Organization and Basis of Presentation

3 Months Ended

Feb. 28, 2025

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Basis of Presentation

Note 1. Organization and Basis of Presentation

Organization

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

service, integrated 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”) and

historically our automobile lending and servicing activities. The

Asset Management reportable business segment provides

alternative investment management services to investors in the

U.S. and overseas 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.

During the fourth quarter of 2023, we acquired Stratos Group

International (“Stratos”) (formerly FXCM Group, LLC, or “FXCM”)

and OpNet S.p.A. (“OpNet,” formerly known as “Linkem”),

investments in our legacy merchant banking portfolio which

became consolidated subsidiaries. In April 2024, we finalized the

sale of Foursight Capital LLC (“Foursight”). In February 2024,

OpNet agreed to sell substantially all of its wholesale operating

assets to Wind Tre S.p.A., a subsidiary of CK Hutchison Group

Telecom Holdings Ltd. The sale closed in August 2024. Refer to

Note 4, Business Acquisitions and Note 5, Assets Held for Sale

and Discontinued Operations for further information.

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, 2024. Certain footnote disclosures included in our

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

2024 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.

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.