167 shares issued and outstanding, after deducting 116,695,397 and 114,821,903 shares held in treasury ..................................................	204,423	206,296
Non-voting common shares, par value $1 per share, authorized 35,000,000, shares; no shares issued and outstanding ....................................................................................................................................................................................	—	—
Additional paid-in capital ..................................................................................................................................................................	2,075,065	2,177,954
Accumulated other comprehensive loss ........................................................................................................................................	(315,023)	(384,434)
Retained earnings ..............................................................................................................................................................................	8,646,325	8,574,825
Total Jefferies Financial Group Inc. shareholders' equity ..........................................................................................................	10,610,845	10,574,696
Noncontrolling interests ...................................................................................................................................................................	50,883	67,507
Total equity .........................................................................................................................................................................................	10,661,728	10,642,203
Total liabilities and equity ................................................................................................................................................................	$74,380,490	$76,012,347

See accompanying notes to consolidated financial statements.

February 2026 Form 10-Q 3

Consolidated Statements of Earnings (Unaudited)

	Three Months Ended February 28,
$ in thousands, except per share amounts	2026	2025
Revenues
Investment banking ....................................................................................................................................................................	$1,018,284	$729,510
Principal transactions ................................................................................................................................................................	487,498	407,230
Commissions and other fees ....................................................................................................................................................	367,604	288,300
Asset management fees and revenues ...................................................................................................................................	67,362	85,408
Interest .........................................................................................................................................................................................	813,119	845,171
Other .............................................................................................................................................................................................	117,398	117,245
Total revenues ............................................................................................................................................................................	2,871,265	2,472,864
Interest expense ..........................................................................................................................................................................	854,135	879,845
Net revenues ...............................................................................................................................................................................	2,017,130	1,593,019
Non-interest expenses
Compensation and benefits ......................................................................................................................................................	1,085,890	841,127
Brokerage and clearing fees .....................................................................................................................................................	133,132	109,436
Underwriting costs ......................................................................................................................................................................	31,383	17,846
Technology and communications ............................................................................................................................................	159,858	139,475
Occupancy and equipment rental .............................................................................................................................................	33,860	30,199
Business development ...............................................................................................................................................................	75,422	72,291
Professional services .................................................................................................................................................................	76,944	72,466
Depreciation and amortization .................................................................................................................................................	56,865	30,988
Cost of sales ................................................................................................................................................................................	29,920	41,568
Other expenses ...........................................................................................................................................................................	121,640	86,558
Total non-interest expenses ....................................................................................................................................................	1,804,914	1,441,954
Earnings before income taxes ..................................................................................................................................................	212,216	151,065
Income tax expense ...................................................................................................................................................................	52,870	14,216
Net earnings ................................................................................................................................................................................	159,346	136,849
Net losses attributable to noncontrolling interests ...............................................................................................................	(15,858)	(6,983)
Preferred stock dividends ..........................................................................................................................................................	19,504	16,039
Net earnings attributable to common shareholders ............................................................................................................	$155,700	$127,793
Earnings per common share
Basic .............................................................................................................................................................................................	$0.72	$0.60
Diluted ...........................................................................................................................................................................................	0.70	0.57
Weighted-average common shares outstanding
Basic .............................................................................................................................................................................................	215,707	214,536
Diluted ...........................................................................................................................................................................................	223,270	222,448

See accompanying notes to consolidated financial statements.

4 Jefferies Financial Group Inc.

Consolidated Statements of Comprehensive Income (Unaudited)

	Three Months Ended February 28,
$ in thousands	2026	2025
Net earnings .............................................................................................................................................................................	$159,346	$136,849
Other comprehensive income (loss), net of tax:
Currency translation adjustments and other (1) ................................................................................................................	9,179	(15,322)
Changes in fair value related to instrument-specific credit risk (2) ................................................................................	59,648	30,256
Unrealized gains on available-for-sale-securities .............................................................................................................	584	125
Total other comprehensive income (loss), net of tax (3) .................................................................................................	69,411	15,059
Comprehensive income ..........................................................................................................................................................	228,757	151,908
Net losses attributable to noncontrolling interests ............................................................................................................	(15,858)	(6,983)
Preferred stock dividends ......................................................................................................................................................	19,504	16,039
Comprehensive income attributable to common shareholders ......................................................................................	$225,111	$142,852

(1)Includes income tax expense of $4.5 million for the three months ended February 28, 2026 and income tax benefit of $4.5 million for the three

months ended February 28, 2025.

(2)Includes income tax expense of $19.0 million and $10.6 million for the three months ended February 28, 2026 and 2025, respectively.

(3)Includes unrealized losses of $0.2 million for the three months ended February 28, 2025, related to currency translation adjustments attributable to

noncontrolling interests.

See accompanying notes to consolidated financial statements.

February 2026 Form 10-Q 5

Consolidated Statements of Changes in Equity (Unaudited)

	Three Months Ended February 28,
$ in thousands, except par value and per share amounts	2026	2025
Preferred shares $1 par value
Balance, beginning of period ....................................................................................................................................................	$55	$55
Balance, end of period ..............................................................................................................................................................	$55	$55
Common shares $1 par value
Balance, beginning of period ....................................................................................................................................................	$206,296	$205,504
Purchase of common shares for treasury ..........................................................................................................................	(2,996)	(696)
Other .........................................................................................................................................................................................	1,123	1,442
Balance, end of period ..............................................................................................................................................................	$204,423	$206,250
Additional paid-in capital
Balance, beginning of period ....................................................................................................................................................	$2,177,954	$2,104,199
Share-based compensation expense ..................................................................................................................................	50,672	35,637
Purchase of common shares for treasury ..........................................................................................................................	(171,307)	(55,622)
Dividend equivalents ..............................................................................................................................................................	10,908	8,597
Change in equity interest related to consolidated subsidiaries .......................................................................................	4,606	853
Other .........................................................................................................................................................................................	2,232	474
Balance, end of period ..............................................................................................................................................................	$2,075,065	$2,094,138
Accumulated other comprehensive loss, net of tax
Balance, beginning of period ....................................................................................................................................................	$(384,434)	$(423,131)
Other comprehensive income, net of taxes ........................................................................................................................	69,411	15,059
Balance, end of period ..............................................................................................................................................................	$(315,023)	$(408,072)
Retained earnings
Balance, beginning of period ....................................................................................................................................................	$8,574,825	$8,270,145
Net earnings attributable to Jefferies Financial Group Inc. ..............................................................................................	175,204	143,832
Dividends - common shares ($0.40 and $0.40 per share) ................................................................................................	(92,674)	(91,095)
Dividends - preferred shares .................................................................................................................................................	(11,025)	(11,025)
Other .........................................................................................................................................................................................	(5)	—
Balance, end of period ..............................................................................................................................................................	$8,646,325	$8,311,857
Total Jefferies Financial Group Inc. shareholders' equity .................................................................................................	$10,610,845	$10,204,228
Noncontrolling interests
Balance, beginning of period ....................................................................................................................................................	$67,507	$68,215
Net losses attributable to noncontrolling interests ...........................................................................................................	(15,858)	(6,983)
Contributions ...........................................................................................................................................................................	119	104
Distributions ............................................................................................................................................................................	(1,518)	(2,795)
Other .........................................................................................................................................................................................	633	5,670
Balance, end of period ..............................................................................................................................................................	$50,883	$64,211
Total equity .................................................................................................................................................................................	$10,661,728	$10,268,439

See accompanying notes to consolidated financial statements.

6 Jefferies Financial Group Inc.

Consolidated Statements of Cash Flows (Unaudited)

	Three Months Ended February 28,
$ in thousands	2026	2025
Cash flows from operating activities:
Net earnings ...................................................................................................................................................................	$159,346	$136,849
Adjustments to reconcile net earnings to net cash used in operating activities:
Depreciation and amortization .................................................................................................................................	41,335	32,995
Impairment of assets ................................................................................................................................................	65,413	—
Share-based compensation ......................................................................................................................................	50,672	35,637
Net bad debt expense ...............................................................................................................................................	14,427	7,493
Income on investments in and loans to related parties .......................................................................................	(24,474)	(7,052)
Distributions received on investments in related parties .....................................................................................	21,173	16,142
Other adjustments .....................................................................................................................................................	118,761	(44,419)
Net change in assets and liabilities:
Receivables:
Brokers, dealers and clearing organizations .......................................................................................................	547,515	(877,505)
Customers ................................................................................................................................................................	(544,527)	32,699
Fees, interest and other ..........................................................................................................................................	7,851	(47,567)
Securities borrowed ...................................................................................................................................................	619,155	(1,198,188)
Financial instruments owned ...................................................................................................................................	(357,809)	(2,271,617)
Securities purchased under agreements to resell ................................................................................................	664,567	(1,976,348)
Other assets ................................................................................................................................................................	(305,830)	(236,583)
Payables:
Brokers, dealers and clearing organizations .......................................................................................................	(1,308,863)	546,020
Customers ................................................................................................................................................................	134,119	48,413
Securities loaned ........................................................................................................................................................	149,785	(30,136)
Financial instruments sold, not yet purchased ......................................................................................................	1,139,710	3,027,469
Securities sold under agreements to repurchase .................................................................................................	(1,776,125)	1,359,656
Lease liabilities ...........................................................................................................................................................	(17,783)	(21,429)
Accrued expenses and other liabilities ...................................................................................................................	(1,135,709)	(1,197,694)
Net cash used in operating activities ........................................................................................................................	(1,737,291)	(2,665,165)
Cash flows from investing activities:
Contributions to investments in and loans to related parties .............................................................................	(64,830)	(21,949)
Capital distributions from investments and repayments of loans from related parties .................................	426	13,752
Net payments on premises and equipment ...........................................................................................................	(64,861)	(49,578)
Net cash used in investing activities ........................................................................................................................	(129,265)	(57,775)
Cash flows from financing activities:
Proceeds from short-term borrowings ...................................................................................................................	$2,081,271	$3,253,704
Payments on short-term borrowings ......................................................................................................................	(1,916,779)	(2,662,000)
Proceeds from issuance of long-term debt, net of issuance costs ....................................................................	2,570,746	1,536,928
Repayment of long-term debt ..................................................................................................................................	(1,239,142)	(188,890)
Purchase of common shares for treasury..............................................................................................................	(174,303)	(56,318)
Dividends paid to common and preferred shareholders ......................................................................................	(92,791)	(92,735)
Net proceeds from (payments on) other secured financings .............................................................................	(600,057)	98,941
Net change in bank overdrafts .................................................................................................................................	(8,400)	137,305
Proceeds from contributions of noncontrolling interests ....................................................................................	119	104
Payments on distributions to noncontrolling interests ........................................................................................	(1,518)	(2,795)
Other ............................................................................................................................................................................	7,956	1,916
Net cash provided by financing activities ................................................................................................................	627,102	2,026,160
Effect of exchange rate changes on cash, cash equivalents, and restricted cash ...........................................	(152)	(8,062)
Change in cash, cash equivalents, and restricted cash reclassified from (to) assets held for sale .................	(6,266)	—
Net decrease in cash, cash equivalents, and restricted cash ................................................................................	(1,239,606)	(704,842)
Cash, cash equivalents, and restricted cash at beginning of period .....................................................................	14,961,586	13,165,612
Cash, cash equivalents, and restricted cash at end of period ..............................................................................	$13,715,714	$12,460,770

February 2026 Form 10-Q 7

Consolidated Statements of Cash Flows (Unaudited)

	Three Months Ended February 28,
$ in thousands	2026	2025
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest .........................................................................................................................................................................	$831,330	$845,673
Income taxes, net .......................................................................................................................................................	37,848	9,089

Noncash investing activities:

During the three months ended February 28, 2025, we donated land with a fair market value of $5.7 million.

Cash, cash equivalents and restricted cash by category in our Consolidated Statements of Financial Condition:

	February 28,	November 30,
$ in thousands	2026	2025
Cash and cash equivalents ...........................................................................................................................................	$11,963,165	$14,043,889
Cash on deposit for regulatory purposes with clearing and depository organizations .......................................	1,752,549	917,697
Total cash, cash equivalents and restricted cash ....................................................................................................	$13,715,714	$14,961,586

See accompanying notes to consolidated financial statements.

8 Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Index

	Page
Note 1. Organization and Basis of Presentation ......................................................................................................................................................................	9
Note 2. Summary of Significant Accounting Policies .............................................................................................................................................................	9
Note 3. Accounting Developments ............................................................................................................................................................................................	9
Note 4. Assets and Liabilities Held for Sale ..............................................................................................................................................................................	10
Note 5. Fair Value Disclosures ....................................................................................................................................................................................................	11
Note 6. Derivative Financial Instruments ..................................................................................................................................................................................	20
Note 7. Collateralized Transactions ...........................................................................................................................................................................................	23
Note 8. Securitization Activities .................................................................................................................................................................................................	24
Note 9. Variable Interest Entities ................................................................................................................................................................................................	25
Note 10. Investments ...................................................................................................................................................................................................................	27
Note 11. Credit Losses on Financial Assets Measured at Amortized Cost .........................................................................................................................	30
Note 12. Goodwill and Intangible Assets ..................................................................................................................................................................................	31
Note 13. Revenues from Contracts with Customers ...............................................................................................................................................................	31
Note 14. Compensation Plans ....................................................................................................................................................................................................	32
Note 15. Borrowings .....................................................................................................................................................................................................................	33
Note 16. Total Equity ....................................................................................................................................................................................................................	35
Note 17. Income Taxes ................................................................................................................................................................................................................	37
Note 18. Commitments, Contingencies and Guarantees .......................................................................................................................................................	37
Note 19. Regulatory Requirements ............................................................................................................................................................................................	38
Note 20. Segment Reporting .......................................................................................................................................................................................................	39
Note 21. Related Party Transactions .........................................................................................................................................................................................	41

February 2026 Form 10-Q 9

Notes to Consolidated Financial Statements

(Unaudited)

Note 1. Organization and Basis of Presentation

Organization

Jefferies Financial Group Inc. is a U.S.-headquartered global

investment banking and capital markets firm. The accompanying

consolidated financial statements represent the accounts of

Jefferies Financial Group Inc. and subsidiaries (together, the

“Company,” “we” or “us”). We, collectively with our consolidated

subsidiaries and through our affiliates, deliver a broad range of

financial services across investment banking, capital markets

and asset management.

We operate in two reportable business segments: (1) Investment

Banking and Capital Markets and (2) Asset Management. The

Investment Banking and Capital Markets reportable business

segment includes our capital markets activities and our

investment banking business, which provides underwriting and

financial advisory services to our clients. We operate in the

Americas; Europe and the Middle East; and Asia-Pacific.

Investment Banking and Capital Markets also includes our

corporate lending joint venture (“Jefferies Finance LLC” or

“Jefferies Finance”), our commercial real estate joint venture

(“Berkadia Commercial Holding LLC” or “Berkadia”). The Asset

Management reportable business segment provides alternative

investment management services to investors globally and

generates investment income from capital invested in and

managed by us or our affiliated asset managers, and includes

certain remaining businesses and assets of our legacy merchant

banking portfolio.

Basis of Presentation

The accompanying consolidated financial statements have been

prepared in accordance with U.S. generally accepted accounting

principles (“U.S. GAAP”) and should be read in conjunction with

our consolidated financial statements and notes thereto included

in our Annual Report on Form 10-K for the year ended November

30, 2025. Certain footnote disclosures included in our Annual

Report on Form 10-K for the year ended November 30, 2025 have

been condensed or omitted from the consolidated financial

statements as they are not required for interim reporting under

U.S. GAAP. The consolidated financial statements reflect all

adjustments of a normal, recurring nature that are, in the opinion

of management, necessary for the fair presentation of the results

for the interim period. The results presented in our consolidated

financial statements for interim periods are not necessarily

indicative of the results for the entire year.

We have made a number of estimates and assumptions relating

to the reporting of assets and liabilities, the disclosure of

contingent assets and liabilities and the reported amounts of

revenues and expenses during the reporting period to prepare

these consolidated financial statements in conformity with U.S.

GAAP. The most important of these estimates and assumptions

relate to fair value measurements, compensation and benefits,

goodwill and intangible assets and the accounting for income

taxes. Although these and other estimates and assumptions are

based on the best available information, actual results could be

materially different from these estimates.

Certain prior period amounts in our consolidated financial

statements and respective notes have been reclassified to be

consistent with the current period presentation. Such

reclassifications had no impact on net earnings, total assets,

total liabilities, or stockholders’ equity.

Consolidation

Our policy is to consolidate all entities that we control by

ownership of a majority of the outstanding voting stock. In

addition, we consolidate entities that meet the definition of a

variable interest entity (“VIE”) for which we are the primary

beneficiary. The primary beneficiary is the party who has the

power to direct the activities of a VIE that most significantly

impact the entity’s economic performance and who has an

obligation to absorb losses of the entity or a right to receive

benefits from the entity that could potentially be significant to the

entity. For consolidated entities that are less than wholly-owned,

the third-party’s holding of equity interest is presented as

Noncontrolling interests in our Consolidated Statements of

Financial Condition and Consolidated Statements of Changes in

Equity. The portion of net earnings attributable to the

noncontrolling interests is presented as Net earnings (losses)

attributable to noncontrolling interests in our Consolidated

Statements of Earnings.

In situations in which we have significant influence, but not

control, of an entity that does not qualify as a VIE, we apply either

the equity method of accounting or fair value accounting

pursuant to the fair value option election under U.S. GAAP, with

our portion of net earnings or gains and losses recorded in Other

revenues or Principal transactions revenues, respectively. We

also have formed nonconsolidated investment vehicles with

third-party investors that are typically organized as partnerships

or limited liability companies and are carried at fair value. We act

as general partner or managing member for these investment

vehicles and have generally provided the third-party investors

with termination or “kick-out” rights.

Intercompany accounts and transactions are eliminated in

consolidation.

Note 2. Summary of Significant Accounting Policies

For a detailed discussion about the Company’s significant

accounting policies, refer to Note 2, Summary of Significant

Accounting Policies in our consolidated financial statements

included in Part II, Item 8 of our Annual Report on Form 10-K for

the year ended November 30, 2025.

During the three months ended February 28, 2026, there were no

significant changes made to the Company’s significant

accounting policies.

Note 3. Accounting Developments

Accounting Standards to be Adopted in Future Periods

Income Taxes. In December 2023, the FASB issued ASU No.

2023-09 (“ASU 2023-09”), Improvements to Income Tax

Disclosures. The guidance is intended to improve income tax

disclosure requirements by requiring (i) consistent categories

and greater disaggregation of information in the rate

reconciliation and (ii) the disaggregation of income taxes paid by

jurisdiction. The guidance makes several other changes to the

income tax disclosure requirements. The amendments in ASU

2023-09 are effective for fiscal years beginning after December

15, 2024 and are required to be applied prospectively with the

option of retrospective application. We are evaluating the impact

of the standard on our income tax disclosures.

10 Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Expenses. In November 2024, the FASB issued ASU No. 2024-03

(“ASU 2024-03”), Disaggregation of Income Statement Expenses.

The guidance primarily will require enhanced disclosures about

certain types of expenses. The amendments in ASU 2024-03 are

effective for fiscal years beginning after December 15, 2026, and

interim periods within fiscal years beginning after December 15,

2027 and may be applied either on a prospective or retrospective

basis. We are evaluating the impact of the standard on our

disclosures.

Credit Losses. In July 2025, the FASB issued ASU No. 2025-05

(“ASU 2025-05”), Financial Instruments–Credit Losses. The

guidance provides an optional practical expedient when applying

the guidance related to the estimation of expected credit losses

for current accounts receivable and current contract assets

resulting from transactions arising from contracts with

customers. The amendments in ASU 2025-05 are effective for

fiscal years beginning after December 15, 2025, and interim

reporting periods, with early adoption permitted. We are

evaluating the impact of the standard on our financial

statements.

Internal-Use Software. In September 2025, the FASB issued ASU

No. 2025-06 (“ASU 2025-06”), Intangibles–Goodwill and Other–

Internal-Use Software. The guidance modernizes and clarifies the

threshold for when an entity is required to start capitalizing

software costs and is based on when (i) management has

authorized and committed to funding the software project and (ii)

it is probable that the project will be completed and the software

will be used to perform the function intended. The amendments

in ASU 2025-06 are effective for fiscal years beginning after

December 15, 2027, and interim reporting periods, with early

adoption permitted. We are evaluating the impact of the standard

on our financial statements.

Derivatives and Hedging and Revenue from Contracts with

Customers. In September 2025, the FASB issued ASU No.

2025-07 (“ASU 2025-07”), Derivatives and Hedging (Topic 815)

and Revenue from Contracts with Customers (Topic 606). The

guidance refines the scope of Topic 815 to clarify which

contracts are subject to derivative accounting. The guidance also

provides clarification under Topic 606 for share-based payments

from a customer in a revenue contract. The amendments in ASU

2025-07 are effective for fiscal years beginning after December

15, 2026, and interim reporting periods, with early adoption

permitted. We are evaluating the impact of the standard on our

financial statements.

Adopted Accounting Standards

Segment Reporting. In November 2023, the Financial Accounting

Standards Board (“FASB”) issued ASU No. 2023-07 (“ASU

2023-07”), Improvements to Reportable Segment Disclosures.

The guidance primarily requires enhanced disclosures about

significant segment expenses. We adopted the guidance

beginning with our year ended November 30, 2025, which

impacted our disclosures only. Refer to Note 20, Segment

Reporting for additional information.

Note 4. Assets and Liabilities Held for Sale

Tessellis

During 2026, we accepted a binding offer from a third party for

the sale of Tessellis. We expect the sale to close during first

quarter of 2027.

Assets held for sale are recorded initially at the lower of their

carrying value or estimated fair value, less estimated costs to

sell. Upon designation as an asset held for sale, we discontinue

recording depreciation and amortization expense on such assets.

Tessellis is included within our asset management reportable

segment.

Tessellis’ major classes of assets and liabilities:

$ in thousands	February 28, 2026
Assets held for sale:
Cash and cash equivalents ........................................	$6,266
Investments in and loans to related parties ............	6,579
Other receivables ........................................................	25,074
Premises and equipment, net ....................................	66,215
Goodwill ........................................................................	56,850
Other assets .................................................................	108,723
Total assets held for sale .....................................	$269,707
Liabilities held for sale:
Short term borrowings ................................................	$6,071
Lease liabilities ............................................................	19,291
Accrued expenses and other liabilities ....................	181,699
Long-term debt ............................................................	50,827
Total liabilities held for sale ................................	$257,888

February 2026 Form 10-Q 11

Notes to Consolidated Financial Statements

(Unaudited)

Note 5. Fair Value Disclosures

	February 28, 2026 (1)
$ in thousands	Level 1	Level 2	Level 3	Counterparty and Cash Collateral Netting (2)	Total
Assets:
Financial instruments owned:
Corporate equity securities ..................................................................................	$7,339,191	$354,960	$218,483	$—	$7,912,634
Corporate debt securities .....................................................................................	—	5,401,094	50,755	—	5,451,849
Collateralized debt obligations and collateralized loan obligations ...............	—	591,727	61,455	—	653,182
U.S. government and federal agency securities ................................................	2,524,173	67,934	—	—	2,592,107
Municipal securities ..............................................................................................	—	556,120	—	—	556,120
Sovereign obligations ............................................................................................	928,270	1,038,133	—	—	1,966,403
Residential mortgage-backed securities ............................................................	—	2,123,844	6,134	—	2,129,978
Commercial mortgage-backed securities ..........................................................	—	2,150	355	—	2,505
Other asset-backed securities .............................................................................	—	630,244	244,714	—	874,958
Loans and other receivables ................................................................................	—	2,156,054	85,396	—	2,241,450
Derivatives ..............................................................................................................	155	7,079,249	14,691	(5,186,913)	1,907,182
Investments at fair value ......................................................................................	—	13,569	167,195	—	180,764
Total financial instruments owned, excluding Investments at fair value based on NAV ....................................................................................................	$10,791,789	$20,015,078	$849,178	$(5,186,913)	$26,469,132
Securities received as collateral ..........................................................................	$393,867	$—	$—	$—	$393,867
Liabilities:
Financial instruments sold, not yet purchased:
Corporate equity securities ..................................................................................	$6,457,960	$119,236	$167	$—	$6,577,363
Corporate debt securities .....................................................................................	—	3,196,057	555	—	3,196,612
Collateralized debt obligations and collateralized loan obligations ...............	—	1,000	—	—	1,000
U.S. government and federal agency securities ................................................	1,590,146	16	—	—	1,590,162
Municipal securities ..............................................................................................	—	88	—	—	88
Sovereign obligations ............................................................................................	688,027	837,099	—	—	1,525,126
Residential mortgage-backed securities ............................................................	—	2,041	—	—	2,041
Loans .......................................................................................................................	—	264,838	921	—	265,759
Derivatives ..............................................................................................................	56	6,858,114	43,253	(5,600,436)	1,300,987
Total financial instruments sold, not yet purchased .......................................	$8,736,189	$11,278,489	$44,896	$(5,600,436)	$14,459,138
Other secured financings ......................................................................................	$—	$412,338	$11,685	$—	$424,023
Obligation to return securities received as collateral .......................................	393,867	—	—	—	393,867
Long-term debt .......................................................................................................	—	2,662,691	1,024,067	—	3,686,758

(1)Excludes investments at fair value based on net asset value (“NAV”) of $1.61 billion at February 28, 2026 by level within the fair value hierarchy.

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

12 Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

	November 30, 2025 (1)
$ in thousands	Level 1	Level 2	Level 3	Counterparty and Cash Collateral Netting (2)	Total
Assets:
Financial instruments owned:
Corporate equity securities ..................................................................................	$7,664,824	$249,847	$218,853	$—	$8,133,524
Corporate debt securities .....................................................................................	—	5,367,201	37,578	—	5,404,779
Collateralized debt obligations and collateralized loan obligations ...............	—	645,798	40,187	—	685,985
U.S. government and federal agency securities ................................................	2,342,718	106,633	—	—	2,449,351
Municipal securities ..............................................................................................	—	563,994	—	—	563,994
Sovereign obligations ............................................................................................	860,832	815,722	—	—	1,676,554
Residential mortgage-backed securities ............................................................	—	1,827,092	6,663	—	1,833,755
Commercial mortgage-backed securities ..........................................................	—	10,458	348	—	10,806
Other asset-backed securities .............................................................................	—	909,474	133,001	—	1,042,475
Loans and other receivables ................................................................................	—	2,111,517	127,720	—	2,239,237
Derivatives ..............................................................................................................	72	5,519,463	10,311	(3,705,764)	1,824,082
Investments at fair value ......................................................................................	—	13,567	163,107	—	176,674
Total financial instruments owned, excluding Investments at fair value based on NAV ....................................................................................................	$10,868,446	$18,140,766	$737,768	$(3,705,764)	$26,041,216
Securities received as collateral ..........................................................................	$200,495	$—	$—	$—	$200,495
Liabilities:
Financial instruments sold, not yet purchased:
Corporate equity securities ..................................................................................	$5,571,534	$47,631	$155	$—	$5,619,320
Corporate debt securities .....................................................................................	—	2,761,794	3,720	—	2,765,514
Collateralized debt obligations and collateralized loan obligations ...............	—	627	—	—	627
U.S. government and federal agency securities ................................................	1,913,403	4	—	—	1,913,407
Sovereign obligations ............................................................................................	796,564	540,555	—	—	1,337,119
Loans .......................................................................................................................	—	184,391	9,757	—	194,148
Derivatives ..............................................................................................................	24	5,429,227	45,953	(3,985,187)	1,490,017
Total financial instruments sold, not yet purchased .......................................	$8,281,525	$8,964,229	$59,585	$(3,985,187)	$13,320,152
Other secured financings ......................................................................................	$—	$412,510	$13,454	$—	$425,964
Obligation to return securities received as collateral ......................................	200,495	—	—	—	200,495
Long-term debt .......................................................................................................	—	2,671,485	1,063,358	—	3,734,843

(1)Excludes investments at fair value based on NAV of $1.68 billion at November 30, 2025 by level within the fair value hierarchy.

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

February 2026 Form 10-Q 13

Notes to Consolidated Financial Statements

(Unaudited)

There have been no significant changes in valuation techniques

and inputs used in measuring our financial assets and liabilities

that are accounted for at fair value on a recurring basis. Refer to

our consolidated financial statements included in Part II, Item 8

of our Annual Report on Form 10-K for the year ended

November 30, 2025.

Investments at Fair Value

Investments at fair value includes investments in hedge funds,

private equity funds, credit funds, real estate funds and other

funds, which are measured at the NAV of the funds, provided by

the fund managers and are excluded from the fair value

hierarchy. Investments at fair value also include direct equity

investments in private companies, which are measured at fair

value using valuation techniques involving quoted prices of or

market data for comparable companies, similar company ratios

and multiples (e.g., price/EBITDA, price/book value), discounted

cash flow analyses and transaction prices observed for

subsequent financing or capital issuance by the company. Direct

equity investments in private companies are categorized within

Level 2 or Level 3 of the fair value hierarchy.

Information about our investments in entities that have the

characteristics of an investment company:

	February 28, 2026
$ in thousands	Fair Value (1)	Unfunded Commitments	Redemption Frequency	Redemption Notice Period
Hedge Funds (2) ..............	$781,873	$—	Quarterly (41%) Monthly (39%) N/R (20%)	45 - 90 days 45 - 60 days N/R
Private Equity Funds (3) ..............	69,295	23,473	N/R (100%)	N/R
Credit Funds (4) ..............	497,569	23,847	Quarterly (53%) Monthly (2%) N/R (45%)	90 days 30 days N/R
Real Estate and Other Funds (5) ....	261,589	111,269	Quarterly (12%) N/R (88%)	90 days N/R
Total ......................	$1,610,326	$158,589

	November 30, 2025
$ in thousands	Fair Value (1)	Unfunded Commitments	Redemption Frequency	Redemption Notice Period
Hedge Funds (2) ............	$888,880	$—	Quarterly (42%) Monthly (41%) N/R (17%)	45 - 90 days 45 - 60 days N/R
Private Equity Funds (3) ............	66,476	26,828	N/R (100%)	N/R
Credit Funds (4)	490,321	23,847	Quarterly (56%) Monthly (2%) N/R (42%)	90 days 30 days N/R
Real Estate and Other Funds (5) .	235,846	114,872	Quarterly (19%) N/R (81%)	90 days N/R
Total ...................	$1,681,523	$165,547

N/R - Not redeemable

(1)Where fair value is calculated based on NAV, fair value has been derived from

each of the funds’ capital statements.

(2)Includes investments in hedge funds that invest, long and short, primarily in

both public and private equity securities in domestic and international

markets, commodities and multi-asset securities.

(3)Includes 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 nine years.

(4)Primarily includes investments in funds that invest in:

•Distressed and special situations long/short credit strategies across

sectors and asset types;

•Short-term trade receivables and payables that are expected to generally be

outstanding between 90 to 120 days; and

•Distressed and event-driven opportunities across structured credit,

opportunistic credit, and private credit.

(5)Primarily includes investments in corporate real estate strategies focused on

buying or building real estate businesses and investments in venture capital

funds.

14 Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

									For instruments still held at February 28, 2026, changes in unrealized gains/(losses) included in:
$ in thousands	Balance at November 30, 2025	Total gains/ losses (realized and unrealized) (1)	Purchases	Sales	Settlements	Issuances	Net transfers into/ (out of) Level 3	Balance at February 28, 2026	Earnings (1)	Other comprehensive income (1)
Assets:
Financial instruments owned:
Corporate equity securities ...	$218,853	$(6,089)	$12,452	$(3,342)	$(397)	$—	$(2,994)	$218,483	$(6,456)	$—
Corporate debt securities ......	37,578	1,716	66,717	(66,617)	(629)	—	11,990	50,755	(579)	—
CDOs and CLOs .......................	40,187	(7,026)	39,519	(11,654)	—	—	429	61,455	(5,505)	—
RMBS ........................................	6,663	(127)	—	—	(402)	—	—	6,134	(127)	—
CMBS ........................................	348	7	—	—	—	—	—	355	7	—
Other ABS .................................	133,001	(45,135)	119,288	(7,909)	(2,919)	—	48,388	244,714	(45,257)	—
Loans and other receivables .	127,720	(973)	214,243	(207,158)	(790)	—	(47,646)	85,396	2,488	—
Investments at fair value .......	163,107	4,636	250	(23)	(775)	—	—	167,195	3,895	—
Liabilities:
Financial instruments sold, not yet purchased:
Corporate equity securities ...	$155	$12	$—	$—	$—	$—	$—	$167	$(12)	$—
Corporate debt securities ......	3,720	192	—	—	—	—	(3,357)	555	(192)	—
CDOs and CLOs .......................	—	3	—	—	(3)	—	—	—	—	—
Loans ........................................	9,757	(40)	(697)	725	—	—	(8,824)	921	(1,687)	—
Net derivatives (2) ...................	35,642	(11,191)	(5,332)	—	1,484	7,638	321	28,562	7,430	—
Other secured financings .......	13,454	(144)	—	120	(1,745)	—	—	11,685	134
Long-term debt ........................	1,063,358	(18,984)	—	—	(23,695)	6,737	(3,349)	1,024,067	(34,884)	53,868

(1)Realized and unrealized gains/losses are primarily reported in Principal transactions revenues. Changes in instrument-specific credit risk related to structured notes

within Long-term debt are presented net of tax in our Consolidated Statements of Comprehensive Income.

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

Analysis of Level 3 Assets and Liabilities for the Three Months

Ended February 28, 2026

Transfers of assets of $81.4 million from Level 2 to Level 3 of the

fair value hierarchy are primarily attributed to:

•Other ABS of $48.5 million, corporate debt securities of $17.2

million, CDOs and CLOs of $12.0 million and loans and other

receivables of $3.5 million due to reduced pricing

transparency.

Transfers of assets of $71.3 million from Level 3 to Level 2 are

primarily attributed to:

•Loans and other receivables of $51.1 million, CDOs and CLOs

of $11.6 million, corporate debt securities of $5.2 million and

corporate equity securities of $3.3 million due to greater

pricing transparency.

Transfers of liabilities of $10.8 million from Level 2 to Level 3 of

the fair value hierarchy are primarily attributed to:

•Structured notes within long-term debt of $9.2 million and net

derivatives of $1.6 million due to reduced pricing and market

transparency.

Transfers of liabilities of $26.0 million from Level 3 to Level 2 of

the fair value hierarchy are primarily attributed to:

•Structured notes within long-term debt of $12.6 million, loans

of $8.8 million, corporate debt securities of $3.4 million and net

derivatives of $1.2 million due to greater pricing and market

transparency.

Net losses on Level 3 assets were $53.0 million and net gains on

Level 3 liabilities were $30.2 million for the three months ended

February 28, 2026. Net losses on Level 3 assets were primarily

due to decreased market values in other ABS, CDOs and CLOs

and corporate equity securities, partially offset by an increase in

investments at fair value. Net gains on Level 3 liabilities were

primarily due to decreased market valuations of certain

structured notes within long-term debt and certain derivatives.

February 2026 Form 10-Q 15

Notes to Consolidated Financial Statements

(Unaudited)

									For instruments still held at February 28, 2025, changes in unrealized gains/(losses) included in:
$ in thousands	Balance at November 30, 2024	Total gains/ losses (realized and unrealized) (1)	Purchases	Sales	Settlements	Issuances	Net transfers into/ (out of) Level 3	Balance at February 28, 2025	Earnings (1)	Other comprehensive income (1)
Assets:
Financial instruments owned:
Corporate equity securities .......................	$239,364	$2,864	$1,703	$(1,016)	$—	$—	$(30,506)	$212,409	$5,300	$—
Corporate debt securities	24,931	(1,002)	6,753	(895)	—	—	(3,862)	25,925	(1,248)	—
CDOs and CLOs .................	63,976	(4,646)	17,177	(9,981)	—	—	5,301	71,827	(4,664)	—
Sovereign obligations .......	172	2	—	(174)	—			—	(1)	—
RMBS ..................................	7,714	(167)	—	—	(21)	—	—	7,526	(59)	—
CMBS ..................................	477	(6)	—	—	—	—	—	471	—	—
Other ABS ...........................	103,214	(1,889)	54,165	(4,709)	(2,312)	—	(1,150)	147,319	(1,318)	—
Loans and other receivables ....................	152,586	(949)	78,763	(53,590)	(9,170)	—	(13,876)	153,764	(1,545)	—
Investments at fair value .	137,865	393	21,288	—	(1,665)	—	—	157,881	393	—
Liabilities:
Financial instruments sold, not yet purchased:
Corporate equity securities .......................	$208	$(72)	$—	$454	$—	$—	$—	$590	$72	$—
Corporate debt securities	165	(40)	(383)	1,025	—	—	346	1,113	24	—
RMBs ..................................	—	—	—	15	—	—	—	15	—	—
CMBS ..................................	1,153	1	—	35	—	—	(35)	1,154	(1)	—
Loans ..................................	16,864	301	(1,917)	75	—	—	(14,475)	848	89	—
Net derivatives (2) .............	22,286	(16,020)	—	22,588	(279)	299	13,202	42,076	14,559	—
Other secured financings .	14,884	(1,938)	—	—	(241)	—	—	12,705	1,938	—
Long-term debt ..................	821,903	(55,177)	—	—	—	124,554	(30,596)	860,684	29,428	25,749

(1)Realized and unrealized gains/losses are primarily reported in Principal transactions revenues. Changes in instrument-specific credit risk related to structured notes

within Long-term debt are presented net of tax in our Consolidated Statements of Comprehensive Income.

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

Analysis of Level 3 Assets and Liabilities for the Three Months

Ended February 28, 2025

Transfers of assets of $52.5 million from Level 2 to Level 3 of the

fair value hierarchy are primarily attributed to:

•Loans and other receivables of $24.8 million, corporate equity

securities of $20.5 million and CDOs and CLOs of $5.7 million

due to reduced pricing transparency.

Transfers of assets of $96.6 million from Level 3 to Level 2 are

primarily attributed to:

•Corporate equity securities of $51.0 million, loans and other

receivables of $38.7 million, corporate debt securities of $4.2

million and other ABS of $2.3 million due to greater pricing

transparency.

Transfers of liabilities of $22.1 million from Level 2 to Level 3 of

the fair value hierarchy are primarily attributed to:

•Net derivatives of $13.2 million and structured notes within

long-term debt of $8.6 million due to reduced pricing and

market transparency.

Transfers of liabilities of $53.7 million from Level 3 to Level 2 of

the fair value hierarchy are primarily attributed to:

•Structured notes within long-term debt of $39.1 million and

loans of $14.5 million due to greater pricing and market

transparency.

Net losses on Level 3 assets were $5.4 million and net gains on

Level 3 liabilities were $72.9 million for the three months ended

February 28, 2025. Net losses on Level 3 assets were primarily

due to decreased market values in CDOs and CLOs, other ABS,

corporate debt securities and loans and other receivables,

partially offset by an increase in corporate equity securities. Net

gains on Level 3 liabilities were primarily due to decreased

market valuations of certain structured notes within long-term

debt, certain derivatives and other secured financings.

16 Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

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 to 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 2026 Form 10-Q 17

Notes to Consolidated Financial Statements

(Unaudited)

February 28, 2026
Financial Instruments Owned	Fair Value (in thousands)	Valuation Technique	Significant Unobservable Input(s)	Input / Range			Weighted Average
Corporate equity securities .....................	$218,483
Non-exchange-traded securities		Market approach	Price	$0	-	$1,115	$90
		Volatility benchmarking	Volatility	45%	-	49%	48%
Corporate debt securities ........................	$50,755	Market approach	Price	$58	-	$122	$92
		Discounted cash flows	Discount rate/yield	22%	-	26%	24%
CDOs and CLOs ..........................................	$31,965	Discounted cash flows	Constant prepayment rate	15%	-	20%	16%
			Constant default rate	2%			—
			Loss severity	30%			—
			Discount rate/yield	13%	-	15%	14%
		Market approach	Price	$98	-	$118	$101
RMBS ...........................................................	$6,134	Discounted cash flows	Constant prepayment rate	10%			—
			Constant default rate	0.5%			—
			Loss severity	45%			—
			Discount rate/yield	20%			—
Other ABS ...................................................	$242,697	Discounted cash flows	Discount rate/yield	10.9%	-	15.8%	15.2%
			Cumulative loss rate	10.5%	-	17.4%	16.5%
			Duration (years)	1.1	-	1.5	1.2
		Market approach	Price	$118	-	$135	$132
		Scenario analysis	Estimated recovery percentage	64%	-	69%	68%
Loans and other receivables ...................	$85,396	Market approach	Price	$8	-	$118	$106
		Scenario analysis	Estimated recovery percentage	18%	-	222%	92%
Derivatives ..................................................	$11,104
Embedded options		Market approach	Basis points upfront	0.3	-	0.5	0.4
Equity options		Volatility benchmarking	Volatility	51%			—
Investments at fair value ..........................	$161,250
Private equity securities		Market approach	Price	$0	-	$27,989	$2,838
			Discount rate/yield	28%			—
			Estimated revenue	$29,760,909			—
Financial Instruments Sold, Not Yet Purchased:
Derivatives ..................................................	$43,253
Equity options		Volatility benchmarking	Volatility	39%	-	67%	53%
Embedded options		Market approach	Basis points upfront	7.2	-	19.9	12.8
Other secured financings .........................	$11,685	Scenario analysis	Estimated recovery percentage	74%	-	100%	95%
		Market approach	Price	$117	-	$118	$118
Long-term debt ..........................................	$1,024,067
Structured notes		Market approach	Price	$70	-	$120	$100

18 Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

November 30, 2025
Financial Instruments Owned	Fair Value (in thousands)	Valuation Technique	Significant Unobservable Input(s)	Input / Range			Weighted Average
Corporate equity securities .....................	$218,853
Non-exchange-traded securities		Market approach	Price	$0	-	$486	$85
		Volatility benchmarking	Volatility	44%	-	48%	47%
Corporate debt securities ........................	$37,578	Market approach	Price	$49	-	$121	$72
		Discounted cash flows	Discount rate/yield	18%	-	20%	19%
		Scenario analysis	Estimated recovery percentage	30%			—
CDOs and CLOs ..........................................	$25,824	Discounted cash flows	Constant prepayment rate	20%			—
			Constant default rate	2%			—
			Loss severity	30%			—
			Discount rate/yield	17%			—
		Market approach	Price	$98	-	$100	$99
RMBS ...........................................................	$6,663	Discounted cash flows	Constant prepayment rate	12%			—
			Constant default rate	0.3%			—
			Loss severity	20%			—
			Discount rate/yield	15%			—
Other ABS ...................................................	$129,693	Discounted cash flows	Discount rate/yield	15.5%	-	15.7%	15.6%
			Cumulative loss rate	16.0%	-	16.4%	16.2%
			Duration (years)	1.1	-	1.2	1.1
		Market approach	Price	$116	-	$133	$130
		Scenario analysis	Estimated recovery percentage	66%			—
Loans and other receivables ...................	$127,720	Market approach	Price	$67	-	$129	$97
		Scenario analysis	Estimated recovery percentage	8%	-	100%	35%
Derivatives ..................................................	$6,094
Embedded options		Market approach	Basis points upfront	0.4	-	0.5	0.5
Equity options		Volatility benchmarking	Volatility	34%			—
Investments at fair value ..........................	$157,162
Private equity securities		Market approach	Price	$0	-	$27,989	$2,722
			Discount rate/yield	28%			—
			Estimated revenue	$29,818,082			—
Financial Instruments Sold, Not Yet Purchased:
Corporate debt securities ........................	$3,720	Scenario analysis	Estimated recovery percentage	30%			—
Loans ...........................................................	$9,757	Market approach	Price	$100	-	$129	$117
		Scenario analysis	Estimated recovery percentage	30%			—
Derivatives ..................................................	$45,953
Equity options		Volatility benchmarking	Volatility	34%	-	61%	58%
Embedded options		Market approach	Basis points upfront	0.0	-	21.0	13.3
Other secured financings .........................	$13,454	Scenario analysis	Estimated recovery percentage	74%	-	100%	96%
		Market approach	Price	$114	-	$117	$115
Long-term debt ..........................................	$1,063,358
Structured notes		Market approach	Price	$72	-	$120	$101

February 2026 Form 10-Q 19

Notes to Consolidated Financial Statements

(Unaudited)

The fair values of certain Level 3 assets and liabilities that were

determined based on third-party pricing information, unadjusted

past transaction prices or a percentage of the reported enterprise

fair value are excluded from the above tables. At February 28,

2026 and November 30, 2025, asset exclusions consisted of

$41.4 million and $28.2 million, respectively, primarily composed

of CDOs and CLOs, Investments at fair value, certain derivatives,

other ABS and CMBS. At February 28, 2026 and November 30,

2025, liability exclusions consisted of $1.7 million and $0.2

million, respectively, primarily composed of loans, corporate

equity securities and corporate debt securities.

Uncertainty of Fair Value Measurement from Use of Significant

Unobservable Inputs

For recurring fair value measurements categorized within Level 3

of the fair value hierarchy, the uncertainty of the fair value

measurement due to the use of significant unobservable inputs

and interrelationships between those unobservable inputs (if any)

are described below:

•Non-exchange-traded securities, corporate debt securities,

CDOs and CLOs, loans and other receivables, other ABS, private

equity securities, certain derivatives, other secured financings

and structured notes using a market approach valuation

technique. A significant increase (decrease) in the price of the

private equity securities, nonexchange-traded securities,

corporate debt securities, CDOs and CLOs, RMBS, other ABS,

loans and other receivables, other secured financings and

structured notes would result in a significantly higher (lower)

fair value measurement. A significant increase (decrease) in

the revenue or revenue multiple related to private equity

securities would result in a significantly higher (lower) fair

value measurement. A significant increase (decrease) in the

discount rate/security yield related to private equity securities

would result in a significantly lower (higher) fair value

measurement. Depending on whether we are a receiver or

(payer) of basis points upfront, a significant increase in basis

points would result in a significant increase (decrease) in the

fair value measurement of options.

•Corporate debt securities, loans and other receivables, other

ABS and other secured financings using a scenario analysis

valuation technique. A significant increase (decrease) in the

possible recovery rates underlying the financial instrument

would result in a significantly higher (lower) fair value

measurement for the financial instrument.

•CDOs and CLOs, corporate debt securities, RMBS and other

ABS using a discounted cash flows valuation technique. A

significant increase (decrease) in isolation in the constant

default rate, loss severity or cumulative loss rate would result

in a significantly lower (higher) fair value measurement. The

impact of changes in the constant prepayment rate and

duration would have differing impacts depending on the capital

structure and type of security. A significant increase

(decrease) in the discount rate/security yield would result in a

significantly lower (higher) fair value measurement.

•Corporate equity securities and derivative equity options using

volatility benchmarking. A significant increase (decrease) in

volatility would result in a significantly higher (lower) fair value

measurement.

Fair Value Option Election

For a description of our financial assets and liabilities for which

we have elected the fair value option, refer to our consolidated

financial statements included in Part II, Item 8 of our Annual

Report on Form 10-K for the year ended November 30, 2025.

Fair value option gains (losses):

	Three Months Ended  February 28,
$ in thousands	2026	2025
Financial instruments owned:
Loans and other receivables (1) .............................................	$(28,722)	$13,283
Other secured financings:
Other changes in fair value (1) ................................................	$(309)	$1,938
Long-term debt:
Changes in instrument-specific credit risk (2) ......................	$77,896	$37,898
Other changes in fair value (1) ................................................	(58,916)	16,944

(1)Other changes in fair value are included in Principal transactions revenues.

(2)Changes in fair value of structured notes related to instrument-specific credit

risk are presented net of tax in our Consolidated Statements of

Comprehensive Income.

Difference between contractual principal and fair value (1):

$ in thousands	February 28,  2026	November 30,  2025
Financial instruments owned:
Loans and other receivables (2) ................................	$2,219,310	$2,378,747
Loans and other receivables on nonaccrual status and/or 90 days or greater past due (2) .....	420,878	319,394
Loans and other receivables 90 days or greater past due (2) ..............................................	70,748	100,300
Long-term debt ............................................................	222,020	166,273
Other secured financings ...........................................	(4,798)	237

(1)Amounts indicate contractual principal greater than or (less than) fair value.

(2)Interest income is recognized separately from other changes in fair value and

is included in Interest revenues.

Fair value of loans and other receivables on nonaccrual status:

$ in thousands	February 28,  2026	November 30,  2025
Financial instruments owned:
Loans and other receivables on nonaccrual status and/or 90 days or greater past due ...........................	$109,143	$119,900
Loans and other receivables 90 days or greater past due .....................................................................	66,657	47,000

Financial Instruments Not Measured at Fair Value

Certain of our financial instruments are not carried at fair value

but are recorded at amounts that approximate fair value due to

their liquid or short-term nature and generally negligible credit

risk. These financial assets include Cash and cash equivalents

and Cash and securities segregated and on deposit for regulatory

purposes or deposited with clearing and depository organizations

and would generally be presented within Level 1 of the fair value

hierarchy.

We have equity securities without readily determinable fair

values, which we account for at cost, minus impairment, which

are presented within Other assets and were $21.9 million at both

February 28, 2026 and November 30, 2025. There were no

impairments and downward adjustments on these investments

during the three months ended February 28, 2026 and 2025.

20 Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Note 6. Derivative Financial Instruments

Our derivative activities are recorded at fair value in our

Consolidated Statement of Financial Condition in Financial

instruments owned and Financial instruments sold, not yet

purchased, net of cash paid or received under credit support

agreements and on a net counterparty basis when a legally

enforceable right to offset exists under a master netting

agreement. We enter into derivative transactions to satisfy the

needs of our clients and to manage our own exposure to market

and credit risks. In addition, we apply hedge accounting to: (1)

interest rate swaps that have been designated as fair value

hedges of the changes in fair value due to the benchmark interest

rate for certain fixed rate senior long-term debt, and (2) forward

foreign exchange contracts designated as hedges to offset the

change in the value of certain net investments in foreign

operations.

Derivatives are subject to various risks similar to other financial

instruments, including market, credit and operational risk. The

risks of derivatives should not be viewed in isolation, but rather

should be considered on an aggregate basis along with our other

trading-related activities. We manage the risks associated with

derivatives on an aggregate basis along with the risks associated

with proprietary trading as part of our firm wide risk management

policies.

In connection with our derivative activities, we may enter into

International Swaps and Derivatives Association, Inc. master

netting agreements or similar agreements with counterparties.

	February 28, 2026 (1)
	Assets		Liabilities
$ in thousands	Fair Value	Number of Contracts (2)	Fair Value	Number of Contracts (2)
Derivatives designated as accounting hedges:
Interest rate contracts:
Cleared OTC ........................................	$3,515	3	$1,256	1
Foreign exchange contracts:
Bilateral OTC .......................................	10,449	5	2,543	6
Total derivatives designated as accounting hedges ............................	13,964		3,799
Derivatives not designated as accounting hedges:
Interest rate contracts:
Exchange-traded ................................	529	44,784	56	48,774
Cleared OTC ........................................	2,331,733	8,403	2,356,258	8,865
Bilateral OTC .......................................	267,009	1,702	577,234	683
Foreign exchange contracts:
Exchange-traded ................................	—	36	—	22
Bilateral OTC .......................................	149,495	35,501	118,551	10,816
Equity contracts:
Exchange-traded ................................	2,553,216	3,135,250	1,875,392	2,233,288
Bilateral OTC .......................................	1,693,580	53,207	1,901,935	44,644
Commodity contracts:
Exchange-traded ................................	3,197	431	61	427
Bilateral OTC .......................................	4,445	7,198	9,626	8,209
Credit contracts:
Cleared OTC ........................................	1,402	71	4,800	10
Bilateral OTC .......................................	75,525	33	53,711	19
Total derivatives not designated as accounting hedges .......................	7,080,131		6,897,624
Total gross derivative assets/ liabilities:
Exchange-traded ................................	2,556,942		1,875,509
Cleared OTC ........................................	2,336,650		2,362,314
Bilateral OTC .......................................	2,200,503		2,663,600
Amounts offset in our Consolidated Statements of Financial Condition (3):
Exchange-traded ................................	(1,318,353)		(1,318,353)
Cleared OTC ........................................	(2,335,539)		(2,338,936)
Bilateral OTC .......................................	(1,533,021)		(1,943,147)
Net amounts per Consolidated Statements of Financial Condition (4) .................................	$1,907,182		$1,300,987

(1)Exchange-traded derivatives include derivatives executed on an organized

exchange. Cleared OTC derivatives include derivatives executed bilaterally and

subsequently novated to and cleared through central clearing counterparties.

Bilateral OTC derivatives include derivatives executed and settled bilaterally

without the use of an organized exchange or central clearing counterparty.

(2)The number of exchange-traded contracts may include open futures

contracts. The unsettled fair value of these futures contracts is included in

Receivables from/Payables to brokers, dealers and clearing organizations.

(3)Amounts netted include both netting by counterparty and for cash collateral

paid or received.

(4)We have not received or pledged additional collateral under master netting

agreements and/or other credit support agreements that is eligible to be

offset beyond what has been offset in our Consolidated Statements of

Financial Condition.

February 2026 Form 10-Q 21

Notes to Consolidated Financial Statements

(Unaudited)

	November 30, 2025 (1)
	Assets		Liabilities
$ in thousands	Fair Value	Number of Contracts (2)	Fair Value	Number of Contracts (2)
Derivatives designated as accounting hedges:
Interest rate contracts:
Cleared OTC .........................................	$—	—	$2,519	4
Foreign exchange contracts:
Bilateral OTC ........................................	40,444	7	574	2
Total derivatives designated as accounting hedges .............................	40,444		3,093
Derivatives not designated as accounting hedges:
Interest rate contracts:
Exchange-traded .................................	232	33,107	24	36,811
Cleared OTC .........................................	806,009	8,148	804,799	8,325
Bilateral OTC ........................................	285,053	1,576	614,104	823
Foreign exchange contracts:
Bilateral OTC ........................................	115,068	34,418	103,297	12,028
Equity contracts:
Exchange-traded .................................	2,776,601	3,275,468	2,156,730	2,298,561
Bilateral OTC ........................................	1,367,089	57,254	1,670,215	36,481
Commodity contracts:
Exchange-traded .................................	452	627	73	668
Bilateral OTC .......................................	6,381	18,497	7,293	15,417
Credit contracts:
Cleared OTC .........................................	10,960	58	17,120	13
Bilateral OTC ........................................	121,557	17	98,456	15
Total derivatives not designated as accounting hedges .............................	5,489,402		5,472,111
Total gross derivative assets/ liabilities:
Exchange-traded .................................	2,777,285		2,156,827
Cleared OTC .........................................	816,969		824,438
Bilateral OTC ........................................	1,935,592		2,493,939
Amounts offset in our Consolidated Statements of Financial Condition (3):
Exchange-traded .................................	(1,600,969)		(1,600,969)
Cleared OTC .........................................	(815,810)		(819,548)
Bilateral OTC ........................................	(1,288,985)		(1,564,670)
Net amounts per Consolidated Statements of Financial Condition (4) ..................................	$1,824,082		$1,490,017

(1)Exchange-traded derivatives include derivatives executed on an organized

exchange. Cleared OTC derivatives include derivatives executed bilaterally and

subsequently novated to and cleared through central clearing counterparties.

Bilateral OTC derivatives include derivatives executed and settled bilaterally

without the use of an organized exchange or central clearing counterparty.

(2)The number of exchange-traded contracts may include open futures

contracts. The unsettled fair value of these futures contracts is included in

Receivables from/Payables to brokers, dealers and clearing organizations.

(3)Amounts netted include both netting by counterparty and for cash collateral

paid or received.

(4)We have not received or pledged additional collateral under master netting

agreements and/or other credit support agreements that is eligible to be

offset beyond what has been offset in our Consolidated Statements of

Financial Condition.

Gains (losses) recognized in Interest expense related to fair value

hedges:

$ in thousands	Three Months Ended February 28,
Gains (Losses)	2026	2025
Interest rate swaps (1) ..............................................................	$1,121	$(5,628)
Long-term debt ...........................................................................	(10,916)	(6,691)
Total .............................................................................................	$(9,795)	$(12,319)

(1)Includes net settlements of $9.6 million and $11.9 million for the three months

ended February 28, 2026 and 2025, respectively.

Gains (losses) on our net investment hedges recognized in

Currency translation and other adjustments, a component of

Other comprehensive income (loss), in our Consolidated

Statements of Comprehensive Income:

$ in thousands	Three Months Ended February 28,
Gains (Losses)	2026	2025
Foreign exchange contracts .....................................................	$(27,965)	$16,854
Total .............................................................................................	$(27,965)	$16,854

Unrealized and realized gains (losses) on derivative contracts

recognized primarily in Principal transactions revenues, which are

utilized in connection with our client activities and our economic

risk management activities:

$ in thousands	Three Months Ended February 28,
Gains (Losses)	2026	2025
Interest rate contracts ...............................................................	$267	$(22,502)
Foreign exchange contracts .....................................................	(1,731)	(4,875)
Equity contracts .........................................................................	(119,375)	494,216
Commodity contracts ................................................................	4,282	5,734
Credit contracts..........................................................................	(3,058)	1,051
Total .............................................................................................	$(119,615)	$473,624

The net gains (losses) on derivative contracts in the table above

are one of a number of activities comprising our business

activities and are before consideration of economic hedging

transactions, which generally offset the net gains (losses)

included above. We substantially mitigate our exposure to market

risk on our cash instruments through derivative contracts, which

generally provide offsetting revenues, and we manage the risk

associated with these contracts in the context of our overall risk

management framework.

22 Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

OTC Derivatives

Remaining contract maturities at February 28, 2026:

	OTC Derivative Assets (1) (2) (3)
$ in thousands	0 – 12 Months	1 – 5 Years	Greater Than 5 Years	Cross- Maturity Netting (4)	Total
Commodity swaps, options and forwards ....................................	$4,444	$—	$—	$—	$4,444
Equity options and forwards ........	88,003	295,129	5,110	(269)	387,973
Credit default swaps .....................	1,012	25,469	—	—	26,481
Total return swaps .........................	174,444	180,251	—	(5,324)	349,371
Foreign currency forwards, swaps and options ...................	86,314	520	—	(520)	86,314
Fixed income forwards .................	49,222	—	—	—	49,222
Interest rate swaps, options and forwards ....................................	57,588	152,609	17,081	(32,665)	194,613
Total .................................................	$461,027	$653,978	$22,191	$(38,778)	1,098,418
Cross-product counterparty netting ........................................					(61,334)
Total OTC derivative assets included in Financial instruments owned ..................					$1,037,084

	OTC Derivative Liabilities (1) (2) (3)
$ in thousands	0 – 12 Months	1 – 5 Years	Greater Than 5 Years	Cross- Maturity Netting (4)	Total
Commodity swaps, options and forwards ....................................	$9,624	$—	$—	$—	$9,624
Equity options and forwards ........	52,569	293,741	3,879	(269)	349,920
Credit default swaps ......................	—	5,643	—	—	5,643
Total return swaps .........................	331,760	316,070	28	(5,324)	642,534
Foreign currency forwards, swaps and options ...................	47,768	216	—	(520)	47,464
Fixed income forwards .................	797	—	—	—	797
Interest rate swaps, options and forwards ....................................	34,569	108,293	421,001	(32,665)	531,198
Total .................................................	$477,087	$723,963	$424,908	$(38,778)	1,587,180
Cross-product counterparty netting ........................................					(61,334)
Total OTC derivative liabilities included in Financial instruments sold, not yet purchased .................................					$1,525,846

(1)At February 28, 2026, we held net exchange-traded derivative assets and

liabilities with a fair value of $1.24 billion and $557.2 million, respectively,

which are not included in these tables.

(2)OTC derivative assets and liabilities in the tables above are gross of collateral

pledged. OTC derivative assets and liabilities are recorded net of collateral

pledged in our Consolidated Statements of Financial Condition. At

February 28, 2026, cash collateral received and pledged was $368.5 million

and $782.0 million, respectively.

(3)Derivative fair values include counterparty netting within product category.

(4)Amounts represent the netting of receivable balances with payable balances

for the same counterparty within product category across maturity categories.

OTC derivative assets at February 28, 2026:

Counterparty credit quality (1):	$ in thousands
A- or higher ...............................................................................................	$180,384
BBB- to BBB+ ...........................................................................................	100,766
BB+ or lower .............................................................................................	332,366
Unrated .....................................................................................................	423,568
Total ..........................................................................................................	$1,037,084

(1)We utilize internal credit ratings determined by our Risk Management

department. Credit ratings determined by Risk Management use

methodologies that produce ratings generally consistent with those produced

by external rating agencies.

Credit Related Derivative Contracts

External credit ratings of the underlyings or referenced assets for

our written credit related derivative contracts:

	February 28, 2026
	External Credit Rating
$ in millions	Investment Grade	Non- investment Grade	Total Notional
Credit protection sold:
Index credit default swaps .....................	$119.8	$808.5	$928.3

	November 30, 2025
	External Credit Rating
$ in millions	Investment Grade	Non- investment Grade	Total Notional
Credit protection sold:
Index credit default swaps .....................	$51.4	$873.2	$924.6

Contingent Features

Certain derivative instruments contain provisions that require us

to either post additional collateral or immediately settle any

outstanding liability balances upon a specific event related to our

credit, primarily downgrades in our credit ratings. The following

table presents the aggregate fair value of all derivative

instruments with such credit-risk-related contingent features that

are in a net liability position, the collateral amounts we have

posted or received in the normal course of business and the

potential collateral we could have been required to return and/or

post additionally to our counterparties if the credit-risk-related

contingent features underlying these agreements were triggered:

$ in millions	February 28, 2026	November 30, 2025
Derivative instrument liabilities with credit-risk- related contingent features ....................................	$98.9	$107.3
Collateral posted ...........................................................	(13.2)	(70.0)
Collateral received ........................................................	611.4	343.3
Return of and additional collateral required in the event of a credit rating downgrade below investment grade (1) ...............................................	697.1	380.5

(1)These potential outflows include initial margin received from counterparties at

the execution of the derivative contract. The initial margin will be returned if

counterparties elect to terminate the contract after a downgrade.

February 2026 Form 10-Q 23

Notes to Consolidated Financial Statements

(Unaudited)

Note 7. Collateralized Transactions

	February 28, 2026
$ in millions	Securities Lending Arrangements	Repurchase Agreements	Obligation to Return Securities Received as Collateral, at Fair Value	Total
Collateral Pledged:
Corporate equity securities .....................	$1,954.8	$1,604.3	$168.4	$3,727.5
Corporate debt securities .....................	594.4	3,465.1	—	4,059.5
Mortgage-backed and asset-backed securities .....................	89.0	2,208.7	—	2,297.7
U.S. government and federal agency securities .....................	22.1	6,057.8	—	6,079.9
Municipal securities ........	—	421.7	—	421.7
Sovereign obligations .....	30.1	1,666.5	225.5	1,922.1
Loans and other receivables ..................	—	406.9	—	406.9
Total ..................................	$2,690.4	$15,831.0	$393.9	$18,915.3

	November 30, 2025
$ in millions	Securities Lending Arrangements	Repurchase Agreements	Obligation to Return Securities Received as Collateral, at Fair Value	Total
Collateral Pledged:
Corporate equity securities .....................	$1,875.2	$1,028.6	$—	$2,903.8
Corporate debt securities .....................	589.7	3,271.5	—	3,861.2
Mortgage-backed and asset-backed securities .....................	—	2,062.6	—	2,062.6
U.S. government and federal agency securities .....................	21.6	9,183.1	—	9,204.7
Municipal securities ........	—	422.3	—	422.3
Sovereign obligations .....	54.3	1,487.7	200.5	1,742.5
Loans and other receivables ..................	—	805.4	—	805.4
Total ..................................	$2,540.8	$18,261.2	$200.5	$21,002.5

	February 28, 2026
$ in millions	Overnight and Continuous	Up to 30 Days	31-90 Days	Greater than 90 Days	Total
Securities lending arrangements ..............	$2,252.7	$89.0	$150.7	$198.0	$2,690.4
Repurchase agreements .	1,719.2	7,290.3	3,104.3	3,717.2	15,831.0
Obligation to return securities received as collateral, at fair value .............................	393.9	—	—	—	393.9
Total ...................................	$4,365.8	$7,379.3	$3,255.0	$3,915.2	$18,915.3

	November 30, 2025
$ in millions	Overnight and Continuous	Up to 30 Days	31-90 Days	Greater than 90 Days	Total
Securities lending arrangements ..............	$2,072.7	$123.8	$81.3	$263.0	$2,540.8
Repurchase agreements .	2,108.1	9,569.4	2,959.8	3,623.9	18,261.2
Obligation to return securities received as collateral, at fair value .............................	200.5	—	—	—	200.5
Total ...................................	$4,381.3	$9,693.2	$3,041.1	$3,886.9	$21,002.5

We receive securities as collateral under resale agreements,

securities borrowing transactions, customer margin loans, and in

connection with securities-for-securities transactions in which we

are the lender of securities. We also receive securities as initial

margin on certain derivative transactions. In many instances, we

are permitted by contract to rehypothecate the securities

received as collateral. These securities may be used to secure

repurchase agreements, enter into securities lending

transactions, satisfy margin requirements on derivative

transactions or cover short positions. At February 28, 2026 and

November 30, 2025, the approximate fair value of securities

received as collateral by us that may be sold or repledged was

$52.59 billion and $49.68 billion, respectively. At February 28,

2026 and November 30, 2025, a substantial portion of the

securities received by us had been sold or repledged.

24 Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Securities Financing Agreements

To manage our exposure to credit risk associated with securities financing transactions, we may enter into master netting agreements

and collateral arrangements with counterparties. Generally, transactions are executed under standard industry agreements, including,

but not limited to, master securities lending agreements (securities lending transactions) and master repurchase agreements

(repurchase transactions).

	February 28, 2026
$ in millions	Gross Amounts	Netting in Consolidated Statements of Financial Condition	Net Amounts in Consolidated Statements of Financial Condition	Additional Amounts Available for Setoff (1)	Available Collateral (2)	Net Amount (3)
Assets:
Securities borrowing arrangements ...................................	$7,675.9	$—	$7,675.9	$(682.6)	$(1,762.3)	$5,231.0
Reverse repurchase agreements .........................................	13,234.8	(5,450.7)	7,784.1	(1,970.8)	(5,766.1)	47.2
Securities received as collateral, at fair value ...................	393.9	—	393.9	—	(393.9)	—
Liabilities:
Securities lending arrangements ........................................	$2,690.4	$—	$2,690.4	$(682.6)	$(1,908.3)	$99.5
Repurchase agreements .......................................................	15,831.0	(5,450.7)	10,380.3	(1,970.8)	(8,109.0)	300.5
Obligation to return securities received as collateral, at fair value .............................................................................	393.9	—	393.9	—	(393.9)	—

	November 30, 2025
$ in millions	Gross Amounts	Netting in Consolidated Statements of Financial Condition	Net Amounts in Consolidated Statements of Financial Condition	Additional Amounts Available for Setoff (1)	Available Collateral (2)	Net Amount (4)
Assets:
Securities borrowing arrangements ...................................	$8,295.2	$—	$8,295.2	$(512.3)	$(1,913.5)	$5,869.4
Reverse repurchase agreements .........................................	14,553.6	(6,104.5)	8,449.1	(2,727.2)	(5,670.2)	51.7
Securities received as collateral, at fair value ...................	200.5	—	200.5	—	(200.5)	—
Liabilities:
Securities lending arrangements ........................................	$2,540.8	$—	$2,540.8	$(512.3)	$(1,920.0)	$108.5
Repurchase agreements .......................................................	18,261.2	(6,104.5)	12,156.7	(2,727.2)	(8,666.7)	762.8
Obligation to return securities received as collateral, at fair value .............................................................................	200.5	—	200.5	—	(200.5)	—

(1)Under master netting agreements with our counterparties, we have the legal right of offset with a counterparty, which incorporates all of the counterparty’s outstanding

rights and obligations under the arrangement. These balances reflect additional credit risk mitigation that is available by a counterparty in the event of a counterparty’s

default, but which are not netted in our Consolidated Statements of Financial Condition because other netting provisions of U.S. GAAP are not met.

(2)Includes securities received or paid under collateral arrangements with counterparties that could be liquidated in the event of a counterparty default and thus offset

against a counterparty’s rights and obligations under the respective repurchase agreements or securities borrowing or lending arrangements.

(3)Includes $5.16 billion of securities borrowing arrangements, for which we have received securities collateral of $4.99 billion, and $250.0 million of repurchase

agreements, for which we have pledged securities collateral of $272.5 million, which are subject to master netting agreements, but we have not determined the

agreements to be legally enforceable.

(4)Includes $5.81 billion of securities borrowing arrangements, for which we have received securities collateral of $5.69 billion, and $670.0 million of repurchase

agreements, for which we have pledged securities collateral of $688.0 million, which are subject to master netting agreements, but we have not determined the

agreements to be legally enforceable.

Note 8. Securitization Activities

We engage in securitization activities related to corporate loans,

mortgage loans, consumer loans and mortgage-backed and other

asset-backed securities. In our securitization transactions, we

transfer these assets to special purpose entities (“SPEs”) and act

as the placement or structuring agent for the beneficial interests

sold to investors by the SPE. A portion of our securitization

transactions are the securitization of assets issued or

guaranteed by U.S. government agencies. These SPEs generally

meet the criteria of VIEs; however, we generally do not

consolidate the SPEs as we are not considered the primary

beneficiary for these SPEs. Refer to Note 9, Variable Interest

Entities for further discussion on VIEs and our determination of

the primary beneficiary.

We account for our securitization transactions as sales, provided

we have relinquished control over the transferred assets.

Transferred assets are carried at fair value with unrealized gains

and losses reflected in Principal transactions revenues prior to

the identification and isolation for securitization. Subsequently,

revenues recognized upon securitization are reflected as net

underwriting revenues. We generally receive cash proceeds in

connection with the transfer of assets to an SPE. We may,

however, have continuing involvement with the transferred

assets, which is limited to retaining one or more tranches of the

securitization (primarily senior and subordinated debt securities

in the form of mortgage-backed and other-asset backed

securities or CLOs). These securities are included in Financial

instruments owned, at fair value and are generally initially

categorized as Level 2 within the fair value hierarchy.

February 2026 Form 10-Q 25

Notes to Consolidated Financial Statements

(Unaudited)

Securitizations that were accounted for as sales in which we had

continuing involvement:

	Three Months Ended February 28,
$ in millions	2026	2025
Transferred assets ....................................................................	$1,368.7	$42.0
Proceeds on new securitizations ............................................	1,368.7	42.0
Cash flows received on retained interests .............................	14.9	6.4

We have no explicit or implicit arrangements to provide additional

financial support to these SPEs, have no liabilities related to

these SPEs and do not have any outstanding derivative contracts

executed in connection with these securitization activities at

February 28, 2026 and November 30, 2025.

Our retained interests in SPEs where we transferred assets and

have continuing involvement and received sale accounting

treatment:

$ in millions	February 28, 2026		November 30, 2025
Securitization Type	Total Assets	Retained Interests	Total Assets	Retained Interests
U.S. government agency RMBS ...	$333.6	$6.0	$405.7	$4.0
U.S. government agency CMBS ...	1,104.9	1.1	1,108.2	1.1
CLOs .................................................	10,907.4	50.3	10,970.6	436.6
Consumer and other loans ...........	2,835.1	108.7	2,596.7	104.9

Total assets represent the unpaid principal amount of assets in

the SPEs in which we have continuing involvement and are

presented solely to provide information regarding the size of the

transactions and the size of the underlying assets supporting our

retained interests and are not considered representative of the

risk of potential loss. Assets retained in connection with a

securitization transaction represent the fair value of the

securities of one or more tranches issued by an SPE, including

senior and subordinated tranches. Our risk of loss is limited to

this fair value amount which is included in total Financial

instruments owned in our Consolidated Statements of Financial

Condition.

Although not obligated, in connection with secondary market-

making activities we may make a market in the securities issued

by these SPEs. In these market-making transactions, we buy

these securities from and sell these securities to investors.

Securities purchased through these market-making activities are

not considered to be continuing involvement in these SPEs. To

the extent we purchased securities through these market-making

activities, and we are not deemed to be the primary beneficiary of

the VIE, these securities are included in agency and non-agency

mortgage-backed and asset-backed securitizations in the

nonconsolidated VIEs section presented in Note 9, Variable

Interest Entities.

If we have not relinquished control over the transferred assets,

the assets continue to be recognized in Financial instruments

owned and a corresponding liability is recognized in Other

secured financings. The related liabilities do not have recourse to

our general credit.

$ in millions	February 28, 2026	November 30, 2025
Financial instruments owned .................	$—	$456.1
Other secured financings .......................	—	456.1

Note 9. Variable Interest Entities

VIEs are entities in which equity investors lack the characteristics

of a controlling financial interest. VIEs are consolidated by the

primary beneficiary. The primary beneficiary is the party who has

both (1) the power to direct the activities of a VIE that most

significantly impact the entity’s economic performance and (2)

an obligation to absorb losses of the entity or a right to receive

benefits from the entity that could potentially be significant to the

entity.

Our variable interests in VIEs include debt and equity interests,

commitments, guarantees and certain fees. Our involvement with

VIEs arises primarily from:

•Purchases of securities in connection with our trading and

secondary market making activities;

•Retained interests held as a result of securitization activities;

•Acting as placement agent and/or underwriter in connection

with client-sponsored securitizations;

•Financing of agency and non-agency mortgage-backed and

other asset-backed securities;

•Warehouse funding arrangements for client-sponsored

consumer and mortgage loan vehicles and CLOs through

participation agreements, forward sale agreements, reverse

repurchase agreements, and revolving loan and note

commitments; and

•Loans to, investments in and fees from various investment

vehicles.

We determine whether we are the primary beneficiary of a VIE

upon our initial involvement with the VIE and we reassess

whether we are the primary beneficiary of a VIE on an ongoing

basis. Our determination of whether we are the primary

beneficiary of a VIE is based upon the facts and circumstances

for each VIE and requires judgment. Our considerations in

determining the VIE’s most significant activities and whether we

have power to direct those activities include, but are not limited

to, the VIE’s purpose and design and the risks passed through to

investors, the voting interests of the VIE, management, service

and/or other agreements of the VIE, involvement in the VIE’s

initial design and the existence of explicit or implicit financial

guarantees. In situations where we have determined that the

power over the VIE’s significant activities is shared, we assess

whether we are the party with the power over the most significant

activities. If we are the party with the power over the most

significant activities, we meet the “power” criteria of the primary

beneficiary. If we do not have the power over the most significant

activities or we determine that decisions require consent of each

sharing party, we do not meet the “power” criteria of the primary

beneficiary.

We assess our variable interests in a VIE both individually and in

aggregate to determine whether we have an obligation to absorb

losses of or a right to receive benefits from the VIE that could

potentially be significant to the VIE. The determination of whether

our variable interest is significant to the VIE requires judgment. In

determining the significance of our variable interest, we consider

the terms, characteristics and size of the variable interests, the

design and characteristics of the VIE, our involvement in the VIE

and our market-making activities related to the variable interests.

26 Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Consolidated VIEs:

	February 28, 2026 (1)
$ in millions	Secured Funding Vehicles	Other
Cash ...................................................................................	$0.1	$2.1
Segregated cash ..............................................................	—	2.3
Financial instruments owned ........................................	14.9	163.5
Securities purchased under agreements to resell (2)	2,860.1	0.8
Receivables from brokers (3) .........................................	—	69.6
Other receivables .............................................................	0.5	3.1
Other assets (4) ...............................................................	—	86.1
Total assets ......................................................................	$2,875.6	$327.5
Financial instruments sold, not yet purchased ...........	$—	$94.8
Other secured financings (5) .........................................	2,874.2	18.7
Payables to brokers and dealers ...................................	—	1.2
Other liabilities (6) ...........................................................	6.6	85.7
Long-term debt ................................................................	—	70.2
Total liabilities .................................................................	$2,880.8	$270.6

	November 30, 2025 (1)
$ in millions	Secured Funding Vehicles	Other
Cash ...................................................................................	$—	$1.7
Segregated cash ..............................................................	—	1.4
Financial instruments owned .........................................	1.4	142.6
Securities purchased under agreements to resell (2)	3,043.4	121.5
Receivables from brokers (3) .........................................	—	104.1
Other receivables .............................................................	—	3.1
Other assets (4) ...............................................................	—	87.1
Total assets ......................................................................	$3,044.8	$461.5
Financial instruments sold, not yet purchased ...........	$—	$83.8
Other secured financings (5) .........................................	3,042.4	21.6
Repurchase agreement ...................................................	—	147.8
Other liabilities (6) ...........................................................	7.3	85.1
Long-term debt ................................................................	—	70.2
Total liabilities .................................................................	$3,049.7	$408.5

(1)Assets and liabilities are presented prior to consolidation and thus a portion of

these assets and liabilities are eliminated in consolidation.

(2)Securities purchased under agreements to resell primarily represent amounts

due under collateralized transactions on related consolidated entities, all of

which are eliminated in consolidation.

(3)Includes $0.5 million and $0.5 million at February 28, 2026 and November 30,

2025, respectively, with related consolidated entities, which are eliminated in

consolidation.

(4)Includes $3.5 million and $3.4 million at February 28, 2026 and November 30,

2025, respectively, with related consolidated entities, which are eliminated in

consolidation.

(5)Includes $709.0 million and $780.5 million at February 28, 2026 and

November 30, 2025, respectively, with related consolidated entities, which are

eliminated in consolidation.

(6)Includes $84.3 million and $84.0 million at February 28, 2026 and

November 30, 2025, respectively, with related consolidated entities, which are

eliminated in consolidation.

Secured Funding Vehicles. We sell agency and non-agency

residential and commercial mortgage loans, and asset-backed

securities to asset-backed financing vehicles pursuant to the

terms of a master repurchase agreement. Our variable interests

in these vehicles consist of our collateral margin maintenance

obligations under the master repurchase agreement, and retained

interests in securities issued. The assets of these VIEs consist of

reverse repurchase agreements, which are available for the

benefit of the vehicle’s debt holders. We also from time to time

securitize other financial instruments and own variable interests

in other securitization vehicles.

Other. We manage investment vehicles for external investors and

for the benefit of our employees and we may also hold a

controlling financial interest in investment vehicles managed by

third parties. The assets of these VIEs consist primarily of equity

securities and broker receivables. Our variable interests in these

vehicles consist of equity securities, management and

performance fees and revenue share arrangements. The

creditors of these VIEs do not have recourse to our general credit

and each such VIE’s assets are not available to satisfy any other

debt.

We are the primary beneficiary of a real estate syndication entity

that develops multi-family residential property and manages the

property. The assets of the VIE consist primarily of real estate

and its liabilities primarily consist of accrued expenses and long-

term debt secured by the real estate property. Our variable

interest in the VIE primarily consists of our limited liability

company interest, a sponsor promote and development and

asset management fees for managing the project.

We are the primary beneficiary of special purpose vehicles that

hold risk retention notes issued as part of unsecured loan asset-

backed transactions. Our variable interests in the VIEs primarily

consist of our ownership of certificates issued by the VIEs.

Nonconsolidated VIEs

	February 28, 2026
	Carrying Amount		Maximum Exposure to Loss	VIE Assets
$ in millions	Assets	Liabilities
CLOs ......................................	$739.9	$51.7	$6,221.1	$20,689.2
Asset-backed vehicles ........	1,392.5	—	1,900.2	7,582.6
Related party private equity vehicles ............................	3.5	—	13.4	61.3
Other investment vehicles ..	1,715.1	—	1,908.0	71,800.9
Total .......................................	$3,851.0	$51.7	$10,042.7	$100,134.0

	November 30, 2025
	Carrying Amount		Maximum Exposure to Loss	VIE Assets
$ in millions	Assets	Liabilities
CLOs ......................................	$1,245.3	$96.5	$7,055.5	$17,600.4
Asset-backed vehicles ........	1,207.3	—	1,797.1	6,616.0
Related party private equity vehicles ............................	3.5	—	14.3	57.7
Other investment vehicles ..	1,722.7	—	2,009.6	74,007.9
Total .......................................	$4,178.8	$96.5	$10,876.5	$98,282.0

Maximum Exposure to Loss

Maximum exposure to loss represents the total of the carrying

value of our on-balance sheet interests in the unconsolidated

VIEs and the notional amount of any unfunded off-balance sheet

arrangements with the unconsolidated VIEs. With respect to

CLOs and asset-backed vehicles, the off-balance sheet

arrangements typically represent the undrawn notional amount of

arrangements to finance the acquisition of assets during the

warehousing and pre-closing phase of the vehicles. The

maximum exposure to loss is based on the unlikely event that all

of the assets in the VIEs become worthless and incorporates not

only potential losses associated with the carrying amounts of

assets recognized on the Consolidated Statements of Financial

Condition but also potential losses associated with unfunded

commitments and other contractual arrangements. The

maximum exposure to loss does not include the offsetting

benefit of any financial instruments that may be utilized to hedge

the risks associated with our variable interests, is not reduced by

the amount of collateral held as part of a transaction with a VIE

February 2026 Form 10-Q 27

Notes to Consolidated Financial Statements

(Unaudited)

and does not consider any executed forward sale agreements

where we have committed to sell ownership interests in any of

the investment vehicles.

Collateralized Loan Obligations. Assets collateralizing the CLOs

include bank loans, participation interests, sub-investment grade

and senior secured U.S. loans, and senior secured Euro-

denominated corporate leveraged loans and bonds. We

underwrite securities issued in CLO transactions on behalf of

sponsors and provide advisory services to the sponsors. We may

also sell corporate loans to the CLOs. Our variable interests

where we have been involved in providing underwriting and/or

advisory services include:

•Forward sale agreements whereby we commit to sell, at a fixed

price, corporate loans and ownership interests in a CLO;

•Warehouse funding arrangements in the form of:

◦Participation interests in corporate loans and commitments

to fund such participation interests;

◦Reverse repurchase agreements and commitments to fund

such reverse repurchase agreements;

◦Variable funding notes; and

◦Senior and subordinated notes issued in connection with

CLO warehousing activities.

•Trading positions in securities issued in CLO transactions.

Asset-Backed Vehicles. We provide financing and lending related

services to certain client-sponsored VIEs in the form of revolving

funding note agreements, revolving credit facilities, forward

purchase agreements and reverse repurchase agreements. We

also may transfer originated corporate loans to certain VIEs and

hold subordinated interests issued by the vehicle. The underlying

assets, which are collateralizing the vehicles, are primarily

composed of unsecured consumer loans, mortgage loans and

corporate loans. In addition, we may provide structuring and

advisory services and act as an underwriter or placement agent

for securities issued by the vehicles. We do not control the

activities of these entities.

Related Party Private Equity Vehicles. We have committed to

invest in private equity funds, (the “JCP Funds”, including JCP

Fund V (refer to Note 10, Investments for further information))

managed by Jefferies Capital Partners, LLC (the “JCP Manager”).

Additionally, we have committed to invest in the general partners

of the JCP Funds (the “JCP General Partners”) and the JCP

Manager. Our variable interests consist of equity interests that, in

total, provide us with limited and general partner investment

returns of the JCP Funds, a portion of the carried interest earned

by the JCP General Partners and a portion of the management

fees earned by the JCP Manager. At February 28, 2026 and

November 30, 2025, our remaining equity commitment in the JCP

Entities was $8.8 million and $9.7 million, respectively. At both

February 28, 2026 and November 30, 2025, we also had

remaining commitments of $0.4 million, to a private equity fund

managed by us for the benefit of our employees. The carrying

value of our collective equity interests were $3.5 million and $3.4

million at February 28, 2026 and November 30, 2025,

respectively. Our exposure to loss is limited to the total of our

carrying value and unfunded equity commitment. The assets of

the vehicles primarily consist of private equity and equity related

investments.

Other Investment Vehicles. At February 28, 2026 and

November 30, 2025, our remaining equity commitment in various

other investment vehicles was $188.2 million and $282.2 million,

respectively. The carrying value of our equity investments was

$1.72 billion at both February 28, 2026 and November 30, 2025.

Our exposure to loss is limited to the total of our carrying value

and unfunded equity commitment. These investment vehicles

have assets primarily consisting of private and public equity

investments, debt instruments, trade and insurance claims,

various oil and gas assets and energy tax credits.

Mortgage-Backed and Other Asset-Backed Secured Funding

Vehicles. In connection with our secondary trading and market-

making activities, we buy and sell agency and non-agency

mortgage-backed securities and other asset-backed securities,

which are issued by third-party securitization SPEs and are

generally considered variable interests in VIEs. Securities issued

by securitization SPEs are backed by residential mortgage loans,

U.S. agency collateralized mortgage obligations, commercial

mortgage loans, CDOs and CLOs and other consumer loans, such

as installment receivables, automobile loans and student loans.

These securities are accounted for at fair value and included in

Financial instruments owned. We have no other involvement with

the related SPEs and therefore do not consolidate these entities.

We also engage in underwriting, placement and structuring

activities for third-party-sponsored securitization trusts generally

through agency (Fannie Mae, Federal Home Loan Mortgage

Corporation (“Freddie Mac”) or Ginnie Mae) or non-agency-

sponsored SPEs and may purchase loans or mortgage-backed

securities from third-parties that are subsequently transferred

into the securitization trusts. The securitizations are backed by

residential and commercial mortgage, home equity and

automobile loans. We do not consolidate agency-sponsored

securitizations as we do not have the power to direct the

activities of the SPEs that most significantly impact their

economic performance. Further, we are not the servicer of non-

agency-sponsored securitizations and therefore do not have

power to direct the most significant activities of the SPEs and

accordingly, do not consolidate these entities. We may retain

unsold senior and/or subordinated interests at the time of

securitization in the form of securities issued by the SPEs.

At February 28, 2026 and November 30, 2025, we held $1.39

billion and $1.06 billion of agency mortgage-backed securities,

respectively, and $183.4 million and $156.3 million of non-agency

mortgage-backed and other asset-backed securities, respectively,

as a result of our secondary trading and market-making activities,

and underwriting, placement and structuring activities. Our

maximum exposure to loss on these securities is limited to the

carrying value of our investments in these securities. These

mortgage-backed and other asset-backed secured funding

vehicles discussed are not included in the above table containing

information about our variable interests in nonconsolidated VIEs.

Note 10. Investments

Investments for which we exercise significant influence over the

investee are accounted for under the equity method of

accounting with our shares of the investees’ earnings recognized

in Other revenues. Equity method investments, including any

loans to the investees, are reported within Investments in and

loans to related parties.

$ in millions	February 28, 2026	November 30, 2025
Total Investments in and loans to related parties ........................................................	$1,560.6	$1,496.1

28 Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

The following presents summarized financial information about

our significant equity method investees. For certain investees, we

receive financial information on a lag and the summarized

information provided for these investees is based on the latest

financial information available as of February 28, 2026 and 2025.

	Three Months Ended February 28,
$ in millions	2026	2025
Total equity method pickup earnings recognized in Other revenues .................	$24.5	$7.1

Jefferies Finance

Jefferies Finance, our 50/50 joint venture with Massachusetts

Mutual Life Insurance Company (“MassMutual”) structures,

underwrites and syndicates primarily senior secured loans to

corporate borrowers; and manages proprietary and third-party

investments in both broadly syndicated and direct lending loans.

In connection with its Leveraged Finance business, loans are

originated primarily through our investment banking efforts and

Jefferies Finance typically syndicates to third-party investors

substantially all of its arranged volume through us. The Asset

Management business is a multi-strategy private credit platform

that manages proprietary and third-party capital across

commingled funds, funds-of-one, separately managed accounts,

business development companies, CLOs and levered balance

sheet funds. Broadly syndicated loan investments are sourced

through transactions arranged by Jefferies Finance and third-

party arrangers and managed through its subsidiary, Apex Credit

Partners LLC. Direct lending investments are primarily sourced

through us. Jefferies Finance and its subsidiaries that are

involved in investment management are registered investment

advisers with the SEC.

At February 28, 2026, we and MassMutual each had equity

commitments to Jefferies Finance of $750.0 million, for a

combined total commitment of $1.5 billion. The equity

commitment is reduced quarterly based on our share of any

undistributed earnings from Jefferies Finance and the

commitment is increased only to the extent the share of such

earnings are distributed. At February 28, 2026, our unfunded

commitment to Jefferies Finance was $15.4 million. The

investment commitment is scheduled to expire on March 1, 2027

with automatic one year extensions absent a 60 day termination

notice by either party.

Jefferies Finance has executed a secured revolving credit facility

with us and MassMutual, to be funded equally, to support loan

underwritings by Jefferies Finance, which bears interest based on

the interest rates of the related Jefferies Finance underwritten

loans and is secured by the underlying loans funded by the

proceeds of the facility. The total facility is a committed amount

of $500.0 million at February 28, 2026. Advances are shared

equally between us and MassMutual. The facility is scheduled to

mature on March 1, 2027 with automatic one year extensions

absent a 60 day termination notice by either party. At

February 28, 2026, our $250.0 million commitment was undrawn.

Activity related to the facility:

	Three Months Ended February 28,
$ in millions	2026	2025
Unfunded commitment fees ........................	$0.3	$0.3

Selected financial information for Jefferies Finance:

$ in millions	February 28, 2026	November 30, 2025
Total assets ....................................................	$6,903.7	$7,356.1
Total liabilities ................................................	5,467.6	5,959.2
Total mezzanine equity .................................	14.9	14.8

$ in millions	February 28, 2026	November 30, 2025
Our total investment balance .......................	$710.6	$691.0

	Three Months Ended February 28,
$ in millions	2026	2025
Net earnings (losses) attributable to members ....................................................	$33.1	$(1.7)

Activity related to our other transactions with Jefferies Finance:

	Three Months Ended February 28,
$ in millions	2026	2025
Origination and syndication fee revenues (1) ...............................................................	$53.1	$60.2
Origination fee expenses (1) ........................	18.6	18.5
CLO placement and structuring fee revenues (2) .............................................	1.0	0.2
Placement and referral fees (3) ...................	6.3	0.6
Underwriting revenues (expenses) (4) .......	(1.0)	—
Service fees (5) ..............................................	65.6	54.4

(1)We engage in the origination and syndication of loans underwritten by

Jefferies Finance. In connection with such services, we earned fees, which are

recognized in Investment banking revenues. In addition, we paid fees to

Jefferies Finance in respect of certain loans originated by Jefferies Finance,

which are recognized as Business development expenses.

(2)We act as a placement and/or structuring agent for CLOs managed by

Jefferies Finance, which are recognized as fees and included in Investment

banking revenues.

(3)We act as a placement agent for investment funds managed by Jefferies

Finance, which are recognized as fees and included in Commissions and other

fees.

(4)We act as an underwriter in connection with term loans issued by Jefferies

Finance.

(5)Under a service agreement, we charge Jefferies Finance for various

administrative services provided.

Additional balances with Jefferies Finance as reported in our

Consolidated Statements of Financial Condition.

$ in millions	February 28, 2026	November 30, 2025
Assets
Financial instruments owned, at fair value (1) .....................................................................	$2.6	$10.9
Other assets (2) .............................................	17.0	7.0
Liabilities
Financial instruments sold, not yet purchased, at fair value (1) (3) ...............	$7.5	$0.4
Payables:
Brokers, dealers and clearing organizations (4) ......................................	16.8	17.2
Customers (5) ...........................................	4.8	3.3

(1)In connection with our capital markets activities, from time to time we make a

market in long-term debt securities and term loans of Jefferies Finance (i.e.,

we buy and sell debt securities and tern loans of Jefferies Finance).

(2)Receivable for services and certain fees from Jefferies Finance.

(3)Includes OTC foreign currency derivatives.

(4)Cash collateral received from Jefferies Finance on OTC foreign currency

derivatives.

February 2026 Form 10-Q 29

Notes to Consolidated Financial Statements

(Unaudited)

(5)Payable to Jefferies Finance in connection with loans originated by Jefferies

Finance to borrowers who are investment banking clients of ours. We have

also entered into an agreement to indemnify Jefferies Finance with respect to

any foreign currency exposure on these loans.

Berkadia

Berkadia is a commercial real estate finance and investment

sales joint venture that was formed by us and Berkshire

Hathaway Inc. We are entitled to receive 45.0% of the profits of

Berkadia. Berkadia originates commercial and multifamily real

estate loans that are sold to U.S. government agencies or other

investors with Berkadia retaining the servicing rights. Berkadia

also provides advisory services in connection with sales of

multifamily assets. Berkadia is a servicer of commercial real

estate loans in the U.S., performing primary, master and special

servicing functions for U.S. government agency programs and

financial services companies.

Commercial paper issued by Berkadia is supported by a

$1.50 billion surety policy issued by a Berkshire Hathaway

insurance subsidiary, for which we receive a surety fee, and a

corporate guaranty, and we have agreed to reimburse Berkshire

Hathaway for one-half of any losses incurred thereunder. At

February 28, 2026, the aggregate amount of commercial paper

outstanding was $1.47 billion.

Selected financial information for Berkadia:

$ in millions	February 28, 2026	November 30, 2025
Total assets ...................................................	$5,146.4	$5,269.8
Total liabilities ...............................................	3,686.4	3,953.1
Total noncontrolling interest .......................	521.0	369.0

$ in millions	February 28, 2026	November 30, 2025
Our total investment balance .......................	$426.6	$429.7

	Three Months Ended February 28,
$ in millions	2026	2025
Net earnings attributable to members .......	$40.5	$37.8

	Three Months Ended February 28,
$ in millions	2026	2025
Distributions ...................................................	$21.2	$16.1

At February 28, 2026 and November 30, 2025, we had

commitments to purchase $13.4 million and $13.6 million,

respectively, of agency CMBS from Berkadia.

Revenues from other transactions with Berkadia for the three

months ended February 28, 2026 and 2025 were $0.0 million and

$0.1 million, respectively.

Real Estate Investments

Our real estate equity method investments primarily consist of

our equity interests in Brooklyn Renaissance Plaza and Hotel and

54 Madison. Brooklyn Renaissance Plaza is composed of a hotel,

office building complex and parking garage located in Brooklyn,

New York. We have a 25.4% equity interest in the hotel and a

61.3% equity interest in the office building and garage. Although

we have a majority interest in the office building and garage, we

do not have control, but only have the ability to exercise

significant influence on this investment. We are amortizing our

basis difference between the estimated fair value and the

underlying book value of Brooklyn Renaissance office building

and garage over the respective useful lives (weighted average life

of 39 years).

We own a 48.1% equity interest in 54 Madison, a fund that most

recently owned an interest in one real estate project and the fund

is in the process of being liquidated.

Selected financial information for the real estate investments:

$ in millions	February 28, 2026	November 30, 2025
Total assets ....................................................	$309.4	$312.6
Total liabilities ................................................	463.7	470.7
	February 28, 2026	November 30, 2025
Our total investment balance .......................	$99.5	$98.7

	Three Months Ended February 28,
$ in millions	2026	2025
Net earnings ...................................................	$3.8	$4.6

JCP Fund V

We have limited partnership interests of 11% and 50% in Jefferies

Capital Partners V L.P. and Jefferies SBI USA Fund L.P. (together,

“JCP Fund V”), respectively, which are private equity funds

managed by a team led by our President and which are in the

process of being fully liquidated. The amount of our investments

in JCP Fund V included in Financial instruments owned, at fair

value was $2.8 million at both February 28, 2026 and

November 30, 2025. We account for these investments at fair

value based on the NAV of the funds provided by the fund

managers. The following summarizes the results from these

investments which are included in Principal transactions

revenues:

	Three Months Ended February 28,
$ in millions	2026	2025
Net gains (losses) from our investments in JCP Fund V ............................................	$—	$(0.2)

At both February 28, 2026 and November 30, 2025, we were

committed to invest equity of up to $85.0 million in JCP Fund V.

At both February 28, 2026 and November 30, 2025, our unfunded

commitment relating to JCP Fund V was $8.7 million. We do not

expect any further capital to be called by JCP Fund V.

The following is a summary of the Net change in net assets

resulting from operations for 100.0% of JCP Fund V, in which we

owned effectively 35.1% at February 28, 2026 of the combined

equity interests:

Three Months Ended (1)
$ in millions	December 31, 2025	December 31, 2024
Net increase (decrease) in net assets resulting from operations .......................................................	$—	$(0.6)

(1)Financial information for JCP Fund V within our results of operations for the

three months ended February 28, 2026 and 2025 is included based on the

periods presented.

Hildene

In July 2024, we invested $25.0 million in the Class A Common

Equity Units of Hildene Insurance Holdings, LLC (“Hildene

Insurance”), an investment fund with insurance exposures. On

March 1, 2025, we made an additional investment of

$75.0 million in Hildene Insurance, which resulted in an increase

of our effective ownership from 8.83% to 23.5%. The investment

is accounted for under the equity method with a carrying amount

of $117.1 million and $113.8 million at February 28, 2026 and

November 30, 2025, respectively.

30 Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Selected financial information for Hildene Insurance:

$ in millions	December 31, 2025 (1)	September 30, 2025 (1)
Total assets ...............................................................	$564.6	$498.4
Total liabilities ...........................................................	20.1	0.7
Total members’ equity .............................................	544.5	497.7

Three Months Ended (1)
$ in millions	December 31, 2025	December 31, 2024
Net increase in members’ equity resulting from operations .............................................................	$16.6	$8.4

(1)Financial information for Hildene Insurance Holdings, LLC included in our

financial position at February 28, 2026 and November 30, 2025 is based on

the dates presented, and in our results of operations for the three months

ended February 28, 2026 and 2025 is based on the periods presented.

On December 9, 2025, we entered into an agreement to acquire a

50% interest in Hildene Holding Company, LLC, parent of Hildene

Capital Management, LLC, a credit-focused asset manager and

the parent of Hildene Insurance. We will contribute our existing

revenue share, a portion of our interest in a Hildene-managed

fund, and $340.0 million in cash. Hildene’s principals will

contribute their ownership interests and approximately

$250.0 million of the fund and related equity interests. Closing is

expected in the third quarter of 2026, subject to customary

approvals.

ApiJect

We own shares that represent a 37.9% and 33.6% economic

interest in ApiJect at February 28, 2026 and November 30, 2025,

respectively, which are accounted for at fair value by electing the

fair value option available under U.S. GAAP, and are included

within corporate equity securities in Financial instruments owned,

at fair value. At both February 28, 2026 and November 30, 2025,

the total fair value of our total equity investment in common

shares of ApiJect was $97.9 million, which is classified within

Level 3 of the fair value hierarchy. Additionally, we own warrants

to purchase up to 950,000 shares of common stock at any time

or from time to time on or before April 15, 2032.

We also have a term loan agreement with a principal of ApiJect

for $23.3 million, which matures on April 30, 2026. The loan is

accounted for at amortized cost and is reported within Other

assets. The loan has a fair value of $23.3 million at both

February 28, 2026 and November 30, 2025, which would be

classified as Level 3 in the fair value hierarchy.

In December 2025, we purchased two secured convertible

promissory notes totaling $9.8 million from ApiJect. These

promissory notes are accounted for at fair value in Financial

instruments owned and classified within Level 3 of the fair value

hierarchy.

Aircadia

In December 2023, Aircadia Leasing II LLC (“Aircadia”), a wholly

owned subsidiary, purchased airplanes from one of our clients

and simultaneously entered into a lease with the seller to lease

the airplanes for a term of 42 months. The transaction was

accounted for as a sale leaseback and the airplanes were

recorded within Premises and equipment at $57.7 million. During

the third quarter of 2025, we sold the airplanes.

	Three Months Ended February 28,
$ in millions	2026	2025
Operating lease income ................................	$—	$5.6

Also in December 2023, we provided a loan to the seller for

$30.0 million, which was paid off on April 1, 2025. The loan was

accounted for at amortized cost and included within Investments

in and loans to related parties. We recognized interest income of

$0.0 million and $0.7 million on the loan during the three months

ended February 28, 2026 and 2025, respectively. We also hold

preferred shares in the seller, which are accounted for at fair

value in Financial instruments owned with a fair value of $43.2

million at both February 28, 2026 and November 30, 2025, and

are classified within Level 3 of the fair value hierarchy.

In September 2024, we provided a €15.0 million loan, maturing in

May 15, 2026, to an individual related to the seller, secured by a

privately owned aircraft and guaranteed by the individual. We

recognized interest income of $0.5 million for both the three

months ended February 28, 2026 and 2025.

Note 11. Credit Losses on Financial Assets Measured at

Amortized Cost

Secured Financing Receivables. In evaluating secured financing

receivables (reverse repurchases agreements, securities

borrowing arrangements, and margin loans), the underlying

collateral maintenance provisions are taken into consideration.

The underlying contractual collateral maintenance for

significantly all of our secured financing receivables requires that

the counterparty continually adjust the collateralization amount,

securing the credit exposure on these contracts. Collateralization

levels for our secured financing receivables are initially

established based upon the counterparty, the type of acceptable

collateral that is monitored daily and adjusted to mitigate the

potential of any credit losses. Credit losses are not recognized

for secured financing receivables where the underlying

collateral’s fair value is equal to or exceeds the asset’s amortized

cost basis. In cases where the collateral’s fair value does not

equal or exceed the amortized cost basis, the allowance for

credit losses, if any, is limited to the difference between the fair

value of the collateral at the reporting date and the amortized

cost basis of the financial assets.

Broker Receivables. Our receivables from brokers, dealers, and

clearing organizations include deposits of cash with exchange

clearing organizations to meet margin requirements, amounts

due from clearing organizations for daily variation settlements,

securities failed-to-deliver or receive and receivables and

payables for fees and commissions. These receivables generally

do not give rise to material credit risk and have a remote

probability of default either because of their short-term nature or

due to the credit protection framework inherent in the design and

operations of brokers, dealers and clearing organizations. As

such, generally, no allowance for credit losses is held against

these receivables.

Investment Banking Fee Receivables. Our allowance for credit

losses on our investment banking fee receivables uses a

provisioning matrix based on the shared risk characteristics and

historical loss experience for such receivables. In some

instances, we may adjust the allowance calculated based on the

provision matrix to incorporate a specific allowance based on the

unique credit risk profile of a receivable. The provisioning matrix

is periodically updated to reflect changes in the underlying

portfolio’s credit characteristics and most recent historical loss

data.

February 2026 Form 10-Q 31

Notes to Consolidated Financial Statements

(Unaudited)

Allowance for credit losses for investment banking receivables:

	Three Months Ended  February 28,
$ in thousands	2026	2025
Beginning balance ........................................................	$3,681	$5,277
Bad debt expense .........................................................	10,164	1,347
Charge-offs ...................................................................	—	(3,076)
Recoveries collected ....................................................	(1,885)	(1,502)
Ending balance (1) ..............................................................	$11,960	$2,046

(1)Substantially all of the allowance for doubtful accounts relate to mergers and

acquisitions and restructuring fee receivables, which include recoverable

expense receivables.

Other Financial Assets. For all other financial assets measured at

amortized cost, we estimate expected credit losses over the

financial assets’ life as of the reporting date based on relevant

information about past events, current conditions, and

reasonable and supportable forecasts.

Note 12. Goodwill and Intangible Assets

Goodwill

	Three Months Ended February 28, 2026
$ in thousands	Investment Banking and Capital Markets	Asset Management	Total
Balance, at beginning of period ...................	$1,535,961	$301,609	$1,837,570
Currency translation and other adjustments ..............................................	1,281	2,115	3,396
Impairment (1) ................................................	—	(58,240)	(58,240)
Reclassification to held for sale (1) ............	—	(56,850)	(56,850)
Balance, at end of period .............................	$1,537,242	$188,634	$1,725,876

(1)Following the acceptance of a binding offer for Tessellis during the first

quarter of 2026, we recorded a $58.2 million goodwill impairment charge. The

remaining goodwill balance was reclassified as held for sale at February 28,

2026. See Note 4, Assets and Liabilities Held for Sale.

	Three Months Ended February 28, 2025
$ in thousands	Investment Banking and Capital Markets	Asset Management	Total
Balance, at beginning of period ...................	$1,533,013	$294,925	$1,827,938
Currency translation and other adjustments ..............................................	(1,151)	(2,140)	(3,291)
Balance, at end of period .............................	$1,531,862	$292,785	$1,824,647

Carrying values of goodwill by reporting unit:

$ in millions	February 28, 2026	November 30, 2025
Investment banking ..............................................................	$702.6	$702.0
Equities and wealth management ......................................	256.1	255.9
Fixed income .........................................................................	578.5	578.0
Asset management ..............................................................	143.0	143.0
Other investments .................................................................	45.7	158.7
Total ........................................................................................	$1,725.9	$1,837.6

Intangible Assets

	February 28, 2026			Weighted Average Remaining Lives (Years)
$ in thousands	Gross Cost	Accumulated Amortization	Net Carrying Amount
Customer relationships (1) ........................................	$127,693	$(104,980)	$22,713	5.0
Trademarks and trade names (1) .............................	128,981	(47,963)	81,018	22.0
Exchange and clearing organization membership interests and registrations ........................................	8,735	—	8,735	N/A
Other (1) .......................................................................	15,128	(14,374)	754	2.5
Total ..............................................................................	$280,537	$(167,317)	$113,220

	November 30, 2025				Weighted Average Remaining Lives (Years)
$ in thousands	Gross Cost	Assets Acquired	Accumulated Amortization	Net Carrying Amount
Customer relationships ..........................	$166,328	$622	$(116,810)	$50,140	4.6
Trademarks and trade names ................	160,674	—	(55,948)	104,726	20.6
Exchange and clearing organization membership interests and registrations ..............................................	8,717	—	—	8,717	N/A
Other ...........................................................	86,815	99	(47,920)	38,994	2.8
Total ...........................................................	$422,534	$721	$(220,678)	$202,577

(1)Following the acceptance of a binding offer for Tessellis during the first

quarter of 2026, the remaining intangible asset balance of $82.7 million was

reclassified as held for sale at February 28, 2026. See Note 4, Assets and

Liabilities Held for Sale.

Amortization Expense

For finite life intangible assets, we recognized aggregate

amortization expense of $8.5 million and $7.8 million for the

three months ended February 28, 2026 and 2025, respectively.

These expenses are included in Depreciation and amortization.

Estimated future amortization expense for the next five fiscal

years:

Year	$ in thousands
Remainder of fiscal year 2026 ............................................................	$6,535
Year ending November 30, 2027 ........................................................	8,685
Year ending November 30, 2028 ........................................................	8,567
Year ending November 30, 2029 ........................................................	8,380
Year ending November 30, 2030 ........................................................	8,322

Note 13. Revenues from Contracts with Customers

	Three Months Ended  February 28,
$ in thousands	2026	2025
Revenues from contracts with customers:
Investment banking ..........................................................	$1,014,955	$725,661
Commissions and other fees .........................................	361,073	287,965
Asset management fees ..................................................	6,899	45,808
Real estate revenues ........................................................	2,246	11,081
Internet connection and broadband revenues .............	52,412	57,804
Other contracts with customers .....................................	18,064	16,107
Total revenue from contracts with customers ............	1,455,649	1,144,426
Other sources of revenue:
Principal transactions ......................................................	487,498	407,230
Revenues from strategic affiliates .................................	69,292	43,449
Interest ...............................................................................	813,119	845,171
Other ..................................................................................	45,707	32,588
Total revenues ..................................................................	$2,871,265	$2,472,864

32 Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Disaggregation of Revenue

	Three Months Ended February 28, 2026
$ in thousands	Investment Banking and Capital Markets	Asset Management	Total
Major business activity:
Investment banking - Advisory ................	$527,128	$—	$527,128
Investment banking - Underwriting .........	487,827	—	487,827
Equities (1) .................................................	359,381	—	359,381
Fixed income (1) ........................................	1,692	—	1,692
Asset management ...................................	—	6,899	6,899
Other investments .....................................	—	72,722	72,722
Total ............................................................	$1,376,028	$79,621	$1,455,649
Primary geographic region:
Americas .....................................................	$1,042,946	$25,226	$1,068,172
Europe and the Middle East .....................	237,296	53,523	290,819
Asia-Pacific ................................................	95,786	872	96,658
Total ............................................................	$1,376,028	$79,621	$1,455,649

	Three Months Ended February 28, 2025
$ in thousands	Investment Banking and Capital Markets	Asset Management	Total
Major business activity:
Investment banking - Advisory ................	$397,780	$—	$397,780
Investment banking - Underwriting .........	327,881	—	327,881
Equities (1) .................................................	286,050	—	286,050
Fixed income (1) ........................................	1,915	—	1,915
Asset management ...................................	—	45,808	45,808
Other investments ....................................	—	84,992	84,992
Total ............................................................	$1,013,626	$130,800	$1,144,426
Primary geographic region:
Americas .....................................................	$748,675	$71,070	$819,745
Europe and the Middle East ....................	173,121	58,794	231,915
Asia-Pacific ................................................	91,830	936	92,766
Total ............................................................	$1,013,626	$130,800	$1,144,426

(1)Revenues from contracts with customers associated with the equities and

fixed income businesses primarily represent commissions and other fee

revenue.

Refer to Note 20, Segment Reporting, for a further discussion on

the allocation of revenues to geographic regions.

Information on Remaining Performance Obligations and Revenue

Recognized from Past Performance

We do not disclose information about remaining performance

obligations pertaining to contracts that have an original expected

duration of one year or less. The transaction price allocated to

remaining unsatisfied or partially unsatisfied performance

obligations with an original expected duration exceeding one year

was not material at February 28, 2026. Investment banking

advisory fees that are contingent upon completion of a specific

milestone and fees associated with certain distribution services

are also excluded as the fees are considered variable and not

included in the transaction price.

During the three months ended February 28, 2026 and 2025, we

recognized $10.9 million and $58.2 million, respectively, of

revenue related to performance obligations satisfied (or partially

satisfied) in previous periods, mainly due to resolving

uncertainties in variable consideration that was constrained in

prior periods. In addition, we recognized $7.8 million and $7.7

million of revenues primarily associated with distribution services

for the three months ended February 28, 2026 and 2025,

respectively, a portion of which relates to prior periods.

Contract Balances

The timing of our revenue recognition may differ from the timing

of payment by our customers. We record a receivable when

revenue is recognized prior to payment and we have an

unconditional right to payment. Alternatively, when payment

precedes the provision of the related services, we record deferred

revenue until the performance obligations are satisfied.

Our deferred revenue primarily relates to retainer and milestone

fees received in investment banking advisory engagements

where the performance obligation has not yet been satisfied.

Deferred revenue at February 28, 2026 and November 30, 2025

was $69.5 million and $92.3 million, respectively, which is

recorded in Accrued expenses and other liabilities. During the

three months ended February 28, 2026 and 2025, we recognized

revenues of $46.0 million and $27.4 million, respectively, that

were recorded as deferred revenue at the beginning of the

periods.

We had receivables related to revenues from contracts with

customers of $353.9 million and $396.8 million at February 28,

2026 and November 30, 2025, respectively.

Contract Costs

We capitalize costs to fulfill contracts associated with

investment banking advisory engagements where the revenue is

recognized at a point in time and the costs are determined to be

recoverable. Capitalized costs to fulfill a contract are recognized

at the point in time that the related revenue is recognized.

At February 28, 2026 and November 30, 2025, capitalized costs

to fulfill a contract were $5.3 million and $5.2 million,

respectively, which are recorded in Receivables – Fees, interest

and other. During the three months ended February 28, 2026 and

2025, we recognized expenses of $2.0 million and $0.9 million,

respectively, related to costs to fulfill a contract that were

capitalized as of the beginning of the year. There were no

significant impairment charges recognized in relation to these

capitalized costs for the three months ended February 28, 2026

and 2025.

Note 14. Compensation Plans

For a description of Restricted Stock, Restricted Stock Units, the

Senior Executive Compensation Plan and other compensation

plans refer to Note 15. Compensation Plans in our consolidated

financial statements included in Part II, Item 8 of our Annual

Report on Form 10-K for the year ended November 30, 2025.

At February 28, 2026, there were approximately 2.1 million shares

of restricted stock outstanding with future service required,

6.4 million RSUs outstanding with future service required

(including target RSUs that may be issued under the senior

executive compensation plan), 10.3 million RSUs outstanding

with no future service required, and 5.1 million stock options

outstanding. The maximum potential increase to common shares

outstanding resulting from these outstanding awards is

21.8 million at February 28, 2026.

February 2026 Form 10-Q 33

Notes to Consolidated Financial Statements

(Unaudited)

In December 2025, the Compensation Committee of our Board of

Directors granted RSUs and performance stock units (“PSUs”) to

each of our senior executives as follows:

$ in millions	Grant Terms
RSUs
Aggregate grant date fair value ......................................	$14.3
Vesting period ...................................................................	3-year cliff
PSUs
Aggregate target fair value ..............................................	$14.3
Service period ....................................................................	3 years
Performance period ..........................................................	Fiscal 2025 to Fiscal 2027
Performance target (1) ....................................................	10% ROTE
Performance range (2) .....................................................	7.5% - 15% ROTE

(1)ROTE is defined as return on tangible equity measured over three years.

(2)Performance below an ROTE of 7.5% results in forfeiture of all PSUs. An ROTE

of 15% or greater results in earning 150% of target PSUs and between 7.5% to

15%, the level of earning PSUs is linearly interpolated.

In addition, we sponsor non-share-based compensation plans.

Non-share-based compensation plans sponsored by us include a

profit sharing plan and other forms of restricted cash awards.

Restricted cash awards are subject to ratable vesting terms with

service requirements. These awards are amortized as

compensation expense over the relevant service period, which is

generally considered to start at the beginning of the annual

compensation year.

Components of total compensation cost associated with certain

of our compensation plans:

	Three Months Ended  February 28,
$ in millions	2026	2025
Restricted cash awards .....................................................	$132.6	$115.1
Restricted stock and RSUs (1) ..........................................	50.7	35.6
Profit sharing plan ...............................................................	7.8	7.4
Total compensation cost...................................................	$191.1	$158.1

(1)Total compensation cost associated with restricted stock and RSUs includes

the amortization of sign-on, retention and senior executive awards, less

forfeitures and clawbacks.

Remaining unamortized amounts related to certain

compensation plans at February 28, 2026:

$ in millions	Remaining Unamortized Amounts	Weighted Average Vesting Period (in Years)
Non-vested share-based awards ..............	$225.9	3.4
Restricted cash awards (1) ........................	1,229.3	3.0
Total ..............................................................	$1,455.2

(1)The remaining unamortized amount is included within Other assets.

Note 15. Borrowings

Short-Term Borrowings

$ in thousands	February 28, 2026	November 30,  2025
Bank loans and other credit facilities ........................	$768,904	$568,418
Fixed rate callable note ...............................................	1,148,588	1,198,788
Total short-term borrowings (1) ...............................	$1,917,492	$1,767,206

(1)Short-term borrowings mature in one year or less and are recorded at cost,

which is a reasonable approximation of their fair values due to their liquid and

short-term nature.

At February 28, 2026 and November 30, 2025, the weighted

average interest rate on bank loans outstanding is 4.94% and

4.92% per annum, respectively.

Our borrowings include credit facilities that contain certain

covenants that, among other things, require us to maintain a

specified level of tangible net worth, require a minimum

regulatory net capital requirement for our U.S. broker-dealer,

Jefferies LLC, and impose certain restrictions on the future

indebtedness of certain of our subsidiaries that are borrowers.

Interest is based on rates at spreads over the federal funds rate

or other adjusted rates, as defined in the various credit

agreements, or at a rate as agreed between the bank and us in

reference to the bank’s cost of funding. At February 28, 2026, we

were in compliance with all covenants under these credit

facilities.

34 Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Long-Term Debt

$ in thousands	Maturity (Fiscal Years)	February 28, 2026	November 30, 2025
Parent Co. unsecured borrowings
Fixed rate	2026	$925,851	$869,461
	2027	1,118,840	1,117,106
	2028	995,065	1,029,501
	2029	597,501	586,495
	2030	1,051,878	1,063,637
	2031 and Later	6,225,104	4,782,178
Variable rate	2026	46,087	45,235
	2029	1,313	1,312
	2031 and Later	71,928	71,924
Structured notes (1)	2026	69,176	102,743
	2027	96,528	94,777
	2028	152,160	176,009
	2029	138,890	178,956
	2030	431,876	443,825
	2031 and Later	2,206,359	2,156,638
Total Parent Co. unsecured borrowings (2) ..........................................................................................................................................		14,128,556	12,719,797
Subsidiaries secured borrowings
Fixed rate	2026	112,725	166,414
	2027	653,483	630,114
	2028	758,938	746,556
	2029	230,994	191,068
Variable rate	2026	—	525,000
	2027	124,559	124,458
	2028	525,000	—
Total Subsidiaries secured borrowings .................................................................................................................................................		2,405,699	2,383,610
Subsidiaries unsecured borrowings
Fixed rate	2029	—	3,937
	2030	—	1,416
	2031 and Later	641,706	633,372
Variable rate	2026	—	100,000
	2027	53,458	53,759
Total Subsidiaries unsecured borrowings .............................................................................................................................................		695,164	792,484
Total long-term debt (3) ..........................................................................................................................................................................		$17,229,419	$15,895,891
Fair value ....................................................................................................................................................................................................		$17,384,685	$16,122,970
Weighted-average interest rate (4) .......................................................................................................................................................		5.10%	5.11%
Interest rate range (4) ..............................................................................................................................................................................		0.00% - 7.40%	0.00% - 7.50%

(1)Structured notes have various interest rate payment terms and are accounted for at fair value, with changes in fair value resulting from non-credit components

recognized in Principal transactions revenues. The structured notes are classified as Level 2 or Level 3 in the fair value hierarchy. All of our long-term debt with exception

of certain of the structured notes would be classified as Level 2 in the fair value hierarchy.

(2)Carrying values of certain borrowings, totaling $2.70 billion and $2.68 billion for February 28, 2026 and November 30, 2025, respectively, include cumulative hedging

adjustments of $131.9 million and $142.8 million at February 28, 2026 and November 30, 2025, respectively, associated with interest rate swaps based on designation

as fair value hedges.

(3)Carrying values include unamortized discounts and premiums, valuation adjustments and debt issuance costs. At February 28, 2026 and November 30, 2025, our

borrowings under several credit facilities classified within Long-term debt amounted to $703.0 million and $803.2 million, respectively. Interest on these credit facilities

is based on an adjusted Secured Overnight Financing Rate (“SOFR”) plus a spread or other adjusted rates, as defined in the various credit agreements. Certain of our

long-term borrowings are callable by us prior to maturity reflected at their contractual maturity dates. Additionally, certain of our borrowings are under agreements

containing covenants that, among other things, require us to maintain specified levels of tangible net worth and liquidity amounts, certain credit and rating levels and

impose certain restrictions on future indebtedness of and require specified levels of regulated capital and cash reserves for certain of our subsidiaries. At February 28,

2026, we were in compliance with all covenants under theses credit agreements.

(4)Interest rates exclude structured notes.

February 2026 Form 10-Q 35

Notes to Consolidated Financial Statements

(Unaudited)

For the three months ended February 28, 2026, long-term debt

increased by $1.33 billion to $17.23 billion at February 28, 2026,

primarily due to proceeds of $1.63 billion from the issuances of

unsecured senior notes and $74.8 million from currency gains on

foreign currency borrowings. These increases were partially

offset by repayments of $188.2 million on our unsecured senior

notes, $52.2 million from net repayments of structured notes, the

reclassification of $51.9 million of Tessellis’ borrowings to Held

for sale (refer to Note 4, Assets and Liabilities Held for Sale for

further information), and $42.3 million from decreased

subsidiaries’ borrowings.

Note 16. Total Equity

Common Stock

At February 28, 2026 and November 30, 2025, we had

565,000,000 authorized shares of voting common stock with a

par value of $1.00 per share. At February 28, 2026 and November

30, 2025, we had outstanding 204,422,673 and 206,296,167

common shares outstanding, respectively.

During the three months ended February 28, 2026, we

repurchased a total 3.0 million of our common shares for $174.3

million, or an average price of $58.18 per share, including 2.5

million of our common shares for $143.8 million in the open

market under our share repurchase program, and 0.5 million of

our common shares for $30.5 million in connection with net-

share tax withholding under our equity compensation plan. In

March 2026, the Board of Directors has authorized the

repurchase of common stock up to $250.0 million under a share

repurchase program.

Preferred Shares

At February 28, 2026 and November 30, 2025, 6.0 million of

preferred shares, par value $1.00 per share, were authorized and

55,125 shares issued and outstanding.

On April 27, 2023, we established Series B Non-Voting

Convertible Preferred Shares with a par value of $1.00 per share

(“Series B Preferred Stock”) and designated 70,000 shares as

Series B Preferred Stock. The Series B Preferred Stock has a

liquidation preference of $17,500 per share and rank senior to our

voting common stock upon dissolution, liquidation or winding up

of Jefferies Financial Group Inc. Each share of Series B Preferred

Stock is automatically convertible into 500 shares of non-voting

common stock, subject to certain anti-dilution adjustments, three

years after issuance. The Series B Preferred Stock participates in

cash dividends and distributions alongside our voting common

stock on an as-converted basis.

Additionally, on April 27, 2023, we entered into an Exchange

Agreement with Sumitomo Mitsui Banking Corporation (“SMBC”),

which entitles SMBC to exchange shares of our voting common

stock for shares of the Series B Preferred Stock at a rate of 500

shares of voting common stock for one share of Series B

Preferred Stock. The Exchange Agreement is limited to 55,125

shares of Preferred Stock and SMBC will pay $1.50 per share of

voting common stock exchanged. As of November 30, 2025,

SMBC had exchanged approximately 27.6 million shares of

voting common stock for 55,125 shares of Series B Preferred

Stock. At February 28, 2026, SMBC owns approximately 15.9% of

our common stock on an as-converted basis and 14.4% on a

fully-diluted, as-converted basis. Since August 2024, the CEO of

Sumitomo Mitsui Financial Group, Inc. has served on our Board,

with the President and Executive Officer of SMBC taking over the

position following his election at the Annual Shareholder Meeting

in March 2026. Additionally, Refer to Note 21, Related Party

Transactions for further information regarding transactions with

SMBC.

On September 19, 2025, our Board of Directors established Series

B-1 Non-Voting Convertible Preferred Shares with a par value of

$1.00 per share (“Series B-1 Preferred Stock”) and designated

17,500 shares as Series B-1 Preferred Stock. The Series B-1

Preferred Stock has a liquidation preference of $500 per share

and ranks senior to our voting common stock and equal to the

Series B Preferred Stock upon dissolution, liquidation or winding

up of Jefferies Financial Group Inc. Each share of Series B-1

Preferred Stock is automatically convertible into 500 shares of

non-voting common stock as soon as such non-voting common

stock exists, subject to certain anti-dilution adjustments. The

Series B-1 Preferred Stock also participates in cash dividends

and distributions alongside our voting common stock on an as-

converted basis.

Additionally, on September 19, 2025, we entered into an amended

and restated Exchange Agreement (the “Amended and Restated

Exchange Agreement”) with SMBC, which entitles SMBC to

exchange shares of our voting common stock for shares of the

Series B-1 Preferred Stock at a rate of 500 shares of voting

common stock for one share of Series B-1 Preferred Stock. The

Amended and Restated Exchange Agreement is limited to 17,500

shares of Series B-1 Preferred Stock. Under the Amended and

Restated Exchange Agreement, SMBC is permitted to increase its

economic ownership in the Company to up to 20% on an as-

converted and fully diluted basis, while continuing to own less

than 5% of a voting interest in the Company.

36 Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Earnings Per Common Share

Basic and diluted earnings per common share amounts were calculated by dividing net earnings by the weighted-average number of

common shares outstanding. The numerators and denominators used to calculate basic and diluted earnings per common share are as

follows:

	Three Months Ended February 28,
In thousands, except per share amounts	2026	2025
Numerator for earnings per common share from continuing operations:
Net earnings from continuing operations .................................................................................................................................................	$159,346	$136,849
Less: Net losses attributable to noncontrolling interests .......................................................................................................................	(15,858)	(6,983)
Allocation of earnings to participating securities (1) ..............................................................................................................................	(19,504)	(16,039)
Net earnings from continuing operations attributable to common shareholders for basic earnings per share .........................	$155,700	$127,793
Net earnings from continuing operations attributable to common shareholders for diluted earnings per share ......................	$155,700	$127,793
Denominator for earnings per common share:
Weighted average common shares outstanding .....................................................................................................................................	206,093	206,046
Weighted average shares of restricted stock outstanding with future service required ...................................................................	(2,147)	(2,200)
Weighted average RSUs outstanding with no future service required .................................................................................................	11,761	10,690
Weighted average basic common shares ................................................................................................................................................	215,707	214,536
Stock options and other share-based awards .........................................................................................................................................	5,152	5,287
Senior executive compensation plan RSU awards ..................................................................................................................................	2,411	2,625
Weighted average diluted common shares (2) .......................................................................................................................................	223,270	222,448
Earnings per common share:
Basic ...............................................................................................................................................................................................................	$0.72	$0.60
Diluted ............................................................................................................................................................................................................	$0.70	$0.57

(1)Represents dividends declared during the period on participating securities plus an allocation of undistributed earnings to participating securities. Net losses are not

allocated to participating securities. Participating securities represent certain preferred stock, restricted stock and RSUs for which requisite service has not yet been

rendered and amounted to weighted average shares of 27.6 million and 27.7 million for the three months ended February 28, 2026 and 2025, respectively. Undistributed

earnings are allocated to participating securities based upon their right to share in earnings if all earnings for the period had been distributed.

(2)Certain securities have been excluded as they would be antidilutive. However, these securities could potentially dilute earnings per share in the future. Antidilutive shares

were 12.3% and 13.4% of the weighted average common shares outstanding for the three months ended February 28, 2026 and 2025, respectively.

February 2026 Form 10-Q 37

Notes to Consolidated Financial Statements

(Unaudited)

Dividends

Three Months Ended February 28, 2026
Declaration Date	Record Date	Payment Date	Per Common Share Amount
January 7, 2026	February 17, 2026	February 27, 2026	$0.40
Three Months Ended February 28, 2025
Declaration Date	Record Date	Payment Date	Per Common Share Amount
January 8, 2025	February 14, 2025	February 27, 2025	$0.40

On March 25, 2026, the Board of Directors declared a dividend of

$0.40 per common share to be paid on May 29, 2026 to common

shareholders of record at May 18, 2026.

During both three months ended February 28, 2026 and 2025, we

paid cash dividends of $11.0 million with respect to the Series B

Preferred stock.

The payment of dividends is subject to the discretion of our

Board of Directors and depends upon general business

conditions and other factors that our Board of Directors may

deem to be relevant.

Accumulated Other Comprehensive Income (Loss)

$ in thousands	February 28,  2026	November 30,  2025
Net unrealized losses on available-for-sale securities .......................................................................	$(1,212)	$(1,796)
Net currency translation adjustments and other .....	(136,256)	(145,280)
Net unrealized losses related to instrument- specific credit risk .......................................................	(141,040)	(200,688)
Net minimum pension liability ....................................	(36,515)	(36,670)
Total accumulated other comprehensive loss, net of tax ..............................................................................	$(315,023)	$(384,434)

Amounts reclassified out of accumulated other comprehensive

income (loss) to net earnings:

	Three Months Ended February 28,
$ in thousands	2026	2025
Net unrealized gains on instrument-specific credit risk at fair value (1) .......................................................	$3,307	$2,538
Amortization of defined benefit pension plan actuarial losses (2) .......................................................	(155)	(759)
Total reclassifications for the period, net of tax .....	$3,152	$1,779

(1)The amounts include income tax expense of $1.1 million and $0.9 million for

the three months ended February 28, 2026 and 2025, respectively.

(2)The amount includes income tax benefit of $0.2 million for the three months

ended February 28, 2025, which were reclassified to Compensation and

benefits expenses.

Note 17. Income Taxes

At February 28, 2026 and November 30, 2025, our total gross

unrecognized tax benefits were $240.0 million and

$241.6 million, respectively.

At February 28, 2026 and November 30, 2025, we had interest

accrued of $184.6 million and $177.9 million, respectively,

included in Accrued expenses and other liabilities.

The total amount of unrecognized tax benefits that, if recognized,

would favorably affect the effective tax rate was $189.5 million

and $190.9 million (net of Federal benefit) at February 28, 2026

and November 30, 2025, respectively.

We recognize interest and penalties, if any, related to

unrecognized tax benefits in income tax expense.

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.

Earliest tax years that remain subject to examination in the major

tax jurisdictions in which we operate:

Jurisdiction	Tax Year
United States ...........................................................................................	2022
New York State ........................................................................................	2001
New York City ..........................................................................................	2006
United Kingdom .......................................................................................	2023
Germany ...................................................................................................	2020
Hong Kong ...............................................................................................	2019
India ...........................................................................................................	2010

	Three Months Ended February 28,
$ in millions	2026	2025
Income tax expense ......................................	$52.9	$14.2
Effective tax rate ............................................	24.9%	9.4%

Note 18. Commitments, Contingencies and Guarantees

Commitments

	Expected Maturity Date (Fiscal Years)
$ in millions	2026	2027	2028 and 2029	2030 and 2031	2032 and Later	Maximum Payout
Equity commitments (1) ....	$14.1	$115.6	$—	$0.1	$123.9	$253.7
Loan commitments (1) ......	85.6	252.5	88.0	137.7	8.8	572.6
Loan purchase commitments (2) ................	3,607.5	—	—	—	—	3,607.5
Forward starting reverse repos (3) ..............................	4,970.2	—	—	—	—	4,970.2
Forward starting repos (3)	3,421.7	—	—	—	—	3,421.7
Other unfunded commitments (1) ................	134.2	1,516.6	1,276.0	—	16.5	2,943.3
Total commitments ...........	$12,233.3	$1,884.7	$1,364.0	$137.8	$149.2	$15,769.0

(1)Equity, loan and other unfunded commitments are presented by contractual

maturity date. The amounts, however, are available on demand.

(2)Loan purchase commitments consist of unfunded commitments to acquire

secondary market loans. For the population of loans to be acquired under the

loan purchase commitments, at February 28, 2026, Jefferies had also entered

into back-to-back committed sale contracts aggregating to $3.29 billion.

(3)At February 28, 2026, all of the of the forward starting securities purchased

under agreements to resell and all of the forward starting securities sold under

agreements to repurchase settled within three business days.

Equity Commitments. Includes commitments to invest in our joint

venture, Jefferies Finance, asset management funds and in

Jefferies Capital Partners, LLC, a manager of private equity funds,

which consists of a team led by our President and a director. At

February 28, 2026, our outstanding commitments relating to

Jefferies Capital Partners, LLC and its private equity funds were

$9.7 million.

Additionally, at February 28, 2026, we had other outstanding

equity commitments to invest up to $192.9 million with strategic

affiliates and $35.7 million to various other investments.

38 Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Loan Commitments. From time to time, we make commitments

to extend credit to clients and to strategic affiliates. These

commitments and any related drawdowns of these facilities

typically have fixed maturity dates and are contingent on certain

representations, warranties and contractual conditions applicable

to the borrower. At February 28, 2026, we had outstanding loan

commitments of $319.2 million to a client and $3.4 million to

strategic affiliates.

Loan commitments outstanding at February 28, 2026 also

include our portion of the outstanding secured revolving credit

facility provided to Jefferies Finance, to support loan

underwritings by Jefferies Finance.

Underwriting Commitments. In connection with investment

banking activities, we may from time to time provide underwriting

commitments to our clients in connection with capital raising

transactions.

Forward Starting Reverse Repos and Repos. We enter into

commitments to take possession of securities with agreements

to resell on a forward starting basis and to sell securities with

agreements to repurchase on a forward starting basis that are

primarily secured by U.S. government and agency securities.

Other Unfunded Commitments. Other unfunded commitments

include obligations in the form of revolving notes, warehouse

financings and debt securities to provide financing to asset-

backed and CLO vehicles. Upon advancing funds, drawn amounts

are collateralized by the assets of an entity. Other unfunded

commitments also include written put options to certain

bondholders of an equity method investee.

Guarantees

Derivative Contracts. As a dealer, we make markets and trade in a

variety of derivative instruments. Certain derivative contracts that

we have entered into meet the accounting definition of a

guarantee under U.S. GAAP, including credit default swaps,

written foreign currency options and written equity put options.

On certain of these contracts, such as written interest rate caps

and foreign currency options, the maximum payout cannot be

quantified since the increase in interest or foreign exchange rates

are not contractually limited by the terms of the contract. As

such, we have disclosed notional values as a measure of our

maximum potential payout under these contracts.

Notional amounts associated with our derivative contracts

meeting the definition of a guarantee under U.S. GAAP at

February 28, 2026:

	Expected Maturity Date (Fiscal Years)
$ in millions	2026	2027	2028 and 2029	2030 and 2031	Notional/ Maximum Payout
Guarantee Type:
Derivative contracts— non-credit related .........	$8,221.6	$15,704.9	$13,773.3	$1,459.0	$39,158.8
Total derivative contracts .......	$8,221.6	$15,704.9	$13,773.3	$1,459.0	$39,158.8

The derivative contracts deemed to meet the definition of a

guarantee under U.S. GAAP are before consideration of hedging

transactions and only reflect a partial or “one-sided” component

of any risk exposure. Written equity options and written credit

default swaps are often executed in a strategy that is in tandem

with long cash instruments (e.g., equity and debt securities). We

substantially mitigate our exposure to market risk on these

contracts through hedges, such as other derivative contracts

and/or cash instruments, and we manage the risk associated

with these contracts in the context of our overall risk

management framework. We believe notional amounts overstate

our expected payout and that fair value of these contracts is a

more relevant measure of our obligations. At February 28, 2026,

the fair value of derivative contracts meeting the definition of a

guarantee, gross of any counterparty and cash collateral netting,

is a liability of approximately $635.0 million.

HomeFed. For real estate development projects, we are generally

required to obtain infrastructure improvement bonds at the

beginning of construction work and warranty bonds upon

completion of such improvements. These bonds are issued by

surety companies to guarantee a municipality satisfactory

completion of a project. As the planned area is developed and the

municipality accepts the improvements, the bonds are released.

At February 28, 2026, the aggregate amount of infrastructure

improvement bonds outstanding was $74.4 million.

Standby Letters of Credit. At February 28, 2026, we provided

guarantees to certain counterparties in the form of standby

letters of credit in the amount of $345.6 million, with a weighted

average maturity of less than one year. Standby letters of credit

commit us to make payment to the beneficiary if the guaranteed

party fails to fulfill its obligation under a contractual arrangement

with that beneficiary. Since commitments associated with these

collateral instruments may expire unused, the amount shown

does not necessarily reflect the actual future cash funding

requirement.

Other Guarantees. We are members of various exchanges and

clearing houses. In the normal course of business, we provide

guarantees to securities clearing houses and exchanges. These

guarantees generally are required under the standard

membership agreements, such that members are required to

guarantee the performance of other members. Additionally, if a

member becomes unable to satisfy its obligations to the clearing

house, other members would be required to meet these

shortfalls. To mitigate these performance risks, the exchanges

and clearing houses often require members to post collateral.

Our obligations under such guarantees could exceed the

collateral amounts posted. Our maximum potential liability under

these arrangements cannot be quantified; however, the potential

for us to be required to make payments under such guarantees is

deemed remote. Accordingly, no liability has been recognized for

these arrangements. Additionally, we provide certain

indemnifications in connection with third-party clearing and

execution arrangements whereby a third-party may clear and

settle transactions on behalf of our clients. These

indemnifications generally have standard contractual terms and

are entered into in the ordinary course of business. Our

obligations in respect of such transactions are secured by the

assets in our client’s account, as well as any proceeds received

from the transactions cleared and settled on behalf of our client.

However, we believe that it is unlikely we would have to make any

material payments under these arrangements and no material

liabilities related to these indemnifications have been recognized.

Note 19. Regulatory Requirements

Net Capital

Jefferies LLC is a broker-dealer registered with the SEC and a

member firm of the Financial Industry Regulatory Authority

(“FINRA”) and is subject to the SEC Uniform Net Capital Rule

(“Rule 15c3-1”), which requires the maintenance of minimum net

capital, and has elected to calculate minimum capital

requirements using the alternative method permitted by Rule

15c3-1 in calculating net capital. Jefferies LLC, as a dually-

registered U.S. broker-dealer and futures commission merchant

February 2026 Form 10-Q 39

Notes to Consolidated Financial Statements

(Unaudited)

(“FCM”), is also subject to Regulation 1.17 of the Commodity

Futures Trading Commission (“CFTC”) under the Commodity

Exchange Act, which sets forth minimum financial requirements.

The minimum net capital requirement in determining excess net

capital for a dually registered U.S. broker-dealer and FCM is equal

to the greater of the requirement under Rule 15c3-1 or Regulation

1.17. FINRA is the designated examining authority for Jefferies

LLC and the National Futures Association (“NFA”) is the

designated self-regulatory organization (“DSRO”) for Jefferies

LLC as an FCM.

Jefferies Financial Services, Inc. (“JFSI”) is registered with the

SEC as a Security-Based Swap Dealer (“SBS Dealer”) and an OTC

Derivatives Dealer (“OTCDD”) subject to the SEC’s SBS dealer

regulatory rules and the SEC’s net capital requirements. JFSI is

also registered as a swap dealer with the CFTC and is subject to

the CFTC’s regulatory capital requirements pursuant to the

minimum financial requirements for swap dealers. Additionally,

as a registered member firm, JFSI is subject to the net capital

requirements of the NFA. The SEC is the designated examining

authority for JFSI in its capacity as an SBS Dealer and OTCDD,

while the NFA is the DSRO for JFSI, as a CFTC registered swap

dealer.

Certain non-U.S. subsidiaries are subject to capital adequacy

requirements as prescribed by the regulatory authorities in their

respective jurisdictions. This includes Jefferies International

Limited (“JIL”), which is subject to the regulatory supervision and

requirements of the Financial Conduct Authority in the U.K. and

Jefferies GmbH, which is subject to the regulatory supervision of

the German Federal Financial Supervisory Authority.

At February 28, 2026, net capital and excess net capital were as

follows:

$ in thousands	Net Capital	Excess Net Capital
Jefferies LLC .................................................................	$1,448,011	$1,277,695
JFSI - SEC ......................................................................	333,245	298,800
JFSI - CFTC ...................................................................	333,245	300,126
JIL (1) .............................................................................	2,095,104	1,045,119
Jefferies GmbH (1) ......................................................	386,316	158,187

(1)Represents an equivalent capital requirement in the respective jurisdiction.

At February 28, 2026, Jefferies LLC, JFSI, JIL and Jefferies GmbH

are in compliance with their applicable requirements.

The regulatory capital requirements referred to above may

restrict our ability to withdraw capital from our regulated

subsidiaries.

Customer Protection and Segregation Requirement

As a registered broker dealer that clears and carries customer

accounts, Jefferies LLC is subject to the customer protection

provisions under SEC Rule 15c3-3 and is required to compute a

reserve formula requirement for customer accounts and deposit

cash or qualified securities into a special reserve bank account

for the exclusive benefit of customers. At February 28, 2026,

Jefferies LLC had $1.02 billion in cash and qualified U.S.

Government securities on deposit in special reserve bank

accounts for the exclusive benefit of customers.

As a registered broker dealer that clears and carries proprietary

accounts of brokers or dealers (commonly referred to as “PAB”),

Jefferies LLC is also required to compute a reserve requirement

for PABs pursuant to SEC Rule 15c3-3. At February 28, 2026,

Jefferies LLC had $596.1 million in cash and qualified U.S.

Government securities in special reserve bank accounts for the

exclusive benefit of PABs.

The qualified securities meeting the SEC Rule 15c3-3 customer

and PAB requirements are included in Cash and securities

segregated and Securities purchased under agreements to resell.

JFSI is exempt from the CFTC and SEC segregation rules.

Note 20. Segment Reporting

We operate in two reportable business segments: (1) Investment

Banking and Capital Markets and (2) Asset Management. The

Investment Banking and Capital Markets reportable business

segment includes our capital markets activities and investment

banking business, which is composed of financial advisory and

underwriting activities. The Investment Banking and Capital

Markets reportable business segment provides the sales, trading,

origination and advisory effort for various fixed income, equity

and advisory products and services. The Asset Management

reportable business segment provides investment management

services to investors globally and invests capital in hedge funds,

separately managed accounts and third-party asset managers.

Our reportable business segment information is prepared using

the following methodologies:

•Net revenues, expenses and income (loss) from equity method

investments directly associated with each reportable business

segment are included in determining earnings (losses) from

continuing operations before income taxes.

•Net revenues and expenses not directly associated with

specific reportable business segments are allocated based on

the most relevant measures applicable, including each

reportable business segment’s net revenues, headcount and

other factors.

•Reportable business segment assets include an allocation of

indirect corporate assets that have been fully allocated to our

reportable business segments, generally based on each

reportable business segment’s capital utilization.

Net revenues presented for our Investment Banking and Capital

Markets reportable segment include allocations of interest

income and interest expense as we assess the profitability of

these businesses inclusive of the net interest revenue or expense

associated with the respective activities, including the net

interest cost of allocated long-term debt, which is a function of

the mix of each business's associated assets and liabilities and

the related funding costs.

40 Jefferies Financial Group Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Our Chief Executive Officer and President serve collectively as

our chief operating decision maker (“CODM”). In this capacity, the

CODM evaluates the performance of each business segment and

allocates resources based on a variety of strategic and financial

considerations. These considerations include measures of

segment results and profitability, including net revenues and

earnings before income taxes, which are calculated in

accordance with U.S. GAAP and align with the amounts reported

in our Consolidated Statements of Earnings. The CODM regularly

reviews results and profitability measures to monitor budget

versus actual results. Furthermore, the ongoing monitoring of

budget versus actual results is used to assess the performance

of each reportable business segment and significantly influences

decisions about allocating resources.

Summary of our results by reportable business segment:

	Three Months Ended  February 28,
$ in millions	2026	2025
Investment Banking and Capital Markets:
Revenues
Non-interest revenues ............................................................	$1,801.4	$1,403.7
Interest income .......................................................................	770.1	802.6
Total revenues (1) ..................................................................	2,571.5	2,206.3
Interest expense .....................................................................	775.5	807.3
Net revenues (1) .....................................................................	1,796.0	1,399.0
Non-interest expenses
Compensation and benefits ..................................................	1,021.3	769.1
Brokerage and clearing fees .................................................	121.8	100.2
Technology and communications .......................................	142.5	127.6
Business development ..........................................................	70.3	58.7
Other segment items (3) (4) .................................................	189.1